Summary
The Appellate Division, Third Department reversed the trial court's grant of summary judgment in a mortgage foreclosure action. The court held that the plaintiff failed to establish standing as a matter of law because it could not prove ownership or possession of the original lost note when the lawsuit was filed. Applying UCC Article 3 standards for lost instruments, the court found material discrepancies in the plaintiff's evidence regarding endorsements and assignments, requiring factual determination by a trier of fact.
Topics
Practice areas
Questions Presented
- Whether the plaintiff established standing as holder of the lost note and mortgage sufficient to support summary judgment in a foreclosure action.
Holdings
- The court reversed the summary‑judgment order because the plaintiff failed to demonstrate standing as a holder of the lost note at the time the action was commenced.
Key quotations
“In order to establish entitlement to summary judgment in a foreclosure action, a plaintiff must produce evidence of the mortgage and unpaid note along with proof of the mortgagor's default.” (215 AD3d at 1024)
Factual background
The defendant executed a $100,000 note in 2005 secured by a mortgage. The original note was lost while in Bank of America’s possession. Bank of America assigned the mortgage to Wilmington, which later assigned the mortgage (but not the note) to the plaintiff. The plaintiff relied on a lost‑note affidavit, copies of the note, and undated allonges to prove ownership of the note at the time the foreclosure action was filed in July 2022.
Procedural history
The Supreme Court of Sullivan County entered summary judgment in favor of 1900 Capital Trust II on the basis of alleged standing. The appellant appealed, arguing that the plaintiff failed to establish standing as holder of the lost note and mortgage.