FILED: QUEENS COUNTY CLERK 02/29/ :49 PM INDEX NO /2013 NYSCEF DOC. NO. 42 RECEIVED NYSCEF: 02/29/2016

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1 FILED: QUEENS COUNTY CLERK 02/29/ :49 PM INDEX NO /2013 NYSCEF DOC. NO. 42 RECEIVED NYSCEF: 02/29/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF QUEENS DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR HOLDERS OF THE MORGAN STANLEY HOME EQUITY LOAN TRUST , Index No /2013 -against- Plaintiff, SANDRA GUADALUPE A/K/A SANDRA I. GUADALUPE A/K/A SANDRA I. TORRES-GUADALUPE; AMERICA'S WHOLESALE LENDER; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; NEW YORKCITY PARKING VIOLATIONS BUREAU; NEW YORK CITY TRANSIT ADJUDICATION BUREAU; UNITED STATES OF AMERICA/IRS; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; CRIMINAL COURT OF THE CITY OF NEW YORK; KENNETH P. SILVERMAN, TRUSTEE; and "JOHN DOE and MARY DOE, (Said names being fictitious, it being the intention of plaintiff to designate any and all occupants, tenants, persons or corporations, if any, having or claiming an interest in or lien upon the premises being foreclosed herein), Defendants. State of New York County of Nassau AFFIRMATION IN OPPOSITION TO PLAINTIFF'S MOTION Harvey Sorid affirms that he is an admitted attorney in New York State, representing Defendant Sandra Guadalupe ( Defendant ) in this action and makes this affirmation under penalties of perjury pursuant to CPLR 2106: 1. The basis of my information is records in the file and conversations with the Defendant; accordingly this Affirmation is made upon information and belief. I submit this affirmation in opposition to Plaintiff s Motion for summary judgment and other relief ( Plaintiff s Motion ) on the following grounds: 1

2 a. Plaintiff failed to comply with Section 22 of the Mortgage in the following respects: 1. Plaintiff did not prove that the Purported Notice of Default was served in the manner required by Sections 15 and 22 of the Mortgage; 2. the Purported Notice of Default demands payment of an amount due in the future to cure the default, thereby impermissibly shortening the required thirty-day cure period; 3. the Purported Notice of Default fails to clearly and explicitly state what sum must be paid to cure Defendant s default; 4. the Court may take judicial notice that a first class mail takes time to deliver, which also shortens the thirty-day requirement; or in the alternative b. Plaintiff lacks standing because it has failed to demonstrate that it owned the note and the mortgage at the time that it commenced the action for the following reasons: 1. Plaintiff failed to prove it had physical possession of the Note when it commenced the action; 2. Mortgage Electronic Registration Systems, Inc. ( MERS ) lacked authority to assign the Note to Plaintiff; c. Plaintiff failed to demonstrate that it complied with R.P.A.P.L. 1304; or in the alternative d. permitting Defendant to conduct discovery of Plaintiff. 2. This is a foreclosure action against Defendant filed on October 14, Defendant served an Answer on or about October 31, Based on the following, this Court should deny Plaintiff s Motion in its entirety. 1 Exhibit A, Summons and Complaint. 2 Exhibit B, Answer 2

3 TABLE OF CONTENTS Page I. THE COURT SHOULD DENY PLAINTIFF S MOTION AND DISMISS THIS ACTION... 4 A. PLAINTIFF FAILED TO DEMONSTRATE THAT A NOTICE OF DEFAULT THAT MEETS THE REQUIREMENTS OF SECTION 22 OF THE MORTGAGE WAS SERVED ON DEFENDANT Plaintiff Failed to Prove That It Served The Purported Notice on Defendant in the Manner Required by Sections 15 and 22 of the Mortgage The Purported Notice of Default Impermissibly Shortens the Thirty-Day Period to Cure By Requiring Payment of an Amount Due in the Future for Compliance Plaintiff s Purported Notice of Default Is Defective in That It Does Not Provide an Explicit Sum to Cure the Default B. PLAINTIFF FAILED TO DEMONSTRATE STANDING TO PROCEED WITH THIS ACTION Plaintiff Failed to Demonstrate That the Note Was Physically Delivered to It Before It Filed the Action The Assignments Fail to Demonstrate Plaintiff s Standing Because MERS Lacked the Authority to Assign the Note and the Mortgage C. PLAINTIFF FAILED TO DEMONSTRATE COMPLIANCE WITH R.P.A.P.L IV. IN THE ALTERNATIVE, THIS COURT SHOULD PERMIT DEFENDANT TO CONDUCT DISCOVERY OF PLAINTIFF

4 I. THE COURT SHOULD DENY PLAINTIFF S MOTION AND DISMISS THIS ACTION 4. New York Courts have repeatedly held that [t]o obtain summary judgment it is necessary that the movant establish his cause of action or defense sufficiently to warrant the court as a matter of law directing judgment in his favor, and he must do so by tender of evidentiary proof in admissible form. Zuckerman v. City of N.Y., 49 N.Y.2d 557, 427 N.Y.S.2d 595, 404 N.E.2d 718 (1980) (internal citations and quotations omitted). In fact, it is well settled that New York Courts have "the authority pursuant to CPLR 3212(b) to search the record and grant summary judgment to a nonmoving party with respect to an issue that was the subject of a motion before the court." N.Y.C.P.L.R. 3212(c) (2013); Goldstein v. County of Suffolk, 300 A.D.2d 441, 442 (2nd Dep t 2002), lv denied, 100 N.Y.2d 509 (2003). Here, this Court should deny summary judgment to Plaintiff and grant summary judgment to Defendant because as will be discussed below, Plaintiff failed to submit sufficient evidentiary proof in admissible form to establish several elements of their prima facie case. A. PLAINTIFF FAILED TO DEMONSTRATE THAT A NOTICE OF DEFAULT THAT MEETS THE REQUIREMENTS OF SECTION 22 OF THE MORTGAGE WAS SERVED ON DEFENDANT 5. Section 22 of the Mortgage dated June 22, 2005 states: Lender may require Immediate Payment in Full under this Section 22 on if all of the following conditions are met: (a) I fail to keep any promise or agreement made in this Security Instrument or the Note, including, but not limited to, to pay the Sums Secured when due, or if another default occurs under this Security Instrument; (b) Lender sends to me, in the manner described in Section 15 of this Security Instrument, a notice that states: 4

