In Wilmington Savings Fund Socy., FSB v. McLaughlin, Slip Opinion 04576 (Appellate Division 2nd Dept 2021), the judgment of foreclosure and sale was reversed, branches of the plaintiff’s motion which were for summary judgment on the complaint as asserted against the defendants Michael McLaughlin and Rosemarie McLaughlin, to strike those defendants’ answer, and for an order of reference was denied, the plaintiff’s motion to confirm the referee’s report and for a judgment of foreclosure and sale denied, and the order entered June 8, 2018, were modified.
On August 5, 2008, the defendant Michael McLaughlin executed a promissory note in the sum of $417,000 in favor of Bank of America, N.A.. The note was secured by a mortgage executed by Michael McLaughlin and the defendant Rosemarie McLaughlin. The plaintiff commenced an action to foreclose the mortgage alleging that the mortgage was assigned to it and that it was the holder of the note and mortgage.
The plaintiff moved for summary judgment, to strike their answer, and for an order of reference. The defendants opposed the motion, asserting, that they did not default in making payment, and that Bank of America erroneously deemed the account in default. In an order entered June 8, 2018, the Supreme Court, granted those branches of the plaintiff’s motion and referred the matter to a referee to ascertain and compute the amount due to the plaintiff. The plaintiff then moved to confirm the referee’s report and for a judgment of foreclosure and sale. The court granted the plaintiff’s motion for Judgment of foreclosure and sale. The defendants appealed.
“In order to establish prima facie entitlement to judgment as a matter of law in a foreclosure action, a plaintiff must submit the mortgage and unpaid note, along with evidence of the default” (Zarabi v Movahedian, 136 A.D.3d 895, 895). A plaintiff may establish a default in payment by, inter alia, submitting an affidavit from “a person having [personal] knowledge of the facts” (CPLR 3212[b]) or by submitting other evidence “in admissible form” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 N.Y.3d 498, 507; see Bank of N.Y. Mellon v Gordon, 171 A.D.3d 197, 208). “Conclusory affidavits lacking a factual basis are without evidentiary value” (U.S. Bank Trust. N.A. v Vanterpool, 189 A.D.3d 1516, 1518).
The Appellate Court found that contrary to the Supreme Court’s determination, the plaintiff failed to establish, prima facie, the defendants’ default in payment by submitting the affidavit of Haley Pope, the Foreclosure Manager for its loan servicer. Pope did not specifically state that she had personal knowledge of the defendants’ default in payment. To the extent Pope relied on her review of business records, she did not identify which records she relied on to assert a default in payment, or attach any business records to her affidavit to substantiate the alleged default in payment. Thus, the plaintiff failed to meet its prima facie burden by relying on Pope’s conclusory assertion that the defendants defaulted in payment, which was not supported by a factual basis (see id. at 1518; Deutsche Bank Natl. Trust Co. v McGann, 183 A.D.3d 700, 702). Further, the affidavit of Ilda Huzejrovic, another employee of the loan servicer, was not submitted on the plaintiff’s motion, for summary judgment.
Accordingly, since the plaintiff failed to meet its prima facie burden, the Supreme Court should have denied those branches of its motion which were for summary judgment on the complaint insofar as asserted against the defendants, to strike their answer, and for an order of reference.
Appellate Court in this matter outlined the standard as needing the records relied upon within the affidavit and/or attached to the affidavit to substantiate the default. If you have any questions regarding this case, please contact Deborah Gallo, Esq. at email@example.com.