I. Statement Pursuant to CPLR § 2219 [a]

Trial was commenced in Part 7 before the Hon. Ronald Castorina, Jr. on August 18, 2025, at 9:30 AM and continued through 5:05 PM. On August 19, 2025 trial continued at 10:00 AM and concluded that afternoon. The Court has considered: (1) the trial transcript of proceedings conducted in Part IAS-7; (2) the exhibits received in evidence (including Plaintiff's Exhibit 1, a CMS data-entry record reflecting counsel's receipt of the original note/allonge on June 10, 2014); and (3) the parties' written post-trial summations (NY St Cts Filing [NYSCEF] Doc Nos. 487; 488).

I. Findings of Fact

This foreclosure action was commenced in 2014. After extensive motion practice, the Court framed the trial on a limited issue: whether Plaintiff possessed the original promissory note prior to commencement, including possession through authorized counsel. At the start of trial, Plaintiff objected that Defendant's late-served exhibit binder violated the Court's deadline; the Court ruled it would strictly adhere to its prior order and would exclude documents not produced in discovery, reiterating that the Court "does not engage in trial by ambush."

Kyra Schwartz, Senior Manager in the Mortgage Default Department at Frenkel Lambert Weisman & Gordon, LLP, testified by videoconference via Microsoft Teams. She has been with the firm since 2008, and her responsibilities include managing staff who process referrals and commence foreclosure actions ("first legal"). She described the firm's collateral-file procedures: original instruments (including the original note and allonge) are received by traceable carrier (FedEx/UPS), scanned into the firm's Case Management System (CMS), and then stored in a secure collateral-room with limited access. CMS entries are date and time-stamped; prior entries are not altered; supplemental entries are added and separately time-stamped.

Ms. Schwartz explained that a CMS entry memorialized the firm's June 10, 2014, receipt of the "original note and allonge" for the subject loan. Plaintiff offered a printout of that CMS [*2]entry as Exhibit 1. Over defense objections (lack of foundation, hearsay, and vagueness), the Court permitted a voir dire. Ms. Schwartz showed her familiarity with CMS, identified it as the firm's regular business system, and testified that the entry was generated in the ordinary course, at or near the time of receipt, by an employee with knowledge and a business duty to record. The Court admitted Exhibit 1 as a business record.

Ms. Schwartz also testified that the foreclosure was commenced in July 2014 (i.e., after counsel's receipt), and she identified the affidavit of note possession she executed in relation to this action, addressing pre-commencement possession. The Court sustained certain objections as to form and scope but allowed the foundational testimony concerning the receipt date and the business-records nature of the CMS entry.

Adam Plotch, a named defendant, was sworn and testified. Defense counsel made appearances on his behalf and participated in objections and cross-examination of Plaintiff's witness; the transcript reflects Plotch's direct participation as a witness (name and New York City address stated for the record). His testimony addressed, inter alia, the history of prior litigation concerning the property (including a 2009 matter) and his belief that Plaintiff's documentation did not prove contemporaneous possession of the operative instrument at the time this action commenced. The defense pressed questions aimed at suggesting ambiguity over "which note" was referenced in Plaintiff's affidavit and whether counsel's custody equated to possession by Plaintiff; the Court sustained some objections and overruled others, directing the parties to proceed piece-by-piece and reiterating that admissibility would turn on foundation and relevance.

On the whole record, the Court credits Ms. Schwartz's account of receipt and custody on June 10, 2014, and finds that Exhibit 1 reliably memorializes that receipt. The defense offered no competing business record contradicting the CMS entry and presented no persuasive proof that any earlier litigation left the operative original note outside Plaintiff's (or its counsel's) possession at the time of commencement in July 2014.

As reflected in the written summations submitted after trial, the controlling standing principle is that a foreclosing plaintiff must be the holder of the note (or otherwise in lawful possession of it) at the time of commencement. The parties' submissions also reflect the corollary proposition that possession may be established through counsel as authorized agent, provided the evidence credibly demonstrates pre-commencement custody on Plaintiff's behalf. The burden rests with Plaintiff to prove such possession by a preponderance of the evidence.

