NEW EVIDENCE RULE ON HEARSAY

Effective December 31, 2021, is CPLR 4549:

" § 4549.  Admissibility of an opposing party's statement. A statement

  offered against an opposing party shall not be excluded from evidence as

  hearsay if made by a person whom the opposing party authorized to make a

  statement on the subject or by the opposing party's agent or employee on

  a matter within the scope of that relationship and during the existence

  of that relationship."

According to the Senate Bill:

This is one in a series of measures being introduced at the request of
the Chief Administrative Judge upon the recommendation if his Advisory
Committee on Civil Practice.

This measure would relax the common law exclusion of the hearsay state-
ment of a party's agent or employee, provided that the statement was on
a matter within the scope of that employment or agency relationship, and
made during the existence of the relationship. The measure would add a
new CPLR 4549, and cause New York's hearsay exception to follow the
approach of Federal Rule of Evidence 801(d)(2)(D).

The measure is intended to change the extent of authority that a propo-
nent must show in order to make the hearsay statement of an opposing
party's agent or employee admissible. While under current law it appears
clear that a hearsay statement will be admissible if there was actual

authority to speak on behalf of the party, such authority often may be
shown only by implication in light of the circumstances of the employ-
ment or agency relationship. In practice, this tends to limit "speaking
authority" to only the high levels of management.

Professor Michael J. Hutter has analyzed several Appellate Division
cases that take a very strict view of the predicate proof for speaking
authority, and these cases indicate that an employee or agent who is not
in charge of the business will have no implied authority to speak on
behalf of the employer -- even if the statement made relates to an
activity the person was charged to undertake.  Instead, the proponent of
the hearsay statement may need to make the difficult showing of express
authority to speak on behalf of the employer. See Boyce v GumleyHaf t,
Inc., 82 AD3d 491  
1ST DEPT 2011; Scherer v Golub Corp., 101 AD3d 1286
 
3D DEPT 2012; Hutter, "Speaking Agent Hearsay Exception: Time to Clar-
ify, if Not Abandon," New York Law Journal, June 6, 2013, Pg. 3, col. 1,
Vol. 249, No. 108.

We believe a strict requirement to demonstrate such authority to speak
may exclude reliable proof of an event, even though the employer as a
party might not be treated unfairly by admissibility, either because the
statement is true and made by a person with relevant knowledge, or
because the employer is able to introduce other proof in opposition to
the implications of the hearsay statement. As noted above, the current
strict requirement to show speaking authority is contrary to Federal
Rule of Evidence. See Barker and Alexander, Evidence in New York State
and Federal Courts (2d ed.) 8:26, p. 148.

We further believe that the rule is unlikely to change without legisla-
tive action. (See, Loschiavo v Port Auth. of New York & New Jersey, 58
NY2d 1040, 1041  
1983  
"WE DECLINE PLAINTIFF'S INVITATION TO CHANGE
THIS WELL-SETTLED, ALBEIT WIDELY CRITICIZED RULE OF EVIDENCE BUT NOTE,
IN THIS CONNECTION, THAT A PROPOSAL FOR MODIFICATION OF THE HEARSAY RULE
IN THIS STATE IS NOW BEFORE THE LEGISLATURE").


An example of statements excluded under the current rule include an
employee-driver's admissions of negligence, unless the driver was
authorized by the employer to speak about the subject accident. In
Schner v Simpson, (286 AD 716, 718  
1ST DEPT 1955), an employee's
statement "I am sorry that I knocked you down, but I think you will be
able to get up" was held inadmissible on the ground that " 
Generally
speaking, employment does not carry authority to make either declara-
tions or admissions."(See, also, Jankowski v Borden's Condensed Milk
Co., 176 AD 453  
2D DEPT 1917  
DRIVER'S STATEMENT THAT IT WAS HIS FAULT
HELD NOT ADMISSIBLE; and Raczes v Home, 68 AD3d 1521, 1522-1523  
3D
DEPT 2009  
MAINTENANCE WORKER'S STATEMENT:  "THIS IS THE THIRD TIME
THAT I FIXED THIS RAILING AND I'M GETTING SICK OF IT," NOT COMPETENT TO
ESTABLISH NOTICE ON THE PART OF EMPLOYER).

However, such employee statements generally are admissible in Federal
court and would be admissible under this measure. (See Corley v Burger
King Corp., 56 F3d 709, 710  
5TH CIR 1995; Martin v Savage Truck Line,
121 F Supp 417, 419  
DDC 1954). On the other hand, an employee's state-
ment would not be admissible against the employer where it concerned a
matter that was not within the employee's scope of employment. (See,
e.g., Wilkinson v Carnival Cruise Lines, Inc., 920 F2d 1560  
11TH CIR
1991; Hill v Spiegel, Inc., 708 F2d 233, 237  
6TH CIR 1983).

We believe that the Federal approach is an improvement over the current
state of New York decisional law, and that trial judges will exercise
appropriate discretion to exclude such hearsay evidence when there is
inadequate foundation or indicia of reliability.

This measure, which would have no fiscal impact, would take effect imme-
diately and apply to all actions pending on or after such effective
date.

A SUMMARY JUDGMENT MOTION REQUIRES ADMISSABLE EVIDENCE

In this case, a foreclosure is delayed due to the bank's failure to submit proper evidence in its motion papers.

SELENE FIN., LP v. Coleman, 2020 NY Slip Op 5962 - NY: Appellate Div., 2nd Dept. October 21, 2020:

".....

However, we agree with the defendant that the Supreme Court also should have denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against him, to strike his answer and affirmative defenses, and for an order of reference. "On its motion for summary judgment, the plaintiff has the burden of establishing, by proof in admissible form, its prima facie entitlement to judgment as a matter of law" (Tri-State Loan Acquisitions III, LLC v Litkowski, 172 AD3d 780, 782; see JPMorgan Chase Bank, N.A. v Akanda, 177 AD3d 718, 719). "In an action to foreclose a mortgage, a plaintiff establishes its case as a matter of law through the production of the mortgage, the unpaid note, and evidence of default" (MLCFC 2007-9 Mixed Astoria, LLC v 36-02 35th Ave. Dev., LLC, 116 AD3d 745, 746). Where, as here, a defendant places standing in issue, the plaintiff must prove standing as part of its prima facie case (see U.S. Bank N.A. v Auguste, 173 AD3d at 932-933).

