HSBC Bank U.S. v. Ji Youn Min

1

2023 NY Slip Op 31749(U)

HSBC BANK USA, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE HOLDERS OF DEUTSCHE ALT-A SECURITIES INC. MORTGAGE LOAN TRUST, MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2007-OA4, Plaintiff, v. JI YOUN MIN, YOOMI MIN, SUNG JIN MIN, NEW YORK SUPREME COURT, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, INTERNAL REVENUE SERVICE, THE BOARD OF MANAGERS OF 200 CHAMBERS STREET CONDOMINIUM, NATIONAL CITY BANK, AND JOHN DOE AND MARY DOE, (SAID NAMES BEING FICTITIOUS, IT BEING THE INTENTION OF PLAINTIFF TO DESIGNATE ANY AND ALL OCCUPANTS, TENANTS, PERSONS OR CORPORATIONS, IF ANY, HAVING OR CLAIMING AN INTEREST IN OR LIEN UPON THE PREMISES BEING FORECLOSED HEREIN) Defendant.

Index No. 850245/2019, Motion Seq. No. 001

Supreme Court, New York County

May 19, 2023

Unpublished Opinion

PRESENT: HON. FRANCIS A. KAHN, III PART JUSTICE

DECISION + ORDER ON MOTION

FRANCIS A. KAHN III JUDGE

The following e-filed documents, listed by NYSCEF document number (Motion 001) 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44 45, 46, 47, 48, 49, 50, 51, 53, 54, 55, 56, 57, 58, 59, 60 61, 62, 63, 64 were read on this motion to/for JUDGMENT-SUMMARY.

Upon the foregoing documents, the motion and cross-motion are determined as follows:

The within action is to foreclose on a mortgage encumbering a parcel of residential real property located at 200 Chambers Street, Unit 7K, New York, New York. The mortgage, given by Defendant Ji Youn Min ("Min"), secures a loan with an original principal amount of $688,000.00 which is memorialized by a note dated April 10, 2007. Plaintiff commenced this action alleging Defendant Mindefaulted in making installment payments under the note. Defendant Min answered and pled fifteen affirmative defenses, including lack of standing, failure to provide a pre-foreclosure notice pursuant to the mortgage and failure to comply with RPAPL §1304.

Now, Plaintiff moves for summary judgment against Defendant Min, striking the answer and affirmative defenses, a default judgment against all non-appearing parties, to appoint a Referee to compute and to amend the caption. Defendant Min opposes the motion and cross-moves to dismiss pursuant to RPAPL §1304. Plaintiff opposes the cross-motion.

In moving for summary judgment, Plaintiff was required to establish prima facie entitlement to judgment as a matter of law though proof of the mortgage, the note, and evidence of Defendants' default in repayment (see U.S. Bank, N.A. v James, 180 A.D.3d 594 [1^st Dept 2020]; Bank of NY v Knowles, 151 A.D.3d 596 [1^st Dept 2017]; Fortress Credit Corp. v Hudson Yards, LLC, 78 A.D.3d 577 [1^st Dept 2010]). Proof supporting a. prima facie case on a motion for summary judgment must be in admissible form (see CPLR §3212[b]; Tri-State Loan Acquisitions III, LLC v Litkowski, 172 A.D.3d 780 [1^st Dept 2019]). Since Defendant Min raised in the answer lack of standing, failure to serve an RPAPL §1304 notice and lack of a contractual pre-foreclosure notice, Plaintiff was required to demonstrate, prima facie, its standing (see eg Wells Fargo Bank, N.A. v Tricario, 180 A.D.3d 848 [2^nd Dept 2020]), its substantial j compliance with the requisites under paragraph 22 of the mortgage (see eg Wells Fargo Bank, N.A. v McKenzie, 186 A.D.3d 1582, 1584 [2d Dept 2020]) as well as its strict compliance with RPAPL §1304 (see U.S. Bank, NA v Nathan, 173 A.D.3d 1112 [2d Dept 2019]; HSBC Bank USA, N.A. v Bermudez, 175 A.D.3d 667, 669 [2d Dept 2019]).

In support of a motion for summary judgment on a cause of action for foreclosure, a plaintiff may rely on evidence from persons with personal knowledge of the facts, documents in admissible form and/or persons with knowledge derived from produced admissible records (see eg U.S. Bank N.A. v Moulton, 179 A.D.3d 734, 738 [2d Dept 2020]). No particular set of business records must be proffered, as long as the admissibility requirements of CPLR 4518 [a] are fulfilled and the records evince the facts for which they are relied upon (see eg Citigroup v Kopelowitz, 147 A.D.3d 1014, 1015 [2d Dept 2017]).

