Gustavia Home, LLC v. Rutty, 785 F. App’x 11

In 2006 Rutty obtained a $134,000 loan from People’s Choice and executed a promissory note and a mortgage (MERS as nominee) on a NYC property.
People’s Choice filed bankruptcy in 2007 and dissolved in 2008; Gustavia was assigned the note and mortgage in March 2016.
Gustavia sued to foreclose after Rutty defaulted, moved for summary judgment (Dec. 2016) and produced an affidavit stating it had physical possession of the note since November 2015.
The district court initially granted summary judgment; this Court vacated and remanded because the record did not show whether People’s Choice’s bankruptcy affected transfers to Gustavia.
On remand Gustavia produced a April 19, 2007 bankruptcy-court order authorizing People’s Choice to sell mortgage loans in bulk and again moved for summary judgment.
The district court again granted summary judgment and foreclosure; Rutty appealed, arguing lack of standing and related evidentiary defects; the Second Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to foreclose	Gustavia was holder/assignee of the note and mortgage and had physical possession before suit; bankruptcy order authorized transfers	Assignment invalid because People’s Choice was in bankruptcy and transfers required bankruptcy-court approval; Gustavia gave no proof	Gustavia established standing: possession of the note + bankruptcy order authorizing bulk sales resolved the standing challenge
Sufficiency of evidentiary showing (possession/chain of title)	Attached mortgage, unpaid note, default evidence, and affidavit of possession since Nov 2015 — sufficient for prima facie case	Gustavia failed to show where the note was 2007–2015 or physical receipt chain, so proof is inadequate	Physical possession prior to suit and the note/mortgage sufficed; no requirement to show chain-of-custody for an endorsed-in-blank negotiable instrument
Appeal of denial to cancel/expunge deeds	N/A (Gustavia opposed)	Rutty appealed denial of his motion to cancel/expunge deeds	Issue waived on appeal because Rutty did not brief argument on it

Garcia v. Hartford Police Dep't, 706 F.3d 120 (2d Cir. 2013) (standard of review for summary judgment)
Doninger v. Niehoff, 642 F.3d 334 (2d Cir. 2011) (summary judgment standard and inference-drawing)
R.B. Ventures, Ltd. v. Shane, 112 F.3d 54 (2d Cir. 1997) (mortgage foreclosure elements)
Wells Fargo Bank, N.A. v. Walker, 141 A.D.3d 986 (N.Y. App. Div. 2016) (prima facie proof in foreclosure: note, mortgage, default)
JPMorgan Chase Nat'l Ass'n v. Weinberger, 142 A.D.3d 643 (N.Y. App. Div. 2016) (plaintiff must prove standing by showing holder or assignee when action commenced)
Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355 (N.Y. 2015) (transfer of note conveys mortgage; possession before suit is sufficient)
Capstone Bus. Credit, LLC v. Imperia Family Realty, LLC, 70 A.D.3d 882 (N.Y. App. Div. 2010) (defenses that create triable issues to defeat foreclosure)
U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752 (N.Y. App. Div. 2009) (physical delivery of the note before suit sufficient to transfer obligation)
Moates v. Barkley, 147 F.3d 207 (2d Cir. 1998) (issues not raised in appellate brief are waived)