Wells Fargo Bank, N.A. v. Farfan

203 A.D.3d 1107

166 N.Y.S.3d 31

WELLS FARGO BANK, N.A., etc., respondent,

v.Napoleon FARFAN, appellant, et al., defendants.

2019–01439

Index No. 26470/07

Supreme Court, Appellate Division, Second Department, New York.

Argued—January 3, 2022

March 23, 2022

Stephen A. Katz, New York, NY, for appellant.

Gross Polowy, LLC (Reed Smith, LLP, New York, NY [Brenda Beauchamp Ward, Andrew B. Messite, and James N. Faller ], of counsel), for respondent.

MARK C. DILLON, J.P., ROBERT J. MILLER, LARA J. GENOVESI, DEBORAH A. DOWLING, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Napoleon Farfan appeals from an order and judgment of foreclosure and sale (one paper) of the Supreme Court, Queens County (Janice A. Taylor, J.), entered August 31, 2020. The order and judgment of foreclosure and sale, upon an order of the same court dated November 21, 2018, granting those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against that defendant and dismissing his counterclaims, to strike his answer, and for an order of reference, inter alia, granted the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, confirmed the referee's report, and directed the sale of the subject property.

ORDERED that the order and judgment of foreclosure and sale is reversed, on the law, with costs, those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Napoleon Farfan, to strike his answer, and for an order of reference are denied, the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale is denied, and the order dated November 21, 2018, is modified accordingly.

On December 22, 1995, the defendant Napoleon Farfan (hereinafter the defendant) and another executed a note in the sum of $296,525, which was secured by a mortgage on residential property in Corona. On October 24, 2007, the plaintiff commenced this action against the defendant, among others, to foreclose the mortgage. The defendant interposed an answer in which he asserted a first counterclaim alleging that the plaintiff violated General Business Law § 349, and a second counterclaim, pursuant to Real Property Actions and Proceedings Law article 15, to quiet title to the subject property. The defendant also asserted the affirmative defense that the plaintiff lacked standing to foreclose.

Subsequently, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant and dismissing his counterclaims, to strike his answer, and for an order of reference. In an order dated November 21, 2018, the Supreme Court, among other things, granted those branches of the plaintiff's motion. On August 31, 2020, the court entered an order and judgment of foreclosure and sale which, inter alia, granted the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, confirmed the referee's report, and directed the sale of the subject property. The defendant 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, the unpaid note, and evidence of default" ( Deutsche Bank Trust Co. Ams. v. Miller, 198 A.D.3d 867, 867–868, 155 N.Y.S.3d 562 ; see Wells Fargo Bank, N.A. v. Heiney, 168 A.D.3d 1126, 1126, 93 N.Y.S.3d 84 ).

"Moreover, where, as here, standing is placed in issue by the defendant, the plaintiff must prove its standing as part of its prima facie case" ( Deutsche Bank Trust Co. Ams. v. Miller, 198 A.D.3d at 868, 155 N.Y.S.3d 562 ; see U.S. Bank Trust N.A. v. Auxila, 189 A.D.3d 1514, 1514–1515, 139 N.Y.S.3d 236 ). A plaintiff establishes its standing to foreclose by establishing, inter alia, that it was a holder in physical possession of the subject note prior to the commencement of the action, or that the subject note was assigned to the plaintiff prior to the date of commencement of the action (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Wilmington Sav. Fund Socy., FSB v. Matamoro, 200 A.D.3d 79, 90–91, 156 N.Y.S.3d 323 ).

Here, in support of its motion, the plaintiff submitted an affidavit of Teri L. Townsend, who averred that, in her position as vice president of loan documentation for the plaintiff, she had access to and was familiar with the business records related to the mortgage loan at issue. She averred that the records were maintained in the ordinary course of business, and were "made at or near the time of the occurrence of the matters recorded by persons with personal knowledge of the information in the business record, or from information transmitted by persons with personal knowledge." Townsend further averred that, based on her review of the plaintiff's "correspondence with the custodian regarding this loan, LaSalle Bank National Association, as prior custodian, was in possession of the original Note on October 24, 2007, the date the Complaint was filed." However, Townsend failed to specify which entity generated the subject correspondence, and, to the extent the correspondence was not generated by the plaintiff, failed to state that she was familiar with the record-keeping practices and procedures of the entity that generated the correspondence, or that the correspondence was incorporated into the plaintiff's own records and routinely relied upon by the plaintiff in its own business (see Deutsche Bank Trust Co. Ams. v. Miller , 198...