The amended complaint for the foreclosure of a mortgage stated that the note, which had been assigned to it with the related mortgage, had been “permanently lost, stolen or inadvertently destroyed” but, notwithstanding, the Plaintiff could maintain the action under the authority of Uniform Commercial Code Section 3-804 (“Lost, destroyed or stolen instruments”). Under Section 3-804, “[t]he owner of an instrument which is lost, whether by destruction, theft or otherwise, may maintain an action in his own name and recover from a party liable thereon upon due proof of his ownership, the facts which prevent the production of the instrument and its terms…” A lost note affidavit, an affidavit supporting the possession of the original note, and a copy of the note accompanied the complaint. The Supreme Court, Rockland County, granted a judgment of foreclosure and sale, confirmed the referee’s report, and directed that the property be sold. The Appellate Division, Second Department, reversed the lower court’s Order. According to the Appellate Division,

“the affidavit of possession of the original note, sworn to by a vice president of loan documentation for the plaintiff, does not contain any details of delivery of the note, except for the claim that it was delivered to the plaintiff sometime after its execution, and that the plaintiff ‘had possession of the Promissory Note on or before…the date that this action was commenced.’ The lost note affidavit of another vice president…stated vaguely, and in a conclusory manner, that the note was ‘inadvertently lost, misplaced or destroyed’, that the plaintiff had not ‘pledged, assigned, transferred, hypothecated or otherwise disposed of the note’ and that the plaintiff had made ‘a diligent and extensive search of its records…’ The lost note affidavit did not provide any facts as to when the search for the note occurred, who conducted the search, or when or how the note was lost [citation omitted]. Thus, it failed to sufficiently establish the plaintiff’s ownership of the note’ [citations omitted].”

Wells Fargo Bank, N.A. v. Meisels, 2019 NY 08243, decided November 13, 2019, is posted at http://www.nycourts.gov/reporter/3dseries/2019/2019_08243.htm.