New York Attorney Susan Chana Lask

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Second Circuit: Brief to Reverse Mortgage Foreclosure Summary Judgment

11-4773           
To be argued by            
Susan Chana Lask, Esq.
___________________________________________________________________________ ____________________________________________________________________________

UNITED STATES COURT OF APPEALS                
for the SECOND CIRCUIT
_____________________________

U.S. Bank, N.A., as Trustee for the Registered Holders of ML-CFC  
Commercial Mortgage Trust 2006-1, Commercial Mortgage Pass-  
Through Certificates, Series 2006-1,         
                                                       Plaintiff - Appellee,
v.

Squadron VCD, LLC, Allen Morton, Patsy Morton,
                                                    Defendants - Appellants,

John Does 1-100, the latter names being fictitious but intending to
designate tenants and persons in possession or persons having an
interest in the premises described in the Complaint herein,
                                                    Defendant.   
_____________________________________________________   

ON APPEAL FROM THE UNITED STATES DISTRICT COURT     
FOR THE SOUTHERN DISTRICT OF NEW YORK
                                                                                                                                                                                                                                                                                                                                  
APPELLANTS’ BRIEF TO REVERSE SUMMARY JUDGMENT                                                                                                                                                                          

LAW OFFICES OF         
SUSAN CHANA LASK         
Attorneys for Defendants-Appellants         
244 Fifth Avenue, Suite 2369         
New York, NY 10001         
917/300-1958
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TABLE OF CONTENTS                                                                              Page No. I. 
STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION....  1

II. STATEMENT OF THE ISSUES PRESENTED....................................................  1    
Did the District Court err in granting Appellees’ FRCP 56 summary judgment  when numerous issues of fact exist?  
YES.............................................................................................................  1  

III.  STATEMENT OF THE CASE.........................................................................   1-2  

IV.  STATEMENT OF FACTS..............................................................................   2  
-Loan History……………………………………………………………..   3  
-The Assignments…………………………………………………………   4     
-Squadron Assumes the Mortgage……………………………………….  4    
-Summary Judgment Filings………………………………………………   5

V. SUMMARY OF ARGUMENT.........................................................................   5

VI. STANDARD OF REVIEW.............................................................................   5

VII.  ARGUMENT..................................................................................................   6 

 A.  ISSUES OF FACT PREVENT SUMMARY JUDGMENT........................................... ……  6

i.    U.S BANK NEVER PRODUCED THE ORIGINAL NOTE DESPITE SQUADRON’S
     RIGHT TO REVIEW IT, CREATING AN ISSUE OF  FACT WHETHER THE NOTE
     WAS LAWFULLY INDORSED TO   TRANSFER IT TO U.S. BANK  ..........................................................  7-9  

ii. MATERIAL CONTRACT TERMS AT ISSUE WERE IGNORED  BY THE DISTRICT COURT WHICH
     ERRONEOUSLY INJECTED ITS OWN TERMS TO UNAMBIGUOUS CONTRACT TERMS TO CORRECT WHAT
     WAS A CLEAR BREACH AND BREAK IN THE CHAIN OF TITLE .....................................................………………………… 9-10     

iii. THE DISTRICT COURT’S INJECTING OF ITS OWN TERMS INTO CONTRACTS THAT WERE BREACHED AFFECTED
     TRUST TERMS BREACHED THAT THE DISTRICT COURT DID NOT HAVE AUTHORITY TO CHANGE AS THE DISTRICT
     COURT IS NOT THE TRUSTEE. THE REMEDY WAS FOR THE COURT TO ACKNOWLEDGE THE BREACH…………………………………….............. 10-11

iv.  ISSUES OF FACT EXIST REGARDING THE DELIVERY OF THE TRUST THAT CANNOT BE SUMMARILY DISMISS..............................    11-13

    TABLE OF CONTENTS (cont’)                                                                                                                        Page No.

  v. THE NOTE VIOLATED THE UCC, THE PSA AND THE TERMS OF THE LOAN DOCUMENTS BECAUSE IT DID NOT
       HAVE ALLONGES NOR INDORSEMENTS TO U.S BANK, VOIDING THE FORECLOSURE ACTION………………………………………………………  14-15

vi.   U.S.BANK ARGUED THE COURT MUST STRICTLY CONSTRUE   THE LOAN TERMS, THUS THEY ARE
      JUDICIALLY ESTOPPED   FROM DENYING THAT THE PSA AND MLPA TERMS ALSO MUST   BE STRICTLY CONSTRUED,
     WHICH MANDATE A DATE CERTAIN   TO DEPOSIT THE NOTE AND PROPER NOTE ASSIGNMENTS, OF  WHICH ALL SUCH
     TERMS WERE BREACHED AND VITIATE STANDING… ............................................................................................15-16

vii.       MATERIAL ISSUES OF FACT EXIST AS TO WHETHER THIS LOAN WAS PAID OFF MANY TIMES OVER AS
           SECURITIZED; THUS, SQUADRON MAY NOT HAVE OWED ANYTHING AND ITS DEMAND FOR AN ACCOUNTING
            SHOULD HAVE BEEN PERMITTED BEFORE SUMMARY DISMISSAL……………………………............................................ 16-18

viii.      SQUADRON RAISED ISSUES OF FACT REGARDING FRAUDULENT   DOCUMENTS…………………………………………………………………….. 18-20

ix.       CONSIDERING ALL OF THE EXISTING MATERIAL ISSUES OF FACT,  U.S. BANK DID NOT HAVE STANDING TO FORECLOSE
           BECAUSE THE NOTE WAS NEVER ASSIGNED, THE NOTE CANNOT BE SPLIT  FROM THE MORTGAGE AND ONLY THE
            MORTGAGE WAS ASSIGNED WITHOUT THE NOTE SECURING IT………………………….........................................................  20-22

x.        THE ASSIGNMENT IS DEFECTIVE UNDER N.Y. REAL PROP. LAW §299–a(1)………………………………………………………………   22

VIII. CONCLUSION...........................................................................................................................................      23

TABLE OF AUTHORITIES             
Page Anderson v. Liberty Lobby, Inc.,  477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)…………………. 6
Bates v. Long Island R.R. Co.,   997 F.2d 1028, 1037 (2d Cir. 1993). ………………………………………….. 15
Bridgeway Corp. v. Citibank,  201 F.3d 134, 141 (2d Cir. 2000)……………………………………………… 16
Celotex Corp. v. Catrett,  477 U.S. 317, 322-23 (1986)…………………………………………………… 6
TABLE OF AUTHORITIES (cont’)                                                                                                        Page

