BANK’S EVIDENCE OF DEFAULT WAS INADMISSIBLE HEARSAY; INSUFFICIENT PROOF THE NOTE WAS ENDORSED IN BLANK; THE BANK’S MOTION FOR SUMMARY JUDGMENT IN THIS FORECLOSURE ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for summary judgment in this foreclosure action should not have been granted. There was insufficient evidence the note was endorsed in blank and there was insufficient evident of defendant’s default:

… [I]t is undisputed that a copy of the underlying note was annexed to the complaint. However, notwithstanding the plaintiff’s assertion in its appellate brief that “[t]he note, as attached to the complaint, was indorsed in blank on the reverse side of the signature page (and not a separate allonge),” it cannot be ascertained from the copy of the note annexed to the complaint whether the separate page that bears the endorsement in blank was stamped on the back of the note, as alleged by the plaintiff, or on an allonge, in which case the plaintiff would have to prove that the endorsement was “so firmly affixed thereto as to become a part thereof,” as required under UCC 3-202(2).

… [W]hile Panganiban’s [plaintiff bank’s vice president’s] affidavit was sufficient to establish a proper foundation for the admission of a business record pursuant to CPLR 4518(a) … , the plaintiff failed to submit copies of the business records themselves. “[T]he business record exception to the hearsay rule applies to a writing or record’ (CPLR 4518[a]) . . . [and] it is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted” … . “While a witness may read into the record from the contents of a document which has been admitted into evidence , … a witness’s description of a document not admitted into evidence is hearsay” … . JPMorgan Chase Bank, N.A. v Grennan, 2019 NY Slip Op 06761, Second Dept 9-25-19