Gustavia Home, LLC v. Rutty

Summary

In a foreclosure action, the Second Circuit held that a plaintiff establishes standing by demonstrating it held the promissory note prior to commencing the action, and a bankruptcy court order authorizing the transfer of the note conclusively addresses challenges based on the lender's bankruptcy. Physical possession of a note endorsed in blank is sufficient to enforce it, without needing to prove where the note was stored between transfer and possession. The court affirmed summary judgment for the plaintiff, applying New York law requiring proof of the mortgage, note, and default to establish a prima facie case.

Holdings

1. Gustavia established its prima facie entitlement to summary judgment by producing the mortgage, note, and evidence of default, and by demonstrating it had possession of the note prior to commencing the action. The bankruptcy court order authorizing the transfer conclusively addressed the standing issue. The burden shifted to Rutty, who failed to raise a genuine issue of material fact.
2. Rutty waived any challenge to the order denying his motion to cancel and expunge deeds by failing to raise any argument in his appellate brief.

Questions Presented

1. Whether the district court erred in granting summary judgment in favor of Gustavia in the foreclosure action, specifically regarding Gustavia's standing to foreclose given the bankruptcy of the original lender.
2. Whether the district court erred in denying Rutty's motion to cancel and expunge the deeds.

Disposition

affirmed