Business records again

Cadlerock Joint Venture, L.P. v Trombley, 2017 NY Slip Op 03927 (2d Dept. 2017)

“Contrary to the Supreme Court’s determination, the plaintiff failed to demonstrate the admissibility of the records relied upon by its account officer under the business records exception to the hearsay rule (see CPLR 4518[a]), and thus, failed to establish a default in payment under the note. “A proper foundation for the admission of a business record must be provided by someone with personal knowledge of the maker’s business practices and procedures” (Citibank, N.A. v Cabrera, 130 AD3d 861, 861). Here, the plaintiff’s account officer did not allege that she was personally familiar with HSBC’s record keeping practices and procedures, and thus failed to lay a proper foundation for the admission of records concerning the payment history under the note”

The assignee to the record cannot articulate how the assignor generated the note.

An AOB is not necessary at all

Beal-Medea Prods., Inc. v Geico Gen. Ins. Co., 2016 NY Slip Op 50594(U)(App. Term 2d Dept. 2016)

“Plaintiff’s motion should have been granted. Defendant’s CPLR 4401 motion for judgment as a matter of law was made before the close of plaintiff’s case, and was therefore premature (see Kamanou v Bert, 94 AD3d 704 [2012]). Furthermore, the court’s reason for granting the application was erroneous, as a no-fault plaintiff is not required to submit an executed assignment of benefits in order to demonstrate its prima facie entitlement to recover on a no-fault claim (see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498 [2015]; Hospital for Joint Diseases v Allstate Ins. Co., 21 AD3d 348 [2005], affd 9 NY3d 312 [2007]; Urban Radiology, P.C. v GEICO Gen. Ins. Co., 39 Misc 3d 146[A], 2013 NY Slip Op 50850[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]). Rather, for the assignment of benefits to become a subject of inquiry, a defendant must first demonstrate that it timely and properly raised an issue with respect to the assignment (see Hospital for Joint Diseases, 21 AD3d 348; Urban Radiology, P.C., 39 Misc 3d 146[A], 2013 NY Slip Op 50850[U]).”

An Assignment of Benefits is not a permitted inquiry unless raised in a verification or denial.  The Court (again) noted that an AOB is not part of a prima facie case.

Unpreserved and without merit

Boris Kleyman Physician, P.C. v IDS Prop. Cas. Ins. Co., 2014 NY Slip Op 51810(U)(App. Term 2d Dept. 2014)

“Defendant’s contention that plaintiff did not establish that it has standing to receive reimbursement of the first-party no-fault benefits to which its assignor is entitled because plaintiff failed to annex a copy of the assignment of benefits form executed by its assignor is not properly before this court, as this argument is being raised for the first time on appeal (see Joe v Upper Room Ministries, Inc., 88 AD3d 963 [2011]). In any event, since the claim forms received by defendant stated that plaintiff’s assignor had executed an assignment and, as in Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co. (9 NY3d 312, 319-320 [2007]), defendant was advised that the signature on the assignment was “on file,” defendant’s contention is devoid of merit (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 319-320 [2007]).

Defendant’s remaining argument is likewise not properly before this court, as this argument is also being raised for the first time on appeal (see Joe, 88 AD3d 963) and, in any event, this argument lacks merit (cf. Radiology Today, P.C. v Mercury Ins. Co., 34 Misc 3d 145[A], 2012 NY Slip Op 50148[U] [App Term, 2d, 11th & 13th Jud Dists 2012]).”

Putting aside the ridiculousness of this appeal, an interesting question is raised.  Does Plaintiff have to show some indicia of standing in order to prevail on its summary judgment motion?  What happens if there was no “on-file” statement on the claim forms or AOB?  I suspect it would not matter, but this case makes that proposition interesting.

Assignment not necessary to make a prima facie case in an assigned first-party action; Prima Facie case

Urban Radiology, P.C. v GEICO Gen. Ins. Co., 2013 NY Slip Op 50850(U)(App. Term 2d Dept. 2013)

(1) Law requiring AOB

“The Civil Court dismissed the complaint, finding that plaintiff had not established a prima facie case because it had not offered into evidence an assignment of benefits.

While the claim forms at issue did not contain any language regarding an assignment of benefits, there is nothing in the record to indicate that defendant timely objected to the completeness of the forms or sought verification of the existence of a valid assignment. Accordingly, defendant waived any defense based thereon (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 320 [2007]; Hospital for Joint Diseases v Allstate Ins. [*2]Co., 21 AD3d 348 [2005]).”

