By Dillon, J.P.; Chambers, Nelson and Christopher, JJ. MATTER of Norma Brooks ap, v. County of Suffolk, res — (Index No. 601746/17) In a proceeding pursuant to General Municipal Law §50-e(5) for leave to serve late notices of claim, the petitioners appeal from (1) an order of the Supreme Court, Suffolk County (James Hudson, J.), dated June 28, 2017, and (2) an order of the same court (William G. Ford, J.) dated February 1, 2018. The order dated June 28, 2017, denied the petition, with leave to renew. The order dated February 1, 2018, upon renewal, adhered to the determination in the order dated June 28, 2017, and, in effect, dismissed the proceeding. ORDERED that the order dated February 1, 2018, is reversed, on the facts and in the exercise of discretion, upon renewal, the order dated June 28, 2017, is vacated, and the petition is granted; and it is further, ORDERED that the appeal from the order dated June 28, 2017, is dismissed as academic in light of our determination on the appeal from the order dated February 1, 2018; and it is further, ORDERED that one bill of costs is awarded to the petitioners. In a news release dated July 22, 2016, the County of Suffolk advised the owners of properties with private wells in the areas in and around Westhampton Beach in Southampton, Suffolk County, that their well water may be contaminated by perfluorooctane sulfonate (hereinafter PFOS) emanating from the New York State Air National Guard Base at Gabreski Airport in Southampton. On October 5, 2016, the New York State Department of Environmental Conservation issued a public notice adding the Gabreski Air National Guard Base to the State Registry of Inactive Hazardous Waste Disposal Sites as “a Class 2 site that presents a significant threat to the public health and/or the environment.” The public notice indicated that PFOS and perfluorooctanoic acid (hereinafter PFOA) had been “detected at elevated levels in on- and off-site goundwater and in off-site public and private drinking water wells.” On February 6, 2017, the petitioners commenced this proceeding seeking leave to serve nine late notices of claim upon the County. The notices of claim alleged that the petitioners were injured when their drinking well water was contaminated by PFOS and PFOA contained in a firefighting foam used at the Gabreski Airport, which was owned and operated by the County. By affirmation dated March 31, 2017, the County opposed the petition. In an order dated June 28, 2017, the Supreme Court denied the petition, finding that the petitioners failed to demonstrate a reasonable excuse for their failures to serve timely notices of claim and their delay in commencing this proceeding. The court denied the petition with leave to renew upon “adequate proof” with respect to a reasonable excuse. By order to show cause dated August 23, 2017, the petitioners renewed their petition for leave to serve late notices of claim upon the County. By affirmation dated September 19, 2017, the County opposed the renewed petition. In an order dated February 1, 2018, the court, upon renewal, adhered to the original determination denying the petition and, in effect, dismissed the proceeding. The petitioners appeal. A court considering a petition for leave to serve a late notice of claim upon a public corporation must consider several factors, including whether the public corporation acquired actual knowledge of the essential facts constituting the claim within 90 days after it arose or within a reasonable time thereafter, whether the delay substantially prejudiced the public corporation in maintaining its defense, and whether the claimant provided a reasonable excuse for the failure to serve a timely notice of claim (see General Municipal Law §50-e[5]; Matter of Messick v. Greenwood Lake Union Free Sch. Dist., 164 AD3d 1448, 1450; Matter of Tejada v. City of New York, 161 AD3d 876, 877; Matter of Kerner v. County of Nassau, 150 AD3d 1234, 1236). While the presence or the absence of any one of the factors is not necessarily determinative, “whether the public corporation acquired timely, actual knowledge of the essential facts constituting the claim within 90 days after the claim arose or a reasonable time thereafter is a factor which should be accorded great weight in determining whether to grant leave to serve a late notice