Motion List released on: April 11, 2019
By Renwick, J.P., Tom, Gesmer, Singh, Moulton, JJ.7358N. Deutsche Bank National Trust Company, etc., plf-res, v. Julio Guevara, def-ap, HSBC Bank USA def — Rubin & Licatesi, P.C., Garden City (Amy J. Zamir of counsel), for ap — Hinshaw & Culbertson, LLP, New York (Benjamin Noren of counsel), for res — Order, Supreme Court, Bronx County (Ben R. Barbato, J.), entered on or about June 6, 2017, which granted plaintiff’s motion for summary judgment on its foreclosure complaint, reversed, on the law, with costs, and plaintiff’s motion for summary judgment denied.A plaintiff in a foreclosure action establishes standing by showing that it had either a written assignment or physical possession of the underlying note and mortgage prior to commencement (Bank of N.Y. Mellon Trust Co. NA v. Sachar, 95 AD3d 695 [1st Dept 2012]; see also Aurora Loan Servs. v. Taylor, 25 NY3d 355, 361 [2015]). Where, as here, a plaintiff cannot establish a written assignment prior to commencement, it must “adequately prove[] that it did, indeed, have possession of the note prior to commencement of this action” (Aurora Loan Servs., 25 NY3d at 362). A conclusory statement in an affidavit will not suffice (Wells Fargo Bank, N.A. v. Jones, 139 AD3d 520, 524 [1st Dept 2016]). As shown below, plaintiff did not establish on its motion that it had possession of the note at the time of commencement, so it was not entitled to summary judgment.The complaint alleges that, in February 2007, defendant Julio Guevara borrowed $499,120 from American Brokers Conduit (ABC) in connection with the purchase of his home in the Bronx.On or about May 1, 2007, American Home Mortgage Assets LLC as depositor (AHMA), Wells Fargo Bank NA as servicer and securities administrator, and plaintiff Deutsche Bank National Trust Company as trustee entered into a Pooling and Servicing Agreement (PSA), pursuant to which AHMA agreed to transfer to plaintiff as trustee a group of mortgage and cooperative loans. Defendant’s mortgage loan number and property appear to be listed on the Mortgage Loan Schedule associated with the PSA.The PSA states, at page 36, that AHMA “has” caused the sponsor, American Home Mortgage Corp., to deliver to Deutsche Bank the original note, or a lost note affidavit, and an assignment of mortgage in connection with each of the pooled mortgage loans. However, there is no proof in the record that the note was in fact delivered.On March 18, 2009, an Assignment of Mortgage from Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for ABC to plaintiff as trustee for the AHMA trust dated March 11, 2009 was recorded. On October 5, 2010, a “Correcting Assignment of Mortgage” dated September 14, 2010 was recorded.1 However, neither document mentions the note. In addition, neither demonstrates that AHMA had complied with the requirements of the PSA, which states that, as of May 1, 2007, AHMA “has” caused to be delivered to plaintiff an assignment of each mortgage to it as trustee.Plaintiff commenced this foreclosure action on April 26, 2011, alleging that defendant had failed to make payments due under the note since August 1, 2008. Plaintiff did not attach a copy of the note to its complaint.On or about September 17, 2014, plaintiff executed a power of attorney appointing Ocwen Loan Servicing, LLC (Ocwen) as its attorney-in-fact with power to enforce its rights with regard to loans included in the PSA.Two years after that, on October 19, 2016, plaintiff moved for summary judgment. Plaintiff submitted an affidavit by Kyle Lucas, an employee of a company whose indirect subsidiary is Ocwen. Lucas alleged that plaintiff had had physical possession of the note since June 6, 2007, but he failed to identify any document which provided the basis for his knowledge. A copy of defendant’s note, endorsed in blank by ABC, was attached to plaintiff’s summary judgment motion. However, there is nothing in the record that proves when the note was physically delivered to plaintiff.In response, defendant raised a triable issue of fact by pointing out that plaintiff’s affiant did not claim to have personal knowledge of the relevant facts, including the circumstances of the alleged physical delivery of the note to plaintiff, and failed to substantiate his claim that plaintiff had physical possession of the note prior to commencement.Ocwen did not have authority to act on plaintiff’s behalf until September 17, 2014. Therefore, Lucas cannot and does not claim to have personal knowledge of the claim that plaintiff came into physical possession of the note in 2007. Instead, he claims to rely on his review of the business records of Ocwen, plaintiff, and their agents. Specifically, he alleges that “the physical transfer to plaintiff was later memorialized” in the 2009 “Assignment of Mortgage” and 2010 “Correcting Assignment of Mortgage.”However, as discussed above, neither of those documents mentions the note, much less memorializes its physical delivery to plaintiff as of June 6, 2007, or at any time before commencement of this action on April 26, 2011. Nor does the PSA establish that the note was in fact delivered by AHMA to plaintiff in 2007, since it is not a sworn statement. Moreover, the assignment of defendant’s mortgage was not executed and effective until, at the earliest, March 8, 2009. Therefore, unlike the plaintiff in Nationstar Mtge. LLC v. Accardo (159 AD3d 662 [1st Dept 2018], lv denied 31 NY3d 1132 [2018]), Lucas failed to attach “corroborating documentary evidence” showing that plaintiff had physical possession of the note before commencement (id. at 662; see also Aurora Loan Servs., 25 NY3d at 362 [allonge in attachments to note "clearly show the note's chain of ownership"]).Our dissenting colleague takes the position that the documents attached to the Lucas affidavit make it “clear that both the mortgage and note had been assigned to plaintiff.” We disagree. To support his statement that the mortgage had been delivered to plaintiff before commencement, Lucas relied solely on certain assignments attached to his affidavit. However, those documents only purport to assign the mortgage, and say nothing about an assignment or physical transfer of the underlying note. Even plaintiff does not claim that the original lender, ABC, ever executed a written assignment of the note to it. Plaintiff only claims that it had physical possession of the note as of June 6, 2007, but fails to offer any proof of this, either in the form of an affidavit by one with personal knowledge of that fact, or documents establishing it. Consequently, contrary to the statements in the opposing writing, there is no documentary support at all for the claim that plaintiff had physical possession of the note, or an assignment of it.Contrary to the dissent’s statement, the facts of this case are entirely distinguishable from those in Aurora Loan Servs. There, the Court of Appeals found that the plaintiff had established that it had physical possession of the note four days prior to commencement by: (1) producing an allonge indorsing the note to the plaintiff and showing the chain of possession history from the original lender to the plaintiff, as was required by the PSA in that case; and (2) submitting an affidavit by its legal liaison stating that she had personally viewed the original note, which had been in the bank’s possession since four days before commencement.2 Moreover, in Aurora, the affiant was acting as the plaintiff’s agent at the time the affiant claimed the plaintiff had obtained physical possession of the note and at the time of commencement. Here, the affiant’s employer’s subsidiary obtained power of attorney to act on plaintiff’s behalf more than seven years after plaintiff allegedly obtained physical possession of the note and more than three years after commencement of the action.Accardo, also cited by our dissenting colleague, is similarly distinguishable from this case. There, the plaintiff established possession of the note prior to commencement by attaching the note to the complaint and submitting the affidavit of its vice president to which was attached the “corroborating documentary evidence” on which the affiant relied.
