                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: July 21, 2016                     521710
________________________________

WELLS FARGO BANK, N.A., as
   Trustee for CARRINGTON
   MORTGAGE LOAN TRUST, SERIES
   2006-NC2 ASSET-BACKED
   PASS-THROUGH CERTIFICATES,
                    Respondent,
      v                                     MEMORANDUM AND ORDER

JONATHAN G. WALKER,
                    Appellant,
                    et al.,
                    Defendant.
________________________________


Calendar Date:   May 31, 2016

Before:   Lahtinen, J.P., Egan Jr., Lynch, Devine and Mulvey, JJ.

                             __________


      John P. Kingsley, PC, Catskill (John P. Kingsley of
counsel), for appellant.

      Peter T. Roach & Associates, PC, Syosset (Michael C.
Manniello of counsel), for respondent.

                             __________


Lynch, J.

      Appeals (1) from an order of the Supreme Court (Melkonian,
J.), entered April 28, 2015 in Ulster County, which, among other
things, granted plaintiff's motion for summary judgment, and (2)
from the judgment entered thereon.


      In April 2006, defendant Jonathan G. Walker (hereinafter
defendant) executed a note in favor of New Century Mortgage
                              -2-                521710

Corporation (hereinafter NCMC) that was secured by a mortgage on
real property located in Ulster County. In a 2006 pooling and
servicing agreement (hereinafter PSA), plaintiff was named as
trustee of a loan trust and NCMC was designated predecessor in
interest to Carrington Mortgage Services, LLC (hereinafter CMS),
as servicer. After NCMC filed for bankruptcy in 2007, certain
assets were transferred to New Century Liquidating Trust
(hereinafter NCLT). Also, as part of NCMC's bankruptcy, it sold
its mortgage loan servicing business to CMS and named it the
attorney-in-fact relative to the mortgages sold. In 2010, CMS
entered into a loan modification agreement with defendant that
increased the principal balance of the existing mortgage. In May
2012, the mortgage and underlying note were assigned to
plaintiff. Three days later, plaintiff commenced this
foreclosure action. Following joinder of issue, defendant sent a
document demand to plaintiff regarding the note and mortgage,
including a demand for production of the original note. Without
responding, plaintiff moved for summary judgment, which was
granted by Supreme Court (Melkonian, J.). Thereafter, Supreme
Court (Cahill, J.) issued a judgment of foreclosure and sale.
Defendant now appeals both the order and the judgment.

      A plaintiff can establish entitlement to summary judgment
by producing evidence of the mortgage, the unpaid note and the
defendant's default (see Deutsche Bank Natl. Trust Co. v Monica,
131 AD3d 737, 738 [2015]; Wells Fargo Bank, NA v Ostiguy, 127
AD3d 1375, 1376 [2015]). However, where, as here, the defendant
raised the issue of standing in the answer, the "plaintiff bore
the additional burden of demonstrating that, 'at the time the
action was commenced, [it] was the holder or assignee of the
mortgage and the holder or assignee of the underlying note'"
(Bank of N.Y. Mellon v McClintock, 138 AD3d 1372, 1373-1374
[2016], quoting Deutsche Bank Natl. Trust Co. v Monica, 131 AD3d
at 738). "Either a written assignment of the underlying note or
the physical delivery of the note prior to commencement of the
foreclosure action is sufficient to transfer the obligation"
(Chase Home Fin., LLC v Miciotta, 101 AD3d 1307, 1307 [2012],
quoting U.S. Bank, N.A. v Collymore, 68 AD3d 752, 754 [2009]).
"That said, the note[,] and not the mortgage, is the dispositive
instrument that conveys standing to foreclose under New York law"
(Deutsche Bank Natl. Trust Co. v Monica, 131 AD3d at 738; see
                              -3-                521710

Aurora Loan Servs., LLC v Taylor, 25 NY3d 355, 361-362 [2015]).
Notably, as relevant here, the holder of a note is "the person in
possession of a negotiable instrument that is payable either to
bearer or to an identified person that is the person in
possession" (UCC 1-201 [b] [21]; see UCC 1-201 [b] [5]).

