| Deutsche Bank Natl. Trust Co. v Spanos |
| 2013 NY Slip Op 00451 [102 AD3d 909] |
| January 30, 2013 |
| Appellate Division, Second Department |
| Deutsche Bank National Trust Company,Respondent, v Demetres Spanos et al., Defendants, and Isadora Sidroula Spanos,Appellant. |
—[*1] Hinshaw & Culbertson LLP, New York, N.Y. (Schuyler B. Kraus and AnnmarieD'Amour of counsel), for respondent.
In an action to foreclose a mortgage, the defendant Isadora Sidroula Spanos appealsfrom an order of the Supreme Court, Nassau County (Adams, J.), dated August 29, 2011,which granted the plaintiff's application, in effect, to compel her to accept its reply to hercounterclaim, and granted the plaintiff's motion for summary judgment dismissing heraffirmative defenses and counterclaims, and denied her cross motion, inter alia, for leaveto enter judgment against the plaintiff on its default in replying to her counterclaims andfor summary judgment dismissing the complaint insofar as asserted against her.
Ordered that on the Court's own motion, the notice of appeal from so much of theorder as granted the plaintiff's application, in effect, to compel the defendant IsadoraSidroula Spanos to accept its reply to her counterclaim is deemed to be an application forleave to appeal from that portion of the order, and leave to appeal is granted (seeCPLR 5701 [c]); and it is further,
Ordered that the order is modified, on the law, by deleting the provisions thereofgranting those branches of the plaintiff's motion which were for summary judgmentdismissing the second and third affirmative defenses asserted by the defendant IsadoraSidroula Spanos, and substituting therefor a provision denying those branches of theplaintiff's motion; as so modified, the order is affirmed, without costs or disbursements.
The Supreme Court erred in granting that branch of the plaintiff's motion which wasfor summary judgment dismissing the second affirmative defense asserted by thedefendant Isadora Sidroula Spanos (hereinafter the appellant). In her second affirmativedefense, the appellant alleged, inter alia, that the plaintiff failed to comply with themortgage foreclosure notice requirements mandated by RPAPL 1304. RPAPL 1304provides that, "at least ninety days before a lender, an assignee or a mortgage loanservicer commences legal action against the borrower, including mortgage foreclosure,such lender, assignee or mortgage loan servicer shall give notice to the borrower in atleast fourteen-point type" (RPAPL 1304 [1]). RPAPL 1304 sets forth the requirementsfor the content of such notice (see RPAPL 1304 [1]), and further provides thatsuch notice must be sent by registered or certified mail, and also by first-class mail, to thelast known address of the [*2]borrower (seeRPAPL 1304 [2]).
RPAPL 1304 currently applies to any "home loan," as defined in RPAPL 1304 (5)(a). When the statute was first enacted, it applied only to "high-cost," "subprime," and"non-traditional" home loans (Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95, 104[2011], citing L 2008, ch 472, § 2). In 2009, the Legislature amended the statute,"effective January 14, 2010, to take its current form, by deleting all references tohigh-cost, subprime, and non-traditional home loans" (Aurora Loan Servs., LLC,85 AD3d at 105, citing L 2009, ch 507, § 1-a). Since the instant action wascommenced on March 26, 2010, the 90-day notice requirement set forth in the statute isapplicable.
"[P]roper service of RPAPL 1304 notice on the borrower or borrowers is a conditionprecedent to the commencement of a foreclosure action, and the plaintiff has the burdenof establishing satisfaction of this condition" (Aurora Loan Servs., LLC, 85AD3d at 106). Here, the plaintiff failed to submit an affidavit of service evincing that itproperly served the appellant pursuant to RPAPL 1304 (see id.). Thus, it failed tomeet its prima facie burden of establishing its entitlement to judgment as a matter of lawin connection with this affirmative defense (see Aurora Loan Servs., LLC, 85AD3d at 106). Accordingly, the Supreme Court should have denied that branch of theplaintiff's motion which was for summary judgment dismissing the second affirmativedefense alleging that the plaintiff failed to comply with RPAPL 1304 without regard tothe sufficiency of the appellant's opposition papers (see Winegrad v New York Univ.Med. Ctr., 64 NY2d 851, 853 [1985]).
