MTGLQ Invs., L.P. v. Cong. Chemdath Tora V' Chesed A Religious Corp.

Opinion

MTGLQ Invs., L.P. v Cong. Chemdath Tora V' Chesed A Religious Corp.

2026 NY Slip Op 04942

August 12, 2026

Appellate Division, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This decision is uncorrected and subject to revision before publication in the Official Reports.

MTGLQ Investors, L.P., respondent,

v

Cong. Chemdath Tora ' Chesed A Religious Corporation, etc., appellant.

Supreme Court of the State of New York, Appellate Division, Second Judicial Department

Decided on August 12, 2026

2024-05973, (Index No. 11036/09)

Colleen D. Duffy, J.P.

Paul Wooten

William G. Ford

Susan Quirk, JJ.

Charles R. Cuneo, P.C., Huntington, NY, for appellant.

Hinshaw & Culbertson LLP, New York, NY (Margaret J. Cascino and Alexandria A. Kaminski of counsel), for respondent.

[*1]

DECISION & ORDER

In an action to foreclose a mortgage, the defendant appeals from an order and judgment of foreclosure and sale (one paper) of the Supreme Court, Kings County (Lawrence Knipel, J.), dated May 2, 2024. The order and judgment of foreclosure and sale, insofar as appealed from, upon an order of the same court dated November 28, 2022, inter alia, granting those branches of the plaintiff's motion which were for summary judgment on the complaint, to strike the defendant's answer, and for an order of reference, and upon an order of the same court dated May 2, 2024, among other things, granting those branches of the plaintiff's motion which were to confirm a referee's report and for a judgment of foreclosure and sale, granted the same relief to the plaintiff, confirmed the referee's report, and directed the sale of the real property at issue.

ORDERED that the order and judgment of foreclosure and sale is reversed insofar as appealed from, on the law, with costs, those branches of the plaintiff's motion which were for summary judgment on the complaint, to strike the defendant's answer, and for an order of reference are denied, those branches of the plaintiff's motion which were to confirm the referee's report and for a judgment of foreclosure and sale are denied, and the orders dated November 28, 2022, and May 2, 2024, are modified accordingly.

The defendant appeals from an order and judgment of foreclosure and sale dated May 2, 2024 (hereinafter the May 2024 judgment), which, upon an order dated November 28, 2022 (hereinafter the November 2022 order), inter alia, granting those branches of the plaintiff's motion which were for summary judgment on the complaint, to strike the defendant's answer, and for an order of reference, and upon an order dated May 2, 2024, among other things, granting those branches of the plaintiff's motion which were to confirm a referee's report and for a judgment of foreclosure and sale, granted the same relief to the plaintiff, confirmed the referee's report, and directed the sale of the real property at issue.

Prior to perfecting their appeal from the May 2024 judgment, the defendant previously appealed from the November 2022 order. However, the appeal was deemed dismissed upon the defendant's failure to perfect the appeal (see 22 NYCRR 1250.10[a]). Although a [*2]defendant may be precluded from relitigating issues which could have been raised on a prior appeal (see Bray v Cox, 38 NY2d 350), under the circumstances of this case, including, inter alia, that the defendant has vigorously litigated the action from its inception, we exercise our discretion to review the merits of the issues presented on the appeal from the May 2024 judgment (see Lacanfora v Tully, 241 AD3d 667, 669; Andino v Samenga, 287 AD2d 425, 425-426).

"Generally, in a mortgage foreclosure action, a plaintiff demonstrates its prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of default" (Deutsche Bank Natl. Trust Co. v Kingsbury, 171 AD3d 871, 871; see Wells Fargo Bank, N.A. v Mitselmakher, 216 AD3d 1056, 1057). "A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it was either the holder or assignee of the underlying note at the time the action was commenced" (HSBC Bank USA, N.A. v Gilbert, 189 AD3d 1377, 1379). Either a written assignment of the underlying note or physical delivery of the note prior to the commencement of the action is sufficient (see Dyer Trust 2012-1 v Global World Realty, Inc., 140 AD3d 827, 828). "Because the note, rather than the mortgage, is the dispositive instrument that conveys standing to foreclose, written assignment of the note or, alternatively, physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation" (U.S. Bank Trust, N.A. v Moomey-Stevens, 189 AD3d 1790, 1791 [citation and internal quotation marks omitted]).

Here, the Supreme Court should have denied those branches of the plaintiff's motion which were for summary judgment on the complaint, to strike the defendant's answer, and for an order of reference, since the plaintiff failed to establish its standing to commence the action. Contrary to the court's determination, the affidavit submitted by the plaintiff in support of its motion failed to establish when the note was acquired by the plaintiff (see HSBC Bank USA, N.A. v Gilbert, 189 AD3d at 1379). Moreover, the plaintiff failed to show that the defendant defaulted on its obligations under the note, as the plaintiff did not submit records evincing such default (see Bank of Am., N.A. v Bloom, 202 AD3d 736; Citimortgage, Inc. v Heyman, 186 AD3d 1487). For the same reasons, the court also should have denied those branches of the plaintiff's motion which were to confirm the referee's report and for a judgment of foreclosure and sale (see HSBC Bank USA, N.A. v Gilbert, 189 AD3d at 1380-1381).

Since the plaintiff failed to demonstrate its standing or that the defendant defaulted, the Supreme Court should not have entered a judgment of foreclosure and sale or confirmed the referee's report.

Accordingly, we reverse the May 2024 judgment insofar as appealed from, deny those branches of the plaintiff's motion which were for summary judgment on the complaint, to strike the defendant's answer, and for an order of reference, and deny those branches of the plaintiff's motion which were to confirm the referee's report and for a judgment of foreclosure and sale.

DUFFY, J.P., WOOTEN, FORD and QUIRK, JJ., concur.

2024-05973 DECISION & ORDER ON MOTION

MTGLQ Investors, L.P., respondent, v Cong.

Chemdath Tora V' Chesed A Religious Corporation,

etc., appellant.

(Index No. 11036/09)

Appeal from an order and judgment (one paper) of the Supreme Court, Kings County, dated May 2, 2024. Motion by the respondent, inter alia, to dismiss the appeal from so much of the [*3]order and judgment as brings up for review an order of the same court dated November 28, 2022, pursuant to Bray v Cox (38 NY2d 350). By decision and order on motion of this Court dated April 9, 2025, that branch of the motion was held in abeyance and referred to the panel of Justices hearing the appeal for determination upon the argument or submission thereof.

Upon the papers filed in support of the motion and the papers filed in opposition thereto, and upon the submission of the appeal, it is

ORDERED that the branch of the motion which is to dismiss the appeal from so much of the order and judgment as brings up for review an order of the same court dated November 28, 2022, pursuant to Bray v Cox (38 NY2d 350), is denied.

DUFFY, J.P., WOOTEN, FORD and QUIRK, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court