| First Franklin Fin. Corp. v Alfau |
| 2018 NY Slip Op 00409 [157 AD3d 863] |
| January 24, 2018 |
| Appellate Division, Second Department |
[*1]
| First Franklin Financial Corporation,Appellant, v Rafael E. Alfau et al., Defendants. |
Dorf & Nelson LLP, Rye, NY (Jonathan B. Nelson of counsel), for appellant.
In an action, inter alia, to foreclose a mortgage, the plaintiff appeals from an order andjudgment (one paper) of the Supreme Court, Queens County (Greco, Jr., J.), entered October 16,2015, which, upon a decision of the same court (Rios, J.) dated October 28, 2013, denied itsunopposed motion for leave to enter a default judgment, to appoint a referee, to reform thesubject mortgage to add the name of the defendant Herminia I. Alfau as a mortgagor, to amendthe caption to excise the defendants "John Doe #2" through "John Doe #10," substitute PilarLuna as a defendant in place of "John Doe #1," and substitute U.S. Bank National Association, astrustee for the holders of the First Franklin Mortgage Loan Trust Mortgage Pass-ThroughCertificates, Series 2005-FF10, as the plaintiff, and, sua sponte, dismissed the complaint.
Ordered that the order and judgment is modified, on the law, (1) by deleting the provisionthereof dismissing the complaint, and (2) by deleting the provisions thereof denying thosebranches of the plaintiff's motion which were to amend the caption to excise the defendants"John Doe #2" through "John Doe #10," substitute Pilar Luna as a defendant in place of "JohnDoe #1," and substitute U.S. Bank National Association, as trustee for the holders of the FirstFranklin Mortgage Loan Trust Mortgage Pass-Through Certificates, Series 2005-FF10, as theplaintiff, and substituting therefor a provision granting those branches of the motion; as somodified, the order and judgment is affirmed, without costs or disbursements, and the complaintis reinstated.
In 2005, the defendant Rafael E. Alfau mortgaged property located in Queens that wasowned by his wife, the defendant Herminia I. Alfau (hereinafter together the Alfau defendants).In May 2008, the plaintiff commenced this action against, among others, the Alfau defendants,alleging that Rafael defaulted by failing to make the monthly payment due in February 2008. Thecomplaint asserted causes of action, inter alia, to foreclose the mortgage, to reform the mortgageto add Herminia as a mortgagor, since she owned the property, or, alternatively, to impose anequitable lien or equitable mortgage on the property.
After the Alfau defendants' time to appear or answer the complaint expired, the plaintiffmoved for leave to enter a default judgment, to appoint a referee, to reform the mortgage to addHerminia as a mortgagor, and to amend the caption to excise the defendants "John Doe #2"through "John Doe #10," substitute Pilar Luna as a defendant in place of "John Doe #1," andsubstitute U.S. Bank National Association, as trustee for the holders of the First FranklinMortgage Loan Trust Mortgage Pass-Through Certificates, Series 2005-FF10 (hereinafterUSBank), as the plaintiff. The Supreme Court issued a decision dated October 28, 2013,concluding that the [*2]unopposed motion should be denied.Thereafter, the plaintiff moved, inter alia, in effect, for leave to renew its prior motion. In anorder dated October 23, 2014, the court denied that branch of the motion which was for leave torenew. Subsequently, the court entered an order and judgment denying the plaintiff's motion,inter alia, for leave to enter a default judgment and, sua sponte, dismissed the complaint. Theplaintiff appeals.
