| DLJ Mtge. Capital, Inc. v David |
| 2017 NY Slip Op 01337 [147 AD3d 1024] |
| February 22, 2017 |
| Appellate Division, Second Department |
[*1]
| DLJ Mortgage Capital, Inc., Plaintiff, v Carol David,Respondent, et al., Defendants. Rockaway Acquisitions, LLC, NonpartyAppellant. |
Suslovich & Klein LLP, Brooklyn, NY (Mark M. Kranz, Berkman, Henoch, Peterson,Peddy & Fenchel, P.C. [Bruce J. Bergman], and Kellner Herlihy Getty & FriedmanLLP [Douglas A. Kellner], of counsel), for nonparty-appellant.
In an action to foreclose a mortgage, nonparty Rockaway Acquisitions, LLC, assuccessor-by-assignment to the plaintiff, appeals, as limited by its brief, from (1) so much of anorder of the Supreme Court, Kings County (Rothenberg, J.), dated September 11, 2013, as deniedits motion, inter alia, for summary judgment on the complaint insofar as asserted against thedefendant Carol David, and granted the cross motion of the defendant Carol David for leave toamend her answer to assert the defense of lack of standing, and (2) so much of an order of thesame court dated September 15, 2014, as denied its motion for leave to renew its prior motion,inter alia, for summary judgment on the complaint insofar as asserted against the defendant CarolDavid and its prior opposition to the cross motion of the defendant Carol David for leave toamend her answer to assert the defense of lack of standing, and granted that branch of the crossmotion of the defendant Carol David which was for summary judgment dismissing the complaintinsofar as asserted against her.
Ordered that the order dated September 11, 2013, is affirmed insofar as appealed from,without costs or disbursements; and it is further,
Ordered that the order dated September 15, 2014, is modified, on the law, by deleting theprovision thereof granting that branch of the cross motion of the defendant Carol David whichwas for summary judgment dismissing the complaint insofar as asserted against her, andsubstituting therefor a provision denying that branch of the cross motion; as so modified, theorder dated September 15, 2014, is affirmed insofar as appealed from, without costs ordisbursements.
The defendant Carol David (hereinafter the defendant) financed the purchase of real propertywith a mortgage loan from First United Mortgage Banking Corp. (hereinafter First United) onMarch 29, 2006. The defendant executed a note and mortgage on that date. The mortgage andnote were assigned several times to various entities. The defendant defaulted in paying hermonthly loan obligation starting June 1, 2006. On February 7, 2008, the plaintiff, DLJ MortgageCapital, Inc. (hereinafter DLJ), commenced this action to foreclose the mortgage. The defendantinterposed an answer dated March 25, 2008, which did not assert lack of standing as adefense.
[*2] By notice of motion dated December3, 2012, nonparty Rockaway Acquisitions, LLC (hereinafter Rockaway), assuccessor-by-assignment to DLJ, moved, inter alia, for summary judgment on the complaintinsofar as asserted against the defendant. In support of the motion, Rockaway submitted copies ofthe mortgage and note, as well as copies of the various assignments of the mortgage and allongesto the note. The defendant opposed the motion and cross-moved for leave to amend her answer toassert the defense of lack of standing. The defendant argued that the various assignments of themortgage and certain undated allonges to the note, which were submitted by Rockaway insupport of its motion, raised a question of fact as to whether DLJ had standing to commence theaction. In reply to the cross motion and in further support of its motion, Rockaway submitted theaffidavit of a vice-president of DLJ which stated that, according to DLJ's records, a "mortgageloan" was assigned and physically delivered by Mortgage Electronic Registration Systems, Inc.,as nominee for First United, to DLJ on a specific date prior to the commencement of the action.In an order dated September 11, 2013, the Supreme Court, inter alia, granted the defendant'scross motion and denied Rockaway's motion.
