OneWest Bank, FSB v. Simpson

Citations: 2017 NY Slip Op 1875; 148 A.D.3d 920; 49 N.Y.S.3d 523Docket: 2015-05226

Court: Appellate Division of the Supreme Court of the State of New York; March 15, 2017; New York; State Appellate Court

Original Court Document: View Document

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In OneWest Bank, FSB v. Simpson, the Appellate Division of the Supreme Court of New York addressed an appeal from defendants Gladys Simpson and Toni K. Bolt concerning a mortgage foreclosure action initiated by OneWest Bank. The court affirmed a November 12, 2014 order that granted OneWest's motion for summary judgment, struck the defendants' answer, and appointed a referee to calculate the amount owed to the bank. The appeal from an earlier October 17, 2014 order was dismissed as it was superseded. 

The case originated from a reverse mortgage issued to the decedent, Gloria Johnson, which was secured by her property. Following her death in July 2011, her daughters, as co-administrators of her estate, transferred the property to their grandmother, Gladys Simpson, without consideration, rather than settling the mortgage debt. In December 2012, OneWest acquired the mortgage and subsequently filed for foreclosure in May 2013. Defendants asserted various defenses, including OneWest's lack of standing and failure to provide required notice of default. However, the court found that OneWest had established its prima facie case by presenting the relevant mortgage documents and proof of default. The court's decision included the awarding of costs to OneWest.

A plaintiff's standing to initiate a foreclosure action is critical when challenged by a defendant. The plaintiff must prove it holds or was assigned the underlying note at the time of filing. Proof of standing can be established through a written assignment or physical delivery of the note before the action's commencement. The mortgage is inseparable from the debt it secures. In this case, OneWest demonstrated its standing by providing an affidavit from an assistant secretary confirming physical possession of the note nearly two years prior to the action. Additionally, OneWest supported its motion for summary judgment by presenting the mortgage, unpaid note, and evidence of the decedent's death, which triggered debt acceleration under the reverse mortgage terms.

OneWest also submitted a repayment notice sent to the decedent's estate, asserting compliance with notification requirements of the mortgage. While the defendant Bolt denied receiving this notice, it was addressed to the estate as per the mortgage terms. OneWest provided internal loan tracking records in response to this denial, confirming the notice was mailed to the estate. The court found this evidence appropriate to consider, as it addressed the denial and clarified compliance with mortgage terms, leaving no factual dispute that would preclude summary judgment. The court granted OneWest's motion for summary judgment against the defendants, allowing for the striking of their answer and ordering a reference.