The question in this case is whether a court may grant a lender summary judgment in a mortgage-foreclosure action if the lender does not produce the original version of the mortgage note for inspection.
Defendant Ross Caliguri owned a house in the Hamptons. In 2005, he gave Washington Mutual a mortgage on the house in exchange for a $1 million loan. As part of that transaction, Caliguri allegedly signed a note promising to repay the money and a contract in which he agreed that he had “no right of set-off, counterclaim or any defense to the obligation of the [note].”
During the financial crisis, Washington Mutual failed and was placed under FDIC receivership. JP Morgan Chase then purchased all of Washington Mutual’s assets and assumed all its liabilities.
In 2009, soon after Caliguri defaulted on his payment obligation under the note, Chase sought to foreclose on the mortgage. Chase alleged that it had purchased the note and the mortgage from the FDIC along with the rest of Washington Mutual’s assets. Supreme Court dismissed that action because Chase had not demonstrated that it had standing to foreclose on a mortgage granted in Washington Mutual’s favor. As the court noted, Chase supported its claim that it was now the holder of the mortgage only through an attorney affirmation, which was not based on personal knowledge.
In 2014, Chase brought a new foreclosure action, attaching a copy of the note to its complaint. Caliguri’s answer asserted, among other things, that the note attached to the complaint was a forgery and Chase lacked standing.
Chase moved for summary judgment. It submitted an affidavit from one its vice presidents, who, based on personal knowledge, described the transfer of the note from Washington Mutual to Chase and the location of the original version of the note. The affidavit attached a copy of the note. Chase also submitted a copy of the mortgage and a notarized copy of the contract between Washington Mutual and Caliguri, which incorporated both the mortgage and the note. And Chase submitted a copy of its agreement to purchase all of Washington Mutual’s assets. Chase’s summary judgment motion automatically stayed discovery.
Caliguri argued that the court should deny summary judgment because Chase had submitted only a copy of the note. He also argued that the court should hold the motion in abeyance and lift the discovery stay, giving him a chance to inspect the original note, which Chase had not made available before the discovery stay took effect.
Supreme Court granted Chase summary judgment. The court rejected Caliguri’s forgery defense, holding that Caliguri had submitted no evidence to support it and that, in any event, Caliguri had contracted away his right to raise any defenses to his obligations under the note. The court also held that Chase established its standing by submitting a copy of the note and evidence of its written assignment to Chase.
The Second Department affirmed on largely the same grounds. It did not specifically address Caliguri’s additional arguments that the earlier 2009 foreclosure action barred Chase’s present foreclosure action.
The Court of Appeals granted Caliguri leave to appeal.
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