Colello v. Colello,   9 A.D.3d 855, 780 N.Y.S.2d 450, 453 (4th Dep't 2004)………………………. 9
DeFabio v. East Hampton Union Free School Dist.,   623 F.3d 71, 81 (2d Cir.2010)………………………………………………… 6

Gallo v. Prudential Residential Servs., Ltd. Partnership,   22 F.3d 1219, 1224 (2d. Cir.1994)………………………………………  6
Henrich,  827 N.Y.S.2d at 60 (quoting Greenfield, 98 N.Y.2d at 569,  750 N.Y.S.2d 565, 780 N.E.2d 166)………………………………………..  10
HSBC Bank USA, Nat'l Ass'n v. Miller,  26 Misc.3d 407, 889 N.Y.S.2d 430, 433 (Sup.Ct. 2009)…………………… 21
In re Feinberg,  442 B.R. 215, Bkrtcy.S.D.N.Y., July 30, 2010 (NO. BR 09-37151, 09-09091).. 7, 20
In re Minbatiwalla,  424 B.R. 104, 109-10 (Bankr. S.D.N.Y. 2010)………………………………….. 20
In re Stralem,  303 A.D.2d 120, 758 N.Y.S.2d 345, 347–48 (2d Dep't 2003)………………….. 21
In the Matter of Cummings,  184 N.Y.S. 404 (N.Y. App. Div. 1920)…………………………………………………. 13
In the Matter of James d Dana,  465 N.Y.S. 2d 102 (N.Y. Sup. Ct.  1982)……………………………………………… 13
King v. Simpson,  189 F.3d 284, 287 (2d Cir.1999)………………………………………………… 6
Klewin Bldg. Co., Inc.,  42 A.D.3d at 560, 840 N.Y.S.2d 144…………………………………………… 10
Kluge v. Fugazy,  145 A.D.2d at 538,536 N.Y.S.2d 92…………………………………………… 22
MHR Capital Partners LP,  12 N.Y.3d at 645, 884 N.Y.S.2d 211, 912 N.E.2d 43)…………………………. 9
Preferred Mtge. Brokers,  282 A.D.2d at 590, 723 N.Y.S.2d 230)…………………………………………. 10
Riegel v Central Hanover Bank & Trust Co,  266 App. Div. 586………………………………………………………………. 11
Salahuddin v. Cuomo,  861 F.2d 40, 42 (2d Cir.1988)………………………………………………….. 7
Slutsky v Blooming Grove Inn, Inc.,  147 AD2d, 542 NYS2d 721 [2nd Dept., 1989]………………………………… 21
Sussman v. Sussman,    61 A.D.2d 838 (2d Dept, 1978)………………………………………………… 11
Tenenbaum v. Williams,  193 F.3d 581, 593 (2d Cir.1999)……………………………………………….. 6
U.S. Bank Nat. Assn. TR U/S 6/01/98 (Home Equity Loan Trust 1998–) v. Alvarez,   49 A.D.3d 711,
854 N.Y.S.2d 171 (2d Dep't 2008)…………………………….. 7  
TABLE OF AUTHORITIES (cont’)                                                                                                 Page

U.S. Bank, N.A. v. Collymore,  68 A.D.3d at 754, 890 N.Y.S.2d 578……………………………………………. 22
U.S. Bank Nat'/ Ass 'n v. Madero,  80 A.D.3d 751, 752-53, 915 N.Y.S.2d 612 (2d Dep't 2011)……………………. 20
U.S. Bank, Nat. Ass'n v. Sharif,  933 N.Y.S.2d 293 (N.Y.A.D. 2 Dept. Nov 01, 2011)…………………………… 22
Vermont Teddy Bear,  1 N.Y.2d at 475, 154 N.Y.S.2d 37, 136 N.E.2d 504……………………………. 10
Vincent v. Putname,  248 NY 76, 82-84 (NY 1928)…………………………………………………….. 11

     Statutes, Rules             Page
28 U.S.C. §1291.......................................................................................   1
Fed.R.Civ.P. 56…………………………………………………………   6
Fed.R.Evid.1003………………………………………………………..   8
EPTL-7-2.4(2)Article 7…………………………………………………   13
N.Y. Est Powers & Trusts sec 11-1.1(b)(12)…………………………..   12
N.Y. Real Prop. Law § 299–a(1)............................................................   22
N.Y. UCC §§3-204(1)-(2)……………………………………………..   20, 21
UCC 3-104…………………………………………………………….   21
UCC 3-202(2)[3], [4]………………………………………………….   21
UCC §3-804 ………………………………………………………….   14  
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RULE 26.1 STATEMENT
 Defendants-Appellants Squadron and Morton have not issued shares that are publicly traded and have no parent, subsidiaries or affiliates that have issued shares to the public. I declare under penalty of perjury that the foregoing is true and correct according to statements provided to me by Appellants. 

Executed on March 2, 2012.

       LAW OFFICES OF SUSAN CHANA LASK

       /s Susan Chana Lask        
___________________________________        
SUSAN CHANA LASK, ESQ. (SCL-1744)        
Attorneys for Defendants-Appellants        
244 Fifth Avenue, Suite 2369        
New York, NY 10001        
917/300-1958
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I.   STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION  

      The United States District Court for the Southern District of New York has jurisdiction over this appeal pursuant to 28 U.S.C. §1291.   On October 4 and November 3, 2011, the District Court issued (a) an October 4, 2011 Memorandum Decision granting summary judgment against Appellants Squadron VCD, LLC and its members Patsy and Allen Morton (collectively, “Squadron”), (b) an October 4, 2011 Memorandum Decision appointing a receiver and Ordering $100,000 paid from Appellant Squadron to the receiver and (c) a November 3, 2011 Judgment of Foreclosure and Sale of commercial property at 20 Squadron Boulevard, New City, New York, with judgment against Squadron in the amount of $12,893,379.75, including attorney fees, costs, and $3,284.95 per diem from July 15, 2010 to November 3, 2011. On November 8, 2011 Appellants Squadron timely filed an appeal.   This appeal is from a final order.

 II.  STATEMENT OF THE ISSUES PRESENTED  

Did the District Court err in granting Appellees’ FRCP 56 summary judgment when numerous issues of fact exist?   YES.