Here, although the plaintiff established its standing, the plaintiff failed to establish, through admissible evidence, the defendant's default in payment under the note. For evidence of default, the plaintiff relied upon the affidavit of a foreclosure manager employed by the plaintiff, wherein she attested, among other things, that the defendant defaulted under the loan in February 2011. By attesting that she was familiar with the record-making practices of her employer, that the records were made in the regular course of business, that it was the regular course of such business to make the record, and that the records were made "at or about the time of the event being recorded" (People v Kennedy, 68 NY2d 569, 580), the foreclosure manager satisfied the requirements for establishing a foundation for the admission of business records (see CPLR 4518[a]; Bank of N.Y. Mellon v Gordon, 171 AD3d 197, 205). However, since the foreclosure manager failed to submit any of the business records upon which she contends she relied in making her affidavit, her averment as to the defendant's purported default "`constitute[s] inadmissible hearsay and lack[s] probative value'" (Federal Natl. Mtge. Assn. v Brottman, 173 AD3d 1139, 1141, quoting Bank of N.Y. Mellon v Gordon, 171 AD3d at 208-209). As "it is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted" (Bank of N.Y. Mellon v Gordon, 171 AD3d at 205), and "a witness's description of a document not admitted into evidence is hearsay" (U.S. Bank N.A. v 22 S. Madison, LLC, 170 AD3d 772, 774), the assertions by the foreclosure manager as to the contents of the records were "inadmissible hearsay to the extent that the records she purport[ed] to describe were not submitted with her affidavit" (id. at 774; see JPMorgan Chase Bank, N.A. v Grennan, 175 AD3d 1513, 1517).

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 defendant, to strike the defendant's answer and affirmative defenses, and for an order of reference, without regard to the sufficiency of the defendant's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853)."

WHEN THE ATTORNEY FOR THE CHILD DISAGREES WITH CPS AND TAKES OVER

In this case, CPS withdrew its neglect petition but the attorney for the child was permitted to adopt it and continue the proceeding, which was granted by the Family Court but reversed by the Third Department - the wheels of justice grind slowly.

Matter of Abel XX. (Jennifer XX.) 2020 NY Slip Op 02129 Decided on April 2, 2020 Appellate Division, Third Department:

"Respondent is the mother of four children (born in 2001, 2010, 2012 and 2014), the youngest three of which were fathered by Patrick XX. In August 2017, petitioner commenced these neglect proceedings against respondent and Patrick XX. based upon, among other things, allegations of educational neglect relating to the second child and medical neglect relating to all of the children. Respondent was present in Family Court for an initial appearance on the petitions, during which time she consented to the temporary placement of the oldest child with the maternal grandmother. Patrick XX. did not appear at the initial appearance, and petitioner advised that it had not been able to serve him with the petitions. Over the course of several subsequent court appearances, at which respondent was present but Patrick XX. was not, petitioner advised the court that its repeated efforts to serve Patrick XX. with the petitions had been unsuccessful. At a November 2017 appearance, at which both respondent and Patrick XX. failed to appear, Family Court dismissed the petitions against Patrick XX. without prejudice.

In December 2017, respondent failed to appear for a permanency hearing relating to the oldest child and a hearing on the neglect petitions. Respondent's assigned counsel indicated that respondent was in Arizona, where it was believed that Patrick XX. had taken the three youngest children. At the request of respondent's counsel, Family Court adjourned the hearing until January 2018.

On the January 2018 hearing date, at which respondent once again failed to appear, petitioner requested to withdraw its petitions against respondent. Family Court provided both respondent's counsel and the attorney for the children with an opportunity to comment on petitioner's request, at which time the attorney for the children expressed his concern for his clients' safety. Referencing Matter of Jamie TT. (191 AD2d 132 [1993]), a case in which this Court found a law guardian to have provided ineffective assistance of counsel for failing to take steps to cure deficiencies in the petitioner's presentation of proof on a child abuse petition, Family Court asked the attorney for the children whether he would be "prepared to go forward" on the petitions if it declined to dismiss them. The attorney for the children requested a brief recess to go over the petitions and to speak with the caseworkers. Family Court granted that request. After the recess, the attorney for the children indicated his intention to go forward on the petitions, and Family Court permitted him to do so. Following the hearing, at which the attorney for the children presented the testimony of petitioner's caseworker and limited documentary evidence, Family Court issued two orders adjudicating the children to have been neglected by respondent. Respondent appeals from both orders.

Initially, we perceive no error or abuse of discretion in Family Court declining to dismiss the petitions and allowing the attorney for the children to adopt the petitions and proceed on them (see Family Ct Act § 1032 [b]; Matter of Amber A. [Thomas E.], 108 AD3d 664, 665 [2013]). Turning to the merits, as relevant here, a party seeking to establish neglect must prove, by a preponderance of the evidence, that a child's "physical, mental or emotional condition has been impaired or is in imminent danger of becoming impaired as a result of the failure of his [or her] parent . . . to exercise a minimum degree of care . . . in supplying [him or her] with adequate . . . education in accordance with the provisions of part one of article [65] of the [E]ducation [L]aw, or medical . . . care, though financially able to do so or offered financial or other reasonable means to do so" (Family Ct Act § 1012 [f] [i] [A]; see Family Ct Act § 1046 [b] [i]; Matter of Amanda M., 28 AD3d 813, 814 [2006]).

Upon our review of the record, we find that — notwithstanding his laudable efforts to protect his clients' welfare by proceeding on the petitions in petitioner's stead — the attorney for the children failed to present sufficient competent evidence to support Family Court's findings of educational and medical neglect (see Family Ct Act § 1046 [b] [iii]). With respect to the claim of educational neglect, the attorney for the children sought to prove that respondent failed to ensure that the second child was enrolled in and attending an adequate educational program for the 2016-2017 school year and beyond, as legally required. To that end, the attorney for the children offered the testimony of petitioner's caseworker and her corresponding progress notes, which together established that respondent had stated to the caseworker that the second child was enrolled in a particular public elementary school. The attorney for the children, however, failed to present any admissible, non-hearsay evidence to establish that, contrary to respondent's assertion, the second child was not actually enrolled in that elementary school or any other educational program. Although the caseworker testified, and the progress notes similarly reflected, that she spoke with individuals at the elementary school and the school district office regarding the second child's enrollment in an educational program, neither her testimony nor the progress notes demonstrated that those conversations were admissible under an exception to the hearsay rule and, therefore, such evidence should not have been relied upon by Family Court (see Matter of Leon RR., 48 NY2d 117, 122-123 [1979]; Matter of Jaden C. [Phillip J.], 90 AD3d 485, 487 [2011]; Matter of Tiffany S., 302 AD2d 758, 761 [2003], lv denied 100 NY2d 503 [2003]).[FN1] In the absence of competent evidence establishing that the second child was not enrolled in an adequate educational program during the 2016-2017 school year, we find that a sound and substantial basis does not exist in the record to support Family Court's finding in this regard (compare Matter of William AA., 24 AD3d 1125, 1126 [2005], lv denied 6 NY3d 711 [2006]).

