| HSBC Bank USA, NA v Halls |
| 2016 NY Slip Op 00935 [136 AD3d 752] |
| February 10, 2016 |
| Appellate Division, Second Department |
[*1]
| HSBC Bank USA, NA, as Trustee for Nomura AssetAcceptance Corporation Mortgage Pass Through Certificates Series 2005-AP2, 3476Stateview Boulevard, Ft. Mill, SC 29715, Respondent, v Joyce Halls et al.,Defendants, and Mortgage Electronic Registration Systems, Inc., as Nominee forAmerican Brokers Conduct, Appellant. |
Sanders, Gutman & Brodie, P.C., Brooklyn, NY (D. Michael Roberts ofcounsel), for appellant.
Hogan Lovells US LLP, New York, NY (David Dunn, Stacey A. Lara, and HeatherR. Gushue of counsel), for respondent.
In an action to foreclose a mortgage, the defendant Mortgage Electronic RegistrationSystems, Inc., as nominee for American Brokers Conduit, appeals from so much of anorder of the Supreme Court, Kings County (Steinhardt, J.), dated November 12, 2013, asdenied that branch of its motion which was pursuant to CPLR 3025 (b) for leave toamend its answer to assert the affirmative defense that the plaintiff lacked standing.
Ordered that the order is affirmed insofar as appealed from, with costs.
The defendant Mortgage Electronic Registration Systems, Inc., as nominee forAmerican Brokers Conduit (hereinafter MERS), failed to assert, in its answer or in apre-answer motion to dismiss the complaint pursuant to CPLR 3211 (a), the defense thatthe plaintiff lacked standing when it commenced this action (see CPLR 3211 [a][3]; U.S. Bank, N.A. vSharif, 89 AD3d 723, 723 [2011]). Nearly five years later, MERS moved, interalia, for leave to amend its answer to assert the defense of lack of standing. The SupremeCourt denied the motion.
An argument that a plaintiff lacks standing, if not asserted in the answer or in apre-answer motion to dismiss the complaint, is waived pursuant to CPLR 3211 (e)(see U.S. Bank, N.A. v Sharif, 89 AD3d at 723; JP Morgan Chase Bank, N.A. vStrands Hair Studio, LLC, 84 AD3d 1173, 1173 [2011]). Defenses waivedunder CPLR 3211 (e) can nevertheless be interposed in an answer amended by leave ofcourt pursuant to CPLR 3025 (b), as long as the amendment does not cause the otherparty prejudice or surprise resulting from the delay, and is not palpably insufficient orpatently devoid of merit (see CPLR 3025 [b]; Bank of N.Y. Mellon v Aquino, 131 AD3d 1186, 1187[2015]; Complete Mgt., Inc. vRubenstein, 74 AD3d 722, 723 [2010]).
A plaintiff in a mortgage foreclosure action has standing where it is the holder orassignee of the underlying note at the time the action is commenced (see Aurora Loan Servs., LLC [*2]v Taylor, 25 NY3d 355, 361 [2015]; U.S. Bank, N.A. v Collymore,68 AD3d 752, 753-754 [2009]). Either a written assignment of the underlying noteor the physical delivery of the note prior to the commencement of the foreclosure actionis sufficient to transfer the obligation (see Aurora Loan Servs., LLC v Taylor, 25NY3d at 361; U.S. Bank, N.A. v Collymore, 68 AD3d at 753-754).
Contrary to MERS' contention, the Supreme Court providently exercised itsdiscretion in denying its motion for leave to amend its answer to add the defense that theplaintiff lacked standing. As the Supreme Court properly determined, such a defense waspatently devoid of merit (seeAurora Loan Servs., LLC v Taylor, 25 NY3d 355 [2015]; Bank of N.Y.Mellon v Aquino, 131 AD3d at 1187; Kondaur Capital Corp. v McCary, 115 AD3d 649, 650[2014]; Deutsche Bank Natl.Trust Co. v Whalen, 107 AD3d 931, 932 [2013]).
MERS' remaining contentions are without merit or academic in light of ourdetermination.
Accordingly, the Supreme Court did not improvidently exercise its discretion indenying that branch of MERS' motion which was pursuant to CPLR 3025 (b) for leave toamend its answer to assert the affirmative defense that the plaintiff lacked standing.Balkin, J.P., Chambers, Cohen and Maltese, JJ., concur.