Supreme Court of the State of New York, Appellate Division, Second Judicial Department

Decided on July 15, 2026

2023-10406, (Index No. 13422/13)

Mark C. Dillon, J.P.

Angela G. Iannacci

Deborah A. Dowling

James P. McCormack, JJ.

[*1]

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Nassau County (David P. Sullivan, J.), entered March 3, 2023. The order denied the plaintiff's motion for summary judgment on the complaint insofar as asserted against the defendants Jocelyn Edouard, individually and as administrator of the estate of Jean Edouard, also known as Jean Maurice Edouard, Shirley Gauthier, and Whitney Edouard, for leave to enter a default judgment against all nonappearing and nonanswering defendants, for leave to amend the caption to substitute US Bank Trust National Association, not in its individual capacity but solely as owner trustee for VRMTG Asset Trust, as the plaintiff, for an order of reference, and for an award of a fee to a guardian ad litem for services rendered.

ORDERED that the order is modified, on the law, by deleting the provision thereof denying those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants Jocelyn Edouard, individually and as administrator of the estate of Jean Edouard, also known as Jean Maurice Edouard, Shirley Gauthier, and Whitney Edouard, for leave to enter a default judgment against all nonappearing and nonanswering defendants, for an order of reference, and for an award of a fee to the guardian ad litem for services rendered, and substituting therefor a provision granting those branches of the motion; as so modified, the order is affirmed, with costs to the plaintiff.

On November 10, 2006, Jean Edouard, also known as Jean Maurice Edouard (hereinafter the borrower), executed a note in the amount of $401,250 in favor of nonparty GreenPoint Mortgage Funding, Inc. (hereinafter GreenPoint). The note was secured by a mortgage on certain real property located in Nassau County. The borrower died on July 10, 2011.

On November 6, 2013, the plaintiff, Bank of America, N.A., GreenPoint's successor in interest, commenced the instant action to foreclose the mortgage against, among others, Jocelyn Edouard, as administrator of the borrower's estate. Thereafter, the plaintiff moved, inter alia, for leave to amend the complaint to add the borrower's heirs, Jocelyn Edouard, individually, Shirley Gauthier, and Whitney Edouard, among others, as defendants. In an order dated May 30, 2018, the Supreme Court granted the plaintiff's motion, appointed a guardian ad litem for Whitney Edouard, and provided for the payment of a $250 fee to the guardian ad litem upon the filing of a notice of [*2]appearance. Jocelyn Edouard and Shirley Gauthier (hereinafter together the defendants) interposed an answer, asserting various affirmative defenses, including lack of standing. On July 7, 2018, the guardian ad litem submitted, among other things, a consent, a qualifying affidavit, an answer, a waiver, a report, and an affidavit of services rendered seeking a fee of $250.

The plaintiff moved for summary judgment on the complaint insofar as asserted against the defendants and Whitney Edouard, for leave to enter a default judgment against all nonappearing and nonanswering defendants, for leave to amend the caption to substitute US Bank Trust National Association, not in its individual capacity but solely as owner trustee for VRMTG Asset Trust (hereinafter US Bank), as the plaintiff, for an order of reference, and for an award of a fee to the guardian ad litem for services rendered. The defendants opposed those branches of the motion which were for summary judgment on the complaint insofar as asserted against them, for an order of reference, and for leave to amend the caption, contending, inter alia, that the plaintiff lacked standing because it failed to demonstrate that the mortgage had been properly assigned to it. In an order entered March 3, 2023, the Supreme Court denied the plaintiff's motion. The plaintiff appeals.

"Generally, in a mortgage foreclosure action, a plaintiff demonstrates its prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of default" (Deutsche Bank Natl. Trust Co. v Kingsbury, 171 AD3d 871, 871; see Wells Fargo Bank, N.A. v Mitselmakher, 216 AD3d 1056, 1057). Where, as here, the plaintiff's standing has been placed in issue by the defendants' answer, "the plaintiff must prove its standing as part of its prima facie showing on a motion for summary judgment" (Deutsche Bank Natl. Trust Co. v Kingsbury, 171 AD3d at 872). A plaintiff has standing where it is the holder or assignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362; U.S. Bank N.A. v Hadar, 206 AD3d 688, 689). "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the . . . action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" (Dyer Trust 2012-1 v Global World Realty, Inc., 140 AD3d 827, 828; see U.S. Bank N.A. v Hadar, 206 AD3d at 689).

