LNV Corp. v. Sofer

171 A.D.3d 1033

98 N.Y.S.3d 302

LNV CORPORATION, Respondent,

v.Agnetta SOFER, Appellant, et al., Defendants.

2016–09543

2016–09561

2017–06285

2017–06287

Index No. 507614/14

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

Submitted - December 18, 2018

April 17, 2019

Harvey Sorid, Uniondale, NY, for appellant.

Stein Wiener & Roth, LLP, Carle Place, N.Y. (Mojdeh Malekan of counsel), for respondent.

MARK C. DILLON, J.P., COLLEEN D. DUFFY, FRANCESCA E. CONNOLLY, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

In an action to foreclose a consolidated mortgage, the defendant Agnetta Sofer appeals from (1) an order of Supreme Court, Kings County (Noach Dear, J.), dated July 19, 2016, (2) an order of the same court, also dated July 19, 2016, (3) an order of the same court dated April 28, 2017, and (4) a judgment of foreclosure and sale of the same court, also dated April 28, 2017. The first order dated July 19, 2016, inter alia, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Agnetta Sofer, to strike that defendant's answer and affirmative defenses, and to appoint a referee, and denied that branch of the cross motion of the defendant Agnetta Sofer which was for summary judgment dismissing the complaint insofar as asserted against her. The second order dated July 19, 2016, among other things, directed the appointment of a referee. The order dated April 28, 2017, inter alia, granted the plaintiff's motion for a judgment of foreclosure and sale. The judgment of foreclosure and sale is in favor of the plaintiff and against the defendant Agnetta Sofer directing the sale of the subject premises.

ORDERED that the appeals from the two orders dated July 19, 2016, and the order dated April 28, 2017, are dismissed, without costs or disbursements; and it is further,

ORDERED that the judgment of foreclosure and sale is reversed, on the law, without costs or disbursements, the plaintiff's motion for a judgment of foreclosure and sale is denied, those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Agnetta Sofer, to appoint a referee, and to strike that defendant's answer and affirmative defenses, except for the first, fifth, and sixth affirmative defenses, are denied, the two orders dated July 19, 2016, and the order dated April 28, 2017, are modified accordingly, and the answer of the defendant Agnetta Sofer is reinstated except for the first, fifth, and sixth affirmative defenses.

The appeals from the two orders dated July 19, 2016, and the order dated April 28, 2017, must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment of foreclosure and sale in the action (see Matter of Aho , 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647 ). The issues raised on the appeals from the orders are brought up for review and have been considered on the appeal from the judgment of foreclosure and sale (see CPLR 5501[a][1] ).

On July 7, 2006, the defendant Agnetta Sofer (hereinafter the defendant) executed a promissory note (hereinafter the first note) in the amount of $ 641,250 in favor of American Home Mortgage (hereinafter American). The first note was secured by a mortgage (hereinafter the first mortgage) in favor of American encumbering real property located in Brooklyn. On April 13, 2007, the defendant executed a second promissory note (hereinafter the second note) in the amount of $ 215,767.88 in favor of American. As security for the second note, the defendant executed a second mortgage (hereinafter the second mortgage) in favor of American encumbering the same property. On April 13, 2007, the defendant also executed a consolidation, extension, and modification agreement (hereinafter CEMA) which consolidated the first and second notes and mortgages into a single consolidated note in the amount of $ 857,000 in favor of American secured by a consolidated mortgage in favor of American, encumbering the same property. The defendant and the plaintiff subsequently executed a loan modification agreement dated March 25, 2011, consolidating the CEMA, the consolidated note, and the consolidated mortgage, and adding an "additional principal amount" of $ 171,194.09 to the existing amount, creating a "new principal balance" of $ 1,026,947.44. The defendant thereafter allegedly defaulted by failing to make the monthly installment payments due August 1, 2012, and thereafter.

In August 2014, the plaintiff commenced this action to foreclose the consolidated mortgage. The defendant interposed an answer in which she asserted, inter alia, several affirmative defenses, including that the plaintiff lacked standing, and that the plaintiff failed to comply with RPAPL 1303 and 1304, and with the notice of default provision in paragraph 22 of the consolidated mortgage.

Thereafter, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant, to strike her answer and affirmative defenses, and to appoint a referee. The defendant cross-moved, inter alia, for summary judgment dismissing the complaint insofar as asserted against her. In two orders, both dated July 19, 2016, the Supreme Court granted the plaintiff's motion, denied the defendant's cross motion, and appointed a referee to compute the amount due and owing the plaintiff. In an order dated April 28, 2017, the court, inter alia, granted the plaintiff's motion for a judgment of foreclosure and sale, and on the same day, a judgment of foreclosure and sale directed the sale of the subject premises. The defendant appeals from the orders and the judgment of foreclosure and sale.

"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" ( U.S. Bank N.A. v. Sabloff , 153 A.D.3d 879, 880, 60 N.Y.S.3d 343 [internal quotation marks omitted] ). However, where, as here, the plaintiff's standing has been placed in issue by a defendant, "the plaintiff must prove its standing as part of its prima facie showing" ( U.S. Bank N.A. v. Henry , 157 A.D.3d 839, 840, 69 N.Y.S.3d 656 ; see Bank of N.Y. Mellon v. Lopes , 158 A.D.3d 662, 663, 71 N.Y.S.3d 147 ). "In a mortgage foreclosure action, a plaintiff has standing where it is the holder or assignee of the underlying note at the time the action is commenced" ( Arch Bay Holdings, LLC v. Albanese , 146 A.D.3d 849, 851–852, 45 N.Y.S.3d 506 ). "Either a written assignment of the underlying note or the physical delivery of the note ... is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" ( U.S. Bank N.A. v. Henry , 157 A.D.3d at 840–841, 69 N.Y.S.3d 656 [internal quotation marks omitted]; see Bank of N.Y. Mellon v. Alli , 156 A.D.3d 597, 598, 66 N.Y.S.3d 291 ).

Here, the plaintiff established through the affidavit of Julia E. Green, vice president of CLMG Corp., the document custodian for the plaintiff, that it had standing by demonstrating that it obtained physical possession of the original consolidated note on February 27, 2009, and was in possession of the consolidated note at the time of the commencement of the action (see Wells Fargo Bank, N.A. v. Inigo , 164 A.D.3d 545, 546, 83 N.Y.S.3d 95 ). In opposition, the defendant failed to raise a triable issue of fact. Moreover, on her cross motion, the defendant failed to establish her prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against her based on the plaintiff's lack of standing, as the defendant failed to provide evidence that the plaintiff was not in possession of the consolidated note at the time of the commencement of the action (see generally Deutsche Bank Nat. Trust Co. v. Homar , 163 A.D.3d 522, 523, 80 N.Y.S.3d 409 ).

Contrary to the defendant's contention, the Supreme Court providently exercised its discretion in considering Green's affidavit, which was submitted with the plaintiff's papers in opposition to the defendant's cross motion and in further support of its motion (see Central Mtge. Co. v. Jahnsen , 150 A.D.3d 661, 664, 56 N.Y.S.3d 107 ). While "[a] party moving for summary judgment generally cannot meet its prima facie burden by submitting evidence for the first time in reply ..., there are exceptions to the general rule, including ... when the other party is given an opportunity to respond to the reply papers" ( id. at 664, 56 N.Y.S.3d 107 ). Here, the defendant had an opportunity to respond to Green's affidavit in her reply papers in further support of her cross motion.

Further, contrary to the defendant's contention, the plaintiff established, prima facie, that...