of claim” (Matter of Messick v. Greenwood Lake Union Free Sch. Dist., 164 AD3d at 1450; see Matter of Tejada v. City of New York, 161 AD3d at 877). ”The public corporation must have knowledge of the facts that underlie the legal theory or theories on which liability is predicated in the notice of claim, and not merely some general knowledge that a wrong has been committed” (Matter of Tejada v. City of New York, 161 AD3d at 877 [internal quotation marks omitted]; see Matter of Felice v. Eastport/South Manor Cent. School Dist., 50 AD3d 138, 148). Here, upon renewal, the petitioners demonstrated that they did not discover their injury until July 22, 2016, when the petitioners became aware of the contamination based on the County’s news release advising of same, or within a reasonable time thereafter (CPLR 214-c). The County’s news release, addressed to particular owners of properties with private wells in the areas in and around Westhampton Beach in Southampton, Suffolk County, shows that the County had knowledge, as of that date, that these property owners may have sustained injuries by reason of the contamination of their well water as the result of PFOS emanating from the New York State Air National Guard Base at Gabreski Airport in Southampton. Furthermore, on October 20, 2016, counsel for the petitioners filed 30 notices of claim against the County concerning contamination of the water, which notices of claim were substantially identical to the notices of claim at issue, and the County held in excess of 30 hearings pursuant to General Municipal Law §50-h. In this circumstance, the County’s alleged negligent ownership and operation of the Gabreski Airport site, resulting in contamination of the petitioners’ water supply with toxic chemicals, constitute the essential facts of the claims, which are common to all the petitioners and were made known to the County by the prior notices of claim (see Matter of Felice v. Eastport/South Manor Cent. School Dist., 50 AD3d at 149). Inasmuch as the County acquired timely, actual knowledge of the essential facts of the petitioners’ claims, the petitioners made an initial showing that the County was not prejudiced by their delay in serving the notices of claim (see Matter of Tejada v. City of New York, 161 AD3d at 878; see also Matter of Newcomb v. Middle Country Cent. Sch. Dist., 28 NY3d 455, 466). Moreover, the petitioners sought leave to serve late notices of claim only a little more than three months after the statutory period had expired (see General Municipal Law §50-e). In opposition, the County failed to rebut the petitioners’ showing that the County was not prejudiced by their delay with any particularized evidence (see Matter of Newcomb v. Middle Country Cent. Sch. Dist., 28 NY3d at 467). The County did no more than assert that the petitioners failed to meet their burden to show that the late notice would not substantially prejudice the County (see id. at 466). “A petitioner’s lack of a reasonable excuse for the delay in serving a timely notice of claim is not necessarily fatal when weighed against other relevant factors” (Matter of Tejada v. City of New York, 161 AD3d at 877; see Matter of Messick v. Greenwood Lake Union Free Sch. Dist., 164 AD3d at 1451). While the petitioners’ assertions that they were not aware of the County’s involvement in the cause of the incident does not constitute a reasonable excuse for their failure to file a timely notice of claim, the absence of a reasonable excuse “is not in and of itself fatal to the petition where, as here, there was actual notice and the absence of prejudice” (Matter of Messick v. Greenwood Lake Union Free Sch. Dist., 164 AD3d at 1451; see Matter of Viola v. Ronkonkoma Middle Sch., 107 AD3d 1009, 1010). Accordingly, upon renewal, the Supreme Court improvidently exercised its discretion in denying the petition. DILLON, J.P., CHAMBERS, BRATHWAITE NELSON and CHRISTOPHER, JJ., concur.