Applying those standards to the record here, Plaintiff has met its burden. The CMS entry, admitted as a business record, reflects that counsel received the original note and allonge on June 10, 2014, and the action was commenced in July 2014. Crediting Ms. Schwartz's testimony about the secure collateral-room, limited access, scanning, date/time stamping, and immutability of prior entries, the Court finds that Plaintiff proved pre-commencement possession through its [*3]counsel.

The written submissions frame the admissibility analysis under the business-records rule: a record made in the regular course of business, at or near the time of the event recorded, by or from information transmitted by a person with knowledge under a business duty to report, is admissible to prove the fact of receipt. The Court sustained certain objections during examination but, after voir dire, found a sufficient foundation for Exhibit 1. The defense's claim that the CMS printout lacked letterhead or visible metadata goes to weight, not admissibility, where the custodian (or a knowledgeable manager) explains how the system stores and time-stamps entries and how printouts are generated. The Court therefore properly admitted Exhibit 1 and accords it significant weight on the question of when counsel had custody.

The defense invoked a 2009 foreclosure to imply that the operative instrument might not be the same or might not have been in Plaintiff's hands in 2014. On this record, that line of argument is speculative. The defense presented no documentary evidence that any other entity held the operative original at the time of commencement in July 2014, and no business records rebutting the June 10, 2014, CMS entry. The Court therefore rejects this contention.

At the threshold of trial, the Court reiterated that it would enforce its prior exhibit-exchange order and exclude materials not produced in discovery; the Court emphasized it would not permit "trial by ambush." Consistent with that directive, the Court sustained Plaintiff's objections to any expanded or untimely exhibit list served at 11:59 PM on the eve of trial, reserving only the possibility of enlargements/clarifications of items already in the record. The enforcement of the Court's schedule was discretionary and undertaken to ensure a fair proceeding.

The Court had the benefit of observing both Ms. Schwartz and Mr. Plotch. Ms. Schwartz's testimony was measured, internally consistent, and corroborated by Exhibit 1 and by her detailed description of the CMS and collateral-room protocols. Mr. Plotch spoke to his beliefs and recollections and raised questions about counsel's custody and the identity of the note; however, his testimony was not corroborated by contemporaneous business records and did not negate the June 10, 2014, receipt evidenced in Exhibit 1. On the whole record, the Court credits Plaintiff's proof.

Article 3 of the Uniform Commercial Code ("UCC"), as adopted in New York, governs negotiable instruments, including promissory notes. Under UCC § 3-104, a promissory note qualifies as a negotiable instrument when it embodies an unconditional promise to pay a fixed sum of money, is payable to order or bearer, and is payable on demand or at a definite time. As such, a mortgage note is a negotiable instrument, and the right to enforce it, and, by extension, the accompanying mortgage, rests with the party who is entitled to enforce the note under UCC § 3-301.

Pursuant to UCC § 3-301, the person entitled to enforce a negotiable instrument includes (1) the holder of the instrument, (2) a non-holder in possession of the instrument who has the rights of a holder, and (3) certain limited persons not in possession but with statutory rights to enforce (e.g., under § 3-309 or § 3-418). A "holder," as defined in UCC § 1-201 [b] [21] [A], is one in possession of an instrument payable either to bearer or to that person. Thus, possession of the original note endorsed in blank or specially to the plaintiff prior to commencement establishes the plaintiff's right to enforce. The New York Court of Appeals in Aurora Loan Servs., LLC v Taylor, 25 NY3d 355 [2015], and subsequent Appellate Division cases such as Bank of NY Mellon v Gordon, 171 AD3d 197 [2d Dept 2019], have reaffirmed that possession of the original note at the time of filing is sufficient to confer standing, even absent a contemporaneous written assignment of the mortgage.