5 (1) The promise or agreement that I failed to keep or the default that has occurred; (2) The action that I must take to correct that default; (3) A date by which I must correct the default. That date will be at least 30 days from the date on which the notice is given; (4) That if I do not correct the default by the date stated in the notice, Lender may require Immediate Payment in Full, and Lender or another Person may acquire the Property by means of Foreclosure and Sale; (5) That if I meet the conditions stated in Section 19 of this Security Instrument, I will have the right to have Lender s enforcement of this Security Instrument stopped and to have the Note and this Security Instrument stopped and to have the Note and this Security Instrument remain fully effective as if Immediate Payment in Full had never been required; and (6) That I have the right is any lawsuit for Foreclosure and Sale to agree I did keep my promises and agreements under the Note and under this Security Instrument, and to present any other defenses that I may have; and (c) I do not correct the default stated in the notice from Lender by the date stated in that notice Paragraph 9 of the Loan Modification Agreement confirms that Section 22 of the Mortgage remains in effect by stating: Nothing in this agreement shall be understood or construed to be a refinance, satisfaction or release in whole or in part of the Note and Security Instrument. Except as otherwise specifically provided in this Agreement, the Note and Security Instrument will remain unchanged, and the Borrower and the Lender will be bound by, and comply with, all terms and provisions thereof, as amended by this Agreement Compliance with Section 22 of the Mortgage is a condition precedent to acceleration of the loan. See Norwest Bank Minnesota v. Sabloff, 297 A.D.2d 722, Exhibit E, Mortgage, Section Exhibit F, Loan Modification Agreement 5

6 N.Y.S.2d 559 (2nd Dep t 2002); HSBC vs. Erneste, 22 Misc. 3d 1115(A), 880 N.Y.S.2d 224 (Sup. Ct. Kings Co. 2009) (citing Chan v. Barry, 36 A.D.3d 579, 580, 827 N.Y.S.2d 295 (2nd Dep t 2007)). As such, admissible proof of a foreclosing party s compliance with section 22 must be submitted to demonstrate a default, which is an essential element of the foreclosing party s prima facie case. Id. Since service of a proper default notice on Defendant is a mandatory condition precedent, Plaintiff s failure to prove service of a proper default notice on Defendant may be raised at any time as grounds for dismissal. Matter of Langella v. Front Door Assocs. Inc., 34 Misc. 3d 1212(A), 943 N.Y.S.2d 792 (Sup. Ct. Suffolk Co. Jan ). 8. Here, Plaintiff failed to prove that it served on Defendant a default notice that met the requirements of Section 22 of the Mortgage for the reasons described below. 1. Plaintiff Failed to Prove That It Served The Purported Notice on Defendant in the Manner Required by Sections 15 and 22 of the Mortgage 9. Plaintiff failed to provide sufficient admissible proof that a Purported Notice of Default was served on Defendant in the manner required by Section 15 and Section 22 of the Mortgage. Section 15 of the Mortgage requires that all notices to Defendant (as the mortgagor) be personally delivered or sent by first class mail. 5 In turn, Section 22 of the Consolidated Mortgage requires that the default notice be served in the manner set forth in Section 15 of the Consolidated Mortgage. 6 Denying the plaintiff s default judgment motion in HSBC vs. Erneste, Justice Battaglia stated: 5 Exhibit E, Mortgage. 6 Id. 6

7 . HSBC vs. Erneste, 22 Misc. 3d 1115(A), 880 N.Y.S.2d 22 (Sup. Ct. Kings. Co. 2009) (citing Chan v. Barry, 36 A.D.3d 579, 580, 827 N.Y.S.2d 295 (2nd Dep t 2007)). 10. The Court s conclusion in Erneste applies to the issue of proof of mailing of the notice of default the general rule concerning evidence of mailing discussed in Nocella v. Fort Dearborn Life Ins. Co.: when the witness is relying on business records to testify regarding proof of mailing, the witness s testimony is not adequate to prove mailing unless the witness can confirm that the business had a regular procedure to ensure proper mailing at the time the mailing supposedly took place and can describe that procedure with the requisite amount of specificity. 99 A.D.3d 877, 955 N.Y.S.2d 70 (2nd Dep t 2012). In Nocella, the Court found affidavit from the employee of a company that purportedly mailed notices to plaintiffs inadequate to prove that the notices were mailed, reasoning: 7

8 Here, in support of their motion for summary judgment dismissing the complaint insofar as asserted against them, Bankers American and Union Security submitted an affidavit from Susan Budelis, wherein she asserted that her employer, Minnesota Life, handled the mailing of the subject cancellation notices on behalf of Bankers American. In addition, Budelis detailed the standard office practice and procedure that Minnesota Life used to ensure that items were properly addressed and mailed. However, Budelis failed to state, based on personal knowledge, that such practice and procedure was in place and used at the time Minnesota Life allegedly mailed, to the plaintiff and his wife, the subject cancellation notice or an alleged notice that the policy issued by Bankers American was to be replaced with a policy issued by Northstar Life Insurance Company (hereinafter Northstar). Rather, in a carefully worded affidavit, Budelis stated, in a vague and conclusory fashion, that "Minnesota Life has utilized the above-described process innumerable times over the years," and that "I have confirmed that these procedures were followed to send the Notice to the Insured Emigrant Customers, including [the plaintiff s wife,] Kathleen Nocella, on April 11, Conspicuously absent from Budelis s affidavit is any indication that she worked at Minnesota Life at the time of the subject mailing. Keeping in mind that "[i]ssue finding, rather than issue determination, is the key to summary judgment", we conclude that Budelis's affidavit was insufficient to eliminate all triable issues of fact in connection with the presumption that the plaintiff and his wife received the notice of cancellation of the Bankers American policy prior to the wife's death. Accordingly, Bankers American and Union Security did not establish their prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against them on the ground that the Bankers American Policy had been cancelled and was no longer in effect at the time of the death of the plaintiff's wife. Consequently, the Supreme Court should have denied their motion regardless of the sufficiency of the plaintiff's opposition papers. Nocella, 99 A.D.3d at (internal citations omitted). 11. The Court further elaborated on the proof of mailing rule in Kearney v. Kearney: The burden is on the (the party obligated to provide notice) to present an affidavit of an employee who personally mailed the verification and/or denial, or, on the other hand, an affidavit of an employee with personal knowledge of the office s mailing practices and procedures. Such individual must describe those practices and procedures in detail, explicitly denoting the manner in which he/she acquired the knowledge of such procedures or practices, and how a personal review of the file indicates that the procedures or practices were adhered to with respect to the processing of that particular claim. 8