Family Court's findings of medical neglect are similarly unsupported by a sound and substantial basis in the record. The attorney for the children presented evidence establishing that, in August 2013, roughly four years prior to the filing of the petitions, a pediatric nurse practitioner — whose care respondent had sought — diagnosed the second and third children with whooping cough and had prescribed antibiotics for the family. The progress notes established that the caseworker visited respondent's home after the diagnosis, at which time respondent stated that she and Patrick XX. had declined on religious grounds to provide the antibiotics to the children, that they were treating the whooping cough with alternative medicine and that the children were recovering well.[FN2] The caseworker's notes indicated that she was able to observe the oldest child and the third child during the visit and that they appeared to be healthy.[FN3] The caseworker's testimony and progress notes also established that, in July 2017, the caseworker had a conversation with respondent, in which respondent stated that she suspected that the youngest child had Lyme disease and that she was using naturopathic treatments to address her suspicions.[FN4] Upon review of the foregoing evidence, and considering that some of the medical neglect allegations pertained to events that occurred more than four years earlier, we find that the attorney for the children failed to prove, by a preponderance of the evidence, that the children's physical conditions were in imminent danger of becoming impaired as a result of a failure to provide adequate medical care (see Family Ct Act § 1012 [f] [i] [A]; compare Matter of Josephine BB. [Rosetta BB.], 114 AD3d 1096, 1098-1099 [2014]). Accordingly, because Family Court's findings of neglect are not supported by a sound and substantial basis in the record, we must reverse Family Court's orders and dismiss the petitions.

Footnotes

Footnote 1: Although respondent's counsel should have raised objections to the hearsay evidence offered by the attorney for the children, we cannot uphold a finding of neglect that is supported solely by inadmissible evidence.

Footnote 2: Family Court's finding that the oldest child also contracted whooping cough in August or September 2013 was solely based upon inadmissible hearsay, and its finding that she consequently missed a substantial amount of school is wholly contradicted by the certified school records that were admitted into evidence.

Footnote 3: The oldest child was observed riding a scooter.

Footnote 4: The remaining evidence proffered by the attorney for the children on the 2013 and 2017 events was inadmissible and, although not objected to, should not have been relied upon by Family Court (see Family Ct Act § 1046 [b] [iii])."

MORTGAGE FORECLOSURE - AGAIN THE EVIDENCE RULES APPLY IN SUMMARY JUDGMENT MOTIONS

American Home Mtge. Servicing, Inc. v Carnegie, 2020 NY Slip Op 01590, Decided on March 11, 2020, Appellate Division, Second Department:

"We agree with the Supreme Court's determination, upon reargument, that the plaintiff failed to establish, prima facie, that it had standing, as the plaintiff's asserted basis in its May 2016 motion—that standing was established through an affidavit of an employee of the plaintiff's current loan sub-servicer—is without merit (see Citibank, N.A. v Cabrera, 130 AD3d 861, 861; see also US Bank N.A. v Hunte, 176 AD3d 894, 896). The affidavit failed to lay the requisite foundation under the business records exception to the hearsay rule to support the admissibility of the records relied upon by the affiant for her assertion that the note was transferred to the plaintiff's custodian prior to the commencement of the action and remained in the possession of the plaintiff's custodian at the time of commencement (see US Bank N.A. v Hunte, 176 AD3d at 896; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 651-652). Moreover, the affiant's assertions as to the contents of the records were inadmissible without the submission of the records themselves (see Deutsche Bank Natl. Trust Co. v Elshiekh, 179 AD3d 1017; Bank of N.Y. Mellon v Gordon, 171 AD3d 197, 205)."

MORTGAGE FORECLOSURE- SUMMARY JUDGMENT DENIED

Reviewing this case on e courts, this foreclosure has been through several litigated motions. And even while the appeal of the 2017 decision was pending, the bank, in August 2019, applied for an order of reference and the homeowner cross-moved for a stay pending the appeal. Both motions were eventually withdrawn.

Wells Fargo Bank, N.A. v Bakth, 2020 NY Slip Op 01382, Decided on February 26, 2020, Appellate Division, Second Department:

"On its motion, inter alia, for summary judgment on the complaint insofar as asserted against the defendant Achwad Bakth (hereinafter the defendant) and for an order of reference, the plaintiff, to establish its standing to commence this mortgage foreclosure action, submitted an affirmation of Amber A. Jurek, a lawyer with Gross Polowy, LLC (hereinafter Gross Polowy), the plaintiff's counsel. Jurek stated that she was familiar with Gross Polowy's records and record-keeping practices. Jurek stated that on January 28, 2015, Gross Polowy received the plaintiff's file, which included the original endorsed note. Gross Polowy commenced this action on the plaintiff's behalf on February 26, 2015. According to Jurek, "[o]n that date, Gross Polowy, on behalf of Plaintiff, remained in physical possession of the collateral file, including the original endorsed Note dated March 20, 2012." The plaintiff also submitted the note, which bore an undated endorsement to the plaintiff. However, Jurek did not set forth any facts based on her personal knowledge to support her statement that the note in the plaintiff's file was the original endorsed note. Further, the plaintiff failed to attach the business records upon which Jurek relied in her affirmation, and since Jurek did not state that she personally witnessed Gross Polowy receive the plaintiff's file, her statement is inadmissible hearsay (see Federal Natl. Mtge. Assn. v Brottman, 173 AD3d 1139; cf. Wells Fargo Bank, N.A. v Gonzalez, 174 AD3d 555; Bank of N.Y. Mellon v Gordon, 171 AD3d 197, 206-207).

The plaintiff also submitted an affidavit of April H. Hatfield, vice president of loan documentation for the plaintiff. Hatfield stated that she was familiar with the plaintiff's records and record-keeping practices. Although Hatfield attached the records upon which she relied, she did not [*2]state that the plaintiff had possession of the endorsed note at the time the action was commenced. Rather, she relied on Jurek's affidavit for that fact. Accordingly, Hatfield's affidavit was also insufficient to establish the plaintiff's standing.

Finally, the plaintiff did not attach a copy of the note to the complaint when commencing this action. Therefore, the plaintiff failed to establish, prima facie, that it had standing to commence this action, and those branches of its motion which were for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference should have been denied."

THE SECOND DEPARTMENT ADDRESSES THE FORECLOSURE CRISIS

Here is a guide to pursuing and defending a foreclosure action.

Bank of N.Y. Mellon v Gordon, 2019 NY Slip Op 02306, Decided on March 27, 2019, Appellate Division, Second Department:

"In the wake of the financial crisis that began in 2008, the trial courts of this state have faced an unprecedented spike in judicial foreclosure actions. The challenges presented by this dramatic increase in litigation have been compounded by poor record-keeping practices, a changing regulatory environment, inordinate delays, and inadequate legal representation. The sheer number of foreclosure cases has also resulted in a renewed focus on the legal principles underlying such actions and presented circumstances under which those principles must be extended and applied to new factual scenarios.

