APPEAL by the plaintiff, in an action to foreclose a mortgage, from an order of the Supreme Court (Joan B. Lefkowitz, J.), entered February 14, 2008, in Westchester County, which granted that branch of the motion of the defendants Vincent Marchione and Debbie Marchione which was, in effect, pursuant to CPLR 3211(a)(3) to dismiss the complaint for lack of standing.
The opinion of the court was delivered by: Leventhal, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
MARK C. DILLON, J. P., THOMAS A. DICKERSON, JOHN M. LEVENTHAL, ARIEL E. BELEN, JJ.
The issue presented on this appeal is whether an assignee of a note and mortgage has standing to commence a foreclosure action prior to the date of the execution of the assignment. We hold that an assignee in such a case has no standing.
The defendants Vincent Marchione and Debbie Marchione (hereinafter together the defendants) moved, inter alia, to dismiss this foreclosure action for lack of standing because the assignment of the mortgage to the plaintiff, Wells Fargo Bank, N.A. (hereinafter Wells Fargo), did not occur until after the foreclosure action had been commenced. The Supreme Court granted that branch of the defendants' motion and we affirm.
On or about September 2, 2005, the defendants executed a mortgage in favor of the mortgagee Option One Mortgage Corporation, creating a security interest in certain real property located in Mamaroneck. On the same date, Vincent Marchione signed an adjustable rate note in consideration of the loan. Wells Fargo alleges that the defendants failed to make payments beginning April 1, 2007, and, as trustee for Option One Mortgage Loan Trust, Wells Fargo commenced this foreclosure action by filing a summons and verified complaint on November 30, 2007, with the County Clerk of Westchester County.
Option One Mortgage Corporation assigned its "right, title and interest" in the aforementioned mortgage to Wells Fargo in an assignment dated December 4, 2007. The assignment contained a provision stating that it became effective on October 28, 2007. The complaint alleged that Wells Fargo was the "sole, true and lawful owner of record of the bond(s), note(s) and mortgage(s) securing the Mortgaged Premises." The complaint was verified by counsel for Wells Fargo on November 29, 2007, and filed with the County Clerk on November 30, 2007. The record indicates that the defendants were served on December 7, 2007. The assignment, which did not yet exist at the time of the verification and filing, was, for obvious reasons, not attached to the complaint, as were other supporting documents such as the note and mortgage.
On December 18, 2007, the defendants made a pre-answer motion pursuant to CPLR 3211 to dismiss the cause of action alleged against the defendant Debbie Marchione, for a determination that the complaint was not verified, and for such other and further relief which may be appropriate. Wells Fargo attached the assignment of the mortgage to its papers dated January 18, 2008, which were submitted in opposition to the defendants' motion. The contents of the assignment were unknown to the defendants at the time they moved.
The defendants first addressed the issue of the assignment in a February 3, 2008, reply affirmation of counsel which pointed out that Wells Fargo lacked standing to bring the action. Wells Fargo argues that the Supreme Court erred in relying on this argument, as it was first raised in the defendants' reply papers. "The function of reply papers is to address arguments made in opposition to the position taken by the movant and not to permit the movant to introduce new arguments in support of, or new grounds for the motion" (Matter of Harleysville Ins. Co. v Rosario, 17 AD3d 677, 677-678; see also Matter of TIG Ins. Co. v Pellegrini, 258 AD2d 658; Dannasch v Bifulco, 184 AD2d 415, 417). Here, however, the Supreme Court correctly recognized that the defendants' raising of the issue of standing in their reply was proper. The defendants' argument that the plaintiff lacked standing was in response to the plaintiff's submission of the assignment, presented for the first time in the papers the plaintiff submitted in opposition to the motion. Accordingly, the Supreme Court, in the exercise of its discretion, properly considered the response to the new evidence offered for the first time in the reply (see Matter of Kennelly v Mobius Realty Holdings LLC, 33 AD3d 380, 382).
Wells Fargo argues that the Supreme Court also erred since the retroactive effective date of the assignment gave Wells Fargo an interest in the mortgage before the action was commenced. We disagree.
In order to commence a foreclosure action, the plaintiff must have a legal or equitable interest in the mortgage (see Katz v East-Ville Realty Co., 249 AD2d 243, 243). "Where the plaintiff is the assignee of the mortgage and the underlying note at the time the foreclosure action was commenced, the plaintiff has standing to maintain the action" (Federal Natl. Mtge. Assn. v Youkelsone, 303 AD2d 546, 546-547; see also First Trust Natl. Assn. v Meisels, 234 AD2d 414, 414). Here, Wells Fargo lacked standing to bring this foreclosure action because it was not the assignee of the mortgage on November 30, 2007, the day the action was commenced. A "foreclosure of a mortgage may not be brought by one who has no title to it" (Kluge v Fugazy, 145 AD2d 537, 538). Since the complaint was filed prior to the execution of the assignment, and the service occurred subsequent to the execution, the issue of standing in this case hinges upon whether the filing or the service of the summons and complaint effectuates ...