9 42 Misc. 3d 360, 979 N.Y.S.2d 226 (Sup. Ct. Monroe Co. 2013) (citing Azriliant v. Eagle Chase Assocs., 213 A.D.2d 573 (2nd Dep t 1995) (the presumption is unavailable in the absence of sufficient evidence attesting to the mailing of the letter or to the existence of an office practice geared to ensure the proper addressing or mailing of correspondence). 12. The Second Department recently decided Nationstar Mortg., LLC v. Dimura on similar grounds: The plaintiff failed to establish its prima facie entitlement to judgment as a matter of law. In support of its motion, the plaintiff did not demonstrate that it complied with the condition precedent contained in the subject mortgage agreement, which required that it provide the defendants Michael Dimura and Jacqueline Dimura (hereinafter together the defendants) with a notice of default prior to demanding payment of the loan in full. The evidence did not establish that the required notice was mailed by first class mail or actually delivered to the notice address if sent by other means, as required by the terms of the mortgage agreement. The plaintiff s failure to make a prima facie showing required the denial of its motion, regardless of the sufficiency of the defendants opposition papers. 127 A.D.3d 1152, 7 N.Y.S.3d 573 (2nd Dep t 2015) (internal citations omitted); see also HSBC Mortg. Corp. (USA) v. Gerber, 100 A.D.3d 966, 955 N.Y.S.2d 131 (2nd Dep t 2012) ( The unsubstantiated and conclusory statements in the affidavits of the plaintiff s employees that the required notice of default was sent in accordance with the terms of the mortgage, combined with a copy of the notice of default, failed to establish that the required notice was mailed to the defendant by first class mail or actually delivered to her notice address if sent by other means, as required by the mortgage agreement. ); GMAC Mtge., LLC v. Bell, 128 A.D.3d 772, 11 N.Y.S.3d 73 (2nd Dep t 2015) ( The mortgagor defendants established, prima facie, that the plaintiff failed to satisfy a condition precedent to the commencement of this action, since it failed to provide them with a notice of default in the payment of their mortgage obligation, as required 9

10 by the subject mortgage. In opposition, the plaintiff, relying on the affidavit of its Authorized Officer, failed to raise a triable issue of fact. ) 13. Moreover, in cases where more than one person or entity is involved in making the business record, each participant in the chain producing the record, from the initial declarant to the final entrant, must be acting within the course of regular business conduct or the declaration must meet the test of some other hearsay exception. Matter of Leon RR, 48 N.Y.2d 117, 421 N.Y.S.2d 863, 397 N.E.2d 374 (1979). Equally important, the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records. Standard Textile Co. v. Nat l Equip. Rental, 80 A.D.2d 911 (2nd Dep t 1981). The outside record must satisfy the foundation requirements of C.P.L.R independently. People v. Cratsley, 86 N.Y.2d 81, 89 (1995). By contrast, in Discover Bank v. Shimer 36 Misc. 3d 1214, 957 N.Y.S.2d 263 (Dist. Ct. N.Y. Co. 2012), the Court found affidavit from the employee of the plaintiff s servicing affiliate (a separate company) inadequate to support the admission of monthly credit card statements generated by the plaintiff as business records, saying: Although the affidavit avers, in conclusory terms, that the [credit card] statements were all created and sent to defendant in the regular course of plaintiff s business, and that [the affiant] is fully familiar with the Plaintiff s record keeping practices, her affidavit otherwise fails to establish how she acquired such personal knowledge of [plaintiff s] business practices or procedures Indeed it appears that [the affiant s] sole involvement in the matter arises from her employment by DB Servicing Corporation, a servicing affiliate for plaintiff s collection efforts regarding defaulted credit card accounts No details are provided respecting that affiliate s involvement, if any, in plaintiff s day to day business operations or its record keeping practices for accounts that are not in default. No effort is made to demonstrate that [the affiant] was actually trained to perform any task besides signing off on large groups of mass produced affidavits. And no details are provided respecting when [the affiant] was first employed by the servicing affiliate. (internal citations and quotations omitted). 10

11 14. Moreover, in cases where one entity is testifying as an agent of another, the declarations of that agent are insufficient to establish the fact of agency. Lexow & Jenkins, P.C. v. Hertz Comm. Leasing Corp., 122 A.D.2d 25, 504 N.Y.S.2d 192 (2nd Dep t 1986); see also Deutsche Bank Trust Ams. v. Eisenberg, 24 Misc. 3d 1205(A), 890 N.Y.S.2d 368 (Sup. Ct. Suffolk Co. 2009). 15. Here, as in Erneste, attached to the Motion the Affidavit in Support and Amount Due of Cynthia Wallace, who claims without any supporting evidence that her employer, Specialized Loan Servicing LLC ( SLS ), is the servicer for Plaintiff, but does not claim to have sent the Purported Notice of Default or describe Plaintiff s or SLS s procedures for ensuring that items are properly addressed and mailed in fact, Ms. Wallace stops short of claiming that Plaintiff or SLS has a standard procedure for ensuring that items are properly addressed and mailed. 7 Ms. Wallace s Affidavit in Support and Amount Due states: 1. I am authorized to sign this affidavit on behalf of Plaintiff, as an officer or employee of SLS, which is Plaintiff s loan servicing agent ( servicer ) for the subject loan ( the Loan ). 2. SLS maintains records for the Loan in its capacity as Plaintiff s servicer. As part of my job responsibilities for SLS, I am familiar with the type of records maintained by SLS in connection with the Loan. 3. The information in this affidavit is taken from SLS s business records. I have personal knowledge of SLS s procedures for creating these records. They are: (a) made at or near the time of the occurrence of the matters recorded by persons with personal knowledge of the information in the business record, or from information transmitted by persons with personal knowledge; (b) kept, made and maintained in the course of SLS s regularly conducted business activities; and (c) it is the regular practice of SLS to make such records. 7 Exhibit K, Affidavit in Support and Amount Due. 11