 III.  STATEMENT OF THE CASE  

     
On July 15, 2010, Appellee U.S. BANK, N.A., as Trustee for the Registered Holders of ML-CFC Commercial Mortgage Trust 2006-1, Commercial Mortgage Pass-Through Certificates, Series 2006-1  (“U.S. Bank”) filed a complaint to foreclose against Squadron on commercial premises at 20 Squadron Boulevard. New City, New York. A30-41.   On September 9, 2010, Squadron filed an answer with affirmative defenses. A47-50.    On October 26, 2010, U.S. Bank filed for summary judgment pursuant to F.R.C.P. 56 arguing that U.S. Bank was the owner of the Note to foreclose against Squadron through a series of assignments of the mortgage . A51-65 On April 22, 2011, Squadron filed Opposition arguing, among other things, that U.S. Bank did not have standing because the Note was never assigned lawfully nor pursuant to the terms of the loan documents, that discovery was needed, including the deposition of a Ms. Cassano whose execution of the assignments was at issue, that U.S. Bank never produced the Pooling and Servicing Agreement (the “PSA”) governing the terms of the Trust and Loan Documents and that Squadron had a right to examine the original Note . A66-81. On May 6, 2011 U.S. Bank filed a Reply. A82-94.   On June 10, 2011 Squadron filed a sur-reply noting that U.S. Bank’s motion papers contradicted themselves and created more issues of fact regarding the propriety of chain of title because U.S. Bank’s motion papers originally certified that they obtained the loan directly from the trustee, but then their May 6, 2011 papers certified there were actually three trustees. A95-99.   On June 17, 2011 U.S. Bank filed opposition. A100-105.  On October 4 and November 3, 2011, Honorable Vincent L. Bricetti granted U.S. Bank’s motion for summary judgment, costs and fees and ordered Squadron to turn over $100,000 to the referee A1-29.  

IV.  STATEMENT OF FACTS

       -LOAN HISTORY

      On September 13, 2005, Henry Leiberman executed a Note for Eleven Million Dollars ($11,000,000.00) and a Mortgage upon premises at 20 Squadron Boulevard, New City New York with Merrill Lynch Mortgage Lending, Inc. (“Merrill Lynch”) (the “Loan”) A42-46.  The documents creating the Loan were (a) a Loan Agreement between Windsor Realty Associates, LLC, as Borrower and Merrill Lynch Mortgage Lending, Inc. as Lender, dated September 13, 2005, (b) an Environmental Indemnity Agreement (c) a Guaranty Agreement and “any and all other documents, agreements and certificates executed and/or delivered in connection with the Loan…”(collectively, the “Loan Documents”). A115.  On March 1, 2006, a trust was created to hold the Loan Documents pursuant to the terms of a Pooling and Servicing Agreement between Merrill Lynch Mortgage Investors Inc. , Depositor, Wachovia Bank National Association, Master Servicer, Midland Loan Services, Inc., Special Servicer, and LaSalle Bank National Association, Trustee of $2,141,833,151 in ML_CFC Commercial Mortgage Trust 2006-1 Commercial Mortgage Pass Through Certificates Series 2006 (the “PSA”). A235-247.   Pursuant to the PSA at page 27, entitled “Closing Date Deposit Mortgage Loan", the Depositor Merrill Lynch Mortgage Investors Inc. was to deposit this Loan, Note and Mortgage into the trust by March 30, 2006 . A247.  Exhibit I of the PSA entitled “Mortgage Loan Schedule”, at page 304, lists this Loan that the Trust should hold as of March 30, 2006:

“PROPERTY LOAN #   PROPERTY NAME   ORIGINATOR   TYPE     STREET ADDRESS   
48                                New City Office        MLML       Office   20 Squadron Boulevard

      On March 23, 2006 a Mortgage Loan Purchase Agreement (the “MLPA”) was created between Merrill Lynch Mortgage Lending, Inc. (the "Seller") and Merrill Lynch Mortgage Investors, Inc. (the "Purchaser") A248-251.  The MLPA is to be read in conjunction with the PSA wherein the MLPA material terms mandate that the Merrill Lynch entities transfer by a date certain of March 30, 2006   the original Note and a sleuth of Loan Documents to the trustee, which at that time was LaSalle .  The MLPA also mandated the closing date as March 30, 2006. A250.

 -The Assignments

        In 2006, a document entitled “Assignment of Mortgage” between Merrill Lynch Mortgage Lending, Inc., a Delaware Corporation, to LaSalle Bank National Association, as Trustee for the Registered Holders of MLCFC Commercial Mortgage Trust 2006-1, Commercial Mortgage Pass-Through Certificates, Series 2006-1 (“LaSalle”) (the “Trust”) empowered the transfer of the mortgage “together with any bonds or notes…”, never describing nor attaching a note. A193-201.  The date is stated as “the Assignor has caused these presents to be effective as of March 30, 2006”, but it was executed before a notary on May 2, 2006 claiming Merrill Lynch’s Vice President David M. Rodgers personally appeared to sign it on May 2, 2006; that is 32 days after the Trust closed. A195.  On June 30, 2008, another Assignment of Mortgage from LaSalle to U.S. Bank was purportedly executed by Karyn Casanao, Vice President of Lasalle, and notarized by out of state Illinois notary Raquel Hernandez on October 14, 2008. A221-230.  On May 5, 2009 that Assignment was recorded in the Rockland County clerk’s office in the State of New York, but it was not “accompanied by a certificate to the effect that it conforms with” the laws of the state in which the acknowledgment is made.” N.Y. Real Prop. Law § 299–a(1). A221. -Squadron Assumes the Mortgage  In between the above two assignments, on or about July 16, 2007, Squadron executed a Loan Assumption and Substitution Agreement with LaSalle, assuming the September 13, 2005 Note and Mortgage A202-220.  On July 20, 2010 U.S. Bank filed a foreclosure complaint alleging Squadron owed U.S. Bank $10,296,412.59, plus interest, late charges, other costs and attorney fees.  On September 9, 2010, Squadron answered with affirmative defenses that U.S. Bank did not have standing, the original note was not produced, a proper chain of title was not established, and that the PSA, loan agreement terms and the Uniform Commercial Code were violated.

-Summary Judgment Filings  

      U.S. Bank’s October 26, 2010 Summary Judgment motion relied upon an affidavit of Jason Gavin as Asset Manager for Midland Loan Services, dated September 21, 2010. A53-65.  He claimed U.S. Bank had standing because of two assignment of mortgages being (a) Merrill Lynch to LaSalle dated May 2, 2006 and (b) LaSalle to U.S. Bank, dated October 14, 2008. A55-256.  Although Mr. Gavin’s affidavit states the PSA and MLPA are attached to his filing, both are not on the District Court docket.  His later May 6, 2011 reply added new information never in his original filing, including a declaration of Karyn Cassano. A83, FN1.   

