| CitiMortgage, Inc. v Rosenthal |
| 2011 NY Slip Op 07198 [88 AD3d 759] |
| October 11, 2011 |
| Appellate Division, Second Department |
| CitiMortgage, Inc., Respondent, v Leah Rosenthal,Appellant, et al., Defendants. |
—[*1] Steven J. Baum, P.C., Amherst, N.Y. (Casey E. Callanan of counsel), forrespondent.
In an action to foreclose a mortgage, the defendant Leah Rosenthal appeals from an amendedorder of the Supreme Court, Rockland County (Jamieson, J.), entered August 12, 2010, which,inter alia, denied her motion, among other things, to vacate a judgment of foreclosure and saledated July 1, 2009.
Ordered that the amended order is affirmed, with costs.
In 1988 the defendant Leah Rosenthal (hereinafter the defendant) executed a note to borrowthe sum of $150,000 from Gelt Funding, Inc. (hereinafter Gelt Funding). The note was securedby a mortgage on the defendant's property located in Monsey, New York. Gelt Funding thereafterassigned the mortgage and note to First Nationwide Bank. In 1994 First Nationwide Bankassigned the mortgage and note to First Nationwide Corporation. On April 3, 2008, FirstNationwide Corporation assigned the mortgage and note to the plaintiff, CitiMortgage, Inc.(hereinafter CitiMortgage).
On July 23, 2008, CitiMortgage commenced this foreclosure action, alleging that it was theholder of the mortgage and note, and that the defendant had defaulted upon her paymentobligation as of March 1, 2008. In August 2008 the defendant interposed a verified answer,wherein she alleged that the complaint "failed to state a basis for a claim upon which relief canbe granted." In April 2009 the Supreme Court granted CitiMortgage's motion for summaryjudgment and to appoint a referee to compute the sums due and owing under the note andmortgage. On July 1, 2009, the Supreme Court signed a judgment of foreclosure and sale. In oraround May 2010, CitiMortgage assigned the mortgage and note to PennyMac Loan ServicesLLC (hereinafter PennyMac). The public sale of the mortgaged premises was scheduled to takeplace on July 21, 2010, but was stayed by the Supreme Court when it signed the defendant's orderto show cause seeking, inter alia, to vacate the judgment of foreclosure and sale. The defendantappeals from the order denying her motion, and we affirm.
In support of her motion, the defendant proffered, for the first time, a purported assignmentof the mortgage and note dated August 1, 1990, from First Nationwide Bank to Federal [*2]Home Loan Mortgage Corporation. She contended that thisunrecorded assignment demonstrated that CitiMortgage had no standing to commence thisaction. Specifically, she maintained that the 1990 assignment invalidated the 1994 assignmentfrom First Nationwide Bank to First Nationwide Corporation and the 2008 assignment from FirstNationwide Corporation to CitiMortgage because, after August 1990, First Nationwide Bank hadno rights under the note and mortgage to assign. The defendant failed to explain how and whenshe obtained the 1990 assignment document or why it was unrecorded.
"In order to commence a foreclosure action, the plaintiff must have a legal or equitableinterest in the subject mortgage" (Countrywide Home Loans, Inc. v Gress, 68 AD3d 709, 709[2009]). "In a mortgage foreclosure action, a plaintiff has standing where it is both the holder orassignee of the subject mortgage and the holder or assignee of the underlying note at the time theaction is commenced" (Bank of N.Y. vSilverberg, 86 AD3d 274, 279 [2011]; see U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753 [2009]).Where the issue of standing is raised by a defendant, a plaintiff must prove its standing in orderto be entitled to relief (see Bank of N.Y.v Silverberg, 86 AD3d 274 [2011]). A defendant waives the defense of lack of standingunless it is raised in either the answer or in a pre-answer motion to dismiss the complaint (see Wells Fargo Bank Minn., N.A. vPerez, 70 AD3d 817, 817-818 [2010], cert denied 562 US —, 131 S Ct648 [2010]; Wells Fargo Bank Minn.,N.A. v Mastropaolo, 42 AD3d 239, 244 [2007]; cf. Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95 [2011]; US Bank N.A. v Madero, 80 AD3d751, 752 [2011]).
Here, the Supreme Court properly denied the defendant's motion, inter alia, to vacate thejudgment of foreclosure and sale. The defendant did not make a pre-answer motion to dismiss thecomplaint, and did not raise lack of standing as an affirmative defense in her answer. Therefore,she waived her right to raise it in support of her motion (see JP Morgan Chase Bank, N.A. v Strands Hair Studio, LLC, 84 AD3d1173 [2011]; Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d at 241-243).
Furthermore, there is no merit to the defendant's contention that this action cannot proceedbecause PennyMac, as CitiMortgage's assignee of the mortgage and note, has not been formallysubstituted as the plaintiff. Pursuant to CPLR 1018, "the action may be continued by or againstthe original parties unless the court directs the person to whom the interest is transferred to besubstituted or joined in the action." "The determination to substitute or join a party pursuant toCPLR 1018 is within the discretion of the trial court" (NationsCredit Home Equity Servs. v Anderson, 16 AD3d 563, 564[2005]). Here, neither party requested, and the Supreme Court did not direct, that PennyMac besubstituted as the plaintiff. Thus, the action could be continued by CitiMortgage.
The defendant's remaining contentions either are without merit or have been renderedacademic by our determination. Dillon, J.P., Eng, Sgroi and Miller, JJ., concur.