17‐345‐cv(L)
Gustavia Home, LLC v. Rutty
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE
OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ).
A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED
BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 21st day of December two thousand seventeen.
PRESENT: GUIDO CALABRESI,
RICHARD C. WESLEY,
DENNY CHIN,
Circuit Judges.
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GUSTAVIA HOME, LLC,
Plaintiff‐Appellee,
v. 17‐345(L),
17‐662(CON)
ROBERT R. RUTTY,
Defendant‐Appellant,
JOHN DOE, 1 through 12, said persons or parties
having or claimed to have a right, title or interest
in the mortgaged premises herein, their
respective names are presently unknown to
Plaintiff,
Defendant.
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FOR PLAINTIFF‐APPELLEE: Alan H. Weinreb, The Margolin & Weinreb
Law Group, LLP, Syosset, New York.
FOR DEFENDANT‐APPELLANT: Robert R. Rutty, pro se, Wadsworth, Illinois.
Appeal from a judgment of the United States District Court for the Eastern
District of New York (Cogan, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is VACATED
and the case is REMANDED for further proceedings.
Defendant‐appellant Robert R. Rutty, proceeding pro se, appeals from a
judgment entered February 1, 2017, ordering that Ruttyʹs property be foreclosed and sold
pursuant to a January 24, 2017 memorandum decision and order granting a motion for
summary judgment for plaintiff‐appellee Gustavia Home, LLC (ʺGustaviaʺ). On appeal
Rutty argues, inter alia, that the district court erred in granting summary judgment in
favor of Gustavia because the original lender on Ruttyʹs mortgage filed for bankruptcy in
2007, and no evidence demonstrated when Gustavia came into possession of the note or
whether the original lender transferred the note before the bankruptcy or had the
bankruptcy courtʹs permission to do so. We assume the partiesʹ familiarity with the
underlying facts, procedural history, and issues on appeal.
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We review a district courtʹs grant of summary judgment de novo and
ʺresolve all ambiguities and draw all inferences against the moving party.ʺ Garcia v.
Hartford Police Dep’t, 706 F.3d 120, 1227 (2d Cir. 2013) (per curiam). ʺSummary judgment
is proper only when, construing the evidence in the light most favorable to the non‐
movant, ʹthere is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.ʹʺ Doninger v. Niehoff, 642 F.3d 334, 344 (2d Cir. 2011)
(quoting Fed. R. Civ. P. 56(a)).
In 2006, Rutty obtained a loan of $134,000 from Peopleʹs Choice Home
Loan, Inc. (ʺPeopleʹs Choiceʺ). Rutty executed a note payable to Peopleʹs Choice and its
successors and assignees. The loan was secured by a mortgage on a New York property
in favor of Mortgage Electronic Registration Systems, Inc. as nominee for Peopleʹs
Choice. Peopleʹs Choice filed for bankruptcy in 2007 and was dissolved in 2008.
Through a series of undated allonges, the note was transferred to Gustavia. After Rutty
failed to pay his mortgage, Gustavia brought this diversity action against Rutty to
foreclose on the New York property.
In a foreclosure action under New York law, a plaintiff establishes its prima
facie entitlement to summary judgment by producing evidence of the mortgage, the
unpaid note, and the defendantʹs default. See, e.g., Wells Fargo Bank, N.A. v. Walker, 35
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N.Y.S.3d 591, 592 (3d Depʹt 2016); see also R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 59 n.2
(2d Cir. 1997). Where, as here, the defendant contests standing to foreclose, i.e., whether
the foreclosure plaintiff has a legal or equitable interest in the mortgage, the plaintiff
must additionally demonstrate that it was the holder or assignee of the mortgage and
note when the action was commenced. Walker, 35 N.Y.S.3d at 592‐93.
Rutty questioned Gustaviaʹs standing to pursue the foreclosure action.
The record demonstrates that Rutty executed the note and mortgage in 2006, and that in
2007 the original lender filed for Chapter 11 bankruptcy. By operation of law, the
original lenderʹs interest in the note and mortgage became property of the bankruptcy
estate. See 11 U.S.C. § 541. Although Gustavia submitted allonges purportedly
transferring the note, those allonges are undated, and no other evidence establishes that
the original lender assigned the note before filing for bankruptcy or obtained the
bankruptcy courtʹs permission to transfer the note. See Deutsche Bank Nat’l Trust Co. v.
Tanibajeva, 17 N.Y.S.3d 399, 4001 (1st Depʹt 2015) (affirming summary judgment in favor
of foreclosure defendant where plaintiff failed to provide evidence that the original
lender transferred note and mortgage before filing for bankruptcy); see also Wells Fargo
Bank, N.A. v. Rutty, No. 14007/11, slip op. at 7 (N.Y. Sup. Ct. 2013) (dismissing without
prejudice foreclosure action against Rutty by Wells Fargo for its failure to show that the
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original lender transferred the note before filing for bankruptcy or with the bankruptcy
courtʹs approval). The district courtʹs decision granting summary judgment in favor of
Gustavia does not address these issues and it is not apparent from the record whether the
bankruptcy impacted the purported transfers of the debt. Summary judgment,
therefore, was not appropriate.
On appeal, Rutty also challenges the district courtʹs denial of his motion to
strike an affidavit submitted by Gustavia. The district court’s denial was not ʺmanifestly
erroneous,ʺ and we therefore affirm that denial. See Hollander v. Am. Cyanamid Co., 172
F.3d 192, 198 (2d Cir. 1999), abrogated on other grounds by Schnabel v. Abramson, 232 F.3d 83
(2d Cir. 2000).
Accordingly, we VACATE the judgment and REMAND for further
proceedings consistent with this order. Ruttyʹs motion for ʺsummary judgment,ʺ filed in
this Court, is construed as a request that we direct the district court on remand to enter
judgment in his favor. The request is DENIED, as we hold not that Gustavia lacked
standing as a matter of law, but simply that on this record it is not clear, considering the
original lenderʹs bankruptcy, that Gustavia has standing.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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