V.  SUMMARY OF ARGUMENT  

      The District Court’s October 4, 2011 decision terminated the case on summary judgment as a matter of law, without discovery, by finding simply that there was a note, a mortgage and a default in payment; thus, there must be a foreclosure.  The District Court relied solely upon assignments of a mortgage to U.S. Bank, but never found that the Note was actually deposited into the Trust by a date certain “closing date” and whether it was assigned pursuant to the Loan, PSA and MLPA terms.  Moreover, the MLPA is never referenced in the District Court opinion.  If the District Court considered the pertinent terms of the PSA and MLPA then it would have understood the Note was not deposited into the PSA timely and material terms of the Loan Documents were violated that vitiated standing by U.S. Bank. There existed multiple issues of fact preventing summary judgment. Thus, U.S. Bank did not have standing to foreclose and foreclosure by summary judgment was in error.  Respectfully, this case should be decided by this court de novo as summary dismissal was in error.  

VI.  STANDARD OF REVIEW

     This Court reviews a district court's grant of summary judgment de novo, construing the evidence in the light most favorable to the nonmoving party, here being Appellant.  Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir.1999).   A motion for summary judgment may be granted only if there is no genuine issue as to any material fact and the moving party is therefore entitled to judgment as a matter of law.  Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Fed.R.Civ.P. 56. The role of the Court is to determine whether there are any genuine issues of material fact to be tried, not to decide them.   Gallo v. Prudential Residential Servs., Ltd. Partnership, 22 F.3d 1219, 1224 (2d. Cir.1994). "The issue is not whether a claimant will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims."  King v. Simpson, 189 F.3d 284, 287 (2d Cir.1999) (quoting Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir.1995)).  “When deciding a summary judgment motion in a civil case, all factual ambiguities must be resolved in the non-moving party's favor and the court may not weigh the evidence, but rather must only determine whether a genuine issue of fact exists for trial.” DeFabio v. East Hampton Union Free School Dist., 623 F.3d 71, 81 (2d Cir.2010).  

VII.  ARGUMENT

A. ISSUES OF FACT PREVENT SUMMARY JUDGMENT  

     Multiple factual ambiguities exist that “might affect the outcome of the suit [and therefore] preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).  In this Circuit, as most Circuits, there is a “jurisprudential preference for adjudication of cases on their merits rather than on the basis of formalities.” Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir.1988). The District Court refused adjudication on the merits and dismissed this case on the premise that there was a Note, a Mortgage and a default so there has to be a foreclosure. It is not that simple when dealing with  so many parties an documents, securitization of loans and transfers and various contractual obligations between these parties and documents.  The simple answer actually is the other way around; that there cannot be a summary judgment if so many issues of fact exist regarding the propriety of the loan documents, parties, terms and transfers involved and whether the law and the terms of the very agreements governing the transfers were followed or were there breaches and the documents fictionalized, backdated and executed without authority?

i. U.S BANK NEVER PRODUCED THE ORIGINAL NOTE DESPITE SQAUDRON’S RIGHT TO REVIEW IT, CREATING AN ISSUE OF FACT WHETHER THE NOTE WAS LAWFULLY INDORSED TO TRANSFER IT TO U.S. BANK     

      Under New York law, “[i]n order to establish its prima facie entitlement to summary judgment in a foreclosure action, a plaintiff must submit the mortgage and unpaid note, along with evidence of default.” U.S. Bank Nat. Assn. TR U/S 6/01/98 (Home Equity Loan Trust 1998–) v. Alvarez, 49 A.D.3d 711, 854 N.Y.S.2d 171 (2d Dep't 2008).  The District Court stopped its findings there and ignored the original Note must be produced to prove the plaintiff has standing. In re Feinberg, 442 B.R. 215, Bkrtcy. S.D.N.Y., July 30, 2010 (NO. BR 09-37151, 09-09091). Despite Squadron’s filings in the District Court requesting the original Note pursuant to its right to inspect it, U.S. Bank did not produce it nor certify whether it possessed the original Note.  Instead it had a servicer, Midland, by a Jason Gavin , attach to his affidavit what he purported to be a “true and complete copy” of the Note but never confirmed that “copy” was compared against the original, and never produced the original as mandated. Jason Gavin as a representative of the loan servicer named Midland is not the actual trustee or plaintiff.  U.S. Bank should have provided a certification upon personal knowledge whether it possessed the original Note. It is an issue of fact whether U.S. Bank compared the copy to the original because the location of the original Note was never confirmed by Jason Gavin’s affidavit (an unreliable affidavit).  

     Moreover, Mr. Gavin’s May 26, 2011 affidavit filed with the District Court confirms that the MLPA is governed by the PSA, but he omits any reference to whether the original Note was transferred to the Trust pursuant to the material terms of the PSA and MLPA mandating a transfer by March 30, 2006.  Pursuant to the PSA, the Note should have been with a trustee that holds the originals in a vault.  At no time does U.S. Bank nor Mr. Gavin for Midland certify that anyone pulled the original Note or went to the vault to inspect it. In his later May 6, 2011 affidavit, Mr. Gavin tries to correct this problem by claiming he reviewed the trust file and the original Note is there; however, he refused to produce the original Note despite Squadron’s multiple requests in their papers filed. That refusal raises suspicion and is an issue of fact as to does the original exist.  U.S. Bank never showed proof whether the original Note was actually possessed by it to determine in the least if it was properly assigned to various parties, ultimately to U.S. Bank, by endorsements as mandated by the Uniform Commercial Code, the law and the Loan Documents and the PSA.  

      Federal Rules of Evidence Rule 1003 says “[a] duplicate [document] is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original.” Fed.R.Evid.1003. Squadron raised issues as to the authenticity of the Note throughout the filings and requested to examine the original Note.  The District Court ignored Squadron’s rights under Rule 1003. Instead, it summarily dismissed the case in complete disregard to Squadron’s rights to examine the original Note that is critical in any foreclosure case.  An examination of the original may have shown endorsements on the back of the Note, or staple marks where allonges may have been and were removed.  The examination is necessary for either party to prove their case of who owns the Note and who has proper standing to file the foreclosure.  Of course, that would have resolved any issue of fact regarding the original Note existing or not and what if any endorsements may have been on the flip side of that document.  Without producing the original, the Court completely ignored Squadron’s rights as a litigant and the importance of contract terms in legal documents such as the MLPA and PSA mandating the original Note, not a copy, must be in the Trustee’s possession and proof that it was deposited timely by the closing date of March 30, 2006 was never produced.

ii. MATERIAL CONTRACT TERMS AT ISSUE WERE IGNORED BY THE DISTRICT COURT WHICH ERRONEOUSLY INJECTED ITS OWN TERMS TO UNAMBIGUOUS CONTRACT TERMS TO CORRECT WHAT WAS A CLEAR BREACH AND BREAK IN THE CHAIN OF TITLE