From an appellate perspective, the recent flood of foreclosure appeals has revealed consistent and repeated confusion about some of the most fundamental aspects of the procedural, substantive, and evidentiary law that must be routinely applied in a foreclosure context. In an effort to provide additional clarity in this important area of the law, we deem it appropriate to collect and reiterate some of these foundational principles in the hope that such clarity will eliminate many of the disputes that make up an ever-increasing proportion of trial-level dockets. For the reasons that follow, we modify the order appealed from.

1. Factual and Procedural Background

The plaintiff commenced this action to foreclose a mortgage. The defendant Dushaun Gordon interposed an answer which included 55 affirmative defenses, 5 counterclaims asserted against the plaintiff, and 2 cross claims asserted against the defendant Mortgage Electronic [*2]Registration Systems, Inc. (hereinafter MERS).

The plaintiff thereafter moved for, among other relief, summary judgment on the complaint insofar as asserted against Gordon and dismissing the affirmative defenses and counterclaims asserted by that defendant, and to appoint a referee to compute the amount due. Gordon opposed the plaintiff's motion and cross-moved pursuant to CPLR 3211 and 3212 to dismiss the complaint insofar as asserted against him or, in the alternative, to compel disclosure, in effect, pursuant to CPLR 3124, and for leave to enter a default judgment on his cross claims asserted against MERS.

In a decision dated July 23, 2015, the Supreme Court determined, among other things, that the plaintiff was entitled to summary judgment on the complaint. A subsequent order entered August 7, 2015, upon the decision, inter alia, (1) granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against Gordon and dismissing the affirmative defenses and counterclaims asserted by that defendant, and to appoint a referee to compute the amount due, and (2), in effect, denied Gordon's cross motion pursuant to CPLR 3211 and 3212 to dismiss the complaint insofar as asserted against him or, in the alternative, to compel disclosure, in effect, pursuant to CPLR 3124, and for leave to enter a default judgment on his cross claims asserted against MERS. Gordon appeals from those portions of the order entered August 7, 2015. We modify.

2. Legal Analysis

A. General Principles

A motion for summary judgment "shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party" (CPLR 3212[b]; see Alvarez v Prospect Hosp., 68 NY2d 320, 324). Such a motion must be supported "by affidavit, by a copy of the pleadings and by other available proof, such as depositions and written admissions" (CPLR 3212[b]). To make a prima facie showing, the moving party must "demonstrate its entitlement to summary judgment by submission of proof in admissible form" (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 507; see Zuckerman v City of New York, 49 NY2d 557, 562). Admissible evidence may include "affidavits by persons having knowledge of the facts [and] reciting the material facts" (GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965, 967; see CPLR 3212[b]; Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 508). "Once a prima facie showing has been made, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action'" (Rosenblatt v St. George Health & Racquetball Assoc., LLC, 119 AD3d 45, 50, quoting Alvarez v Prospect Hosp., 68 NY2d at 324).

"In determining a motion for summary judgment, the court must view the evidence in the light most favorable to the nonmoving party" (Stukas v Streiter, 83 AD3d 18, 22; see Pearson v Dix McBride, LLC, 63 AD3d 895). "The function of the court on a motion for summary judgment is not to resolve issues of fact or determine matters of credibility, but merely to determine whether such issues exist" (Kolivas v Kirchoff, 14 AD3d 493, 493; see Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404; Stukas v Streiter, 83 AD3d at 23). Accordingly, "[t]he court may not weigh the credibility of the affiants on a motion for summary judgment unless it clearly appears that the issues are not genuine, but feigned" (Glick & Dolleck v Tri-Pac Export Corp., 22 NY2d 439, 441; see 6243 Jericho Realty Corp. v AutoZone, Inc., 27 AD3d 447, 449). "[W]here credibility determinations are required, summary judgment must be denied" (People v Greenberg, 95 AD3d 474, 483, affd 21 NY3d 439; see Pryor & Mandelup, LLP v Sabbeth, 82 AD3d 731, 732; Campbell v Campbell, 43 AD3d 1264, 1266).
In addition, " [a] motion for summary judgment will not be granted if it depends on proof that would be inadmissible at the trial under some exclusionary rule of evidence'" (Rosenblatt v St. George Health & Racquetball Assoc., LLC, 119 AD3d at 52, quoting David D. Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3212:18 at 27 [2005 ed]; see HSBC Mtge. Servs., Inc. v Royal, 142 AD3d 952, 954; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 652; US Bank N.A. v Madero, 125 AD3d 757, 758). "Out-of-court statements offered for the truth of the matters they assert are hearsay and may be received in evidence only if they fall within one of the recognized exceptions to the hearsay rule, and then only if the proponent demonstrates that the evidence is reliable" (Nucci v Proper, 95 NY2d 597, 602 [internal quotation marks omitted]; see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 508).
However, as a general matter, a court should not examine the admissibility of evidence submitted in support of a motion for summary judgment unless the nonmoving party has specifically raised that issue in its opposition to the motion (see Rosenblatt v St. George Health & Racquetball Assoc., LLC, 119 AD3d at 55), for "[w]e are not in the business of blindsiding litigants, who expect us to decide their appeals on rationales advanced by the parties, not arguments their adversaries never made" (Misicki v Caradonna, 12 NY3d 511, 519). Indeed "in civil cases, inadmissible hearsay admitted without objection may be considered and given such probative value as, under the circumstances, it may possess'" (Rosenblatt v St. George Health & Racquetball Assoc., LLC, 119 AD3d 54-55, quoting Jerome Prince, Richardson on Evidence § 8-108 [Farrell 11th ed 2008]; see Matter of Findlay, 253 NY 1, 11; Ford v Snook, 205 App Div 194, 198, affd 240 NY 624).

B. Standing

In this case, Gordon contends that the Supreme Court should not have awarded the plaintiff summary judgment on the complaint insofar as asserted against him because, in his view, there are triable issues of fact as to whether the plaintiff has standing to maintain this action. This
contention is without merit.

"[W]here, as here, standing is not an essential element of the cause of action, under CPLR 3018(b) a defendant must affirmatively plead lack of standing as an affirmative defense in the answer in order to properly raise the issue in its responsive pleading" (US Bank N.A. v Nelson, ___ AD3d ___, ___, 2019 NY Slip Op 00494, *2-3 [2d Dept 2019]; see Matter of Fossella v Dinkins, 66 NY2d 162, 167; BAC Home Loans Servicing, LP v Alvarado, 168 AD3d 1029, 1030; see also Green Bus Lines v Consolidated Mut. Ins. Co., 74 AD2d 136, 142-143). Here, Gordon asserted standing as an affirmative defense in his answer. Accordingly, the issue of standing is properly before this Court (cf. US Bank N.A. v Nelson, ___ AD3d ___, 2019 NY Slip Op 00494).

