LPP Mortg. v. Simeon

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2023 NY Slip Op 32113(U)

LPP MORTGAGE LTD., Plaintiff, v. FLORENCE SIMEON, BOARD OF MANAGERS OF RIVERSIDE SOUTH PROPERTY OWNERS ASSOCIATION, INC., BOARD OF MANAGERS OF 200 RIVERSIDE BOULEVARD AT TRUMP PLACE, JOVIA FINANCIAL CREDIT UNION F/K/A NASSAU EDUCATORS FEDERAL CREDIT UNION, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, JOHN DOE Defendant.

Index No. 850137/2020, Motion Seq. No. 001

Supreme Court, New York County

June 23, 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Unpublished Opinion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) 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 65, 66, 67, 68 69, 70 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 200 Riverside Boulevard, Unit 14A, New York, New York. The consolidated mortgage, dated June 11, 2003, was given by Defendant Florence Simeon ("Simeon") to non-party Morgan Stanley Dean Witter Credit Corporation and secures a loan with an original principal amount of $821,972.61. The loan is memorialized by an adjustable-rate consolidated note of the same date. Also executed that date was a modification and extension agreement These documents consolidated two prior sets of notes and mortgages on the same property dated September 14, 2000, and January 4, 2002.

Plaintiff commenced this action and alleged that Simeon defaulted in repayment of the indebtedness on or about February 1, 2019. A conference pursuant to CPLR §3408 was initially scheduled for August 10, 2021. Simeon appeared at one of the conferences by counsel, but she failed to appear at the final two conferences. Simeon also failed to file an answer in accordance with a Court set deadline (NYSCEF Doc No 34). Simeon filed a late answer on July 20, 2022, which Plaintiff rejected (CPLR §3408[m]). In that answer, Simeon pled nineteen [19] affirmative defenses, including lack of standing, failure to provide a contractual pre-foreclosure notice and failure to comply with RPAPL §§1303, 1304 and 1306.

Now, Plaintiff moves for summary judgment against Defendant Simeon, notwithstanding her default, striking the answer and affirmative defenses, a default judgment against all non-appearing parties, and to appoint a Referee to compute. Defendant Simeon opposes the 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 [1st Dept 2020]; Bank of NY v Knowles, 151 A.D.3d 596 [1st Dept 2017]; Fortress Credit Corp. v Hudson Yards, LLC, 78 A.D.3d 577 [1st 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 [1st Dept 2019]). Since Defendant pled 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 [2nd Dept 2020]), its substantial 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 §§1303, 1304 and 1306 (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 Juliana Thurab ("Thurab"), a Contract Management Coordinator of PHH Mortgage Corporation. ("PHH"), Plaintiffs servicer. Thurab's affidavit laid a proper foundation for the admission of the records of PHH into evidence under CPLR §4518 (see Bank of N.Y.Mellon v Gordon, 171 A.D.3d 197 [2d Dept 2019]). The records of other entities were also admissible since Thurab sufficiently established that those records were received from the makers and incorporated into the records PHH kept and that it routinely relied upon such documents in its business (see U.S. Bank N.A. v Kropp-Somoza, 191 A.D.3d 918 [2d Dept 2021]). Further, annexed to the motion were records referenced by Thurab (cf Deutsche Bank Natl. Trust Co. v Kirschenbaum, 187 A.D.3d 569 [1st Dept 2020]) as well as a power of attorney, dated November 1, 2022, demonstrating the authority of PHH to act on behalf of Plaintiff (see Deutsche Bank Natl. Trust Co. v Silverman, 178 A.D.3d 898, 901 [2d Dept 2019]).

Thurab'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, Thurab'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 [1st 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 Camivale, 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 to which an allonge was attached. That document contained an endorsement executed by the original lender to Plaintiff. Thurab averred in her affidavit that the allonge was firmly affixed to the note when the action was filed. The proffered evidence was sufficient to demonstrate Plaintiffs standing (see Nationstar Mtge, LLC v Calomarde, 201 A.D.3d 940 [2d Dept 2022]).

Plaintiff was also 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 [mortgagor] under this Note will be given by delivering it or by mailing it... to [mortgagor] at the Property Address above".

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 Schijfman, 36 N.Y.3d 550, 556 [2020][internal citations omitted]). A...