| U.S. Bank N.A. v Dellarmo |
| 2012 NY Slip Op 02481 [94 AD3d 746] |
| April 3, 2012 |
| Appellate Division, Second Department |
| U.S. Bank National Association, as Trustee for the First FranklinMortgage Loan Trust, Mortgage Pass-Through Certificates, Series 2006-FF2,Respondent, v Joseph Dellarmo, Also Known as Joseph Dell'Armo, Appellant, et al.,Defendants. |
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Locke Lord, LLP, New York, N.Y. (R. James DeRose III of counsel), forrespondent.
In an action to foreclose a mortgage, the defendant Joseph Dellarmo, also known as, JosephDell'Armo, appeals from an order of the Supreme Court, Rockland County (Weiner, J.), enteredOctober 5, 2010, which denied his motion pursuant to CPLR 3211 (a) to dismiss the complaintinsofar as asserted against him for lack of standing.
Ordered that the order is reversed, on the law, with costs, and the motion of the defendantJoseph Dellarmo, also known as Joseph Dell'Armo, to dismiss the complaint insofar as assertedagainst him is granted.
In commencing this action on April 25, 2006, to foreclose a mortgage entered into by thedefendant Joseph Dellarmo, also known as Joseph Dell'Armo (hereinafter Dellarmo), the plaintiffasserted in its complaint that it had been assigned the subject mortgage by assignment datedApril 11, 2006, which was duly recorded with the Clerk of Rockland County. Dellarmo failed toanswer or appear, but thereafter moved, inter alia, to enjoin the plaintiff from foreclosing on theproperty on the ground that it lacked standing, and to vacate a default judgment entered againsthim. On October 30, 2009, while Dellarmo's motion was pending, a "Corrective Assignment ofMortgage" (hereinafter the corrective assignment) dated July 28, 2009, to the plaintiff wasrecorded with the Clerk of Rockland County, purporting to "correct and replace the April 11,2006 assignment . . . which was sent for recording but was lost prior to beingrecorded" by the Clerk of Rockland County. The corrective assignment was notarized outsideNew York State but unaccompanied by a CPLR 2309 (c) certification. By order dated January 4,2010, the Supreme Court determined, based on the April 11, 2006, assignment, which thecomplaint described as having been recorded, and without referencing the corrective assignment,that the plaintiff had standing to commence this action, and directed a hearing to determine thevalidity of the service of process. Following the hearing, the Supreme Court vacated the defaultjudgment entered against Dellarmo.
Dellarmo moved pursuant to CPLR 3211 (a) to dismiss the complaint insofar as assertedagainst him, contending, among other things, that the corrective assignment was a nullity, as ithad been notarized out-of-state without the required CPLR 2309 (c) certification, and, even if thecorrective assignment was valid, the plaintiff nevertheless lacked standing to bring this action, asit was not the holder in due course of both the mortgage and note when it commenced the action.The Supreme Court denied the motion, finding that the failure to accompany the correctiveassignment with a CPLR 2309 (c) certification was not a fatal defect and that Dellarmo raisedmerely speculative doubts about the validity of the corrective assignment. Dellarmo appeals, andwe [*2]reverse.
The plaintiff's failure to comply with CPLR 2309 (c) in submitting various documents,including, among others, the corrective assignment, which were notarized outside the state butnot accompanied with a certificate in conformity with CPLR 2309 (c), was not a fatal defect, assuch certification may be provided nunc pro tunc (see CPLR 2001; Betz v Daniel Conti, Inc., 69 AD3d545 [2010]; Matapos Tech. Ltd. vCompania Andina de Comercio Ltda, 68 AD3d 672, 673 [2009]; Smith v Allstate Ins. Co., 38 AD3d522 [2007]).