Where the issue of standing is raised by a defendant in a mortgage foreclosure action, a plaintiff must prove its standing in order to be entitled to relief against that defendant (see HSBC Bank USA, N.A. v Roumiantseva, 130 AD3d 983, 983-984; HSBC Bank USA, N.A. v Calderon, 115 AD3d 708, 709; Bank of N.Y. v Silverberg, 86 AD3d 274, 279). "A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is either the holder or assignee of the underlying note at the time the action is commenced" (Wells Fargo Bank, N.A. v Gallagher, 137 AD3d 898, 899; see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 360-362). "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; see JPMorgan Chase Bank, N.A. v Weinberger, 142 AD3d 643, 644-645).

Here, the plaintiff established, prima facie, that it had standing to prosecute this action by demonstrating that it was in physical possession of the note, which had been endorsed in blank, at the time the action was commenced. In this regard, the plaintiff submitted the affidavit of its attorneys' employee, Kyra Schwartz, who stated that certain business records, which were maintained by her employer and attached to her affidavit, demonstrated that the plaintiff's attorneys were in possession of the original note endorsed in blank since August 19, 2011, a date which was prior to the commencement of this action (see Bank of Am., N.A. v Tobing, 163 AD3d 518, 519-520; U.S. Bank, N.A. v Cardenas, 160 AD3d 784, 785; PennyMac Corp. v Chavez, 144 AD3d 1006, 1007; M & T Bank v Cliffside Prop. Mgt., LLC, 137 AD3d 876, 877).

In opposition, Gordon failed to raise a triable issue of fact with respect to the issue of standing. Inasmuch as the mortgage "passes with the debt as an inseparable incident" (U.S. Bank,
N.A. v Collymore, 68 AD3d at 754; see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361), Gordon's arguments regarding the validity and timing of the mortgage assignment failed to raise a triable issue of fact in opposition (see Wells Fargo Bank, N.A. v Heiney, 168 AD3d 1126, 1127; Aurora Loan Servs., LLC v Vrionedes, 167 AD3d 829, 830; Flagstar Bank, FSB v Mendoza, 139 AD3d 898, 900).

Gordon further contends that Schwartz's affidavit was insufficient to lay a proper foundation for the admissibility of the business records that she attached to it. This contention is also without merit.
"Records made in the regular course of business are hearsay when offered for the truth of their contents" (Jerome Prince, Richardson on Evidence § 8-301 [Farrell 11th ed 1995]). "The statutory business records rule, now CPLR 4518(a), was originally enacted in 1928 to overcome the [*3]deficiencies of common law rules which severely hampered proof of many valid claims" (id.; see People v Kennedy, 68 NY2d 569, 578; Johnson v Lutz, 253 NY 124, 127-128).

The current version of the business records rule provides that

"[a]ny writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter" (CPLR 4518[a]).
An "electronic record . . . shall be admissible in a tangible exhibit that is a true and accurate representation of such electronic record" (id.). A court "may consider the method or manner by which the electronic record was stored, maintained or retrieved in determining whether the exhibit is a true and accurate representation of such electronic record" (id.). However, "[a]ll other circumstances of the making of the memorandum or record, including lack of personal knowledge by the maker, may be proved to affect its weight, but they shall not affect its admissibility" (id.; see People v Kangas, 28 NY3d 984, 985-986; cf. Fed Rules Evid rule 803[6]).

Accordingly, to establish a foundation for the admission of a business record, the proponent of the record must satisfy the requirements identified in the statute (see CPLR 4518[a]). First, the proponent must establish "that the record be made in the regular course of business—essentially, that it reflect a routine, regularly conducted business activity, and that it be needed and relied on in the performance of functions of the business" (People v Kennedy, 68 NY2d at 579). Second, the proponent must also demonstrate "that it be the regular course of such business to make the record . . . essentially, that the record be made pursuant to established procedures for the routine, habitual, systematic making of such a record" (id. at 579-580). Third, the proponent must establish "that the record be made at or about the time of the event being recorded—essentially, that recollection be fairly accurate and the habit or routine of making the entries assured" (id. at 580).

In addition to these statutory requirements, the Court of Appeals has held that "[u]nless some other hearsay exception is available, admission may only be granted where it is demonstrated that the informant has personal knowledge of the act, event or condition and he [or she] is under a business duty to report it to the entrant" (Matter of Leon RR, 48 NY2d 117, 123 [citation omitted]; see People v Patterson, 28 NY3d 544, 550; Johnson v Lutz, 253 NY at 127-128; Murray v Donlan, 77 AD2d 337, 346). That said, "[i]t would clearly defeat the utility of CPLR 4518 to require the testimony of all persons involved in creating the record" (Jerome Prince, Richardson on Evidence § 8-306 [Farrell 11th ed 1995]).

Finally, under the circumstances here, it bears noting that the business record exception to the hearsay rule applies to a "writing or record" (CPLR 4518[a]). Although "[t]he foundation for admission of a business record usually is provided by the testimony of the custodian, the author or some other witness familiar with the practices and procedures of the particular business" (Jerome Prince, Richardson on Evidence § 8-306 [Farrell 11th ed 1995]), it is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted (see generally Great Am. Ins. Co. v Auto Mkt. of Jamaica, N.Y., 133 AD3d 631, 632-633; 35 Carmody-Wait 2d § 194:94 [2019]; cf. 9 Weinstein-Korn-Miller, NY Civ Prac CPLR ¶ 4518.20). Accordingly, "[e]vidence of the contents of business records is admissible only where the records themselves are introduced" (35 Carmody-Wait 2d § 194:94 [2019]; see People v Barnes, 177 AD2d 989; see also People v Olivero, 27 Misc 3d 1218[A], 2010 NY Slip Op 50794[U] [Civ Ct, Kings County]; People v Ross, 12 Misc 3d 755, 764 [Crim Ct, Kings County 2006]). "Without their introduction, a witness's testimony as to the contents of the records is inadmissible hearsay" (35 Carmody-Wait 2d § 194:94 [2019]; see U.S. Bank Natl. Assn. v 22 S. Madison, LLC, ___ AD3d ___, ___, 2019 NY Slip Op 01635, *2 [2d Dept 2019]; People v Barnes, 177 AD2d 989). Of course, generally speaking, a witness may always testify as to matters which are within his or her personal knowledge through personal observation (see Jerome Prince, Richardson on Evidence §§ 4-301, 6-210 [Farrell 11th ed 1995]; see also People v Daddona, 81 NY2d 990, 992; Pease v Smith, 61 NY 477, 484-485; People v Duffy, 124 AD2d 258, 260; Levy v Huwer, 80 App Div 499, 501-502, affd 176 NY 612).

