| U.S. Bank, N.A. v Sharif |
| 2011 NY Slip Op 07835 [89 AD3d 723] |
| November 1, 2011 |
| Appellate Division, Second Department |
| U.S. Bank, National Association, Successor in Interest to WachoviaBank, N.A., as Indentured Trustee of MLMI 2005-A0, Respondent, v Mohamed Y.Sharif, Appellant, et al., Defendants. |
—[*1] Shapiro, DiCarlo & Barak, LLC, Rochester, N.Y. (Ellis M. Oster of counsel), forrespondent.
In an action to foreclose a mortgage, the defendant Mohamed Y. Sharif appeals, as limited byhis brief, from so much of an order of the Supreme Court, Nassau County (Adams, J.), enteredAugust 20, 2010, as granted those branches of the plaintiff's motion which were for summaryjudgment on the complaint insofar as asserted against him and for an order of reference, anddenied those branches of his cross motion, made jointly with the defendant Nazimah Sharif,which were for leave to serve and file an amended answer to assert a defense based on lack ofstanding and, thereupon, to dismiss the complaint insofar as asserted against him based on lackof standing.
Ordered that the order is reversed insofar as appealed from, on the law, on the facts, and inthe exercise of discretion, with costs, those branches of the plaintiff's motion which were forsummary judgment on the complaint insofar as asserted against the defendant Mohamed Y.Sharif and for an order of reference are denied, and those branches of the cross motion of thedefendant Mohamed Y. Sharif, made jointly with the defendant Nazimah Sharif, which were forleave to serve and file an amended answer, and thereupon, to dismiss the complaint insofar asasserted against the defendant Mohamed Y. Sharif based on lack of standing are granted.
" 'Entitlement to a judgment of foreclosure may be established, as a matter of law, where amortgagee produces both the mortgage and unpaid note, together with evidence of themortgagor's default, thereby shifting the burden to the mortgagor to demonstrate, through bothcompetent and admissible evidence, any defense which could raise a question of fact' " (Zanfini v Chandler, 79 AD3d1031, 1031-1032 [2010], quoting HSBC Bank USA v Merrill, 37 AD3d 899, 900 [2007]; see Household Fin. Realty Corp. of N.Y. vWinn, 19 AD3d 545, 546 [2005]; Sears Mtge. Corp. v Yaghobi, 19 AD3d 402, 403 [2005]; Ocwen Fed. Bank FSB v Miller, 18AD3d 527 [2005]). However, "foreclosure of a mortgage may not be brought by one whohas no title to it" (Kluge v Fugazy, 145 AD2d 537, 538 [1988]). Where standing is raisedas a defense by the defendant, the plaintiff is required to prove its standing before it may bedetermined whether the plaintiff is entitled to relief (see U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753 [2009]; Wells Fargo Bank Minn., N.A. vMastropaolo, 42 AD3d 239, 242 [2007]).[*2]
Here, the defendant Mohamed Y. Sharif (hereinafterSharif) initially did not raise a defense based on lack of standing in his answer or in a pre-answermotion to dismiss. "[A]n argument that a plaintiff lacks standing, if not asserted in thedefendant's answer or in a pre-answer motion to dismiss the complaint, is waived pursuant toCPLR 3211 (e)" (Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d at 242; see JP Morgan Chase Bank, N.A. v StrandsHair Studio, LLC, 84 AD3d 1173, 1173 [2011]). However, defenses waived underCPLR 3211 (e) can nevertheless be interposed in an answer amended by leave of court pursuantto CPLR 3025 (b) so long as the amendment does not cause the other party prejudice or surpriseresulting directly from the delay (Complete Mgt., Inc. v Rubenstein, 74 AD3d 722, 723 [2010]; see Nunez v Mousouras, 21 AD3d355, 356 [2005]; Aurora LoanServs., LLC v Thomas, 70 AD3d 986, 987 [2010]).
After the plaintiff moved for summary judgment, Sharif, with the defendant Nazimah Sharif,cross-moved, inter alia, for leave to serve and file an amended answer to assert a defense basedon the plaintiff's lack of standing, and, upon the assertion of that defense, to dismiss thecomplaint insofar as asserted against them. "Motions for leave to amend pleadings should befreely granted, absent prejudice or surprise directly resulting from the delay in seeking leave,unless the proposed amendment is palpably insufficient or patently devoid of merit" (AuroraLoan Servs., LLC v Thomas, 70 AD3d at 987; see CPLR 3025 [b]; Lucido v Mancuso, 49 AD3d 220,222 [2008]). " 'Mere lateness is not a barrier to the amendment. It must be lateness coupled withsignificant prejudice to the other side, the very elements of the laches doctrine' " (Public Adm'r of Kings County v HossainConstr. Corp., 27 AD3d 714, 716 [2006], quoting Edenwald Contr. Co. v City ofNew York, 60 NY2d 957, 959 [1983]; see Abrahamian v Tak Chan, 33 AD3d 947, 949 [2006]).
The Supreme Court improvidently exercised its discretion in denying that branch of Sharif'scross motion which was for leave to serve and file an amended answer to assert a defense basedon lack of standing. In opposition to that branch of the cross motion, the plaintiff failed todemonstrate the existence of any prejudice or surprise that would result from the amendment, orthat the proposed amended answer was palpably insufficient or patently devoid of merit (seeAurora Loan Servs., LLC v Thomas, 70 AD3d at 987).
Upon Sharif's assertion of the defense of lack of standing, the plaintiff was required todemonstrate its standing to prosecute this action (see U.S. Bank, N.A. v Collymore, 68AD3d at 753). In opposition to that branch of Sharif's cross motion which, upon the amendmentof the answer, was to dismiss the complaint insofar as asserted against him, the plaintiff failed tomake any showing that it had standing to maintain this action. The plaintiff did submit anassignment of the mortgage. However, "[w]here a mortgage is represented by a bond or otherinstrument, an assignment of the mortgage without assignment of the underlying note or bond isa nullity" (U.S. Bank, N.A. v Collymore, 68 AD3d at 754; see Merritt vBartholick, 36 NY 44, 45 [1867]; Kluge v Fugazy, 145 AD2d at 538). "Either awritten assignment of the underlying note or the physical delivery of the note prior to thecommencement of the foreclosure action is sufficient to transfer the obligation, and the mortgagepasses with the debt as an inseparable incident" (U.S. Bank, N.A. v Collymore, 68 AD3dat 754). In opposing the cross motion, the plaintiff did not submit a written assignment of thenote. Moreover, the plaintiff submitted no evidence to establish physical delivery of the note.Accordingly, in the absence of any evidence to demonstrate the existence of a written assignmentof the note or physical delivery of the note, the Supreme Court should have granted that branchof Sharif's cross motion which, upon the amendment of the answer, was to dismiss the complaintinsofar as asserted against him for lack of standing (see CPLR 3211 [a] [3]; Bank of N.Y. v Silverberg, 86 AD3d274 [2011]; Aurora Loan Servs.,LLC v Weisblum, 85 AD3d 95, 109 [2011]; US Bank, N.A. v Collymore, 68AD3d at 753-754). Dillon, J.P., Dickerson, Chambers and Miller, JJ., concur.