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DLJ Mortgage Capital, Inc. v. Pittman

Supreme Court of New York, Second Department

May 10, 2017

DLJ Mortgage Capital, Inc., respondent,
v.
Bertha Pittman, also known as Bertha Mae Pittman, et al., defendants, Vista Holding, Inc., appellant. Index No. 506702/13

          Warner & Scheuerman, New York, NY (Jonathon D. Warner of counsel), for appellant.

          Hogan Lovells U.S. LLP, New York, NY (David Dunn, Chava Brandriss, and Richard A. Sillett of counsel), for respondent.

          WILLIAM F. MASTRO, J.P., JOHN M. LEVENTHAL, L. PRISCILLA HALL, SANDRA L. SGROI, JJ.

          DECISION & ORDER

         In an action to foreclose a mortgage, the defendant Vista Holding, Inc., appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Silber, J.), dated September 8, 2014, as denied those branches of its motion which were pursuant to CPLR 3211(a)(3) and (5) to dismiss the complaint insofar as asserted against it.

         ORDERED that the order is affirmed insofar as appealed from, with costs.

         On October 24, 2001, the defendant Bertha Pittman, also known as Bertha Mae Pittman, then the owner of the subject property, executed a note and mortgage in favor of the defendant D & M Financial Corp. (hereinafter D & M). In August 2002, Pittman defaulted in making her mortgage payments. Thereafter, the defendant Vista Holding, Inc. (hereinafter the appellant), obtained title to the subject property.

         After a prior action to foreclose the mortgage was dismissed for lack of standing, the plaintiff commenced the instant action to foreclose the mortgage, alleging that it was the owner and holder of the note and mortgage. The appellant moved, inter alia, pursuant to CPLR 3211(a)(3) and (5) to dismiss the complaint insofar as asserted against it, arguing that the plaintiff lacked standing, and that the action was time-barred. The Supreme Court denied those branches of the appellant's motion.

         The Supreme Court properly determined that the action was not time-barred. Contrary to the appellant's contention, an affidavit made in support of a motion for an order of reference in the prior action, which the plaintiff in that action lacked standing to commence, did not, under the circumstances of this case, constitute an affirmative action evidencing the exercise of the option to accelerate the maturity of the loan (see Wells Fargo Bank, N.A. v Burke, 94 A.D.3d 980; EMC Mtge. Corp. v Suarez, 49 A.D.3d 592, 593).

         The Supreme Court also properly denied that branch of the appellant's motion which was to dismiss the complaint insofar as asserted against it for lack of standing. A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder of, or the assignee of, the underlying note (see LGF Holdings, LLC v Skydel, 139 A.D.3d 814; Wells Fargo Bank, N.A. v Rooney, 132 A.D.3d 980, 981). "Either 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 the mortgage passes with the debt as an inseparable incident" (U.S. Bank, N.A. v Collymore, 68 A.D.3d 752, 754; see LGF Holdings, LLC v Skydel, 139 A.D.3d at 814; Deutsche Bank Trust Co. Ams. v Vitellas, 131 A.D.3d 52, 59).

         Here, the complaint alleged that the plaintiff had standing based on a series of assignments of the note. Specifically, the note was assigned by D & M, the original mortgagee, to Fairbanks Capital Corp. (hereinafter Fairbanks). A second assignment from Fairbanks to U.S. Bank National Association, as trustee for Credit Suisse First Boston Mortgage Securities Corp. Mortgage Pass-Thru Certificates, Series 2004-AR6 (hereinafter U.S. Bank), was executed by Wells Fargo Bank, N.A. (hereinafter Wells Fargo), "as attorney-in-fact" for Fairbanks. Wells Fargo, as attorney-in-fact for U.S. Bank, then executed a third assignment, from U.S. Bank to the plaintiff.

         On a defendant's motion to dismiss a complaint based upon the plaintiff's alleged lack of standing, "the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing" as a matter of law (Deutsche Bank Trust Co. Ams. v Vitellas, 131 A.D.3d at 59; see New York Community Bank v McClendon, 138 A.D.3d 805, 806; Arch Bay Holdings, LLC-Series 2010B v Smith, 136 A.D.3d 719). Here, the appellant failed to meet that burden, since it merely demonstrated the existence of questions of fact as to Wells Fargo's authority to assign the note on behalf of Fairbanks, by pointing to the plaintiff's failure to attach a power of attorney to the complaint along with the assignment and asserting that no such document was recorded. Although the plaintiff will ultimately be required to demonstrate that Wells Fargo had authority to assign the note on behalf of Fairbanks in order to demonstrate its standing on the basis of the written assignments (see Deutsche Bank Natl. Trust Co. v Haller, 100 A.D.3d 680, 683; Bank of N.Y. v Silverberg, 86 A.D.3d 274, 281-283; Aurora Loan Servs., LLC v Weisblum, 85 A.D.3d 95, 109), the appellant was not entitled to dismissal of the complaint based on lack of standing (see HSBC Bank USA, N.A. v Lewis, 134 A.D.3d 764, 765).

         Contrary to the appellant's further contention, the language of the assignments was " broad enough to transfer the interest in the mortgage as well as the underlying debt'" (Deutsche Bank Nat. Trust Co. v Romano, 147 A.D.3d 1021, 1023, quoting Chase Home Fin., LLC v Miciotta, 101 A.D.3d 1307, 1307-1308).

         Accordingly, the Supreme Court properly denied those branches of the appellant's motion which were pursuant to CPLR 3211(a)(3) and (5) to dismiss ...


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