However, the appellant's contention that the Supreme Court should have granted thatbranch of her cross motion which was for summary judgment dismissing the complaintinsofar as asserted against her based on the plaintiff's failure to comply with the noticerequirements set forth in RPAPL 1304 is without merit. The appellant failed to meet herburden of establishing, prima facie, that the plaintiff did not properly serve her withnotice pursuant to RPAPL 1304. In support of her cross motion, the appellant's counselmerely argued that the plaintiff failed to submit any proof that such notice was served.However, as the moving party, the appellant needed to affirmatively demonstrate that thepre-condition was not satisfied. Indeed, "[a] party does not carry its burden in moving forsummary judgment by pointing to gaps in its opponent's proof, but must affirmativelydemonstrate the merit of its claim or defense" (Velasquez v Gomez, 44 AD3d 649, 650-651 [2007],quoting George Larkin Trucking Co. v Lisbon Tire Mart, 185 AD2d 614, 615[1992]; see Fields v Village ofSag Harbor, 92 AD3d 718 [2012]; Calderone v Town of Cortlandt, 15 AD3d 602 [2005]).The plaintiff alleged in the complaint that it complied with the provision of RPAPL1304. Having failed to submit evidence which disproved this allegation, the appellantfailed to satisfy her initial burden on this branch of her cross motion.
The Supreme Court also erred in granting that branch of the plaintiff's motion whichwas for summary judgment dismissing the appellant's third affirmative defense allegingthat the plaintiff lacked standing to commence this action. In a mortgage foreclosureaction, "[a] plaintiff has standing where it is the holder or assignee of both the subjectmortgage and of the underlying note at the time the action is commenced" (HSBC Bank USA vHernandez, 92 AD3d 843, 843 [2012]; see U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753[2009]; Countrywide HomeLoans, Inc. v Gress, 68 AD3d 709, 709 [2009]). A mortgage " 'is merelysecurity for a debt or other obligation and cannot exist independently of the debt orobligation' " (Bank of N.Y. vSilverberg, 86 AD3d 274, 280 [2011], quoting FGB Realty Advisors vParisi, 265 AD2d 297, 298 [1999]; see Weaver Hardware Co. v Solomovitz,235 NY 321, 331-332 [1923]). Consequently, where a note is transferred, a mortgagesecuring the debt passes as an incident to the note. By contrast, an assignment of amortgage without assignment of the underlying note or bond is a nullity (see Merritt vBartholick, 36 NY 44, 45 [1867]; Bank of N.Y. v Silverberg, 86 AD3d at280; LaSalle Bank Natl. Assn. vAhearn, 59 AD3d 911 [2009]). " 'Either a written assignment of the underlyingnote or the physical delivery of the note prior to the commencement of the foreclosureaction is sufficient to transfer the obligation' " (HSBC Bank USA v Hernandez,92 AD3d at 844, quoting U.S. Bank, N.A. v Collymore, 68 AD3d at 754; seeBank of N.Y. v Silverberg, 86 AD3d at 281).
Here, the plaintiff failed to establish, prima facie, that it had standing to commencethe action. Contrary to the plaintiff's contention, the evidence it submitted did notdemonstrate that [*3]the adjustable rate note executed bythe defendant Demetres Spanos was physically delivered to it prior to the commencementof the action, or that it was the assignee of the note by execution of a written assignmentprior to the commencement of the action. Accordingly, the Supreme Court should havedenied that branch of the plaintiff's motion which was for summary judgment dismissingthe appellant's third affirmative defense alleging that the plaintiff lacked standing withoutregard to the sufficiency of the appellant's opposition papers (see Winegrad v NewYork Univ. Med. Ctr., 64 NY2d at 853). However, since, as the appellant concedes,questions of fact exist in this regard, the appellant was not entitled to summary judgmentdismissing the complaint insofar as asserted against her on the ground that the plaintifflacked standing.
The appellant's remaining contentions either have been rendered academic in light ofour determination or are without merit. Skelos, J.P., Hall, Roman and Cohen, JJ., concur.