Here, Schwartz stated in her affidavit that she was employed by the law firm that represented the plaintiff in this action. Schwartz stated that she was "employed as the manager of a group of employees . . . that is responsible for receiving original loan documents from the firm's clients [and] documenting the receipt of [those] original loan documents." She stated that, when a client forwards a file containing original loan documents, "[her] staff makes a computer entry . . . confirming [their] receipt." These entries were made "at or about the time of the receipt of the original loan documents," and the records of such events were "created and maintained in the ordinary course of [the] business" of the plaintiff's attorneys. Finally, Schwartz stated that "[i]t was the normal course of [the firm's] business to store these records as computer entries."

Schwartz further stated that she reviewed the firm's business records relative to this case, which records showed that the original note was received on August 19, 2011. Attached to Schwartz's affidavit was "a true and accurate printout [she] made of the computer entry confirming the receipt . . . of the original note." Schwartz also attached a copy of the original note to her affidavit, and affirmed that she had compared this copy "to the original note which remains in storage under the custody of [her] team" and that the copy was "a true and accurate copy of the original note."
Contrary to Gordon's contention, Schwartz did not need to demonstrate her familiarity with the record-keeping practices and procedures of the plaintiff, the original lender, Countrywide Home Loans, Inc. (hereinafter Countrywide), or MERS, in order to lay a proper foundation for the admission of the business record attached to her affidavit. Schwartz sought to lay a foundation for the admission of a business record maintained by her employer, the plaintiff's attorneys. She did not seek to lay a foundation for business records produced or maintained by any of the other entities identified by Gordon. As this Court has previously observed, "[t]here is no requirement that a plaintiff in a foreclosure action rely on any particular set of business records to establish a prima facie case, so long as the plaintiff satisfies the admissibility requirements of CPLR 4518(a), and the records themselves actually evince the facts for which they are relied upon" (Citigroup v Kopelowitz, 147 AD3d 1014, 1015; see HSBC Bank USA, N.A. v Ozcan, 154 AD3d 822, 826). Accordingly, under the circumstances, since Schwartz only sought to lay a foundation for a business record produced and maintained by her own employer, she was only required to set forth her familiarity with her employer's record-keeping practices and procedures (see generally CPLR 4518[a]; People v Kennedy, 68 NY2d at 579-580; cf. Aurora Loan Servs., LLC v Baritz, 144 AD3d 618; US Bank N.A. v Handler, 140 AD3d 948; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650).

Gordon's remaining arguments relating to the issue of standing are either improperly raised for the first time on appeal or without merit. Accordingly, since Gordon failed to raise a triable issue of fact with respect to the issue of standing in opposition to the plaintiff's prima facie showing, we agree with the Supreme Court's determination to grant those branches of the plaintiff's motion which were for summary judgment dismissing the affirmative defenses that raised the issue of standing, to wit, the 1st, 2nd, 3rd, 4th, 5th, 14th, 15th, 26th, 27th, and 36th affirmative defenses (see Aurora Loan Servs., LLC v Vrionedes, 167 AD3d at 830; cf. US Bank N.A. v Weinman, 123 AD3d 1108, 1109-1110).

C. Default

Although vague and inartfully drafted, Gordon's brief, liberally construed, in effect, contends that the Supreme Court should not have awarded the plaintiff summary judgment on the complaint insofar as asserted against him and dismissing the 20th affirmative defense because, in his view, the plaintiff failed to sustain its initial burden of demonstrating that he defaulted in the repayment of the subject note. This contention has merit.

To establish a prima facie case in an action to foreclose a mortgage, a plaintiff must produce the mortgage, the unpaid note, and evidence of default (see Aurora Loan Servs., LLC v Vrionedes, 167 AD3d at 830; Giller v Weiss, 140 AD3d 1117, 1118; HSBC Bank USA, N.A. v Spitzer, 131 AD3d 1206, 1206-1207). A plaintiff may establish a payment default by an admission made in response to a notice to admit (see CPLR 3212[b]; 3123), by an affidavit from "a person having [personal] knowledge of the facts" (CPLR 3212[b]), or by other evidence "in admissible form" (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 507). Here, as Gordon correctly contends, the plaintiff's submissions failed to lay a proper foundation for the admission of the business records relied upon by the plaintiff to establish Gordon's default in the repayment of the subject loan.
The plaintiff relied upon the affidavit of Rosalind Carroll to lay a foundation for the [*4]admission of business records purporting to show that Gordon had defaulted under the terms of the subject note by failing to make required monthly payments. Carroll stated that she was a "document coordinator" for an entity named "Bayview Loan Servicing, LLC" (hereinafter Bayview), which was identified by Carroll as a "servicer for the plaintiff." Carroll went on to state: "According to the business records I have reviewed, [Gordon] defaulted on the loan by failing to make monthly payments due on May 1, 2008 and continuing to the present."

Although Carroll adequately described the record-keeping practices and procedures utilized by Bayview, and adequately stated her familiarity with those practices, she did not actually attach or otherwise incorporate any of Bayview's business records to her affidavit. Accordingly, to the extent that Carroll's purported knowledge of Gordon's default was based upon her review of unidentified business records created and maintained by Bayview, her affidavit constituted inadmissible hearsay and lacked probative value (see Flick Lbr. Co. v Breton Indus., 223 AD2d 779, 780; People v Barnes, 177 AD2d 989; Dempsey v Intercontinental Hotel Corp., 126 AD2d 477, 479; see also 35 Carmody-Wait 2d § 194:94 [2019]).

The only purported business record specifically identified by Carroll as demonstrating Gordon's default is a document dated June 16, 2008. The record indicates that this document was annexed to Carroll's affidavit. However, Carroll does not specifically allege that Bayview created the document. Furthermore, the document, on its face, indicates that it was created by Countrywide, the original lender, and Carroll does not allege that she is personally familiar with that entity's record-keeping practices and procedures. As previously noted, "[a] proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker's business practices and procedures" (Citibank, N.A. v Cabrera, 130 AD3d 861, 861 [emphasis added]).

Of course, Carroll's status as an employee of Bayview does not necessarily mean that she is incompetent to lay a foundation for the admission of business records that were created by another entity (see People v Cratsley, 86 NY2d 81, 90). It is true that as a general rule, "the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records" (Standard Textile Co. v National Equip. Rental, 80 AD2d 911, 911; see People v Cratsley, 86 NY2d at 90). However, such records may be admitted into evidence if the recipient can establish personal knowledge of the maker's business practices and procedures, or establish that the records provided by the maker were incorporated into the recipient's own records and routinely relied upon by the recipient in its own business (see People v Cratsley, 86 NY2d at 90-91; Bank of Am., N.A. v Brannon, 156 AD3d 1, 8; State of New York v 158th St. & Riverside Dr. Hous. Co., Inc., 100 AD3d 1293, 1296; People v DiSalvo, 284 AD2d 547, 548-549; Plymouth Rock Fuel Corp. v Leucadia, Inc., 117 AD2d 727, 728; cf. United States v Jakobetz, 955 F2d 786, 800 [2d Cir]; Matter of Ollag Constr. Equip. Corp., 665 F2d 43, 46 [2d Cir]). Indeed, "[t]he reports of an independent contractor regularly relied on by the business may qualify as the business' record" (Jerome Prince, Richardson on Evidence § 8-307 [Farrell 11th ed 1995]; cf. General Ins. Co. of Am. v United States Fire Ins. Co., 886 F3d 346, 358 [4th Cir]; Cocroft v HSBC Bank USA, N.A., 796 F3d 680 [7th Cir]).