(2) What is a prima facie case

“Contrary to defendant’s contention, at a trial, unlike upon a provider’s motion for summary judgment, a provider is not required to “show that there is no defense to the cause of action or that the cause of action or defense has no merit” (CPLR 3212 [b]). Rather, it is defendant’s burden to show that it has a meritorious defense (see generally Seaboard Sur. Co. v Gillette Co., 64 NY2d 304 [1984]; Northrup v Blue Cross & Blue Shield of Utica-Waterdown, 235 AD2d 1022 [1997]; 70 NY Jur 2d, Insurance § 1493) and that such a defense is not precluded (see Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 282 [1997]).”

Considering that the validity of an AOB is a defense, in both no-fault and non-no-fault litigation, this makes sense.  The prima facie rule is weird.  It promotes more trials where traditional Mary Immaculate and Dan Medical would control over Avenue T v. Auto One.  I think the Court is probably stretching 3212(b) if it really believes that submission of a bill is sufficient for purposes of trial but not for summary disposition.

Assignment valid during unresolved lawsuit

Citibank, N.A. v Van Brunt Props., LLC, 2012 NY Slip Op 03974 (2d Dept. 2012)

In the world of multiple assignments, it is sometimes asked whether you can assign a chose of action or an interest in something after the commencement of a lawsuit?  The answer is “yes” and an order concomitantly amending the caption is also deemed proper:

“Finally, contrary to the defendant mortgagor’s contention, the documents submitted by the plaintiff established that the subject note and mortgage were validly assigned to Wells Fargo Bank, N.A., after the commencement of this action, and that Wells Fargo Bank, N.A., is therefore now the real plaintiff in interest. Under these circumstances, the Supreme Court should have granted the plaintiff’s motion to substitute Wells Fargo Bank, N.A., as the plaintiff in this action, and to amend the caption accordingly (see CPLR 1018, 3025[b]; Deutsche Bank Trust Co., Americas v Stathakis, 90 AD3d 983; Maspeth Federal Savings and Loan Ass’n v Simon-Erdan, 67 AD3d 750, 751; East Coast Props. v Galang, 308 AD2d 431).”

Standing in a direct first party case is waivable

Kruger v State Farm Mut. Auto. Ins. Co., 2010 NY Slip Op 09456 (3d Dept. 2010)

This is why I always plead every affirmative defense in every answer I generate.

“After joinder of issue and discovery, defendant moved for dismissal of the complaint, asserting for the first time that plaintiff had assigned her right to payment for no-fault benefits to her chiropractor and did not have standing to bring the present action. Supreme Court agreed that plaintiff lacked the capacity to sue and dismissed the complaint, and plaintiff appeals.

Defendant asserted that plaintiff lacked standing to maintain this action but, as that defense was not raised in a pre-answer motion to dismiss or in defendant’s answer, it was waived and cannot [*2]now be advanced (see CPLR 3211 [a] [3], [e]; McHale v Anthony, 70 AD3d 466, 467 [2010]; Todaro v GEICO Gen. Ins. Co., 46 AD3d 1086, 1087 [2007]). Contrary to defendant’s contention, the standing issue does not implicate the jurisdiction of Supreme Court such as to render it nonwaivable. Supreme Court is empowered to determine whether defendant is liable to pay no-fault benefits (see Marangiello v Kamak, 64 AD2d 624, 625 [1978]), and whether plaintiff is a proper person to pursue that claim “is an issue separate from the subject matter of the action or proceeding, and does not affect the court’s power to entertain the case before it” (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 243 [2007]; see Matter of Renee XX. v John ZZ., 51 AD3d 1090, 1092-1093 [2008]). Accordingly, defendant waived its right to assert lack of standing as an affirmative defense.”

Spell it out in the affidavit

St. Vincent’s Hosp. & Med. Ctr. v American Tr. Ins. Co., 2010 NY Slip Op 52063(U)(App. Term 2d Dept. 2010)

“As defendant was already in possession, prior to its verification requests, of the subject NF-5 forms, which each bore notations that the assignor’s signature was “on file,” defendant’s verification requests, in effect, sought a copy of the document(s) “on file” which had been signed by the assignors. Since SVHMC established that it had, in response to the verification requests, provided defendant with copies of the authorizations to release information and the assignments executed by the assignors, SVHMC established that it had complied with those requests. While defendant’s attorney asserted that defendant had never received the signed assignment of benefits forms, defendant’s attorney’s affirmation was without probative value as defendant’s attorney lacked personal knowledge of same

Do you see what was missing from Appellant’s answering papers?

Motion seeking leave to amend the answer to seek affirmative defense of lack of standing is proper

Aurora Loan Servs., LLC v Thomas, 2010 NY Slip Op 01606 (2d Dept. 2010)

Contrary to the plaintiff’s contention, the defendant Terence Thomas did not waive the defenses of lack of standing and lack of capacity to sue (cf. Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239). Further, the Supreme Court properly granted those branches of Thomas’s motion which were for leave to amend his answer to assert the defenses of lack of standing and lack of capacity to sue. Motions for leave to amend pleadings should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit (see CPLR 3025[b]; Lucido v Mancuso, 49 AD3d 220, 222). Here, the proposed amendments were not palpably insufficient or patently devoid of merit. Since the documents upon which Thomas relied in making his motion were obtained from the plaintiff in discovery, there was also no showing of prejudice or surprise resulting directly from Thomas’s delay in seeking leave. Accordingly, the Supreme Court properly granted those branches of Thomas’s motion.”

