MORTGAGE FORECLOSURE - SUMMARY JUDGMENT AGAIN DENIED IF HEARSAY RULES NOT FOLLOWED

Bank of N.Y. Mellon v Alli, 2017 NY Slip Op 0850,1 Decided on December 6, 2017, Appellate Division, Second Department:

"Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the production of the mortgage, the unpaid note, and evidence of default" (Deutsche Bank Natl. Trust Co. v Abdan, 131 AD3d 1001, 1002 [internal quotation marks omitted]; see Hudson City Sav. Bank v Genuth, 148 AD3d 687). Where a plaintiff's standing to commence a foreclosure action is placed in issue by a defendant, it is incumbent upon the plaintiff to prove its standing to be entitled to relief (see Deutsche Bank Trust Co. Ams. v Garrison, 147 AD3d 725; Wells Fargo Bank, N.A. v Arias, 121 AD3d 973, 973-974). A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362; U.S. Bank, N.A. v Noble, 144 AD3d 786; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753-754). Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident (see Deutsche Bank Trust Co. Ams. v Garrison, 147 AD3d at 726; U.S. Bank N.A. v Saravanan, 146 AD3d 1010, 1011; Deutsche Bank Natl. Trust Co. v Logan, 146 AD3d 861, 862).

Here, the plaintiff failed to meet its prima facie burden of establishing its standing (see Wells Fargo Bank, N.A. v Talley, 153 AD3d 583). In support of its motion, the plaintiff submitted the affidavit of Dara Foye, a document coordinator for Bayview Loan Servicing, LLC (hereinafter Bayview), the loan servicer. Foye averred, based on her review of Bayview's business records, that the original, endorsed consolidated note was delivered to the plaintiff on January 24, 2007, and that the plaintiff "maintained possession of the original note since that date up until and including the date the action was commenced on May 24, 2010." However, the plaintiff failed to demonstrate the admissibility of the records relied upon by Foye under the business records exception to the hearsay rule (see CPLR 4518[a]), since Foye did not attest that she was personally familiar with the record-keeping practices and procedures of the plaintiff (see Wells Fargo Bank, N.A. v Talley, 153 AD3d at 583; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849, 853; Aurora Loan Servs., LLC v Baritz, 144 AD3d 618, 620; Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 685). The plaintiff also failed to establish its standing based on the purported assignment of the note and mortgage to it by MERS, as it failed to submit any evidence establishing delivery or assignment of the note to MERS prior to its execution of the assignment to the plaintiff (see Arch Bay Holdings, LLC v Albanese, 146 AD3d at 853). Since the plaintiff failed to meet its prima facie burden, the Supreme Court should have denied those branches of its motion which were for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference, without regard to the sufficiency of the defendants' opposition papers (see Alvarez v Prospect Hosp., 68 NY2d 320, 324)."