      Here, plaintiff sought to establish standing by virtue of
the 2012 assignment, coupled with its assertion that it has had
possession of the note since 2006. To that end, plaintiff
produced the affidavit of Elizabeth Ostermann, a vice-president
for CMS, which, as noted, had been appointed attorney-in-fact for
plaintiff in February 2012. As to the issue of possession,
Ostermann avers that plaintiff, as trustee, has been in
continuous possession of the note since the PSA was signed in
June 2006 and "is still in possession of the [n]ote, and can
produce same if the [c]ourt so requires." As CMS was servicer
and attorney-in-fact, Ostermann was entitled to rely on the
transaction records (see Deutsche Bank Natl. Trust Co. v Monica,
131 AD3d at 739). For proof of possession, however, she simply
refers to the PSA, which is not in the record (compare Aurora
Loan Servs., LLC v Taylor, 25 NY3d at 359; Bank of N.Y. Mellon v
McClintock, 138 AD3d at 1374-1375; HSBC Bank USA, N.A. v Sage,
112 AD3d 1126, 1127-1128 [2013], lvs dismissed 23 NY3d 1015
[2014], 22 NY3d 1172 [2014]), and makes no representation as to
having examined the original note (see JP Morgan Chase Bank, N.A.
v Hill, 133 AD3d 1057, 1058 [2015]). Contrary to Supreme Court's
findings, the note is not indorsed and, thus, the court's
conclusion that plaintiff was the holder of the note was in error
(see UCC 1-201 [b] [5] [21]; 3-202). In our view, plaintiff's
proof falls short of establishing standing by physical delivery
of the note.

      As to the assignment, Ostermann avers that "[t]he
[m]ortgage was assigned by written agreement on May 14, 2012
. . . from New Century Corporation, to Wells Fargo Bank, N.A., as
Trustee." We recognize that, by its terms, the assignment
conveys the mortgage "together with the bond or note or
obligation described in said mortgage" – language that effects an
assignment of both the note and mortgage. The focus here,
however, is on whether the assignor had authority to actually
assign the note (see Bank of N.Y. v Silverberg, 86 AD3d 274, 281
                              -4-                521710

[2011]). Plaintiff has the burden of proof on this issue (see
id.). The assignment identifies the assignor as NCMC, while the
document is executed on behalf of "New Century Liquidating Trust
Successor-In-Interest to New Century Mortgage Corporation By
Carrington Mortgage Services, LLC as Attorney-in-Fact" by
Ostermann as vice-president of foreclosure for CMS. Plaintiff
points to several documents in the record to establish the
underlying authority for this assignment. Specifically, in
November 2008, NCLT, as successor to NCMC, gave CMS a limited
power of attorney to, among other things, execute mortgage
assignments. Previously, NCMC had transferred its servicing
rights to CMS. Significantly, in 2010, CMS and defendant entered
into a "Loan Modification Agreement" restating the principal
balance at $266,277 – a transaction memorializing a continuing
ownership interest in the note held by NCLT as successor to NCMC
and exercised through its agent CMS. Given the foregoing, we
agree that plaintiff established authority for NCLT, as successor
to NCMC, to effectuate the assignment of the note to plaintiff.
That CMS served as power of attorney for both parties to the
assignment does not undermine its validity. As such, we conclude
that Supreme Court properly found that plaintiff had standing to
initiate this foreclosure action (see Aurora Loan Servs., LLC v
Taylor, 25 NY3d at 361-362). We further conclude that plaintiff
duly demonstrated compliance with the 90-day notice requirements
and corresponding filing requirements set forth in RPAPL 1304 and
1306, respectively (see TD Bank, N.A. v Leroy, 121 AD3d 1256,
1257 [2014]).

     Lahtinen, J.P., Egan Jr., Devine and Mulvey, JJ., concur.
                              -5-                  521710

      ORDERED that the order and judgment are affirmed, with
costs.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
