| LaSalle Bank Natl. Assn. v Ahearn |
| 2009 NY Slip Op 01388 [59 AD3d 911] |
| February 26, 2009 |
| Appellate Division, Third Department |
| LaSalle Bank National Association, as Trustee forCertificateholders of Bear Stearns Asset-Backed Securities I, LLC Asset-Backed Certificates,Series 2004-FR3, Respondent, v Timothy J. Ahearn, Appellant, et al.,Defendants. |
—[*1] Steven J. Baum, P.C., Amherst (Eric S. Aronson of Greenberg Traurig, L.L.P. of counsel),Florham Park, N.J., for respondent.
Cardona, P.J. Appeal from an order of the Supreme Court (Zwack, J.), entered October 23,2007 in Ulster County, which, among other things, conditionally granted defendant Timothy J.Ahearn's motion to dismiss the amended complaint.
In 2004, defendant Timothy J. Ahearn (hereinafter defendant) entered into a mortgageagreement with Fremont Investment & Loan in the amount of $180,000 to purchase a home inUlster County. The mortgage lists Mortgage Electronic Registration Systems, Inc. (hereinafterMERS) as the nominee of Fremont and its assignees. The document also states that MERS is themortgagee of record for recording purposes and specifically grants it the right to seek foreclosurein the event of default. Thereafter, in January 2007, defendant allegedly defaulted on hismortgage payments.[*2]
In April 2007, plaintiff, claiming to be the holder of thatmortgage, commenced this foreclosure action by summons and complaint and, three days later,served a supplemental summons and amended complaint. Thereafter, defendant moved pursuantto CPLR 3211 to dismiss the amended complaint on the basis of, among other things, lack ofstanding. According to defendant, since the amended complaint sets forth that the mortgage "isto be assigned" at a future time to plaintiff, it was apparent that plaintiff did not have an interestin the mortgage at the time the foreclosure action was commenced. In response, plaintiffsubmitted a written assignment, dated June 2007, wherein MERS purported to assign its interestin defendant's mortgage to plaintiff. Inasmuch as the document states that the assignment becameeffective in April 2007, plaintiff maintained it had standing to commence this action. Uponreview of defendant's various arguments seeking dismissal, Supreme Court concluded that hisstanding objection had merit. Rather than dismissing the action outright, however, the courtfound that MERS was the proper plaintiff to bring the action and sua sponte granted plaintiffleave to add MERS as a party pursuant to CPLR 1003. The order also provided that failure toadd MERS by service of a supplemental pleading would result in dismissal of the amendedcomplaint. Defendant now appeals.
Initially, inasmuch as this Court has previously held, in light of the 1996 amendments toCPLR 1003, that a court cannot, on its own initiative, direct the addition of another party (seeNew Medico Assoc. v Empire Blue Cross & Blue Shield, 267 AD2d 757, 758-759 [1999]),we find persuasive defendant's challenge to Supreme Court's sua sponte grant of leave to addMERS. Without that addition, the question of whether this action must be dismissed outrighthinges on the propriety of Supreme Court's determination as to plaintiff's lack of standing. Uponreview of that ruling, we conclude that the court appropriately found that plaintiff did not havesaid standing at the time it commenced this action.
Notably, "foreclosure of a mortgage may not be brought by one who has no title to it"(Kluge v Fugazy, 145 AD2d 537, 538 [1988]) and an assignee of such a mortgage doesnot have standing to foreclose unless the assignment is complete at the time the action iscommenced (see Bankers Trust Co. v Hoovis, 263 AD2d 937, 938 [1999]; see also Mortgage Elec. Registration Sys.,Inc. v Coakley, 41 AD3d 674, 674 [2007]). An assignment of a mortgage does not haveto be in writing and can be effective through physical delivery of the mortgage (see Flyer vSullivan, 284 App Div 697, 699 [1954]). However, if it is in writing, the execution date isgenerally controlling and a written assignment claiming an earlier effective date is deficientunless it is accompanied by proof that the physical delivery of the note and mortgage was, infact, previously effectuated (see Bankers Trust Co. v Hoovis, 263 AD2d at 938).
Here, the written assignment submitted by plaintiff was indisputably written subsequent tothe commencement of this action and the record contains no other proof demonstrating that therewas a physical delivery of the mortgage prior to bringing the foreclosure action (see id.).In fact, the language in the amended complaint indicating that the assignment to plaintiff had notyet occurred would clearly contradict any assertion to the contrary. Accordingly, Supreme Courtcorrectly found that plaintiff did not have standing and the amended complaint must bedismissed, without prejudice.
Given the above resolution, it is unnecessary to address defendant's remaining arguments.
Peters, Kavanagh and Stein, JJ., concur. Ordered that the order is modified, on the law,without costs, by reversing so much thereof as sua sponte granted plaintiff leave to add MortgageElectronic Registration Systems, Inc. as a party plaintiff; motion granted in its entirety andcomplaint dismissed, without prejudice; and, as so modified, affirmed.