12 9. By letter dated June 03, 2013, Plaintiff forwarded to Defendant, Sandra Guadalupe, a thirty (30) day notice, by first class mail advising Defendant of, inter alia, the default; the action necessary to cure the default, the time within which to cure the default; and that failure to do so would result in acceleration of the mortgage obligation. A true and accurate copy of the notice is annexed hereto as Exhibit E. 8 Like the statements in Erneste, Gerber, Dimura and Bell, Ms. Wallace s assertions concerning the purported service of the Purported Notice of Default are unsubstantiated and conclusory. Ms. Wallace does not claim to have personally served the Purported Notice of Default; instead she asserts: The information in this affidavit is taken from SLS s business records. 9 Despite her claim to have learned the details of the purported service through business records, Ms. Wallace does not identify or describe any of the records she reviewed apart from the copy of the Purported Notice of Default itself, nor does she claim that any of records relating to the purported service of the Purported Notice of Default apart from the copy of the Purported Notice of Default itself are attached to the Motion. 10 Evidencing both her lack of personal knowledge and the lack of information about the mailing in the records she reviewed, Ms. Wallace does not state when the Purported Notice of Default was purportedly served (recognizing that the date that appears on a notice is not necessarily the date it is purportedly served) Moreover, as explained above, Ms. Wallace has not met the standard discussed in Nocella, Kearney and Erneste for establishing the admissibility or reliability of the business records she relies on as evidence of mailing of the Purported Notice of Default. Ms. Wallace s affidavit is deficient as proof of mailing because like the affiant in Erneste, Ms. Wallace fails to offer any evidence that SLS or Plaintiff ever had a standard office practice for ensuring that 8 Exhibit K, Affidavit in Support and Amount Due, 1-3 & 9. 9 Exhibit K, Affidavit in Support and Amount Due, Exhibit K, Affidavit in Support and Amount Due, Id. 12

13 items are properly addressed and mailed, let alone one that was in place at the time the Purported Notice of Default were purportedly served. 12 In addition, like the witness in Nocella, Ms. Wallace does not say if she was working for SLS or if SLS was Plaintiff s agent at the time the Purported Notice of Default were purportedly mailed, leaving doubt as to whether she would know if a standard office practice for proper mailing even existed at that time (and Defendant does not admit that the Purported Notice of Default was served or that SLS sent it). 17. In addition, as discussed above, Ms. Wallace does not work for Plaintiff but instead asserts that she is employed by SLS and claims that SLS is the servicer for the Note and Mortgage without attaching a power of attorney or otherwise documenting or even explaining the details of the relationship between SLS and Plaintiff or the division of record-keeping practices between the two entities. 13 Applying the reasoning of Matter of Leon RR and Lexow, Ms. Wallace s conclusory, unsubstantiated assertions are insufficient to establish her authority, and that of her employer SLS, to act on Plaintiff s behalf respecting the Note and Mortgage or testify to the facts underlying this action. 18. Ms. Wallace s affidavit is also problematic because she claims that Plaintiff served the Purported Notice of Default without claiming that she examined Plaintiff s records. 14 Even more troubling, the purported copy of the Purported Notice of Default submitted with Plaintiff s Motion (and Defendant does not admit that the purported copy of the Purported Notice of Default has been authenticated or is admissible) states that it comes from a third party, Bank 12 Exhibit K, Affidavit in Support and Amount Due. 13 Exhibit K, Affidavit in Support and Amount Due. 14 Exhibit K, Affidavit in Support and Amount Due, 9. 13

14 of America, N.A., and claims that Bank of America, N.A. services the Note and Mortgage. 15 Applying the rule in Standard Textile Co., Cratsley, and Shimer, the testimony of an employee of SLS as to records SLS received from other entities is insufficient to show that those records are admissible or reliable as evidence, even if the records are from Plaintiff (and Defendant does not admit the source of the records has been identified). Since, as discussed above, Ms. Wallace does not claim to have examined or to be familiar with any entity s mailing practices or the record-making practices of either Plaintiff or Bank of America, N.A., there is an issue of fact as to whether Ms. Wallace or anyone from SLS can authenticate the documents they rely on including the purported copy of the Purported Notice of Default attached to Plaintiff s motion Equally important, Plaintiff failed to any other documentary proof that the purported copy of the Purported Notice of Default were ever delivered to the post office or dropped in a mailbox. 17 This is important, as there is absolutely no proof of first-class mailing or mailing thirty days before the time required to cure the default, which are both requirements of the Mortgage. 18 In addition, it is worth nothing the Appellate Division has repeatedly rejected the argument that a copy of the Purported Notice of Default suffices as proof. See, Gerber, 100 A.D.3d 966; Bell, 128 A.D.3d Applying the case law, Plaintiff has failed to submit adequate proof that the Purported Notice of Default was served by personal delivery or first class mail as required Section 15 and Section 22 of the Mortgage. 15 Exhibit M, Purported Notice of Default. 16 Exhibit K, Affidavit in Support and Amount Due; Exhibit M, Purported Notice of Default. 17 Exhibit M, Purported Notice of Default; Plaintiff s Motion. 18 Exhibit K, Affidavit in Support and Amount Due; Exhibit M, Purported Notice of Default; Exhibit E, Mortgage. 19 Exhibit M, Purported Notice of Default. 14