      The District Court simply dismissed issues of fact raised by Squadron regarding the propriety of the depositing of the Loan into the Trust pursuant to the PSA by finding “…[i]t is fundamental that where parties to an agreement expressly provide that a written contract be entered into ‘as of’ an earlier date than that on which it was executed, the agreement is effective retroactively ‘as of’ the earlier date and the parties are bound thereby accordingly.” Colello v. Colello, 9 A.D.3d 855, 780 N.Y.S.2d 450, 453 (4th Dep't 2004).” A10.  To rationalize its dismissal of solid contract law that “Express conditions must be literally performed,” and even “substantial performance will not suffice” MHR Capital Partners LP, 12 N.Y.3d at 645, 884 N.Y.S.2d 211, 912 N.E.2d 43), the District Court erroneously turned to the doctrine of nunc pro tunc to correct a material breach that the District Court had no right changing unambiguous terms of a contract. Nevertheless, that doctrine fails because limited and untimely performance does not constitute performance of such an express condition. Klewin Bldg. Co., Inc., 42 A.D.3d at 560, 840 N.Y.S.2d 144; Preferred Mtge. Brokers, 282 A.D.2d at 590, 723 N.Y.S.2d 230). “Thus, a written agreement that is complete, clear and unambiguous must be enforced according to the plain meaning of its terms.” Henrich, 827 N.Y.S.2d at 60 (quoting Greenfield, 98 N.Y.2d at 569, 750 N.Y.S.2d 565, 780 N.E.2d 166); see also Vermont Teddy Bear, 1 N.Y.2d at 475, 154 N.Y.S.2d 37, 136 N.E.2d 504 (“In the absence of any ambiguity, we look solely to the language used by the parties to discern the contract's meaning.”).  

      Since U.S. Bank was obligated by the PSA and MLPA in unambiguous contract terms to deposit the Loan documents, including the original Note, by March 30 2006 and that was raised as an issue of fact by Squadon that it never occurred, then the District Court cannot excuse a material breach with a band-aide of nunc pro tunc. Courts are not permitted to “add or excise terms” to a contract, nor are they permitted to “distort the meaning of those used,” thereby creating a new contract than that originally intended by the parties “under the guise of interpreting the writing.” Vermont Teddy Bear, 1 N.Y.2d at 475, 154 N.Y.S.2d 37, 136 N.E.2d 504 (citation omitted). If the loan was not in the Trust on March 30, 2006, then there was a material breach of the PSA and MLPA terms and a break in the chain of title. Issues of fact exist as to who owned the Note and had standing to file this action.

iii. THE DISTRICT COURT’S INJECTING OF ITS OWN TERMS INTO  CONTRACTS THAT WERE BREACHED AFFECTED TRUST TERMS BREACHED THAT THE DISTRICT COURT DID NOT HAVE AUTHORITY TO CHANGE AS THE DISTRICT COURT IS NOT THE TRUSTEE. THE REMEDY WAS FOR THE COURT TO ACKNOWLEDGE THE BREACH.

      Mr. Gavin produced a November 24, 2009 Power of Attorney from U.S. National Bank to Midland Loan Services, Inc. (the “POA”) stating various parties deposited the loan into a securitized trust regulated by the PSA.  But it does not state the original Note was properly assigned, deposited or in U.S. Bank’s possession.   Mr. Gavin excludes the fact that the PSA and MLPA mandated the closing date as of March 30, 2006 and he does not address whether the original Note and Loan Documents made it into the trust by that date. The District Court cannot correct these breaches but should acknowledge them as facts needed to be determined regarding the Trust.  Moreover, the District Court’s rationale to permit foreclosure is contrary to Squadron’s rights under clear trust law and standing. 

iv. ISSUES OF FACT EXIST REGARDING THE DELIVERY OF THE TRUST THAT CANNOT BE SUMMARILY DISMISSED

       The District Court recognized this trust falls under New York trust law by citing the EPTL, but failed to recognize that New York common law dictates that there must be a gift or delivery of the asset to the trust, either physically or constructively by an instrument of gift.  First, “until the delivery to the trustee is performed by the settlor, or until the securities are definitely ascertained by the declaration of the settlor, when he himself is the trustee, no rights of the beneficiary in a trust created without consideration arise. Sussman v. Sussman, 61 A.D.2d 838 (2d Dept, 1978) citing Riegel v Central Hanover Bank & Trust Co, 266 App. Div. 586. Next, to complete the gift to the trust the delivery must be perfect regarding the property and the circumstances, or in other words there must be a change of  dominion and ownership and neither words or intention can substitute for the actual delivery. Vincent v. Putname, 248 NY 76, 82-84 (NY 1928). Finally, there must be four elements met as (a) a designated beneficiary, (b) a designated trustee that cannot be the beneficiary, (c) a fund or other property properly identified to pass title to the trustee and (d) the actual delivery of the property, or legal assignment thereof, with the intent to pass legal title to the trustee.  Sussman, Id.  Here there was no valid transfer of the Note to U.S. Bank pursuant to trust laws.

       As demonstrated hereinabove, the purported copy of the Note produced is devoid of endorsements or allonges.  The PSA mandates a complete chain of title made by Notes endorsed from each payee to the trustee. The Note must have had the proper chain of endorsements in the least from Wells endorsed to LaSalle and Lasalle endorsed to US Bank.  No such endorsements of the Note were produced. The October 14, 2008 Assignment of Mortgage is just that- a mortgage assignment, not a note transfer. Therefore, it is impossible that LaSalle transferred the Note and it is as impossible that even the assignments of mortgage were valid because assigning a mortgage without endorsing the note that secures it is useless.  Moreover, the first assignment of this loan of May 2, 2006 was invalid because the Note never made it to the trust, so that invalidates any subsequent assignments; meaning U.S. Bank never had standing.  That is proven by the fact that not only did U.S. Bank withhold the actual wet ink original Note, but it then deflected the issues to confuse the court by using affidavits of Jason Gavin of Midland that is not even a party to the action to focus on assignments of mortgages as if assignments of mortgages control when they do not. That caused the Court to ignore the PSA and MLPA mandates that control wherein the Note must be properly assigned and endorsed, not referenced in an assignment of mortgage as the District Court erroneously held.   