Subsequently, Rockaway moved for leave to renew its prior motion for summary judgmenton the complaint insofar as asserted against the defendant and its prior opposition to thedefendant's cross motion for leave to amend her answer to assert the defense of lack of standing.The defendant opposed the motion and cross-moved, inter alia, for summary judgmentdismissing the complaint insofar as asserted against her. The Supreme Court, in an order datedSeptember 15, 2014, among other things, denied the plaintiff's motion for leave to renew andgranted that branch of the defendant's cross motion which was for summary judgment dismissingthe complaint insofar as asserted against her. Rockaway appeals from the orders dated September11, 2013, and September 15, 2014.
The Supreme Court providently exercised its discretion in granting the defendant's crossmotion for leave to amend her answer to assert the defense of lack of standing. CPLR 3025 (b)provides that leave to amend a pleading "shall be freely given." Thus, leave to amend a pleadingshould be granted where the amendment is neither palpably insufficient nor patently devoid ofmerit, and the delay in seeking amendment does not prejudice or surprise the opposing party (see US Bank, N.A. v Primiano, 140AD3d 857, 857 [2016]; HSBCBank v Picarelli, 110 AD3d 1031 [2013]). Here, the defendant waived the defense oflack of standing by failing to include it in her answer. However, Rockaway addressed standing inits motion, inter alia, for summary judgment and, moreover, submitted documents in support ofthat motion that raised questions as to DLJ's standing to commence this action. Under thesecircumstances, any delay by the defendant in seeking leave to amend her answer did not result inprejudice or surprise to Rockaway (see US Bank, N.A. v Primiano, 140 AD3d at 857;HSBC Bank v Picarelli, 110 AD3d at 1032). Furthermore, the proposed amendment wasneither palpably insufficient nor patently devoid of merit (see HSBC Bank v Picarelli,110 AD3d at 1032).
Inasmuch as there is a triable issue of fact as to DLJ's standing to commence this action,Rockaway's motion, inter alia, for summary judgment on the complaint insofar as assertedagainst the defendant was properly denied (see US Bank, N.A. v Primiano, 140 AD3d at857). Contrary to Rockaway's contention, the affidavit of a vice-president of DLJ failed toestablish, prima facie, that DLJ had standing to commence this action, as the affidavit failed toestablish, prima facie, that DLJ had physical possession of the note prior to the commencementof the action (see U.S. Bank N.A. vHandler, 140 AD3d 948, 949-950 [2016]).
The Supreme Court providently exercised its discretion in denying Rockaway's motion forleave to renew its prior motion for summary judgment and its prior opposition to the defendant'scross motion for leave to amend her answer to assert the defense of lack of standing. A motionfor leave to renew "shall be based upon new facts not offered on the prior motion that wouldchange the prior determination" (CPLR 2221 [e] [2]) and "shall contain reasonable justificationfor the failure to present such facts on the prior motion" (CPLR 2221 [e] [3]). "The new oradditional facts either must have not been known to the party seeking renewal or may, in theSupreme Court's discretion, be based on facts known to the party seeking renewal at the time ofthe original motion" (Deutsche BankTrust Co. v Ghaness, 100 AD3d 585, 586 [2012]; see Wells Fargo Bank, N.A. vRooney, [*3]132 AD3d 980, 982 [2015]). "However, in eitherinstance, a reasonable justification for the failure to present such facts on the original motionmust be presented" (Deutsche Bank Trust Co. v Ghaness, 100 AD3d at 586 [internalquotation marks omitted]; see Cioffi vS.M. Foods, Inc., 129 AD3d 888, 891 [2015]).
Here, since Rockaway failed to set forth a reasonable justification for failing to present thenew facts in connection with its prior motion and opposition, the Supreme Court providentlyexercised its discretion in denying Rockaway's motion for leave to renew (see Cioffi v S.M.Foods, Inc., 129 AD3d at 891).
However, the Supreme Court improperly granted that branch of the defendant's cross motionwhich was for summary judgment dismissing the complaint insofar as asserted against her, asthere is a triable issue of fact as to whether DLJ had standing to commence this action (seeU.S. Bank N.A. v Handler, 140 AD3d at 950). Balkin, J.P., Hall, Sgroi and Barros, JJ.,concur.