Ditech Fin., LLC v. Naidu

198 A.D.3d 611

156 N.Y.S.3d 27

DITECH FINANCIAL, LLC, etc., respondent,

v.Santhana Kumar Nataraja NAIDU, appellant, et al., defendants.

2016–11072 , 2016–11073

Index No. 700387/16

Supreme Court, Appellate Division, Second Department, New York.

Argued—April 29, 2019

October 6, 2021

Law Office of Maggio & Meyer, Bohemia, N.Y. (Holly C. Meyer of counsel), for appellant.

Day Pitney LLP, New York, N.Y. (Christina A. Livorsi of counsel), for respondent.

HECTOR D. LASALLE, P.J., LEONARD B. AUSTIN, COLLEEN D. DUFFY, FRANCESCA E. CONNOLLY, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Santhana Kumar Nataraja Naidu appeals from two orders of the Supreme Court, Queens County (Robert J. McDonald, J.), both dated September 9, 2016. The orders, insofar as appealed from, granted those branches of the plaintiff's cross motion which were for summary judgment on the complaint insofar as asserted against that defendant and for an order of reference, and denied that defendant's motion pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as time-barred. By decision and order dated September 18, 2019, this Court reversed the orders insofar as appealed from, granted the motion of the defendant Santhana Kumar Nataraja Naidu pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as time-barred, and denied those branches of the plaintiff's cross motion which were for summary judgment on the complaint insofar as asserted against that defendant and for an order of reference as academic (see Ditech Fin., LLC v. Naidu, 175 A.D.3d 1387, 109 N.Y.S.3d 196 ). In an opinion dated February 18, 2021, the Court of Appeals reversed the decision and order of this Court, and remitted the matter to this Court "for consideration of issues raised but not determined on the appeal to [this] Court" ( Freedom Mtge. Corp. v. Engel, 37 N.Y.3d 1, 35, 146 N.Y.S.3d 542, 169 N.E.3d 912 ). Justices Duffy and Connolly have been substituted for former Justices Leventhal and Roman (see 22 NYCRR 1250.1 [b]).

ORDERED that, upon remittitur from the Court of Appeals, the orders are modified, on the law, by deleting the provision thereof granting those branches of the plaintiff's cross motion which were for summary judgment on the complaint insofar as asserted against the defendant Santhana Kumar Nataraja Naidu and for an order of reference, and substituting therefor a provision denying those branches of the cross motion; as so modified, the orders are affirmed insofar as appealed from, without costs or disbursements.

On April 1, 2003, the defendant Santhana Kumar Nataraja Naidu (hereinafter the defendant) executed a note in favor of nonparty America's Wholesale Lender, which was secured by a mortgage in favor of Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for America's Wholesale Lender, on residential real property located in Flushing. On March 20, 2006, the defendant executed a note in favor of America's Wholesale Lender and a consolidated note evincing a promise to repay America's Wholesale Lender for the principal amount of both notes. The defendant also executed a Consolidation, Extension, and Modification Agreement in favor of MERS dated March 20, 2006, which consolidated the notes and mortgages arising from the defendant's obligations to America's Wholesale Lender. The consolidated note was endorsed by Countrywide Home Loans, Inc., a New York Corporation doing business as America's Wholesale Lender, without recourse. The payments on the consolidated note were to be made in installments.

Thereafter, there were three assignments of the mortgage: (1) an assignment of mortgage by MERS to BAC Home Loans Servicing, L.P. (hereinafter BAC), dated July 22, 2009; (2) an assignment of mortgage by BAC to Everbank, dated July 15, 2013; and (3) an assignment of mortgage from Everbank to the plaintiff, dated May 8, 2015.

On July 28, 2009, BAC commenced an action to foreclose the mortgage against the defendant and others, in which BAC declared that it "elect[ed] to call due the entire amount secured by the mortgage." That action was voluntarily discontinued, without prejudice, by a stipulation the parties entered into in February 2014.

On January 13, 2016, this action was commenced to foreclose the mortgage. The defendant served an answer with various affirmative defenses, including that the action was time-barred. Thereafter, the defendant moved pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him on the ground that the action was time-barred. The plaintiff opposed the motion and cross-moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference. The Supreme Court, among other things, granted those branches of the plaintiff's cross motion and denied the defendant's motion. This appeal ensued. In a decision and order dated September 18, 2019, this Court, inter alia, reversed the orders insofar as appealed from, and granted the defendant's motion to dismiss the complaint insofar as asserted against him as time-barred (see Ditech Fin., LLC v. Naidu, 175 A.D.3d 1387, 109 N.Y.S.3d 196, revd 37 N.Y.3d 1, 146 N.Y.S.3d 542, 169 N.E.3d 912 ). The Court of Appeals reversed the decision and order of this Court on the statute of limitations issue and remitted the matter to this Court to address the defendant's remaining contentions concerning those branches of the plaintiff's cross motion which had been granted by the Supreme Court (see Freedom Mtge. Corp. v. Engel, 37 N.Y.3d 1, 35, 169 N.E.3d 912 ).

"Generally, in moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie case through the production of the mortgage, the unpaid note, and evidence of default" ( Deutsche Bank Natl. Trust Co. v. Abdan, 131 A.D.3d 1001, 1002, 16 N.Y.S.3d 459 [internal quotation marks omitted]; see Hudson City Sav. Bank v. Genuth, 148 A.D.3d 687, 688–689, 48 N.Y.S.3d 706 ). Where, as here, standing is placed in issue by a defendant, the plaintiff must prove its standing in order to be entitled to relief (see Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d 725, 726, 46 N.Y.S.3d 185 ; Wells Fargo Bank, N.A. v. Arias, 121 A.D.3d 973, 973–974, 995 N.Y.S.2d 118 ). A plaintiff in a mortgage foreclosure action establishes its standing by demonstrating that, when the action was commenced, it was the holder or assignee of the underlying note (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d at 725, 46 N.Y.S.3d 185 ). "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" ( Dyer Trust 2012–1 v. Global World Realty, Inc., 140 A.D.3d 827, 828, 33 N.Y.S.3d 414 ; see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 361–362, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Deutsche Bank Trust Co. Ams. v. Garrison, 147 A.D.3d at 726, 46 N.Y.S.3d 185 ; U.S. Bank N.A. v. Saravanan, 146 A.D.3d 1010, 1011, 45 N.Y.S.3d 547 ; Deutsche Bank Natl. Trust Co. v. Logan, 146 A.D.3d 861, 862, 45 N.Y.S.3d 189 ).

Here, the plaintiff established, prima facie, its standing to commence this action by submitting in support of its cross motion a copy of the consolidated note, endorsed in blank, that was annexed to the complaint at the time the action was commenced (see HSBC Bank USA, N.A. v. Desir, 188 A.D.3d 657, 134 N.Y.S.3d 398 ; U.S. Bank N.A. v. Offley, 170 A.D.3d 1240, 1241, 97 N.Y.S.3d 307 ; Bank of New York Mellon v. Chamoula, 170 A.D.3d 788, 791, 96 N.Y.S.3d 148 ; Deutsche Bank Natl. Trust Co. v. Nair, 170 A.D.3d 658, 659, 93 N.Y.S.3d 599 ). Moreover, the plaintiff established its prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid consolidated note, and evidence of the defendant's default in repayment of his mortgage loan obligation (see Wells Fargo Bank, N.A. v. Inigo, 164 A.D.3d 545, 546, 83 N.Y.S.3d 95 ). In...