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THE BANK IN THIS FORECLOSURE ACTION FAILED TO PROVIDE THE ORIGINAL LOAN DOCUMENT AND THE LOST NOTE AFFIDAVIT WAS INSUFFICIENT; THE MOTION FOR A DEFAULT JUDGMENT SHOULD HAVE BEEN DENIED, CRITERIA EXPLAINED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the bank’s motion for a default judgment in this foreclosure action should not have been granted because the original loan document was not provided and the lost note affidavit was insufficient:

A plaintiff moving for leave to enter a default judgment against a defendant must submit proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of the defendant’s failure to answer or appear … . Pursuant to UCC 3-804, “[t]he owner of an instrument which is lost, whether by destruction, theft or otherwise, may maintain an action in his [or her] own name and recover from any party liable thereon upon due proof of his [or her] ownership, the facts which prevent his [or her] production of the instrument and its terms.” Here, the plaintiff failed to set forth the facts that prevented the production of the original home equity line of credit agreement … . The lost note affidavit submitted by the plaintiff in support of its motion, inter alia, for leave to enter a default judgment against the defendants failed to state when the search for the credit agreement occurred, did not identify who conducted the search for the credit agreement, or explain when or how the credit agreement was lost … . JPMorgan Chase Bank, N.A. v Morton, 2024 NY Slip Op 01802, Second Dept 4-3-24

Practice Point: Here in this foreclosure action, in moving for a default judgment the bank did not provide the original loan document and did not provide a sufficient lost note affidavit. The motion should have been denied, criteria explained.

 

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