Here, however, Carroll failed to attest to her personal knowledge of Countrywide's record-keeping practices, and failed to allege that the document that she attached to her affidavit was incorporated into Bayview's records and routinely relied upon by Bayview in its business. Accordingly, under the circumstances, Carroll's affidavit was insufficient to lay a proper foundation for the admission of the document dated June 16, 2008 (see e.g. Aurora Loan Servs., LLC v Baritz, 144 AD3d at 619-620; HSBC Mtge. Servs., Inc. v Royal, 142 AD3d at 954; Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; Citibank, N.A. v Cabrera, 130 AD3d at 861-862).

Moreover, as Gordon correctly contends, certain factual assertions made by Carroll in her affidavit which are relevant to the issue of Gordon's default are directly contradicted by the documents that she attached to her affidavit. Other factual assertions made by Carroll in her affidavit are contradicted by other portions of her own affidavit. These contradictions raise issues of credibility (see e.g. Taieb v Hilton Hotels Corp., 131 AD2d 257, 261), and, as such, Carroll's affidavit failed to eliminate all triable issues of fact with respect to the issue of Gordon's default (see Cristescu v Gasparis, 148 AD3d 669; see generally Pryor & Mandelup, LLP v Sabbeth, 82 AD3d at 732).

We note that the plaintiff did actually submit payment records relating to Gordon's mortgage in support of its motion. However, these payment records were not attached to, or [*5]otherwise incorporated into, Carroll's affidavit, and she did not identify these records or make specific reference to them. Rather, the plaintiff inexplicably attached these payment records as an exhibit to its attorney's affirmation. The plaintiff's attorney does not allege personal knowledge of the record-keeping practices and procedures of the entity that created these payment records (see generally Zuckerman v City of New York, 49 NY2d at 563). Since the plaintiff failed to lay the proper foundation for the admission of the payment records into evidence, those records do not constitute admissible evidence and cannot serve to establish, prima facie, Gordon's default in the repayment of the subject loan (see generally Mallen v Farmingdale Lanes, LLC, 89 AD3d 996, 997; Roldan v New York Univ., 81 AD3d 625, 627; Toussaint v Ferrara Bros. Cement Mixer, 33 AD3d 991, 992; Daliendo v Johnson, 147 AD2d 312, 321).

In sum, since the plaintiff failed to establish, prima facie, Gordon's default in the repayment of the subject loan through the submission of evidence in admissible form, the Supreme Court should have denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against Gordon and dismissing the 20th affirmative defense asserted by that defendant, and to appoint a referee to compute the amount due (see Fulton Holding Group, LLC v Lindoff, 165 AD3d 1045, 1047-1048; HSBC Mtge. Servs., Inc. v Royal, 142 AD3d at 954).
D. Gordon's Remaining Contentions
Addressing the remaining affirmative defenses asserted in his answer, Gordon contends that they should not have been dismissed by the Supreme Court, sua sponte. Contrary to Gordon's contention, the court did not "sua sponte" strike Gordon's answer and counterclaims. Rather, this relief was specifically requested in the plaintiff's motion papers.

Further, we agree with the Supreme Court's determination to deny those branches of Gordon's cross motion which were pursuant to CPLR 3211 and 3212 to dismiss the complaint insofar as asserted against him, as he failed to demonstrate his entitlement to such relief. Gordon argues that the plaintiff's general denials of the allegations underlying his counterclaims constituted judicial admissions that prove fatal to the plaintiff's complaint. Formal judicial admissions include facts that are "admitted" by a party's pleadings (Zegarowicz v Ripatti, 77 AD3d 650, 653). To constitute a judicial admission, a statement must be "deliberate, clear, and unequivocal" (Rahman v Smith, 40 AD3d 613, 615). The plaintiff's general denials do not meet these criteria.

Gordon also contends that the Supreme Court should not have, in effect, denied that branch of his cross motion which was for leave to enter a default judgment on his cross claims asserted against MERS. To be entitled to such relief, Gordon was required to demonstrate, inter alia, "proof of service" of the cross claims on MERS (CPLR 3215[f]). Although Gordon's counsel affirmed that proof of service of the answer with cross claims upon MERS had been submitted in connection with Gordon's cross motion, the record on appeal does not support this assertion. Since Gordon failed to submit proof of service of process on MERS, he failed to satisfy the requirements for demonstrating his entitlement to leave to enter a default judgment on his cross claims asserted against that defendant (see generally Stevens v Law Off. of Blank & Star, PLLC, 155 AD3d 917, 918).

3. Conclusion

In light of the foregoing, we modify the order appealed from, insofar as described below. Inasmuch as the Supreme Court's denial of that branch of Gordon's cross motion which was to compel disclosure, in effect, pursuant to CPLR 3124 appears to have been premised on its granting of that branch of the plaintiff's motion which was for summary judgment on the complaint insofar as asserted against Gordon, we remit the matter to that court for a new determination of the branch of the defendant's cross motion which was to compel discovery (see Bank of N.Y. Mellon v Cutler, 154 AD3d 910, 912).

Accordingly, the order is modified, on the law, (1) by deleting the provisions thereof granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Dushaun Gordon and dismissing the 20th affirmative defense asserted by that defendant, and to appoint a referee to compute the amount due, and substituting therefor a provision denying those branches of the plaintiff's motion, and (2) by deleting the provision thereof, in effect, denying that branch of the cross motion of the defendant Dushaun Gordon which was to compel disclosure, in effect, pursuant to CPLR 3124; as so modified, the order is affirmed insofar as appealed from, and the matter is remitted to the Supreme Court, Nassau County, for a new determination of that branch of the cross motion of the defendant Dushaun [*6]Gordon which was to compel disclosure, in effect, pursuant to CPLR 3124."

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)."

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)."

