## Facts

- On May 18, 2006, Adrian Hunte executed a $440,000 promissory note in favor of Mortgage Lenders Network USA, Inc. (MLN).
- The note was secured by a mortgage on real property located in Brooklyn, New York.
- U.S. Bank National Association (U.S. Bank), as MLN’s successor in interest, commenced a mortgage foreclosure action on October 22, 2018, against Hunte and others, including John Surita and Migdalia Surita, who allegedly held an interest in the mortgaged premises.
- John and Migdalia Surita served an answer on June 6, 2019, but U.S. Bank rejected the answer as untimely.
- U.S. Bank moved, among other things, for leave to enter a default judgment against the Suritas and for an order of reference.
- The Suritas cross-moved under CPLR 5015(a)(1) to vacate their default in answering and under CPLR 3012(d) for leave to serve a late answer, arguing (among other things) that U.S. Bank lacked standing to foreclose.
- By order dated December 17, 2019, the Supreme Court, Kings County, granted the branches of U.S. Bank’s motion seeking leave to enter a default judgment and an order of reference and, in effect, denied the Suritas’ cross-motion.
- The Suritas appealed from the portions of the order that granted default relief and denied their requested relief.

## Issues

1. Whether U.S. Bank established entitlement to a default judgment and an order of reference under CPLR 3215.
2. Whether the Suritas were entitled to vacatur of their default and leave to serve a late answer under CPLR 5015(a)(1) and CPLR 3012(d), including whether they showed a reasonable excuse for the late answer.
3. Whether U.S. Bank demonstrated standing to commence the foreclosure action based on the note and an allonge endorsed in blank that was shown to be physically attached to the note.

## Decision

- The Appellate Division, Second Department, affirmed the order insofar as appealed from, with costs.
- The court held that, as a threshold matter, U.S. Bank demonstrated entitlement to a default judgment under CPLR 3215 and an order of reference by submitting proof of service, proof of the facts constituting the claim (including the borrower’s payment default), and proof of the Suritas’ default in timely answering.
- The court held that the Suritas were not entitled to vacatur of their default or leave to serve a late answer because they failed to offer a reasonable excuse for their untimely answer; their claim that the answer was “inadvertently filed late” was raised for the first time in reply papers and, in any event, was not a reasonable excuse.
- The court rejected the Suritas’ standing argument, holding that U.S. Bank established standing by attaching to the complaint a certified copy of the note and an allonge endorsed in blank that bore matching hole-punch marks and the image of a paperclip, demonstrating the allonge was physically attached to the note.

## Legal Principles

- A plaintiff seeking a default judgment must provide proof of service, proof of the default, and proof of the facts constituting the claim (CPLR 3215).
- A party seeking to vacate a default under CPLR 5015(a)(1) must show both a reasonable excuse for the default and a potentially meritorious defense; the same reasonable-excuse requirement applies to requests for leave to serve a late pleading under CPLR 3012(d).
- A court may deny vacatur and late-answer relief where the moving party fails to establish a reasonable excuse, without reaching the asserted defenses.
- Arguments or facts raised for the first time in reply papers are not properly considered in support of a motion.
- In a mortgage foreclosure action, standing is shown by establishing that, at commencement, the plaintiff was the holder or assignee of the note; possession of a note endorsed in blank generally establishes holder status.
- An allonge used to endorse a note must be affixed to the note, and physical indicia on the documents (such as matching hole-punch marks and an image of a paperclip) may support a finding that the allonge was attached.

## Conclusion

The Second Department affirmed the entry of default foreclosure relief because U.S. Bank satisfied CPLR 3215 and showed standing through a certified note copy and a blank-endorsed allonge shown to be attached to the note, while the Suritas were denied vacatur and leave to file a late answer because they did not provide a reasonable excuse for their untimely answer.


U.S. Bank National Association v. Hunte, 215 A.D.3d 887 (2023)