15 21. As compliance with Section 22 of the Mortgage is a mandatory condition precedent to acceleration of the loan, Plaintiff s failure to prove that the Purported Notice of Default complied with the requirements of Section 22 requires dismissal of the action. 2. The Purported Notice of Default Impermissibly Shortens the Thirty-Day Period to Cure By Requiring Payment of an Amount Due in the Future for Compliance 22. Paragraph 22(b)(3) of the Mortgage explicitly requires that Defendant be given 30 days to cure the default In HSBC v. Kramer, Justice McCabe, the former foreclosure justice in Supreme Court of Nassau County and the Appellate Division, found a default notice defective in that it impermissibly shortened the thirty-day period, stating: 20 Exhibit E, Mortgage, 22(b)(3). 15

16 Here, the Purported Notice of Default 22 dated June 3, 2013 explicitly shortens the required thirty-day period to cure by piggybacking additional amounts arising from possible future defaults onto the amount required to cure the present default. The Purported Notice of Default identifies and amount as the TOTAL DUE but immediately below that amount states: You have the right to cure the default. To cure the default, on or before July 13, 2013, Bank of America, N.A. must receive the amount of $75, plus any additional regular monthly payment or payments, late charges, fees and charges, which become due on or before July 1, The Purported Notice of Default is dated June 3, The Note requires monthly payments on the first day of each month beginning August 1, 2005 and the Loan Modification Agreement implicitly continues that in Paragraphs 3 through 5 by making the dates of all monthly payments and changes in monthly payments the first of the month. 25 Therefore, an additional payment became due on July 1, 2013, which the Purported Notice of Default indicates must be paid only twelve days later, July 13, 2013 to cure the default. 26 This shortens the thirty-day period in violation of the Mortgage; therefore, the action should be dismissed. 21 Exhibit N, HSBC v. Kramer, Index No /08 (Sup. Ct. Nassau Co. Jul. 27, 2009). 22 Exhibit M, Purported Notice of Default. 23 Exhibit M, Purported Notice of Default (emphasis added). 24 Exhibit M, Purported Notice of Default. 25 Exhibit D, Note; Exhibit F, Loan Modification Agreement. 26 Exhibit M, Purported Notice of Default. 16

17 3. Plaintiff s Purported Notice of Default Is Defective in That It Does Not Provide an Explicit Sum to Cure the Default 26. An equally persuasive variation is that Plaintiff failed to provide an explicit sum that Defendant must pay to avoid a default. In Wells Fargo v. Cullen, in discussing the thirty-day notice requirement, Justice Alice Schlesinger noted: Here, as discussed above, the Purported Notice of Default identifies and amount as the TOTAL DUE but immediately below that amount states: You have the right to cure the default. To cure the default, on or before July 13, 2013, Bank of America, N.A. must receive the amount of $75, plus any additional regular monthly payment or payments, late charges, fees and charges, which become due on or before July 1, Exhibit O, Wells Fargo v. Cullen, Index No /08 (Sup. Ct. N.Y. Co. Jun. 30, 2010). 28 Exhibit M, Purported Notice of Default (emphasis added). 17

18 28. Like the notice in Cullen, the Purported Notice of Default fails to clearly advise Defendant of the amount required to cure the default; instead it vaguely refers to A any additional regular monthly payment or payments, late charges, fees and charges, which become due on or before July 1, 2013 without indicating how much they may be or when they may become due. 29 That confusion is exacerbated in the following paragraph, which states [t]he default will not be considered cured unless Bank of America, N.A. receives good funds in the amount of $75, on or before July 13, 2013, suggesting that Bank of America will accept the amount $75, due as of the date of default without the additional regular monthly payments, late charges, fees and charges due on or before July 1, 2013 previously referenced. 30 Thus, it is clear that the ambiguities in the Purported Notice of Default fail to comport with the express, straightforward requirements of Section 22 of the Mortgage. 29. Service of a proper default notice is a condition precedent to the acceleration of the loan. Sabloff, supra at 722; Erneste, supra at 1115(A). Thus, since the Purported Notice of Default fails to make clear the amount required to cure the default, the action must be dismissed. B. PLAINTIFF FAILED TO DEMONSTRATE STANDING TO PROCEED WITH THIS ACTION 30. For Plaintiff to have standing to prosecute this action, it must been granted ownership of both the mortgage and the note at the time the action is commenced. See U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 890 N.Y.S.2d 578 (2nd Dep t 2009). In Citimortgage v. Stosel, 89 A.D.3d 887, 934 N.Y.S.2d 182 (2nd Dep t 2011) (internal citations omitted) the 29 Id. 30 Exhibit M, Purported Notice of Default. 18

19 Second Department noted that [a] plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note, either by physical delivery or execution of a written assignment prior to the commencement of the action. The Second Department further held that the plaintiff bears the burden of demonstrating standing where the defendant s answer places standing in issue. Id. 31. Here, Defendant placed Plaintiff s standing in issue by raising it in her answer. 31 In response, Plaintiff produces the conclusory statement in the Affidavit in Support and Amount Due that [t]he note has been duly indorsed and delivered to Plaintiff or its agent, and the original Note is currently and has been physically held by Plaintiff prior to the commencement of the action 32 and three assignments. The assignment dated May 13, 2011(the First Assignment ) states: Exhibit C, Answer. 32 Exhibit K, Affidavit in Support and Amount Due, Exhibit G, First Assignment. 19

20 32. The assignment dated June 20, 2013 (the Second Assignment ) states: Finally, there is a so-called Correction Assignment dated November 8, 2013 (the Correction Assignment ) claiming to correct the First Assignment that states: Exhibit H, Second Assignment. 35 Exhibit I, Correction Assignment. 20

