On August 21, 2024, the Second Department issued a decision in Lakeview Loan Servicing, LLC v. Florio, 2024 NY Slip Op. 04256, denying plaintiff in a foreclosure action summary judgment because of insufficient proof that the allonge was attached to the note, explaining:
Where, as here, the plaintiff’s standing has been placed in issue by a defendant’s answer, the plaintiff must prove its standing as part of its prima facie showing on a motion for summary judgment. A plaintiff has standing to maintain a mortgage foreclosure action where it is the holder or assignee of the underlying note at the time the action is commenced. Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident. A plaintiff may establish, prima facie, its standing as the holder of the note by demonstrating that a copy of the note, including an endorsement in blank, was among the exhibits annexed to the complaint at the time the action was commenced. A promissory note is a negotiable instrument within the meaning of the Uniform Commercial Code. A holder 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. Where an instrument is endorsed in blank, it may be negotiated by delivery. An indorsement must be on the instrument or on a paper so firmly affixed thereto as to become a part thereof.
Here, the plaintiff failed to make a prima facie showing that it had standing to commence the action. Although the plaintiff attached a copy of the note and a purported allonge endorsed in blank to the complaint, the plaintiff failed to demonstrate that the purported allonge was so firmly affixed to the note as to become a part thereof, as required by UCC 3-202(2). Moreover, an affidavit of an assistant secretary of the plaintiff’s servicer/attorney-in-fact, submitted in support of the plaintiff’s motion, inter alia, for summary judgment on the complaint insofar as asserted against the defendant, to strike his answer, and for an order of reference, was also insufficient to demonstrate the plaintiff’s compliance with UCC 3-302(2), as it was bereft of any reference to the purported allonge.
(Internal quotations and citations omitted) (emphasis added).