      The District Court’s errors become more clear as at page 11 of its decision the District Court erroneously cites N.Y. Est Powers & Trusts sec 11-1.1(b)(12) as authority for U.S. Bank to have standing by assignment of the mortgage, but the District Court fails to explain how the Note was assigned other than claiming the Note follows the Mortgage if it is referenced in the assignment of Mortgage.  The District Court assumed the “Trust contains the mortgage, note and related loan documents”( U.S. Bank, at 11) based on assignments of the mortgage, but the Court never received proof that the Note was actually deposited into the Trust to even permit it to be assigned to U.S. Bank.  By law if either one of those actions did not occur then U.S. Bank had no standing to bring the foreclosure action against Squadron. New York is clear that Squadron had the right to challenge standing because standing is based on having a sufficient interest in the outcome of litigation, not privity of contract. Case law dictates that Squadron has the right to challenge the Trust ownership of a note and mortgage in a foreclosure case as a means of contesting standing to file suit. As a matter of law, a Trust may not take ownership of a note and mortgage or hold it in violation of its Trust documents.

      It is elementary Trust Law that trust founding documents control the limitations and must be adhered to by the Trustee and the Trust. The court cannot change those terms. In the Matter of Cummings, 184 N.Y.S. 404 (N.Y. App. Div. 1920) holding and stating that trusts are sacred and the Trustees cannot violate the express terms thereof if terms are incorporated in the instrument creating a Trust”. Particularly the court cannot interfere when the note and assignment of mortgage were not properly transferred to the trust as occurred in this case. In the Matter of James d Dana, 465 N.Y.S. 2d 102 (N.Y. Sup. Ct.  1982)-voiding a transaction that violated a Trust document and upholding a Trust; EPTL-7-2.4(2) Article 7, “Trust”; part 2  “Rules Governing Trustees “- a cardinal principal of law of Trust is that the instrument under which the Trustee acts is the charter of its rights and must act in administering the Trust in accordance with its terms.  Thus, if the Trust does own the subject instruments the alleged Plaintiff U.S. Bank acting as Trustee never had standing to file the instant case and the District Court cannot stand in the shoes of the trustee to correct the trustee’s breaches and create its own terms to correct material terms breached throughout the PSA, MLPA, the UCC and trust law.

v. THE NOTE VIOLATED THE UCC, THE PSA AND THE TERMS OF THE LOAN DOCUMENTS BECAUSE IT DID NOT HAVE ALLONGES NOR INDORSEMENTS TO U.S BANK, VOIDING THE FORECLOSURE ACTION  

      Section 3-202 of the N.Y.S. Uniform Commercial Code (UCC) regarding negotiation of notes provides in subparagraph “2:'“An endorsement must be written by or on behalf of the holder and on the instrument or on a paper so firmly affixed thereto as to become a part thereof.” The UCC is specific that endorsements must be attached to the note and become “a part thereof.”  Also, a party suing on a note that cannot produce the original can be required to post a bond. NY UCC §3-804. The copy of the Note that U.S. Bank relied on as its Exhibit A was devoid of any endorsements.  If U.S. Bank was the holder of the Note, then they should have produced the original as requested multiple times by Squadron.  Not only did U.S. Bank violate the UCC and basic New York mortgage law, but it violated its own material loan terms multiple times mandating endorsements on the Note before any assignment. First, Loan Document MLCFC 2006-1 PSA, Article II, Mortgage Transfer Section 201 et seq. mandates endorsement of the Note before any transfer and mandates the original note to be kept in the trust.  Since the PSA dictates that the Note must be endorsed and it was not, then the District Court erred to permit this foreclosure action on summary judgment; no less permit U.S. Bank to have standing when it was not named on the Note.   

     If the Note was not endorsed nor timely deposited pursuant to the PSA terms, then then there could be no foreclosure. Also, mirroring the mandates of the PSA, the MLPA mandated the deposit of the Squadron Loan Documents into the PSA to include the original Note and all endorsements and allonges:            

(i) (A) the original executed Mortgage Note for the subject Mortgage Loan, including any power of attorney related to the execution thereof (or a lost note affidavit and indemnity with a copy of such Mortgage Note attached thereto), together with any and all intervening endorsements thereon, endorsed on its face or by allonge attached thereto (without recourse, representation or warranty, express or implied) to the order of LaSalle Bank National Association, as trustee for the registered holders of ML-CFC Commercial Mortgage Trust 2006-1, Commercial Mortgage Pass-Through Certificates, Series 2006-1, or in blank, . A251.

Despite these mandates, only a purported copy of the Note was produced without an allonge or endorsement to U.S. Bank, and U.S. Bank confused the issues by focusing the District Court on an assignment of the mortgage; omitting the fact that the Note endorsements and allonges were never produced.

vi. U.S.BANK ARGUED THE COURT MUST STRICTLY CONSTRUE THE LOAN TERMS, THUS THEY ARE JUDICIALLY ESTOPPED FROM DENYING THAT THE PSA AND MLPA TERMS ALSO MUST BE STRICTLY CONSTRUED, WHICH MANDATE A DATE CERTAIN TO DEPOSIT THE NOTE AND PROPER NOTE ASSIGNMENTS, OF WHICH ALL SUCH TERMS WERE BREACHED AND VITIATE STANDING

      U.S. Bank argued that Squadron signed loan documents with loan terms they must adhere to in an effort to support a position that Squadron waived its right to contest the Note and Mortgage; yet U.S. Bank wants us to ignore the material terms of the Loan Document, PSA and MPLA mandating the original Note be deposited into the trust by a date certain and have proper endorsements if they are to have standing.   U.S. Bank is judicially estopped from opposing Squadron’s argument that U.S. Bank and its predecessors as well must be strictly held to material contract terms because in the District Court U.S. Bank successfully argued that Squadron must be strictly held to the terms of the Loan Assumption Agreement.  “The doctrine of judicial estoppel prevents a party from asserting a factual position in a legal proceeding that is contrary to a position previously taken by him in a prior legal proceeding.” Bates v. Long Island R.R. Co., 997 F.2d 1028, 1037 (2d Cir. 1993).  Thus, if U.S. Bank wants us to strictly construe one contract but not the cumulative agreements that dictate the entire transaction then that is illogical, particularly when the District Court adopted U.S. Bank’s position to hold Squadron to the Loan Assumption Agreement. Bridgeway Corp. v. Citibank, 201 F.3d 134, 141 (2d Cir. 2000). 