This would not apply in a no-fault action.  This has been discussed previously.  Type in “assignment” in the search box to the right if you want to see a prior discussion of this issue.

But just note how through discovery, information was gleaned that would allow an otherwise untimely motion to have merit.

Proving standing without an assignment?

Since proof of standing is generally not an affirmative part of a no-fault claimant’s prima facie case, this case from the First Department might be of minimal importance to the no-fault bar.  For those of us who are called to help friends, loved ones and members of the armed services avoid foreclosures, the “assignment” defense has scored major victories at the Appellate Division, Second Department.

The matter of IRB-Brasil Resseguros S.A. v Eldorado Trading Corp. Ltd., 2009 NY Slip Op 09395 (1st Dept. 2009), takes away some steam from this defense as set forth herein:

“Plaintiff’s original motion for summary judgment was denied because of the court’s concern that the Euroclear statement and other documents suggested that BB Securities, rather than plaintiff, may have been the true holder under the terms of the note. Plaintiff moved to renew, submitting an affidavit by BB’s managing director, clearly averring that it held the note solely as custodian for plaintiff, as well as an assignment agreement between BB and plaintiff, establishing the latter’s exclusive entitlement to sue under the note. Under these circumstances, the court providently exercised its discretion in granting renewal in the interest of justice (see Garner v Latimer, 306 AD2d 209 [2003]). The additional affidavit by an officer familiar with the corporate records, accompanying a true copy of the assignment agreement, was admissible (see DeLeon v Port Auth. of N.Y. & N.J., 306 AD2d 146 [2003]), and established plaintiff’s entitlement to summary judgment.

In view of our finding that summary judgment was correctly granted upon renewal, we dismiss plaintiff’s appeal of the denial of its original motion for summary judgment as academic. However, had we not done so, we would hold that plaintiff met its prima facie burden on the initial motion for summary judgment by submitting evidence of defendant Eldorado Trading’s promise to pay under the note, the guarantee by defendants Eldorado S.A. and Verpar, and nonpayment (see Eastbank v Phoenix Garden Rest., 216 AD2d 152 [1995], lv denied 86 NY2d 711 [1995]). Plaintiff also submitted evidence demonstrating it had purchased the note, which was held by BB Securities on its behalf in a secure account at Euroclear. Contrary to defendants’ contention, the affidavit of a corporate officer with personal knowledge, together with [*2]authenticated business records, is admissible in support of a motion for summary judgment (see First Interstate Credit Alliance v Sokol, 179 AD2d 583, 584 [1992]).”

This case also has a rare appearance of the “interest of justice” exception to the general rule that renewal is not allowed unless new facts are presented.  It also has a standard business records discussion.  I will cross-link this on the evidence blog.

It is Standing Again

Countrywide Home Loans, Inc. v Gress, 2009 NY Slip Op 08989 (2d Dept. 2009)

“Contrary to the plaintiff’s contention, the Supreme Court properly granted that branch of the motion of the defendant Anthony Gress which was to dismiss the complaint insofar as asserted against him pursuant to CPLR 3211(a)(3) on the ground that the plaintiff lacked standing to bring this action. In order to commence a foreclosure action, the plaintiff must have a legal or equitable interest in the subject mortgage (see Wells Fargo Bank, N.A. v Marchione,AD3d, 2009 NY Slip Op 07624 [2d Dept 2009]; Katz v East-Ville Realty Co., 249 AD2d 243; Kluge v Fugazy, 145 AD2d 537, 538). “Where the plaintiff is the assignee of the mortgage and the underlying note at the time the foreclosure action was commenced, the plaintiff has standing to maintain the action” (Federal Natl. Mtge. Assn. v Youkelsone, 303 AD2d 546, 546-547; see Wells Fargo Bank, N.A. v Marchione,AD3d, 2009 NY Slip Op 07624 [2d Dept 2009]; First Trust Natl. Assn. v Meisels, 234 AD2d 414). Here, it is undisputed that the subject mortgage was not assigned to the plaintiff until July 5, 2007, more than five months after the commencement of this action on January 22, 2007. Furthermore, although the July 5, 2007, assignment recited that it was effective retroactive to August 1, 2006, “a retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of the assignment”

Would we have the same result in a no-fault case?  Compare, Davydov v. Progressive Ins. Co., 25 Misc.3d 19 (App. Term 2d Dept. 2009).