"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 Countrywide Home Loans, Inc. v Gress, 68 AD3d 709 [2009]).Where a defendant raises the issue of standing, the plaintiff must prove its standing to be entitledto relief (see CitiMortgage, Inc. vRosenthal, 88 AD3d 759 [2011]; US Bank, N.A. v Collymore, 68 AD3d 752, 753 [2009]).Moreover, while assignment of a promissory note also effectuates assignment of the mortgage(see Bank of N.Y. Silverberg, 86 AD3d at 280; US Bank, N.A. v Collymore, 68AD3d at 753-754; Mortgage Elec.Registration Sys., Inc. v Coakley, 41 AD3d 674 [2007]), the converse is not true: since amortgage is merely security for a debt, it cannot exist independently of the debt, and thus, atransfer or assignment of only the mortgage without the debt is a nullity and no interest isacquired by it (see Deutsche Bank Natl.Trust Co. v Barnett, 88 AD3d 636 [2011]; Bank of N.Y. v Silverberg, 86 AD3dat 280). The failure to record an assignment prior to the commencement of the action is notnecessarily fatal since "an assignment of a note and mortgage need not be in writing and can beeffectuated by physical delivery" (Bank of N.Y. v Silverberg, 86 AD3d at 280; see Deutsche Bank Natl. Trust Co. vBarnett, 88 AD3d 636 [2011]; US Bank, N.A. v Collymore, 68 AD3d at 754; LaSalle Bank Natl. Assn. v Ahearn, 59AD3d 911, 912 [2009]).
Here, as the plaintiff concedes, the complaint incorrectly asserts that the April 11, 2006,assignment of the mortgage to the plaintiff had been duly recorded. Further, there is no allegationthat the note or mortgage was physically delivered to the plaintiff prior to commencement of theaction (compare Mortgage Elec.Registration Sys., Inc. v Coakley, 41 AD3d 674 [2007]). The record also suggests that inthe order dated January 4, 2010, in which the Supreme Court held that the plaintiff had standingpursuant to the April 11, 2006, assignment, the court relied upon the incorrect assertion in thecomplaint that the April 11, 2006, assignment had been recorded. The Supreme Court referredonly to the April 11, 2006, assignment and made no reference to the corrective assignment'spurported replacement of the April 11, 2006, assignment.
The plaintiff now relies on the corrective assignment, which was recorded with the Clerk ofRockland County on October 30, 2009, to demonstrate that it was a holder of the mortgage as ofthe April 25, 2006, commencement of this action. The corrective assignment recites, in pertinentpart, that it "is meant to correct and replace the April 11, 2006 assignment by and between theparties herein which was sent for recording but was lost prior to being recorded" in RocklandCounty. However, inasmuch as the complaint does not allege that the note was physicallydelivered to the plaintiff, and nothing in the plaintiff's submission in opposition to Dellarmo'smotion could support a finding that such physical delivery occurred, the corrective assignmentcannot be given retroactive effect (see Countrywide Home Loans, Inc. v Gress, 68 AD3dat 710; Wells Fargo Bank, N.A. vMarchione, 69 AD3d 204, 210 [2009]; LaSalle Bank Natl. Assn. v Ahearn, 59AD3d at 912-913). Moreover, both the unrecorded April 11, 2006, assignment and the recordedcorrective assignment indicate only that the mortgage was assigned to the plaintiff. Since anassignment of a mortgage without the underlying debt is a nullity (see Deutsche Bank Natl. Trust Co. vBarnett, 88 AD3d 636 [2011]; Bank of N.Y. v Silverberg, 86 AD3d at 280), theplaintiff has failed to demonstrate that it had standing to commence this action (see Bank ofN.Y. v Silverberg, 86 AD3d at 280; US Bank, N.A. v Collymore, 68 AD3d at 754).
Accordingly, the Supreme Court should have granted Dellarmo's motion pursuant to CPLR3211 (a) to dismiss the complaint insofar as asserted against him for lack of standing.
In light of the foregoing, we need not reach Dellarmo's remaining contentions. Skelos, J.P.,Hall, Austin and Miller, JJ., concur.