Everhome Mortgage Company v. Pettit , 23 N.Y.S.3d 408 ( 2016 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: January 7, 2016 521156
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EVERHOME MORTGAGE COMPANY,
Respondent,
v MEMORANDUM AND ORDER
WILLIAM E. PETTIT et al.,
Appellants,
et al.,
Defendants.
________________________________
Calendar Date: November 20, 2015
Before: Lahtinen, J.P., McCarthy, Egan Jr., Lynch and Clark, JJ.
__________
Ronald J. Kim, Saratoga Springs, for appellants.
Rosicki, Rosicki & Associates, PC, Plainview (Thomas C.
Frost of counsel), for respondent.
__________
McCarthy, J.
Appeal from an order of the Supreme Court (Nolan Jr., J.),
entered July 17, 2014 in Saratoga County, which, among other
things, granted plaintiff's motion for summary judgment against
defendants William E. Pettit and Susan A. Pettit.
In July 2006, defendants William E. Pettit and Susan A.
Pettit (hereinafter collectively referred to as defendants)
executed a note in favor of Opteum Financial Services, LLC that
was secured by a mortgage on certain real property. In 2009,
defendants ceased to make payments on the loan and subsequently
defaulted. Plaintiff commenced the instant action for
foreclosure in July 2010. In January 2014, plaintiff moved to,
among other things, substitute EverBank – its successor – as
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plaintiff and for summary judgment against defendants.
Defendants, among other things, cross-moved for summary judgment
dismissing the complaint against them for lack of standing.
Supreme Court granted plaintiff's motion and denied defendants'
cross motion.1 Defendants appeal, and we affirm.
Defendants' contention that plaintiff failed to prove as a
matter of law that it had standing to foreclose is without merit.
A plaintiff's standing is established in a mortgage foreclosure
action "where it is both the holder or assignee of the subject
mortgage and the holder or assignee of the underlying note at the
time the action is commenced" (Chase Home Fin., LLC v Miciotta,
101 AD3d 1307, 1307-1308 [2012] [internal quotation marks and
citation omitted]; see Deutsche Bank Natl. Trust Co. v Monica,
131 AD3d 737, 738 [2015]). However, "[o]nce a note is
transferred, . . . the mortgage passes as an incident to the
note" and, thus, "it is not necessary [for a plaintiff] to have
possession of the mortgage at the time the action is commenced"
(Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362 [2015]
[internal quotation marks and citation omitted]). Therefore,
"the note, and not the mortgage, is the dispositive instrument
that conveys standing to foreclose" (id. at 361; see Deutsche
Bank Trust Co. Ams. v Vitellas, 131 AD3d 52, 59 [2015]).
Plaintiff submitted, among other things, a copy of the
original note and an affidavit from EverBank's vice-president, E.
Michele de Craen. De Craen averred that, based on her personal
knowledge of how loan records were kept and her review of the
loan records for defendants, which were maintained by EverBank in
its regularly conducted business activities, defendants executed
and delivered the original note to Opteum Financial Services, LLC
1
Although Supreme Court's order granted plaintiff's
request to substitute EverBank in place of plaintiff, the court
did not amend the caption. Regardless, a successor corporation
"is vested with all of the rights and powers of the merged
corporations, and is considered to have been named in any
document taking effect before the merger" (Barclay's Bank of N.Y.
v Smitty's Ranch, 122 AD2d 323, 324 [1986]; see Banking Law
§ 602; see e.g. TD Bank, N.A. v Mandia, 133 AD3d 590 [2015]).
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on July 18, 2006. De Craen further averred that the note was
thereafter transferred to plaintiff on June 1, 2007 (compare
Loancare v Firshing, 130 AD3d 787, 789 [2015]; Wells Fargo Bank,
N.A. v Arias, 121 AD3d 973, 974 [2014]). According to de Craen,
plaintiff continued to maintain the note and held it at the time
that it commenced the instant action.2 Given this competent
evidence establishing transfer of the note and plaintiff's
possession of it at the time of commencement, and further
considering that defendants' submissions do not raise any
material issues of fact, plaintiff established its standing as a
matter of law (see Aurora Loan Servs., LLC v Taylor, 25 NY3d at
359-362; TD Bank, N.A. v Mandia, 133 AD3d 590, 591 [2015]; Wells
Fargo Bank, N.A. v Rooney, 132 AD3d 980, 982 [2015]; HSBC Bank
USA, N.A. v Spitzer, 131 AD3d 1206, 1207 [2015]; Deutsche Bank
Natl. Trust Co. v Abdan, 131 AD3d 1001, 1002 [2015]; Loancare v
Firshing, 130 AD3d at 789; Wells Fargo Bank, N.A. v Arias, 121
AD3d at 974). Defendants' remaining arguments are also without
merit.
Lahtinen, J.P., Egan Jr., Lynch and Clark, JJ., concur.
2
Given that, in this case, de Craen's affidavit accounted
for the chain of ownership leading to plaintiff's possession, and
further considering the fact that defendants – who had been
provided a copy of the note during discovery and more than a year
and a half prior to plaintiff's motion for summary judgment – did
not move to compel the production of the original note for
inspection, the facts in this case do not raise the same issues
that caused disagreement between certain members of this Court in
JP Morgan Chase Natl. Assoc. v Hill (133 AD3d 1057, 1057-1062
[2015]).
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ORDERED that the order is affirmed, with costs.
ENTER:
Robert D. Mayberger
Clerk of the Court