Mortg. Assets Mgmt. v. Johnson

2024 NY Slip Op 50473(U)

Mortgage Assets Management, LLC FKA REVERSE MORTGAGE SOLUTIONS, INC., Plaintiff(s), v. Dana Grace Johnson, AS HEIR AND DISTRIBUTEE OF THE ESTATE OF MARISIA BOTTS A/K/A MARISIA B. BOTTS; TANYA L. HARRIS, AS HEIR AND DISTRIBUTEE OF THE ESTATE OF MARISIA BOTTS A/K/A MARISIA B. BOTTS; VINCENT JOHNSON, AS HEIR AND DISTRIBUTEE OF THE ESTATE OF MARISIA BOTTS A/K/A MARISIA B. BOTTS; CHARLES JOHNSON, AS HEIR AND DISTRIBUTEE OF THE ESTATE OF MARISIA BOTTS A/K/A MARISIA B. BOTTS; UNKNOWN HEIRS AND DISTRIBUTEES OF THE ESTATE OF MARISIA BOTTS A/K/A MARISIA B. BOTTS, any and all persons unknown to plaintiff, claiming, or who may claim to have an interest in, or general or specific lien upon the real property described in this action; such unknown persons being herein generally described and intended to be included in the following designation, namely the wife, widow, husband, widower, heirs at law, next of kin, descendants, executors, administrators, devisees, legatees, creditors, trustees, committees, lienors, and assignees of such deceased, any and all persons deriving interest in or lien upon, or title to said real property by, though or under them, or either of them, and their respective wives, widows, husbands, widowers, heirs at law, next of kin, descendants, executors, administrators, devisees, legatees, creditors, trustees, committees, lienors and assigns, all of whom and whose names, except as stated, are unknown to plaintiff; SECRETARY OF HOUSING AND URBAN DEVELOPMENT; CLERK OF THE SUFFOLK COUNTY TRAFFIC & PARKING VIOLATIONS AGENCY; THE HAMPTONS CENTER FOR REHABILITATION AND NURSING; NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE; UNITED STATES OF AMERICA; PEOPLE OF THE STATE OF NEW YORK; CLERK OF THE SUFFOLK COUNTY DISTRICT COURT; PETER JOHNSON, "JOHN DOE #2" through "JOHN DOE #12," the last eleven names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint, Defendants.

Index No. 606623/2022

Supreme Court, Suffolk County

February 28, 2024

Unpublished Opinion

ROBERTSON ANSCHUTZ SCHNEID CRANE & PARTNERS, PLLC Attorneys for Plaintiff

RONALD D. WEISS, P.C. Attorneys for Defendant Dana Grace Johnson

HON CHRISTOPHER MODELEWSKI, J.S.C.

Upon the E-file document list numbered 74 to 101 and 103 to 124 read and considered on the motion filed by plaintiff for an order granting it, inter alia, summary judgment on its complaint, as against defendant Dana Grace Johnson appointing a referee to compute the amount due, and dismissing the counterclaims of defendant Dana Grace Johnson and on the cross-motion of defendant Dana Grace Johnson for an order dismissing this foreclosure action; it is

ORDERED that the motion by plaintiff for an order granting it summary judgment on its complaint, and as against defendant Dana Grace Johnson, appointing a referee to compute the amount due, fixing the default of the non-answering parties, and dismissing the counterclaims of defendant Dana Grace Johnson is granted, for the reasons set forth herein; and it is further

ORDERED that the motion by defendant Dana Grace Johnson for an order dismissing the complaint is denied, for the reasons set forth herein.

This is an action to foreclose a reverse mortgage, the surviving borrower having passed away on January 28, 2021, resulting in a default under the terms of the subject loan. Plaintiff commenced this action by the filing of a summons and complaint on April 6, 2022. Issue was joined through the service and filing of an answer with counterclaims on May 19 2022 and plaintiff served and filed its reply on June 8, 2022. Plaintiff now moves for summary judgment and related relief. Defendant Dana Grace Johnson ("defendant") cross-moves to dismiss the complaint. Plaintiff opposes the cross-motion and replies to defendant's opposition.