By Rivera, J.P.; Austin, Cohen and Iannacci, JJ. HSBC Bank USA, N.A., etc., res, v. Kirk Williams, appellant def — (Index No. 29408/09) Duane Morris LLP, New York, NY (Brett L. Messinger of counsel), for respondent. In an action to foreclose a mortgage, the defendant Kirk Williams appeals from (1) an order of the Supreme Court, Queens County (Duane A. Hart, J.), entered April 6, 2016, and (2) an order of the same court also entered April 6, 2016. The first order, insofar as appealed from, denied the motion of the defendant Kirk Williams pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against him and granted those branches of the plaintiff’s cross motion which were for summary judgment on the complaint insofar as asserted against that defendant, to strike his affirmative defenses, and for an order of reference. The second order, insofar as appealed from, also granted those branches of the plaintiff’s cross motion which were for summary judgment on the complaint insofar as asserted against that defendant, to strike his affirmative defenses, and for an order of reference, and referred the matter to a referee to compute the amount due on the mortgage loan. ORDERED that the first order is modified, on the law, by deleting the provision thereof granting those branches of the plaintiff’s cross motion which were for summary judgment on the complaint insofar as asserted against the defendant Kirk Williams, to strike his affirmative defenses, and for an order of reference, and substituting therefor a provision denying those branches of the cross motion; as so modified, the first order is affirmed insofar as appealed from, without costs or disbursements, and so much of the second order as granted those branches of the plaintiff’s cross motion and referred the matter to a referee to compute the amount due on the mortgage loan is vacated; and it is further, ORDERED that the appeal from the second order is dismissed as academic, without costs or disbursements, in light of our determination on the appeal from the first order. On December 21, 2004, the defendant Kirk Williams executed a note in the amount of $399,000 in favor of Fremont Investment & Loan (hereinafter Fremont) and a mortgage in favor of Mortgage Electronic Registration Systems, Inc., as nominee for Fremont. Williams defaulted on the note by failing to make the payment due on April 1, 2009. On November 2, 2009, the plaintiff commenced this action to foreclose the mortgage. On March 23, 2010, and June 18, 2010, respectively, the plaintiff obtained an order of reference and a judgment of foreclosure and sale, on default. On October 13, 2010, the order of reference and the judgment of foreclosure and sale were vacated. On November 9, 2010, Williams served an amended answer dated October 27, 2010, in which he generally denied the allegations of the complaint and asserted six affirmative defenses, including lack of standing. On June 18, 2015, Williams filed and served a “Demand for Resumption of Prosecution of Action and For Note of Issue.” When the plaintiff failed to comply, Williams moved pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against him. The plaintiff opposed the motion and cross-moved, inter alia, for summary judgment on the complaint insofar as asserted against Williams, to strike his affirmative defenses, and for an order of reference. The plaintiff asserted that it had a justifiable excuse for not proceeding with the action and a potentially meritorious cause of action. The Supreme Court, among other things, denied Williams’s motion and granted those branches of the plaintiff’s cross motion. Williams appeals. Where, as here, a plaintiff has been served with a 90-day demand pursuant to CPLR 3216(b)(3), that plaintiff must comply with the demand by filing a note of issue or by moving, before the default date, either to vacate the demand or to extend the 90-day period (see Deutsche Bank Natl. Trust Co. v. Inga, 156 AD3d 760). The plaintiff here failed to do either within the 90-day period. Therefore, in order to excuse the default, the plaintiff was obliged to demonstrate a justifiable excuse for its failure to take timely action in response to the 90-day demand, as well as a potentially meritorious cause of action (see Baczkowski v. Collins Constr. Co., 89 NY2d 499; Bischoff v. Hoffman, 112 AD3d 659). CPLR 3216 is “extremely forgiving” (Baczkowski v. Collins Constr. Co., 89 NY2d at 503), “in that it never requires, but merely authorizes, the Supreme Court to dismiss a plaintiff’s action based on the plaintiff’s unreasonable neglect to proceed” (Davis v. Goodsell, 6 AD3d 382, 384; see Angamarca v. 47-51 Bridge St. Prop., LLC, 167 AD3d 559; Deutsche Bank Natl. Trust Co. v. Inga, 156 AD3d