21 34. Based on the following, Plaintiff failed to demonstrate that it has standing to maintain this action. 1. Plaintiff Failed to Demonstrate That the Note Was Physically Delivered to It Before It Filed the Action 35. Plaintiff has failed to establish standing based on its physical possession of the Note prior to the commencement of the action. To establish standing by physical possession, a plaintiff is required to produce probative evidence clearly setting forth the factual details of a physical delivery of the note. CitiMortgage, Inc. v. Stosel, 89 A.D.3d 887, 934 N.Y.S.2d 182 (2nd Dep t 2011); Deutsche Bank Nat l Trust Co. v. Barnett, 88 A.D.2d 636, 931 N.Y.S.2d 630 (2nd Dep t 2011). Conclusory boilerplate statements such as plaintiff is the holder of the note or plaintiff is in possession of the note will not suffice when standing is raised as a defense. Aurora Loan Svcs. v. Weisblum, 85 A.D.3d 95, 923 N.Y.S.2d 609 (2nd Dep t 2011). In U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 890 N.Y.S.2d 578 (2nd Dep t 2009), the Second Department held that the plaintiff failed to establish physical delivery of the note because the affidavit from the plaintiff s vice president was conclusory and the copy of the note the plaintiff submitted contained an undated endorsement in blank by the original lender. See also U.S. Bank, N.A. v. Faruque, 120 A.D.3d 575, 577, 991 N.Y.S.2d 630 (2nd Dep t 2014); Deutsche Bank Nat l Trust Co. v. Haller, 100 A.D.3d 680, 682, 954 N.Y.S.2d 551 (2nd Dep t 2012). 36. In Wells Fargo Bank, NA v. Ostiguy, 127 A.D.3d 1375, 8 N.Y.S.3d 669 (3rd Department), the Court rejected the affidavit of plaintiff s representative as proof of standing because of its equivocation as to the location of the Note, stating: 21

22 37. Also, in JP Morgan Chase Bank, N.A. v. Hill, 36, the Third Department reversed the grant of summary judgment to the foreclosing plaintiff based on the failure of the plaintiff to demonstrate physical possession of the note, reasoning: 36 Exhibit P, 2015 N.Y. Slip Op (3rd Dep t 2015). 22

23 38. In LaSalle Bank v. Browd, the Court found no evidence that the foreclosing plaintiff possessed the Note, reasoning: To the extent plaintiff asserts that it had physical possession of the note at the time of the commencement of this action, the affidavit of Mr. Cline does not give any factual details as to when plaintiff received physical possession of the note (see US Bank Nat. Assn. v Faruque, 120 AD3d 575 [2d Dept 2014]; Deutsche Bank Natl. Trust Co. v Barnett, 88 AD3d 636, 637 [2d Dept 2011]; Aurora Loan Servs., LLC v Weisblum, 85 AD3d at 108; U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2d Dept 2009]) and by whom physical delivery of the note was made (see Homecomings Fin., LLC v Guldi, 108 AD3d 506 [2d Dept 2013]; HSBC Bank USA v Hernandez, 92 AD3d 843 [2d Dept 2012]; cf. Aurora Loan Servs., LLC v Taylor, 114 AD3d 627). In addition, to the degree Mr. Cline's knowledge is based upon plaintiff's records (as opposed to the records of Select Portfolio), he does not establish that he had personal knowledge of plaintiff's business practices or procedures. The affirmation of plaintiff's counsel is not based upon personal knowledge and therefore is of no probative or evidentiary significance regarding the issue of whether plaintiff received physical possession of the note prior to commencement of the action (see Zuckerman v City of New York, 49 NY2d at 563). That a copy of the note and endorsement was annexed to the complaint does not itself demonstrate plaintiff was in physical possession of the original note (with endorsement) at the time of commencement of the action. 37 In HSBC Bank USA v Hernandez, the Court also rejected the Plaintiff s attempt to rely on a conclusory affidavit from its servicing agent to demonstrate standing. 92 A.D.3d 843, 844, 939 N.Y.S.2d 120 (2nd Dep t 2012) (finding that plaintiff failed to sufficiently demonstrate its standing because the affidavit of its servicing agent "did not give any factual details of a physical delivery of the note and, thus, failed to establish that the plaintiff had physical possession of the note prior to commencing this action.") 37 Exhibit Q, 2015 N.Y. Slip Op (Sup. Co. Queens Co. Jan. 13, 2015) (emphasis added). 23

24 39. Also, New York courts have repeatedly found that an attorney s affirmation is not sufficient to establish that a note was delivered to Plaintiff where the attorney lacks personal knowledge of the delivery of the Note to Plaintiff. Deutsche Bank Trust Ams. v. Eisenberg, 24 Misc. 3d 1205(A), 890 N.Y.S.2d 368 (Sup. Ct. Suffolk Co. 2009). Moreover, in cases where an affiant is testifying as an agent of another person, the declarations of that agent are insufficient to establish the fact of agency. Lexow & Jenkins, P.C. v. Hertz Comm. Leasing Corp., 122 A.D.2d 25, 504 N.Y.S.2d 192 (2nd Dep t 1986); see also Deutsche Bank Trust Ams. v. Eisenberg, 24 Misc. 3d 1205(A), 890 N.Y.S.2d 368 (Sup. Ct. Suffolk Co. 2009). 40. Here, as in Collymore and Weisblum, Plaintiff made only conclusory statements concerning transfer of the Note and Mortgage, if at all. First, the Summons and Complaint was verified by an attorney who lacks personal knowledge instead of Plaintiff it cannot be relied upon as evidence. 38 See Juseinoski v. Board of Education of City of New York, 15 A.D.3d 353, 790 N.Y.S.2d 162 (2nd Dep t 2005). 41. Here, applying the reasoning in Collymore and Hernandez, Ms. Wallace s Affidavit in Support and Amount Due is insufficient proof of physical delivery because Ms. Wallace does not confirm the exact date that Plaintiff received the original Note or give any details of its physical delivery to Plaintiff. 39 Applying the reasoning in Ostiguy, Ms. Wallace s Affidavit is also deficient in that Ms. Wallace equivocates as to whether the Note was delivered to Plaintiff or to Plaintiff s unidentified agent Exhibit A, Summons and Complaint. 39 Exhibit K, Affidavit in Support and Amount Due, Exhibit K, Affidavit in Support and Amount Due, 5. 24

