Banc of California loses foreclosure after affidavit skips key evidence
The defendants appealed. And won.
The problem sat with the affidavit the lender submitted from its vice president. To win summary judgment in a New York foreclosure, a lender has to produce the mortgage, the unpaid note, and evidence of default. That evidence must come from someone with personal knowledge of the facts or through properly authenticated business records.
The vice president’s affidavit delivered neither. He did not claim personal knowledge of the alleged default. To the extent his knowledge came from business records, he did not identify which records he relied on and did not attach them. The court pointed to established precedent: the business records exception to the hearsay rule covers the records themselves, not an affidavit about them. Without the actual records, testimony about what they contain is inadmissible hearsay.
Because the lender failed to establish default, it failed to establish its right to judgment as a matter of law. That failure required denial of the motion “regardless of the sufficiency of the opposing papers,” the court wrote.
The reversal did not just undo the foreclosure sale. The court also reversed the underlying summary judgment and the order of reference, sending the case back to square one. Costs were awarded to the defendants.