Here, the plaintiff established its standing by attaching a copy of the endorsed note to the complaint when commencing the action (see U.S. Bank N.A. v Hadar, 206 AD3d at 689; Deutsche Bank Trust Co. Ams. v Garrison, 147 AD3d 725, 726). In opposition, the defendants failed to raise a triable issue of fact as to the issue of standing. Contrary to the contention of the defendants before the Supreme Court , "a mere assignment of mortgage is irrelevant to the issue of the plaintiff's standing to foreclose, as the mortgage is not the dispositive document of title" (U.S. Bank Trust v McGlone, 201 AD3d 999, 1001, citing Aurora Loan Servs., LLC v Taylor, 25 NY3d at 361-362). Furthermore, the plaintiff sustained its burden of demonstrating its prima facie entitlement to judgment as a matter of law by submitting the mortgage, the note, and an affidavit of Jaimie Inman, a document verification specialist of the current loan servicer, attesting to the default in the repayment of the mortgage loan obligation (see Deutsche Bank Trust Co. Ams. v Garrison, 147 AD3d at 726). In opposition, the defendants failed to raise a triable issue of fact. Accordingly, the court should have granted that branch of the plaintiff's motion which was for summary judgment on the complaint insofar as asserted against the defendants.

Moreover, the Supreme Court should have granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against Whitney Edouard and for an order of reference.

Further, the Supreme Court erred in denying that branch of the plaintiff's motion which was for leave to enter a default judgment against all nonanswering and nonappearing defendants. An applicant for a default judgment against a defendant must submit proof of service of the summons and complaint, proof of the facts constituting the cause of action, and proof of the defaulting defendant's failure to answer or appear (see Star201, LLC v Duran, 233 AD3d 726, 728-729; Vanderbilt Mtge. & Fin., Inc. v Ammon, 179 AD3d 1138, 1141). To demonstrate the facts constituting the cause of action, the plaintiff "need only allege enough facts to enable a court to determine that a viable cause of action exists," because "defaulters are deemed to have admitted all [*3]factual allegations contained in the complaint and all reasonable inferences that flow from them" (Woodson v Mendon Leasing Corp., 100 NY2d 62, 71). Here, the plaintiff satisfied these requirements (see Star201, LLC v Duran, 233 AD3d at 729).

However, the plaintiff failed to establish that the caption should be amended to substitute US Bank as the plaintiff. Leave to amend a caption to substitute an assignee for the plaintiff may properly be granted upon evidence that the mortgage and underlying debt were assigned to the assignee (see CPLR 1018; U.S. Bank N.A. v Medina, 230 AD3d 1371, 1376; Nationstar Mtge., LLC v Grunwald, 203 AD3d 1170). Here, Inman stated in his affidavit that after the commencement of the action, the mortgage was transferred to US Bank and "said transfer was memorialized by an Assignment of Mortgage executed on November 5, 2021 and recorded December 24, 2021 at Liber MM46161, page 532." However, since Inman failed to annex to his affidavit the business records on which he relied for that statement, his statement was inadmissible hearsay (see U.S. Bank N.A. v Medina, 230 AD3d at 1376-1377; Citimortgage, Inc. v Bredehorn, 160 AD3d 803, 804). As such, the plaintiff failed to establish that US Bank is now the real party in interest (cf. Austin 26 Dental Group, PLLC v Sino Northeast Metals [U.S.A.], Inc., 230 AD3d 545, 548).

The Supreme Court should have granted that branch of the plaintiff's motion which was for an award of a fee to the guardian ad litem of $250, as the prior order of the court dated May 30, 2018, provided for the payment of such fee upon the filing of a notice of appearance on behalf of the ward, which was done by the guardian ad litem on July 7, 2018 (see generally Matter of Stark, 174 AD2d 746, 747).

DILLON, J.P., IANNACCI, DOWLING and MCCORMACK, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court