HEARSAY AND MORTGAGE FORECLOSURE SUMMARY JUDGMENT

Bank of N.Y. Mellon v Cutler, 2017 NY Slip Op 07424, Decided on October 25, 2017, Appellate Division, Second Department:

"The plaintiff commenced this mortgage foreclosure action following the default of the defendants Gregg E. Cutler and Mirela S. Cutler, also known as Mirela Cutler (hereinafter together the defendants), on a note executed by them in the principal amount of $372,000 and issued in favor of Countrywide Home Loans, Inc., the plaintiff's predecessor in interest. The defendants asserted, inter alia, the defense of lack of standing in their answer. The parties engaged in pretrial disclosure, and the plaintiff subsequently moved, among other things, for summary judgment on the complaint insofar as asserted against the defendants and for the appointment of a referee to facilitate the sale of the property mortgaged by the defendants as security for the debt. The defendants [*2]opposed the motion, inter alia, on the ground that the plaintiff lacked standing to maintain the action, and cross-moved to compel further discovery. The Supreme Court granted those branches of the plaintiff's motion and, apparently in light of that determination, denied the defendants' cross motion. The defendants appeal.

Where, as here, a plaintiff's standing to commence a foreclosure action is placed in issue by the defendant, it is incumbent upon the plaintiff to prove its standing to be entitled to relief (see Bank of N.Y. v Willis, 150 AD3d 652, 652; Citimortgage, Inc. v Klein, 140 AD3d 913, 914; Bank of N.Y. Mellon v Visconti, 136 AD3d 950, 950). A plaintiff has standing in a mortgage foreclosure action 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 355, 361; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 207-209; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 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" (U.S. Bank, N.A. v Collymore, 68 AD3d at 754; see Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361-362).

Here, the plaintiff attempted to establish its standing by submitting the affidavit of Katherine Cacho, a vice president at Bank of America, N.A., which serviced the defendants' loan on behalf of the plaintiff. Cacho averred, in relevant part, that her affidavit was based upon her review of unspecified records indicating that the note was physically transferred to the plaintiff on August 16, 2007. The plaintiff failed to demonstrate that the records relied upon by Cacho were admissible under the business records exception to the hearsay rule (see CPLR 4518[a]) because Cacho did not attest that she was personally familiar with the plaintiff's record-keeping practices and procedures (see Bank of N.Y. v Willis, 150 AD3d at 652; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849; Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 685; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 652).

Since the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law on the issue of standing, we need not consider the sufficiency of the defendants' opposition papers (see Alvarez v Prospect Hosp., 68 NY2d 320, 324).

Inasmuch as the Supreme Court's denial of the defendants' cross motion to compel further discovery appears to have been premised on its granting of the plaintiff's motion for summary judgment, we remit the matter to that court for a new determination of the cross motion."

MORTGAGE FORECLOSURE - BANKS STILL NEED EVIDENCE

AURORA LOAN SERVS., LLC v. BARITZ, 2016 NY Slip Op 7154 - NY: Appellate Div., 2nd Dept. 2016:

" On May 27, 2005, the defendant Steven Baritz executed a note in the amount of $960,000 in favor of GreenPoint Mortgage Funding, Inc. (hereinafter GreenPoint). On the same date, to secure repayment of the note, Baritz executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), acting solely as nominee for GreenPoint, on property he owned in Lake Grove. Thereafter, the mortgage was assigned to the plaintiff. In April 2009, the plaintiff commenced this action to foreclose the mortgage, alleging that Baritz defaulted on his loan payments. Baritz answered the complaint and asserted as an affirmative defense that the plaintiff did not have standing to commence the action. The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against Baritz and for an order of reference. Baritz cross moved, inter alia, for leave to amend his answer to assert certain counterclaims. The Supreme Court granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against Baritz and for an order of reference, and denied Baritz's cross motion. Baritz appeals.

Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case by producing the mortgage and the unpaid note, and evidence of the default (see Wells Fargo Bank, N.A. v Morgan, 139 AD3d 1046, 1048; Flagstar Bank, FSB v Mendoza, 139 AD3d 898, 899; LaSalle Bank, N.A. v Zaks, 138 AD3d 788). Where, as here, the plaintiff's standing has been placed in issue by the defendant's answer, the plaintiff must also prove its standing as part of its prima facie showing (see Flagstar Bank, FSB v Mendoza, 139 AD3d at 899; LaSalle Bank, N.A. v Zaks, 138 AD3d at 788; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 651). In a foreclosure action, a plaintiff has standing if 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 355, 361-362; One W. Bank, FSB v Albanese, 139 AD3d 831, 832; Aurora Loan Servs., LLC v Mercius, 138 AD3d at 651). A plaintiff may demonstrate that it is the holder or assignee of the underlying note by showing either a written assignment or physical delivery of the note (see Aurora Loan Servs., LLC v Mercius, 138 AD3d at 651).

Here, the plaintiff failed to meet its prima facie burden to establish its standing. In support of its motion, the plaintiff relied on the affidavit of Jaclyn Holloway, an assistant secretary of Nationstar Mortgage, LLC (hereinafter Nationstar). Holloway alleged that, after the action was commenced, the plaintiff delivered the note to NationStar. She alleged that, "pursuant to the business records of [the plaintiff]," the plaintiff had physical possession of the note when it commenced the action. However, the plaintiff failed to demonstrate the admissibility of the records relied upon by Holloway under the business records exception to the hearsay rule (see CPLR 4518[a]) since Holloway did not attest that she was personally familiar with the record-keeping practices and procedures of the plaintiff (see U.S. Bank N.A. v Handler, 140 AD3d 948, 949; Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; Citibank, N.A. v Cabrera, 130 AD3d 861). Consequently, Holloway's allegations based on those records were inadmissible (see Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; US Bank N.A. v Madero, 125 AD3d 757, 758), and, therefore, insufficient to meet the plaintiff's prima facie burden to establish its standing (see Zuckerman v City of New York, 49 NY2d 557, 562; U.S. Bank N.A. v Handler, 140 AD3d at 949; Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; Citibank, N.A. v Cabrera, 130 AD3d at 861; US Bank N.A. v Madero, 125 AD3d at 758).

The plaintiff could not rely on the affidavit of its vice president to meet its prima facie burden since the affidavit was improperly submitted for the first time in its reply papers (see HSBC Bank USA, N.A. v Roumiantseva, 130 AD3d 983, 985; Arriola v City of New York, 128 AD3d 747, 749; Poole v MCPJF, 127 AD3d 949, 949-950; DiLapi v Saw Mill Riv., LLC, 122 AD3d 896, 900). Additionally, although the plaintiff submitted evidence that MERS, as nominee for GreenPoint, assigned the mortgage and note to the plaintiff before the action was commenced, the plaintiff failed to establish delivery or assignment of the note to MERS prior to its execution of the assignment (see Aurora Loan Servs., LLC v Mercius, 138 AD3d at 652; HSBC Bank USA, N.A. v Roumiantseva, 130 AD3d at 984; Midland Mtge. Co. v Imtiaz, 110 AD3d 773, 775; Deutsche Bank Natl. Trust Co. v Haller, 100 AD3d 680, 683). 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 Baritz and for an order of reference, without regard to the sufficiency of Baritz's opposition papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).