| MLCFC 2007-9 Mixed Astoria, LLC v 36-02 35th Ave. Dev.,LLC |
| 2014 NY Slip Op 02416 [116 AD3d 745] |
| April 9, 2014 |
| Appellate Division, Second Department |
| MLCFC 2007-9 Mixed Astoria, LLC,Appellant-Respondent, v 36-02 35th Ave. Development, LLC, et al.,Respondents-Appellants, et al., Defendants. KZ Annex II, LLC, NonpartyAppellant-Respondent. |
—[*1] Sweeney Gallo Reich & Bolz, LLP, Rego Park, N.Y. (Michael H. Reich and RashelM. Mehlman of counsel), for respondents-appellants.
In an action to foreclose a mortgage, (1) the plaintiff appeals from an order of theSupreme Court, Queens County (J. Golia, J.), dated April 16, 2012, which, inter alia,denied that branch of its motion which was for summary judgment on the complaint anddenied its application for the appointment of a receiver, (2) the plaintiff and the nonpartyKZ Annex II, LLC, appeal from so much of an order of the same court dated October 23,2012, as denied the nonparty's motion for substitution as the plaintiff in this action and toamend the caption accordingly, and (3) the defendants 36-02 35th Ave. Development,LLC, and Larry Cerullo cross-appeal, as limited by their brief, from so much of the orderdated October 23, 2012, as denied their cross motion, in effect, for summary judgmentdismissing the complaint insofar as asserted against them on the ground that the plaintifflacked standing.
Ordered that on the Court's own motion, the notice of appeal from so much of theorder dated April 16, 2012, as denied the plaintiff's application for the appointment of areceiver is treated as an application for leave to appeal, and leave to appeal from thatportion of the order is granted (see CPLR 5701 [c]); and it is further,
Ordered that the orders are affirmed insofar as appealed and cross-appealed from,without costs or disbursements.[*2]
In an action to foreclose a mortgage, a plaintiffestablishes its case as a matter of law through the production of the mortgage, the unpaidnote, and evidence of default (see Argent Mtge. Co., LLC v Mentesana, 79 AD3d 1079,1080 [2010]; Wells Fargo BankMinn., N.A. v Mastropaolo, 42 AD3d 239, 244 [2007]). Where, as here, theissue of standing is raised by a defendant, a plaintiff must prove its standing to be entitledto relief (see Bank of N.Y. vSilverberg, 86 AD3d 274, 279 [2011]; U.S. Bank, N.A. v Collymore, 68 AD3d 752, 753 [2009]).In a mortgage foreclosure action, a plaintiff has standing where it is both the holder ofthe subject mortgage and of the underlying note at the time the action is commenced(see Bank of N.Y. v Silverberg, 86 AD3d at 279; Aurora Loan Servs., LLC vWeisblum, 85 AD3d 95, 108 [2011]; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 207[2009]). Where a note is transferred, a mortgage securing the debt passes as an incidentto the note (see Bank of N.Y. v Silverberg, 86 AD3d at 280). By contrast, anassignment of a mortgage without assignment of the underlying note or bond is a nullity(see Merritt v Bartholick, 36 NY 44, 45 [1867]; Bank of N.Y. vSilverberg, 86 AD3d at 280). "Either a written assignment of the underlying note orthe physical delivery of the note prior to the commencement of the foreclosure action issufficient to transfer the obligation" (U.S. Bank, N.A. v Collymore, 68 AD3d at754; see Aurora Loan Servs., LLC v Weisblum, 85 AD3d at 108).
Here, the plaintiff failed to demonstrate its prima facie entitlement to judgment as amatter of law because it did not establish that it had standing as the lawful holder orassignee of the subject note on the date it commenced this action (see Deutsche Bank Natl. Trust Co.v Barnett, 88 AD3d 636 [2011]; US Bank N.A. v Madero, 80 AD3d 751 [2011]; U.S. Bank, N.A. v Collymore,68 AD3d 752 [2009]). Accordingly, the Supreme Court properly denied that branchof its motion which was for summary judgment on the complaint, and properly denied itsapplication for the appointment of a receiver.
The documents submitted by the nonparty KZ Annex II, LLC (hereinafter KZ), didnot establish that the subject note and mortgage were validly assigned to it after thecommencement of this action and, therefore, that it is now the real plaintiff in interest.Thus, KZ's motion to substitute it as the plaintiff in this action and to amend the captionaccordingly was properly denied (cf. Citibank, N.A. v Van Brunt Props., LLC, 95 AD3d1158, 1160 [2012]).
The Supreme Court properly denied the cross motion of the defendants 36-02 35thAve. Development, LLC, and Larry Cerullo, in effect, for summary judgment dismissingthe complaint insofar as asserted against them on the ground that the plaintiff lackedstanding, as there are issues of fact regarding the plaintiff's standing as the lawful holderor assignee of the subject note on the date it commenced this action (see US Bank N.A. v Madero,80 AD3d 751 [2011]).
The plaintiff's remaining contentions are without merit. Rivera, J.P., Lott, Romanand Hinds-Radix, JJ., concur.