MORTGAGE FORECLOSURE - AGAIN FOLLOW THE HEARSAY RULES

OneWest Bank, FSB v Berino, 2018 NY Slip Op 01318, Decided on February 28, 2018, 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" (Plaza Equities, LLC v Lamberti, 118 AD3d 688, 689). Additionally, "[w]here, as here, standing is put into issue by a defendant, the plaintiff must prove its standing in order to be entitled to relief" (Aurora Loan Servs., LLC v Taylor, 114 AD3d 627, 628 [internal quotation marks omitted], affd 25 NY3d 355). A plaintiff in a mortgage foreclosure action has standing where it is the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361; U.S. Bank N.A. v Handler, 140 AD3d 948, 949). "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" (U.S. Bank, N.A. v Collymore, 68 AD3d 752, 754).

Here, OneWest failed to meet its prima facie burden of establishing that it had standing as the holder or assignee of the note at the time it commenced the action (see Wells Fargo Bank, N.A. v Talley, 153 AD3d 583, 584; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849, 852). In support of its motion, OneWest submitted the affidavit of Jillian Thrasher, an employee of its loan servicer, who averred that OneWest was the holder of the note, which is endorsed in blank, and assignee of the mortgage at the time the action was commenced. However, OneWest failed to demonstrate the admissibility of the records that Thrasher relied upon under the business records exception to the hearsay rule (see CPLR 4518[a]), since she did not attest that she was personally familiar with OneWest's record-keeping practices and procedures (see Arch Bay Holdings, LLC v Albanese, 146 AD3d at 853; Aurora Loan Serv., LLC v Baritz, 144 AD3d 618, 620; Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 685; U.S. Bank N.A. v Handler, 140 AD3d at 949; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 652). Insofar as the Supreme Court reached its determination that OneWest had standing by, sua sponte, "independently tak[ing] judicial notice of the FDIC website," this Court has repeatedly cautioned against such independent Internet investigations, especially when conducted without providing notice or an opportunity for the parties to be heard (see First United Mtg. Banking Corp. v Lawani, 147 AD3d 912, 913; HSBC Bank USA, N.A. v Taher, 104 AD3d 815, 818). Since OneWest failed to meet its prima facie burden, the court should have denied the subject branches of its motion without regard to the sufficiency of the Berino defendants' opposition papers (see Alvarez v Prospect Hosp., 68 NY2d 320, 324)."