25 42. Moreover, like the affiant in Hill, Ms. Wallace fails to claim that she examined the original wet ink Note or even describe, identify or attach to the Motion the records that show who possessed it when the action was commenced. 41 Even more important, like in Hill, Ms. Wallace does not reference, and Plaintiff does not submit, any direct evidence showing how Plaintiff came to physically possess the Note Equally important, Ms. Wallace does not claim to be an employee of Plaintiff or to have reviewed any records of Plaintiff respecting the Note and Mortgage (let alone records relating to physical delivery of the Note). 43 Ms. Wallace does not provide enough evidence of the relationship she claims SLS has with Plaintiff to show that she can testify as to the delivery of the Note to Plaintiff or its identified agent Moreover, as in Eisenberg, since Plaintiff s counsel fails to claim personal knowledge that the Note was delivered to Plaintiff, the assertion by Plaintiff s counsel that Plaintiff is in possession of the Note is irrelevant Further, here, as recognized in Browd, Plaintiff s production of a copy of the Note with undated endorsements is insufficient proof of ownership of the Note in the absence of admissible proof of the circumstances of the physical delivery of the Note to Plaintiff Exhibit K, Affidavit in Support and Amount Due. 42 Id. 43 Exhibit K, Affidavit in Support and Amount Due; Plaintiff s Motion. 44 Exhibit K, Affidavit in Support and Amount Due. 45 Exhibit J, Affirmation in Support of Motion (1) for Summary Judgment; (2) to Amend Title; and (3) to Appoint Referee. 46 Exhibit D, Note; Exhibit Q, LaSalle Bank v. Browd, 2015 N.Y. Slip Op (Sup. Co. Queens Co. Jan. 13, 2015). 25

26 46. Therefore, since Plaintiff failed to provide the details regarding the physical delivery of the Note, Plaintiff failed to demonstrate that it has standing to proceed with this action based on physical delivery. 2. The Assignments Fail to Demonstrate Plaintiff s Standing Because MERS Lacked the Authority to Assign the Note and the Mortgage 47. The First Assignment fails to demonstrate Plaintiff s standing because Plaintiff failed to demonstrate that MERS was authorized to assign the Note or the Mortgage to BAC HOME LOAN SERVICING, LP, FKA COUNTRYWIDE HOME LOANS SERVICING, LP; equally important, the Correction Assignment fails to demonstrate Plaintiff s standing because Plaintiff failed to demonstrate that MERS, acting as solely as a nominee for America s Wholesale Lender was authorized to assign the Note or the Mortgage to BAC Home Loans Servicing, LP, FKA Countrywide Home Loans Servicing, LP. 47 The Mortgage defines America s Wholesale Lender as the lender at paragraph D. 48 Nothing in the Note or the Mortgage provides authority for MERS to assign the Note or the Mortgage. 49 In the same manner, there is no proof that Mortgage defines America s Wholesale Lender granted MERS a power of attorney to assign or deliver the Note or the Mortgage at any time. 50 In Bank of New York v. Silverberg, 86 A.D.3d 274, 926 N.Y.S.2d 532 (2nd Dep t June 7, 2011), the Second Department held that a plaintiff lacks standing to commence a foreclosure action where, as in the instant action, MERS, acting as the assignor of the Mortgage, has been listed as the nominee and mortgage for purposes of recording, but was never the actual holder or assignee of the underlying note. The Second Department reasoned: 47 Exhibit E, Mortgage; Exhibit G, First Assignment; Exhibit I, Correction Assignment. 48 Exhibit E, Mortgage. 49 Exhibit E, Note; Exhibit E, Mortgage. 50 Plaintiff s Motion 26

27 Bank of New York v. Silverberg, 86 A.D.3d 274, 926 N.Y.S.2d 532 (2nd Dep t June 7, 2011). 48. Since Plaintiff has failed to demonstrate either that MERS had the authority to assign the Note, Plaintiff has failed to show that the First Assignment or the Correction Assignment effectively transferred the Note to BAC Home Loans Servicing, LP, FKA Countrywide Home Loans Servicing, LP. 51 In turn, without this evidence, Plaintiff failed to show that Bank of America, N.A. acquired the Note by being a successor to BAC Home Loans Servicing, LP, FKA Countrywide Home Loans Servicing, LP or was otherwise authorized to 51 Exhibit G, First Assignment. 27

28 transfer the Note or the Mortgage to Plaintiff via the Second Assignment. 52 By reason thereof, the Plaintiff lacks standing to proceed with this action. C. PLAINTIFF FAILED TO DEMONSTRATE COMPLIANCE WITH R.P.A.P.L Plaintiff failed to demonstrate that R.P.A.P.L does not apply to this action. Section 1304 of the R.P.A.P.L. requires the foreclosing party in an action involving a home loan to serve a notice on the homeowner at least ninety days before commencing the action. The notice must contain certain statutorily-prescribed information and be printed in at least fourteen point type. N.Y.R.P.A.P.L. 1304(1) (2013). 50. In Aurora Loan Services v. Weisblum, 85 A.D.3d 95, 923 N.Y.S.2d 609 (2nd Dep t 2011), the Second Department held that the foreclosing plaintiff must submit sufficient evidence demonstrating the absence of material issues as to its strict compliance with RPAPL 1304, and the failure to make this showing requires denial of the [plaintiff s] motion [for summary judgment], regardless of the opposing papers. Id. (emphasis added). The Court went on to grant the defendant s motion to dismiss, holding that because compliance with RPAPL 1304 is a mandatory condition precedent, the plaintiff s failure to comply cannot be disregarded. 51. In Weisblum, the Court detailed the specificity required to comply with 1304: 52 Exhibit H, Second Assignment. 28