      The District Court erred by not advancing its findings to consider the PSA and MLPA were breached before Squadron signed the Loan Assumption. If thought through the District Court would have had an issue of fact, not a matter of law, as to whether the entire transaction was void.  A nullity that could not be corrected as the District Court attempted using assignments of mortgages that are inapplicable and then the doctrine of nunc pro tunc that does not work here.  U.S. Bank’s arguments to strictly hold Squadron to contract terms proved Squadron’s case that the PSA and MLPA voided standing here because if we strictly follow contract terms then that means we have to look back to the documents and their material terms before U.S. Bank came into the picture.  If we do that then we see the terms of the PSA and MLPA as discussed herein above were all breached-no original Note, no proof of assignments of that original Note, no proof of deposit of an original Note by the “Closing Date”. Those issues of fact alone prevent summary judgment. 

vii. MATERIAL ISSUES OF FACT EXIST AS TO WHETHER THIS LOAN WAS   PAID OFF MANY TIMES OVER AS SECURITIZED; THUS, SQUADRON MAY NOT HAVE OWED ANYTHING AND ITS DEMAND FOR AN ACCOUNTING SHOULD HAVE BEEN PERMITTED BEFORE SUMMARY DISMISSAL       

      The District Court minimized the securitization process that led to its erroneous summary judgment decision because if it considered the entire securitization picture then it would have realized that other multiple parties should have been named in this action to resolve issues of fact before summary dismissal.  Securitization occurs by pooling and selling contractual debt obligations (“CDO”), including residential and commercial mortgages, and depositing them to a trust.  The trust pays for those deposits by issuing the CDO debt securities paid for by investors.  There is an issue of fact as to who are those investors should they need to be named as indispensible parties since they literally have an interest in this Loan and paid for it. This Loan was to be deposited into a trust named “U.S. BANK, N.A., as Trustee for the Registered Holders of ML-CFC Commercial Mortgage Trust 2006-1, Commercial Mortgage Pass-Through Certificates, Series 2006-1”.  Thus, without consumer and commercial borrowers, here Squadron, to originate the Note to be deposited into the trust as part of the securitization process, then U.S. Bank would not have the opportunity to profit from Squadron’s loan to deposit into a pass-through trust involving other related entities; yet the only entity named as plaintiff was U.S. Trust.  Likewise, if the District Court scrutinized the documents, Loan and Trust terms and the dictates of the PSA and MLPA then summary judgment would not have occurred because those terms were all breached as no one proved if the Note was deposited, where the original Note is, who possesses it. In fact, it was proven the Note was never deposited as the first assignment of it was notarized over 30 days after the Trust closing date of March 30, 2006. 

      The Court cannot whitewash this material breach, otherwise it is supporting fictionalized Trusts, PSAs and other documents that violate the law and by injecting its own terms and using nunc pro tunc it is rewriting the Trust and other contract documents that have unambiguous terms that the Court has no authority to rewrite.  The Loan was to be deposited into a trust with a trustee named “U.S. BANK, N.A., as Trustee for the Registered Holders of ML-CFC Commercial Mortgage Trust 2006-1, Commercial Mortgage Pass-Through Certificates, Series 2006-1”.  That is a pass-through trust which receives tax benefits by avoiding taxes on its own income because of its “pass through” status.  The Trust allows its assets to be “bankruptcy remote”, protecting its assets from bank creditors. Thus, without borrowers such as Squadron to originate the Note to be deposited into a trust as part of the securitization process, then U.S. Bank would not have the opportunity to profit from Squadron’s loan many times over by tax benefits and investors. Those profits derive by slicing and dicing under the PSA terms to deposit it into a pass-through trust to gain more benefits; that is, tax exempt status in addition to selling it to investors in addition to taking monthly payments from Squadron towards the Loan. Considering the investors who have an interest in this Loan through the Trust, then more issues of fact exist as to whether this loan was paid off many times over that should be credited to Squadron. Squadron raised an issue as to its right to an accounting because the actual amount due may have been zero.   Squadron had a right to discover what actually occurred with its Loan, who invested in their Loan, what other parties paid their Loan down and whether or not the Loan was paid off in other ways that relieved them from any debt or violated the law. The securitization of the Note at issue involves many entities; yet the only entity named as plaintiff was U.S. Trust. An issue of fact exists whether there were missing indispensable parties to this action which could have been discovered but for the District Court summarily dismissing the case.

viii.  SQUADRON RAISED ISSUES OF FACT REGARDING FRAUDULENT DOCUMENTS

     Squadron’s filings questioned why Wachovia Securities was not named in the action despite being an indispensable party related to the original Note holders and related servicer obligations.  Other issues of fact raised are the multiple discrepancies of dates on the assignment of mortgage being notarized October 14, 2008 but signed and dated June 30, 2008 then recorded almost a year later on May 5, 2009. Notably, the signature page thereof was a separate attachment that raised issues of fact whether and how many times that page could have been switched with different signatures and notarizations.  LaSalle’s alleged Vice President Ms. Cassano states in her affidavit filed in the District Court that in 2008 Lasalle was taken over by Bank of America in 2008, but she never gives the exact date. Then she declares she was vice-president of LaSalle in 2008 when she executed the assignment in question but omits whether at the time her signature was notarized on October 14, 2008 if she was actually a LaSalle vice president authorized to execute that assignment on that date. Nor does she explain why that document has three dates of June, 2008 and October, 2008 then recorded May, 2009. Interestingly,  Mr. Gavin’s May 6, 2011 affidavit  ¶14  admits what Ms. Cassano omits- that on June 30, 2008 LaSalle resigned as trustee of the loan and Wells Fargo took over. This alone shows the October 14, 2008 notarized assignment of Mortgage by Ms. Cassano of LaSalle is an issue of fact of whether it is false.  The issue of fact here is whether LaSalle had a right to the loan as of June 30, 2008 when Lasalle’s VP Ms. Cassano executed an assignment on their behalf 4 months later on October 14, 2008. The District Court completely ignored this issue of fact.

      Notably, there is no law presented from U.S. Bank in their motion addressing this issue.  In the least, with this fact existing, Squadron had a right to depose Ms. Cassano and the notary and have discovery to protect their due process rights for a full hearing before the court and to protect their property rights. And Squadron asked for that discovery in their filings which the District Court ignored.   Also, Squadron raised factual issues regarding U.S. Bank using a securitization repair firm of Anderson, McCoy and Orta that necessitated their right to depose that firm to determine what repair they did to these loan documents that raised doubt regarding dates, signature pages, assignments and whether or not the original Note existed pursuant to the PSA. Finally, issues of fact are raised regarding the Loan Documents’ Power of Attorney from LaSalle to Wells Fargo and Wells Fargo to U.S. Bank as a break in the chain of title exists because none of the loan documents show a transfer from LaSalle to Wells Fargo. The questions is when did LaSalle resign as trustee, because if it was before Ms. Cassano alleged to be Lasalle’s Vice President at the time she executed the assignment of mortgage with multiple dates, then that assignment is void.  If that is void, the entire foreclosure filing should have been dismissed unless and until U.S. Bank establishes standing and provides proper documents to the Court.