at 761). Here, the plaintiff demonstrated the existence of a justifiable excuse for the delay and a potentially meritorious cause of action. Furthermore, there was no evidence of its intent to abandon the action (see generally Angamarca v. 47-51 Bridge St. Prop., LLC, 167 AD3d at 559; Vera v. New York El. & Elec. Corp., 150 AD3d 927; Altman v. Donnenfeld, 119 AD3d 828). Under the circumstances of this case, the Supreme Court providently exercised its discretion in denying Williams’s motion pursuant to CPLR 3216 to dismiss the complaint insofar as asserted against him. In moving for summary judgment, a plaintiff in a mortgage foreclosure action establishes its prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of the default (see James B. Nutter & Co. v. Feintuch, 164 AD3d 485, 486; Onewest Bank, N.A. v. Mahoney, 154 AD3d 770, 771; Deutsche Bank Trust Co. Ams. v. Garrison, 147 AD3d 725, 726). In addition, where, as here, a plaintiff’s standing to commence the foreclosure action is placed in issue by the defendant, it is incumbent upon the plaintiff to prove its standing to be entitled to relief (see Deutsche Bank Natl. Trust Co. v. Brewton, 142 AD3d 683, 684; Wells Fargo Bank, N.A. v. Arias, 121 AD3d 973, 974). “A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note” (Dyer Trust 2012-1 v. Global World Realty, Inc., 140 AD3d 827, 828; see Aurora Loan Servs., LLC v. Taylor, 25 NY3d 355, 360-362; Flagstar Bank, FSB v. Mendoza, 139 AD3d 898, 899). ”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” (Dyer Trust 2012-1 v. Global World Realty, Inc., 140 AD3d at 828; see Aurora Loan Servs., LLC v. Taylor, 25 NY3d at 361-362; U.S. Bank, N.A. v. Collymore, 68 AD3d 752, 754). The plaintiff may establish that it was the holder of the note at the time the action was commenced by submitting proof that a copy of the note, including an allonge containing an endorsement in blank, was among the various exhibits annexed to the complaint (see UCC 1-201[b][21]; Bank of Am., N.A. v. Tobin, 168 AD3d 661; CitiMortgage, Inc. v. McKenzie, 161 AD3d 1040, 1041). In support of its cross motion, the plaintiff failed to meet its prima facie burden of establishing that it had standing to commence this action. Initially, while the plaintiff alleged that the note had been endorsed to it, the plaintiff failed to submit sufficient evidence to demonstrate that a copy of the note with the endorsement was attached to the complaint. The only copy of the complaint that appears in the record before us was submitted as an exhibit in support of Williams’s motion, and the version of the note accompanying that copy of the complaint did not include the endorsement. The plaintiff’s attempt to establish standing through the submission of the affidavit of Morgan Battle Ames, a contract management coordinator for the plaintiff’s loan servicer, was also insufficient. Ames stated that she had “personal knowledge of the stated facts and circumstances and books and records maintained by [the loan servicer],” and that the “information in this affidavit is taken from [the loan servicer's] business records,” which were “recorded by persons with personal knowledge of the information in the business record.” Since Ames failed to attest that she was personally familiar with the record-keeping practices and procedures of the entity that generated the subject business records, she failed to demonstrate that the records relied upon in her affidavit were admissible under the business records exception to the hearsay rule (see CPLR 4518[a]; Federal Natl. Mtge. Assn. v. Marlin, 168 AD3d 679, 681; HSBC Mtge. Servs., Inc. v. Royal, 142 AD3d 952, 954; Deutsche Bank Natl. Trust Co. v. Brewton, 142 AD3d at 685). Since the plaintiff’s cross motion was based on evidence that was not in admissible form (see Federal Natl. Mtge. Assn. v. Marlin, 168 AD3d at 681; HSBC Mtge. Servs., Inc. v. Royal, 142 AD3d at 954), the Supreme Court should have denied those branches of the cross motion which were for summary judgment on the complaint insofar as asserted against Williams, to strike his affirmative defenses, and for an order of reference, regardless of the sufficiency of the evidence submitted by Williams in opposition (see Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853). RIVERA, J.P., AUSTIN, COHEN and IANNACCI, JJ., concur.