29 85 A.D.3d at Several Courts have stated that an affidavit of service of the notices required by R.P.A.P.L 1304 is only adequate if prepared by one with personal knowledge of the service. In Deutsche Bank Nat l Trust Co. v. Day, 53 Justice Pitts stated: In HSBC Mortg. Corp. v. Laurent, 54 Justice Thomas Adams found that an affidavit from an employee of the plaintiff was insufficient proof of a first class mailing in that it does not specifically state that [the employee] himself mailed the RPAPL 1304 notice to defendant Laurent. 53. As discussed above, where the witness is relying on business records to prove mailing, the witness must be able to confirm that the business had a regular procedure to ensure proper mailing at the time the mailing supposedly took place and can describe that procedure 53 Exhibit R, Deutsche Bank Nat l Trust Co. v. Day, Index No. 2728/11 (Sup. Ct. Suffolk Co. Dec. 15, 2011). 54 Exhibit S, Index No /10 (Sup. Ct. Nassau Co. Apr. 8, 2012). 29

30 with the requisite amount of specificity. Nocella v. Fort Dearborn Life Ins. Co., 99 A.D.3d 877, 955 N.Y.S.2d 70 (2nd Dep t 2012); Kearney v. Kearney, 42 Misc. 3d 360, 979 N.Y.S.2d 226 (Sup. Ct. Monroe Co. 2013) (citing Azriliant v. Eagle Chase Assocs., 213 A.D.2d 573 (2nd Dep t 1995). 54. Equally important, as previously discussed, the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records. Standard Textile Co. v. Nat l Equip. Rental, 80 A.D.2d 911 (2nd Dep t 1981). The outside record must satisfy the foundation requirements of C.P.L.R independently. People v. Cratsley, 86 N.Y.2d 81, 89 (1995). Additionally, in cases where an affiant is testifying as an agent of another person, the declarations of that agent are insufficient to establish the fact of agency. Lexow & Jenkins, P.C. v. Hertz Comm. Leasing Corp., 122 A.D.2d 25, 504 N.Y.S.2d 192 (2nd Dep t 1986); see also Deutsche Bank Trust Ams. v. Eisenberg, 24 Misc. 3d 1205(A), 890 N.Y.S.2d 368 (Sup. Ct. Suffolk Co. 2009). 55. In this action, Plaintiff failed to attach to the Motion adequate proof that the Notices required by R.P.A.P.L 1304 were mailed. This is important, because in Weisblum the Second Department emphasized that it is necessary to prove strict compliance with R.P.A.P.L A.D.3d at 95. To begin with, the Complaint is not verified by Plaintiff or anyone with personal knowledge and cannot be relied upon as evidence. 55 See Juseinoski v. Board of Education of City of New York, 15 A.D.3d 353, 790 N.Y.S.2d 162 (2nd Dep t 2005). 55 Exhibit A, Summons and Complaint. 30

31 56. Even more problematic, the Affidavit in Support of Motion and Amount Due by Ms. Wallace like the affidavits submitted in Laurent and Nocella, fails to allege either that Ms. Wallace served the Purported 1304 Notices herself or that Plaintiff or any other entity has procedures for ensuring that items are properly addressed and mailed. 56 Ms. Wallace states: 1. I am authorized to sign this affidavit on behalf of Plaintiff, as an officer or employee of SLS, which is Plaintiff s loan servicing agent ( servicer ) for the subject loan ( the Loan ). 2. SLS maintains records for the Loan in its capacity as Plaintiff s servicer. As part of my job responsibilities for SLS, I am familiar with the type of records maintained by SLS in connection with the Loan. 3. The information in this affidavit is taken from SLS s business records. I have personal knowledge of SLS s procedures for creating these records. They are: (a) made at or near the time of the occurrence of the matters recorded by persons with personal knowledge of the information in the business record, or from information transmitted by persons with personal knowledge; (b) kept, made and maintained in the course of SLS s regularly conducted business activities; and (c) it is the regular practice of SLS to make such records. 10. Plaintiff further sent to Defendant, Sandra Guadalupe, a separate ninety (90) day pre-foreclosure notice on May 8, 2013 in accordance with RPAPL 1304, by certified and first class mail. The 90-day notice is typed in at least fourteen (14) point font. Each mailing included a list of approved Housing and Urban Development loan counselors in the Defendant s local area. A true and accurate copy of the notice is annexed hereto as Exhibit F. 57 Applying the standard laid out in Day and Laurent, since Ms. Wallace does not allege that she served the Purported 1304 Notices herself, but instead, relies on business records of SLS to reach the conclusions in her Affidavit, her allegations are insufficient to demonstrate compliance with R.P.A.P.L Tellingly, apart from the purported copy of the Purported Exhibit L, Purported 1304 Notices; Exhibit K, Affidavit in Support of Motion for Summary Judgment. 57 Exhibit K, Affidavit in Support and Amount Due at 1-2 & Id. 31

32 Notices, Ms. Wallace fails to identify any of the records she claims confirm the mailing of the Purported 1304 Notices or claim that any of those records are attached to Plaintiff s Motion Equally important, Ms. Wallace s allegations fail to meet the standard of admissibility laid out in Kearney and Nocella because Ms. Wallace does not allege that the purported sender of the Purported 1304 Notices (be it Plaintiff, SLS, Bank of America, N.A. or another entity) had a practice for ensuring that items are properly addressed and mailed or that she has knowledge of such a practice. 60 In addition, Ms. Wallace does not say whether she was employed with SLS or whether SLS was the agent of Plaintiff at the time of the alleged mailing of the Purported 1304 Notices, leaving doubt about the applicability to the Purported 1304 Notices of the knowledge she does claim to have. 61 In light of these deficiencies, the affidavits prepared by Ms. Wallace wholly fails to establish the reliability of either Ms. Wallace testimony or Plaintiff s business records as proof that the Purported 1304 Notices were served. 58. Similarly problematic, Ms. Wallace s affidavit is also problematic because she claims that Plaintiff served the Purported 1304 Notices without claiming that she examined Plaintiff s records. 62 Even more troubling, the purported copy of the Purported 1304 Notices submitted with Plaintiff s Motion (and Defendant does not admit that the purported copy of the Purported 1304 Notice has been authenticated or is admissible) states that it comes from a third party, Bank of America, N.A., and claims that Bank of America, N.A. services the Note and 59 Exhibit K, Affidavit in Support and Amount Due. 60 Id. 61 Exhibit K, Affidavit in Support and Amount Due. 62 Exhibit K, Affidavit in Support and Amount Due,