ix. CONSIDERING ALL OF THE EXISTING MATERIAL ISSUES OF FACT, U.S. BANK DID NOT HAVE STANDING TO FORECLOSE BECAUSE THE NOTE WAS NEVER ASSIGNED, THE NOTE CANNOT BE SPLIT FROM THE MORTGAGE AND ONLY THE MORTGAGE WAS ASSIGNED WITHOUT THE NOTE SECURING IT

      New York law is clear that a party has standing to foreclose on a property only if it is the holder or assignee of both the note and the mortgage at the time of filing the foreclosure action. U.S. Bank Nat'/ Ass 'n v. Madero, 80 A.D.3d 751, 752-53, 915 N.Y.S.2d 612 (2d Dep't 2011); In re Feinberg, 442 B.R. 215, 223 (Bkrtcy. S.D.N.Y. 2010); In re Minbatiwalla, 424 B.R. 104, 109-10 (Bankr. S.D.N.Y. 2010). To establish standing, U.S. Bank must have been the assignee of the Note, not just the assignee mortgage. The note cannot be split from the mortgage by assigning the Mortgage without assigning the note with it.  Therefore, to establish standing, U.S. Bank must have been the assignee of the Note and the Mortgage. The District Court erroneously relied solely upon assignments of mortgages from Merrill Lynch to LaSalle and then from Lasalle to U.S. Bank, never acknowledging the note needed to be properly assigned as well.   A Note was never produced by U.S. Bank to prove it was assigned, endorsed or in any way negotiated to U.S. Bank pursuant to the Trust, PSA and Loan Documents terms, no less the UCC.    

      A promissory note is a negotiable instrument that must be either endorsed to the foreclosing party on the note itself, or on a firmly affixed allonge, or endorsed in blank or to bearer and physically held by the foreclosing party. N.Y. UCC §§3-204(1)-(2). The only Note produced by U.S. Bank was Exhibit A to its Complaint as “a true and complete copy of the Note”. A42-46.  That Exhibit A proved the Note was never assigned or transferred to U.S. Bank pursuant to the UCC because it is a Note between Windsor Realty as borrower and Merrill Lynch as Lender. Nowhere is U.S. Bank named, listed nor endorsed on that Note. Indeed, there are no allonges nor evidence whatsoever of a legal assignment of that Note to anyone.  U.S. Bank is not named nor endorsed on that Note. A promissory note is a negotiable instrument that must be either endorsed to the foreclosing party on the Note itself, or on a firmly affixed allonge, or endorsed in blank or to bearer. Slutsky v Blooming Grove Inn, Inc., 147 AD2d, 542 NYS2d 721 (2nd Dept., 1989)” , the Court held that when "[t]he note secured by the mortgage is a negotiable instrument (see, UCC 3-104) [it] requires endorsement on the instrument itself or on a paper so firmly affixed thereto as to become a part thereof' (UCC 3-202[2] in order to effectuate a valid assignment" of the entire instrument (cf., UCC 3-202[3], [4])." 

      Endorsements to the Note were never produced by U.S. Bank that it as the foreclosing party should have physically held the original Note.  N.Y. UCC §§3-204(1)-(2).  Indeed, U.S. Bank produced a copy without any explanation of where the original was and that copy showed no endorsement or otherwise to give U.S. Bank standing.  The District Court erroneously relied on assignments of a mortgage was based upon antiquated opinions as “Written assignment of the underlying note can be accomplished by a written reference to the note within the mortgage assignment. See In re Stralem, 303 A.D.2d 120, 758 N.Y.S.2d 345, 347–48 (2d Dep't 2003) (holding a note was properly assigned when the mortgage was assigned “together with the note or obligation described in or secured by said mortgage”); cf. HSBC Bank USA, Nat'l Ass'n v. Miller, 26 Misc.3d 407, 889 N.Y.S.2d 430, 433 (Sup.Ct. 2009) (holding the assignment of a note invalid where the language of the assignment did not explicitly assign “the note or obligation described and secured by said mortgage”).” U.S.Bank, N.A. v. Squadron VCD, LLC, 2011 WL 4582484 S.D.N.Y., 2011, at 7.  The recent decision of the Second Department in U.S. Bank, Nat. Ass'n v. Sharif, 933 N.Y.S.2d 293 (N.Y.A.D. 2 Dept. Nov 01, 2011) found that “although an assignment of mortgage was produced, an assignment of the mortgage without an assignment of the underlying note or bond is a nullity” (U.S. Bank, N.A. v. Collymore, 68 A.D.3d at 754, 890 N.Y.S.2d 578; see Merritt v. Bartholick, 36 N.Y. 44, 45; Kluge v. Fugazy, 145 A.D.2d at 538,536 N.Y.S.2d 92).”at 11. Therefore, while a written assignment or physical transfer of the Note may implicitly transfer an associated Mortgage, the converse is not true that assigning a mortgage assigns the Note because an explicit assignment of the Note is required. U. S. Bank, N.A. v. Collymore, 68 AD3d 752, 754 (2d Dept, 2009).  U.S. Bank’s Exhibit A admits that the Note was never assigned because that Exhibit is devoid of any allonge or endorsement. Without that, U.S. Bank never had standing.

x.  THE ASSIGNMENT IS DEFECTIVE UNDER N.Y. REAL PROP. LAW §299–a(1).

    The October 14, 2008 Assignment of Mortgage filed in this state’s County Clerk’s office is defective and cannot be upheld. A221-224. It is not “accompanied by a certificate to the effect that it conforms with” the laws of the state in which the acknowledgment is made.” N.Y. Real Prop. Law § 299–a(1).  At no time did U.S. Bank offer to correct this defect during the proceedings.  This defect is part of a cumulative history of issues of fact raised by Squadron as to the suspiciousness of the entire foreclosure action based on defective documents in violation of their own terms and the law.       

VIII. CONCLUSION   

       For the forgoing reasons, Appellants Squadron respectfully requests that this Court vacate the District Court orders, return the property to the Appellants, or in the alternative, remand this case to the District Court, and grant such other and further relief as this Court deems just and proper.

Dated: March 2, 2012                                                                       Law Offices of Susan Chana Lask

                                                                                                         /s Susan Chana Lask        
                                                                                                           ___________________       
                                                                                                         By: Susan Chana Lask, Esq. (SCL1744)            
                                                                                                         Attorney for Appellant        
                                                                                                          244 Fifth Avenue, Suite 2369        
                                                                                                          New York, NY 10001       
                                                                                                            917.300-1958

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