"On a motion for leave to enter a default judgment pursuant to CPLR 3215, the movant isrequired to submit proof of service of the summons and complaint, proof of the facts constitutingits claim, and proof of the defaulting party's default in answering or appearing" (Glenwood Mason Supply Co., Inc. vFrantellizzi, 138 AD3d 925, 926 [2016] [internal quotation marks omitted]; seeCPLR 3215 [f]; Boudine vGoldmaker, Inc., 130 AD3d 553 [2015]; DLJ Mtge. Capital, Inc. v United Gen. Tit. Ins. Co., 128 AD3d 760,761 [2015]; Atlantic Cas. Ins. Co. vRJNJ Servs., Inc., 89 AD3d 649 [2011]). "To demonstrate 'the facts constituting theclaim,' the movant need only submit sufficient proof to enable a court to determine if the claim isviable" (Global Liberty Ins. Co. v W.Joseph Gorum, M.D., P.C., 143 AD3d 768, 769 [2016]; see Woodson v MendonLeasing Corp., 100 NY2d 62, 71 [2003]; Mortgage Elec. Registration Sys., Inc. v Smith, 111 AD3d 804[2013]).
Here, since the Alfau defendants defaulted in appearing or answering the complaint andfailed to demonstrate grounds for vacating their default, they were precluded from asserting lackof standing as a defense. Accordingly, it was unnecessary for the plaintiff to demonstrate that ithad standing to commence the action in order to establish its entitlement to a default judgment(see Bank of N.Y. Mellon vIzmirligil, 144 AD3d 1067, 1069-1070 [2016]).
Nevertheless, the plaintiff failed to submit the requisite proof of the facts constituting theclaim (see DLJ Mtge. Capital, Inc. v United Gen. Tit. Ins. Co., 128 AD3d at 762). "Whilea verified complaint may be used as the affidavit of the facts constituting the claim, it mustcontain evidentiary facts from one with personal knowledge" (id. [citation omitted];see CPLR 3215 [f]). " '[A] pleading verified by an attorney pursuant to CPLR3020 (d) (3) [, and not by someone with personal knowledge of the facts,] is insufficient toestablish its merits' " (DLJ Mtge. Capital, Inc. v United Gen. Tit. Ins. Co., 128AD3d at 762, quoting Triangle Props.#2, LLC v Narang, 73 AD3d 1030, 1032 [2010]). On its motion, the plaintiff submittedthe complaint, verified only by counsel, and an affirmation of counsel, with counsel having nopersonal knowledge of the facts. The plaintiff also submitted an affidavit of a representative ofthe loan servicer attesting to a default, but failing to address the relevant questions relating to thefact that the mortgagor did not own the subject property, whether the relevant documents shouldbe reformed, or whether an equitable lien or mortgage should be imposed.
Since the plaintiff's motion papers failed to set forth sufficient facts to enable the SupremeCourt to determine whether there exists a viable cause of action, the court properly denied thosebranches of the plaintiff's motion which were for leave to enter a default judgment, to appoint areferee, and to reform the mortgage. However, the plaintiff's submissions were sufficient to grantthose branches of its motion which were to amend the caption to excise the defendants "JohnDoe #2" through "John Doe #10," substitute Pilar Luna as a defendant in place of "John Doe #1,"and substitute USBank as the plaintiff. Since standing was not in issue, there was no bar tosubstituting USBank as the plaintiff and to amend the caption accordingly (see TCIF REO GCM, LLC v Walker,139 AD3d 704, 706 [2016]).
The Supreme Court properly denied that branch of the plaintiff's subsequent motion whichwas, in effect, for leave to renew. The documentary evidence submitted on that motion,consisting of, inter alia, a HUD-1 Settlement Statement and a satisfaction of mortgage, whichindicated that the proceeds from the mortgage loan in issue in this case were used to satisfy amortgage in Herminia's name, should have been submitted in support of the plaintiff's originalmotion as proof of facts of an equitable lien against the property owned by her, and the plaintifffailed to provide a reasonable justification for not submitting the documentation in support of itsoriginal motion (see CPLR 2221 [e] [3]; Putterman v Wenk-Wolff, 92 AD3d 746, 747 [2012]; Ruddock v Boland Rentals, 5 AD3d368, 371 [2004]).
[*3] Finally, the Supreme Courtshould not have dismissed the complaint sua sponte (see U.S. Bank, N.A. v Razon, 115 AD3d 739, 740 [2014]).Accordingly, the complaint must be reinstated. Hall, J.P., Hinds-Radix, Maltese and Iannacci, JJ.,concur.