In this matter, the record demonstrates that Wells Fargo Bank, N.A. ("Plaintiff"), through its authorized counsel, possessed the original promissory note and its accompanying allonge on June 10, 2014, prior to commencement of this foreclosure action in July 2014. The CMS data-entry record, admitted as Plaintiff's Exhibit 1, was received in evidence as a business record under the parameters of CPLR § 4518 [a] and UCC § 3-307 [b], reflecting regular-course business activity in the custody and logging of original loan documents. Ms. Kyra Schwartz's testimony described in detail the firm's collateral-management protocol, including use of a secure collateral room, date-stamped logging within the case-management system, and immutability of prior entries. The Court found her testimony credible and corroborated by the contemporaneous CMS record.

Applying the governing principles of UCC §§ 3-203 and 3-204, the Court finds that delivery of the note and allonge to Plaintiff's counsel constituted a transfer of the instrument for the purpose of giving the transferee the right to enforce it. Section 3-203 [1] defines transfer as delivery of an instrument "for the purpose of giving to the person receiving delivery the right to enforce the instrument." Such delivery, when made to an authorized agent or attorney, vests the principal with constructive possession and the corresponding right to enforce. The record amply supports that Plaintiff's counsel received and held the note in this representative capacity. Thus, under Article 3, the Plaintiff was the holder of the note through its counsel's possession as agent at the time of commencement.

Furthermore, the Court credits Ms. Schwartz's testimony regarding the allonge. Under UCC § 3-204 [2], an endorsement may appear either on the instrument itself or on a separate paper, commonly called an allonge, "affixed" to the instrument. Courts interpreting this provision have recognized that physical stapling is not mandatory where the evidence establishes the allonge was maintained with the note in the ordinary course of business. Here, the CMS record and Schwartz's testimony together establish that the allonge accompanied the note as part of a unified collateral package upon delivery. The allonge contained a valid endorsement that rendered the note payable either specifically to the Plaintiff or in blank, making it enforceable by [*4]the possessor.

The defense contended that the note produced in this action might differ from that in a prior foreclosure proceeding initiated in 2009. However, Article 3 looks to present possession and enforceability at the time of commencement, not historical or speculative chain-of-custody assertions unsupported by contemporaneous business documentation. The defense offered no documentary evidence, under UCC § 3-308, to rebut the presumption of authenticity attaching to a duly endorsed and produced negotiable instrument. The Plaintiff's production of a contemporaneous business record and credible testimony concerning pre-commencement possession is therefore legally sufficient to establish standing.

Considering the evidence presented, the Court finds that the Plaintiff has met its burden under Article 3 to demonstrate that it was a "person entitled to enforce" the note within the meaning of UCC § 3-301. The note's negotiation and transfer to Plaintiff's counsel prior to commencement, the existence of a properly executed allonge, and the maintenance of the original note in the counsel's collateral facility all collectively satisfy the statutory requirements. The defense's objections regarding lack of foundation or evidentiary completeness go to weight rather than admissibility, and the Court accords the admitted evidence full probative value.

Accordingly, under the comprehensive framework of Article 3 of the UCC, the Court concludes that Wells Fargo Bank, N.A., through its authorized counsel, lawfully possessed and held the negotiable instrument underlying this mortgage prior to commencement of this action, thereby acquiring the status of holder with standing to enforce the note and foreclose the mortgage securing it.

Plaintiff has proven, by a preponderance of the credible evidence, that it (through its authorized counsel) possessed the original note and allonge prior to commencement of this action.

Accordingly, it is

ORDERED, that Plaintiff Wells Fargo Bank, N.A. has established standing to foreclose; and it is further

ORDERED, that Defendant's defenses and objections directed to standing and to the admissibility of Plaintiff's business record are denied; and it is further

ORDERED, that Plaintiff shall settle a proposed Judgment of Foreclosure and Sale on notice, consistent with this Decision and Order; and it is further

ORDERED, that any evidentiary objections not expressly sustained on the record are overruled; and it is further

ORDERED, that this constitutes the Decision and Order of the Court.