Plaintiffs motion was supported with an affidavit from Nicholad J. Raab ("Raab"), an Assistant Vice President of Select Portfolio Servicing, Inc. ("SPS"), the alleged servicing agent and attorney-in-fact for Plaintiff. Raab's affidavit laid a proper foundation for the admission of the records of Plaintiff and SPS into evidence under CPLR §4518 (see Bank of NY. Mellon v Gordon, 171 A.D.3d 197 [2d Dept 2019]). Further, annexed to the motion were records referenced by Raab (cf Deutsche Bank Natl. Trust Co. v Kirschenbaum, 187 A.D.3d 569 [1^st Dept 2020]) as well as a power of attorney, dated January 19, 2017, demonstrating the authority of SPS to act on behalf of Plaintiff (see Deutsche Bank Natl. Trust Co. v Silverman, 178 A.D.3d 898, 901 [2d Dept 2019]).

Raab's affidavit and the referenced documents sufficiently evidenced the note and mortgage. As to the Mortgagor's default, it "is established by (1) an admission made in response to a notice to admit, (2) an affidavit from a person having personal knowledge of the facts, or (3) other evidence in admissible form" (Deutsche Bank Natl. Trust Co. v McGann, 183 A.D.3d 700, 702 [2d Dept 2020]). Here, Raab's review of the attached account records demonstrated that the Mortgagor defaulted in repayment under the note (see eg ING Real Estate Fin. (USA) LLC v Park Ave. Hotel Acquisition, LLC, 89 A.D.3d 506 [1^st Dept 2011]).

As to standing in a foreclosure action, the note is the dispositive instrument (Aurora Loan Servs., LLC v Taylor, 25 N.Y.3d 355, 361-362 [2015]). '"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 Carnivale, 138 A.D.3d 1220, 1221 [2d Dept 2016], quoting Onewest Bank, F.S.B v Mazzone 130 A.D.3d 1399, 1400 [2d Dept 2015]). However, "mere physical possession of a note at the commencement of a foreclosure action is insufficient to confer standing or to make a plaintiff the lawful holder of a negotiable instrument for the purposes of enforcing the note" (U.S. Bank N. A. v Moulton, 179 A.D.3d 734, 737 [2d Dept 2020]). "Holder status is established where the plaintiff possesses a note that, on its face or by allonge, contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff (Wells Fargo Bank, NA v Ostiguy, 127 A.D.3d 1375, 1376 [2d Dept 2015] [citations omitted]). The indorsement must be made either on the face of the note or on an allonge "so firmly affixed thereto as to become a part thereof (UCC §3-202[2]). "The attachment of a properly endorsed note to the complaint may be sufficient to establish, prima facie, that the plaintiff is the holder of the note at the time of commencement" (Deutsche Bank Natl. Trust Co. v Webster, 142 A.D.3d 636, 638 [2d Dept 2016]; cf. JPMorgan Chase Bank, N.A. v Grennan, supra).

In this case, Plaintiff annexed a copy of the note to the complaint which contained two I endorsements on its face. One endorsement transfers the note from Countrywide Bank, NA to Countrywide Home Loans, Inc. The other endorsement is in blank and is executed by Countrywide Home Loans, Inc. This is sufficient to demonstrate that Plaintiff was the holder of the note when the I action was commenced (see Bank of NY v Knowles, supra at 597; cf. U.S. Bank N.A. v. Rozo-Castellanos, 201 A.D.3d 995, 999 [2d Dept 2022]). '

Plaintiff was required to proffer "sufficient evidence demonstrating the absence of material issues as to its strict compliance with RPAPL 1304" (Aurora Loan Servs., LLC v Weisblum, 85 A.D.3d 95, 106 [2d Dept 2011]). As to the contractual pre-foreclosure notice, paragraph 22 of the mortgage, a ubiquitous provision in residential mortgages, provides that as a prior to acceleration of the note, the lender must send a notice containing the information specified in paragraph 22[b][l] - [6] in the manner described in paragraph 15 of the mortgage. That section provides that all notices must be in writing and "is considered given to [Mortgagor] when mailed by first class mail or when actually delivered to my notice address if sent by other means ... The notice address is the address of the Property unless I give notice to Lender of a different address". Paragraph 8 of the note also states that required notices will be given by delivering it... at the Property Address above or at a different address if I give the Note Holder a notice of my different address". That section also provides that "any notice that must be given to the Note Holder under this Note will be given by delivering it or by mailing it... to the Note Holder at the address stated in Section 3(A)".

The Court of Appeals has "has long recognized a party can establish that a notice or other document was sent through evidence of actual mailing or-as relevant here-by proof of a sender's routine business practice with respect to the creation, addressing, and mailing of documents of that nature" (Cit Bank N.A. v Schiffman, 36 N.Y.3d 550, 556 [2020][internal citations omitted]). A satisfactory office practice giving rise to the presumption "must be geared so as to ensure the likelihood that [the] notice is always properly addressed and mailed" (Nassau Ins. Co. v Murray, 46 N.Y.2d 828, 830 [1978]) and can be demonstrated via an affiant who explains "among other things, how the notices and envelopes were generated, posted and sealed, as well as how the mail was transmitted to the postal service" (Cit Bank N.A. v Schiffman, supra)...