New York Family Law Blog
A New York Family Lawyer said the plaintiff commenced this action to foreclose a mortgage given by defendant Realty Corporation, to secure a promissory note of the same date in the amount of $1,450,000.00 executed by defendant borrower in favor of a Savings Bank. The note was further secured by the written unconditional guarantees of payment executed by guarantor defendants. The subject mortgage, in which the mortgagor promised to pay the debt a provided in the note executed by defendant borrower was recorded in the office of the County Clerk. The original lender/mortgagee, the parent company of the plaintiff, assigned the promissory note secured by the subject mortgage and such mortgage to the plaintiff by a written assignment bearing a corporate acknowledgment. That assignment was recorded in the office of the Suffolk County Clerk thereafter.
A Kings County Family attorney said that the mortgaged premises consist of commercial property situated in New York which houses several rental units of commercial space. In its complaint, the plaintiff alleges that the mortgagor defendant defaulted in making the payment due and such default has not been cured. The plaintiff thereafter elected to accelerate the mortgage debt, the principal amount of which was $1,371,504.21 as of the date of complaint.
A New York Custody Lawyer said that the plaintiff seeks recovery of such amount together with late fees, interest and reasonable counsel fees upon the public sale of the subject premises, and a deficiency of judgment, if there be any following such sale, against the obligor defendants.
The plaintiff commenced this action to foreclose the lien of its mortgage and secured the appointment of a receiver by order of the court. Defendant occupant of the premises, appeared herein by answer. The obligor defendants appeared herein by an undated answer bearing a verification by the corporate defendant. Therein, the obligor defendants assert nine affirmative defenses to the plaintiff’s pleaded demands for relief.
By the instant motion, the plaintiff moves for an order: (1) amending the captions of this action to reflect the proper name of answering defendant; 2) awarding summary judgment against the answering defendants; (2) fixing the defaults in answering of the non-answering defendants; (3) substituting one or more occupants found at the premises for unknowns named in the caption and deleting as party defendants the remaining unknown defendants; and (4) appointing a referee to compute amounts due under the subject mortgage.
A Suffolk County Custody Lawyer said the court is without receipt of opposition from answering defendant. However, the obligor defendants oppose the plaintiff’s motion-in-chief by cross moving papers in which they seek an order granting them leave to serve an amended answer and an order compelling the plaintiff to produce the documents demanded in a document demand notice. For the reasons stated below, the cross motion is denied while the plaintiff’s motion-in-chief is granted.
A Suffolk County Child Custody Lawyer said it is well settled law that a mortgagee establishes a prima facie case for foreclosure of a mortgage lien by presenting the subject mortgage, the unpaid note and due evidence of a default under the terms thereof. Claims for a deficiency judgment based upon written guarantees of payment are similarly established, prima facie, by the production of the underlying agreements and evidence of a default on the part of a guarantor defendant.
Here, the moving papers established the plaintiff’s prima facie entitlement to summary judgment on its complaint to the extent it asserts claims against the answering defendants, as it included copies of the note, mortgage and written guarantees as well as due evidence of defaults in payment by the obligor defendants. It was thus incumbent upon the answering defendants to submit proof sufficient to raise a genuine question of fact rebutting the plaintiff’s prima facie showing or in support of the affirmative defenses asserted in the answers, if any, or others available to such defendants.
The foregoing rule is the result of the nature of the issue of standing under principles of New York jurisprudence. It has recently been established that the issue of a plaintiff’s standing is not an issue concerning subject matter jurisdiction, but instead, is an affirmative defense in bar which may be waived by a defendant possessed of such defense. A plaintiff is thus under no obligation to plead and prove its standing in the first instance. It is only where standing is put in issue by a defendant’s pre-answer motion or by an affirmative defense set forth in an answer must the plaintiff prove its standing to be entitled to relief from the court.
A principal plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note “either by physical delivery or execution of a written assignment prior to the commencement of the action”. “Where a mortgage is represented by a bond or other instrument, an assignment of the mortgage without assignment of the underlying note or bond is a nullity”. However, a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation and vest standing in the plaintiff, since the mortgage passes with the debt that is evidenced by the note as an inseparable incident thereto.
Here, the plaintiff’s moving papers included proof that the note secured by the subject mortgage was physically delivered to the plaintiff by the original lender. The record also includes evidence that the underlying note, executed by the borrower, together with the mortgage given as security for said note by corporate defendant was assigned to the plaintiff in an undated assignment containing a sworn acknowledgment by a notary public, of such assignment’s execution by an agent of the original lender/mortgagee.
Under the above cited authorities, this written assignment of the note was “sufficient to transfer the obligation and vest standing in the plaintiff, since the mortgage passes with the debt that is evidenced by the note as an inseparable incident thereto”. Because ” [n]o special form or language is necessary to effect an assignment as long as the language shows the intention of the owner of a right to transfer it'”, the assignment relied upon by the plaintiff here, to establish its ownership interest in the note and mortgage, was sufficient to establish its standing to maintain this action.
The opposing papers also failed to demonstrate that the instant motion by the plaintiff is premature due to the obligor defendants’ inability to state facts essential to opposition as contemplated by CPLR 3212[f]. To defeat or delay determination of a summary judgment motion on such grounds, the claimant must demonstrate that additional discovery might lead to relevant evidence or that facts essential to justify opposition to the motion were exclusively within the knowledge and control of the plaintiffs. A review of the record reveals that no such showing was made by the obligor defendants, as they relied upon speculative expressions of hope that further discovery would yield evidence of a triable issue of fact which is not a basis for denying summary judgment pursuant to CPLR 3212(f).
Those portions of the plaintiff’s motion wherein it seeks an order amending the captions of this action to reflect the proper name of defendant, from the incorrect named set forth in the caption is considered under CPLR 305 and 3025 and is granted. There is no jurisdictional impediment to the caption amendment sought as the misnomer of this defendant was cured by its appearance herein by an answer containing no jurisdictional defenses. In any event, the misnomer appears to be of the type which is curable by a caption amendment of the type sought by the plaintiff on its motion-in-chief.
The moving papers further established the default in answering on the part of the newly identified non-answering defendants including the newly identified defendant each of whom failed to serve answers to the plaintiff’s complaint. Accordingly, the defaults of all such defendants are hereby fixed and determined. Since the plaintiff has been awarded summary judgment against the sole answering defendant and has established a default in answering by the remaining defendants, the plaintiff is entitled to an order appointing a referee to compute amounts due under the subject note and mortgage.
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