Opinion
Index No. 704710/2017
03-30-2023
WELLS FARGO BANK, N.A., Plaintiff, v. Margaret C. CHRYSOSTOM, Carol M. Procope, United States of America, New York City Environmental Control Board, New York City Parking Violations Bureau, New York City Transit Adjudication Bureau, and "John Doe #1" through "John Doe #10", the last Ten names being fictitious and unknown to the Plaintiff, the person or parties intended being the Persons or parties, if any, having or claiming an Interest in or lien upon the mortgaged premises Described in the Complaint, Defendants.
The following papers numbered 1 to 11 read on this motion by plaintiff for an Order substituting Limosa, LLC in as plaintiff for Wells Fargo Bank, N.A. and amending the caption accordingly, dismissing and/or striking the Answer interposed by defendants Margaret C. Chrysostom, and Carol M. Procope, granting plaintiff Summary Judgment and an Order of Reference, granting permission to treat Borrowers’ Answer as a limited Notice of Appearance entitling Borrowers to receive, without prior notice, a copy of the Notice of Sale, Notice of Discontinuance, and/or Notice of Surplus Monies, substituting Gary Jones as John Doe #1, removing John Doe #2 through John Doe 10 as a defendant and amending the caption to reflect same, appointing a Referee, and providing that all non-appearing and non-answering defendants be deemed in default.
Papers/Numbered
Notice of Motion, Affirmation, Memorandum, Facts, Exhibits 1-6
Affirmation in Opposition, Exhibits 7-9
Reply Memorandum 10-11
Upon the foregoing papers, it is ordered that this motion is determined as follows:
Plaintiff's motion for an Order substituting Limosa, LLC in as plaintiff for Wells Fargo Bank, N.A. and amending the caption accordingly, dismissing and/or striking the Answer interposed by defendants Margaret C. Chrysostom, and Carol M. Procope, granting plaintiff Summary Judgment and an Order of Reference, granting permission to treat Borrowers’ Answer as a limited Notice of Appearance entitling Borrowers to receive, without prior notice, a copy of the Notice of Sale, Notice of Discontinuance, and/or Notice of Surplus Monies, substituting Gary Jones as John Doe #1, removing John Doe #2 through John Doe 10 as a defendant and amending the caption to reflect same, appointing a Referee, and providing that all non-appearing and non-answering defendants be deemed in default is denied, as plaintiff failed to eliminate all issues of fact as to whether it was in possession of the note at the time of commencement of the action. (See Wells Fargo Bank, N.A. v. Meisels , 177 AD3d 812 [2d Dept. 2019].) Plaintiff commenced this action to recover on a consolidated note and mortgage given to defendants Margaret C. Chrysostom and Carol M. Procope on March 18, 2002, secured by real property located at 200-15 100th Avenue in Hollis, New York. Plaintiff filed the Summons and Complaint on April 6, 2017, and issue was joined by defendants Chrysostom and Procope on May 31, 2019.
In a foreclosure action, a plaintiff can establish a prima facie case of entitlement to summary judgment through the production of the mortgage, the unpaid note, and evidence of default. (See JP Morgan Chase Bank, Nat'l Assn. v. Escobar , 177 AD3d 721 [2d Dept. 2019].) Under UCC 3-804 , the owner of a lost note may maintain an action ‘upon due proof of his or her ownership, the facts which his or her production of the instrument, and its terms.’ ( U.S. Bank, N.A. v. Cope , 173 AD3d 527 [2d Dept. 2019].) The owner seeking to enforce a lost note is required to account for its absence. (Id. )
Here, plaintiff failed to establish a prima facie case, notwithstanding the sufficiency of defendants Chrysostom and Procope's opposition papers, as plaintiff failed to demonstrate it was in possession of the original note at the time of commencement of this action and the lost note affidavit was insufficient to permit enforcement under UCC § 3-804. (See Wells Fargo, N.A. v. Zolotnitsky , 195 AD3d 659 [2d Dept. 2021] ; U.S. Bank, N.A. v. Cope , supra. ) Plaintiff presented an affidavit of merit from Frank S. Brannen III, an authorized representative of Limosa LLC, plaintiff's Assignee. Brannen alleged that plaintiff was in possession of the note at the time of commencement and that plaintiff assigned the mortgage to Limosa on November 25, 2019, after the action was commenced. The affidavit also included business records relied upon by Brannen, and attested to the incorporation and "on-boarding" of plaintiff's records into Limosa's records into Limosa’ records and that Brannen reviewed and had personal knowledge of the records that demonstrated defendants’ default as of November 1, 2010. (See Citibank N.A. v. Gentile , 156 AD3d 859 [2d Dept. 2017] ; see also Aurora Loan Servs. LLC v. Taylor , 25 NY3d [2015].)
Plaintiff argues that a copy of the Note was attached to the Summons and Complaint, and along with a "lost note" affidavit from Omar Yusuf Qanyare, "Vice President Loan Documentation" of Wells Fargo Bank, N.A., plaintiff's servicer. Qanyare demonstrated through the affidavit that Fannie Mae owned the note at the time of commencement and that the note had been lost, misplaced, or destroyed. However, plaintiff failed to present due proof of its ownership of the note, the facts which prevent production of the note and its terms. (See U.S. Bank Trust, N.A. v. Rose , 176 AD3d 1012 [2d Dept. 2019].) Qanyare's lost note affidavit was insufficient as it did not identify who conducted the search, the date the note was lost, or explain the circumstances under which the note was lost. (See LaSalle Bank N.A. v. Carlton , 204 AD3d 985 [2d Dept. 2022].)
Possession of the note is the quintessential element of establishing entitlement to foreclose, as it is the cornerstone to proving the parties’ assent to contract. The failure to produce the original note creates an inherent prejudice for the defendant, who may seek to challenge the original terms of the note yet will be unable to do so. Therefore, it is incumbent upon plaintiff to provide a lost note affidavit that is sufficient to justify permitting a foreclosure proceeding despite the unavailability of the original note. As plaintiff failed to present sufficient evidence to establish prima facie possession of the note, plaintiff's motion is denied.
Accordingly, plaintiff's motion for an Order substituting Limosa, LLC in as plaintiff for Wells Fargo Bank, N.A. and amending the caption accordingly, dismissing and/or striking the Answer interposed by defendants Margaret C. Chrysostom, and Carol M. Procope, granting plaintiff Summary Judgment and an Order of Reference, granting permission to treat Borrowers’ Answer as a limited Notice of Appearance entitling Borrowers to receive, without prior notice, a copy of the Notice of Sale, Notice of Discontinuance, and/or Notice of Surplus Monies, substituting Gary Jones as John Doe #1, removing John Doe #2 through John Doe 10 as a defendant and amending the caption to reflect same, appointing a Referee, and providing that all non-appearing and non-answering defendants be deemed in default is denied.
This constitutes the decision and Order of the Court.