Addressing first the cross-motion, defendant failed to assert plaintiff's lack of capacity as an affirmative defense in her answer and thus, she has waived it (see CPLR 3211 [e]; see also U.S. Bank Trust N.A. v Auxila, 189 A.D.3d 1514, 1516, 139 N.Y.S.3d 236 [2d Dept 2020]; Household Bank (SB), N.A. v Mitchell, 12 A.D.3d 568, 785 N.Y.S.2d 116 [2d Dept 2004]). Notwithstanding, defendant failed to meet her burden under section 1312 of the Business Corporation Law ("BCL 1312") in support of this unpled defense. Specifically, defendant claims that plaintiff lacks capacity to commence this foreclosure action because it has not registered to do business in New York. Other than hearsay evidence from an "ACRIS" search of plaintiff's "involvement in the mortgage market" revealing that it was assigned mortgages and an "E-Courts" printout showing plaintiff has commenced other foreclosure actions to enforce its mortgages, defendant has submitted no evidence that plaintiff is "doing business" in New York (see JPMorgan Chase Bank, N.A. v Didato, 185 A.D.3d 801, 802-803, 128 N.Y.S.3d 520 [2d Dept 2020] citing S & T Bank v Spectrum Cabinet Sales, 247 A.D.3d 373, 668 N.Y.S.2d 641 [2d Dept 1998]). Therefore, defendant has failed to overcome the presumption that plaintiff is doing business in the state of its incorporation and not in New York (id.). Furthermore, under Banking Law § 200, a foreign banking corporation is authorized to commence actions in New York to enforce mortgages and notes that it acquires (see Flat Rock Mortgage Inv. Trust v Lott, 214 A.D.3d 1221, 187 N.Y.S.3d 122 [3d Dept 2023] citing Commonwealth Bank & Trust Co. v Tioga Mills, Inc., 78 A.D.2d 953, 953, 433 N.Y.S.2d 519 [3d Dept 1980]; see also Valley Nat. Bank v Soho Properties, Inc., 34 Misc.3d 1237 [A], 950 N.Y.S.2d 611 [Sup. Ct. New York County 2012] citing Commonwealth Bank & Trust Co. v Tioga Mills, Inc., supra [foreign banking corporations are excluded from BCL 1312]; Skylake State Bank v Solar Heat & Insulation of Cent. Utah, 148 Misc.2d 32, 559 N.Y.S.2d 930 [Sup Ct. Bronx County 1990] citing Commonwealth Bank & Trust Co. v Tioga Mills, Inc., supra ["logically bringing a foreclosure action in the courts of the State is permitted under the Banking Law" and BCL 1312 cannot bar a lender from maintaining a foreclosure action in New York]). As such, this defense is dismissed.

As to the defense that plaintiff failed to comply with section 1304 of the Real Property Actions and Proceedings Law ("RPAPL 1304"), it is firmly established that this statute was enacted for the benefit and protection of borrowers. The statutory defense created by RPAPL 1302 (2) for noncompliance with RPAPL 1304 is a "personal defense" which cannot be raised by one who is a "stranger to the note and underlying mortgage" (HSBC Bank USA, Nat'l Ass'n v Tigani, 185 A.D.3d 796, 799, 128 N.Y.S.3d 522, 526 [2d Dept 2020]; HSBC Bank USA, N.A. v Shah, 185 A.D.3d 794, 128 N.Y.S.3d 32 [2d Dept 2020]; see also Bank of New York Mellon v Ramsamooj, 194 A.D.3d 997, 144 N.Y.S.3d 600 [2d Dept 2021]; Hartford Funding, Ltd. v Harris, 193 A.D.3d 1035, 147 N.Y.S.3d 659 [2d Dept 2021]; Citimortgage, Inc. v Etienne, 172 A.D.3d 808, 810, 101 N.Y.S.3d 59, 62 [2d Dept 2019]). As defendant is not the borrower, defendant has no standing to assert RPAPL 1304 as a defense and plaintiff was exempt from compliance under RPAPL 1304 (see U.S. Bank, N.A. v Lloyd-Lewis, 205 A.D.3d 838, 165 N.Y.S.3d 864 [2d Dept 2022]). Therefore, this defense likewise is dismissed.

In regard to the defense that plaintiff lacks standing, the documentary evidence submitted by plaintiff demonstrates that this defense lacks merit. Plaintiff annexed to its complaint a copy of the note (see HSBC Bank USA, N.A. v Chabot, 191 A.D.3d 648, 649-50, 140 N.Y.S.3d 584 [2d Dept 2021]), it submitted the assignments of the mortgage, each of which included an assignment of the subject note, the allonge to the note specifically provides that it is affixed and is a permanent part of the note, and plaintiff provided other indicia that the allonge was attached to the note when it came into possession of it and commenced this action (see U.S. Bank N.A. v Hunte, 215 A.D.3d 887, 188 N.Y.S.3d 92 [2d Dept 2023]; M & T Bank v Bonilla, 215 A.D.3d 813, 188 N.Y.S.3d 509 [2d Dept 2023]; Bayview Loan Servicing, LLC v Caracappa, 202 A.D.3d 900, 159 N.Y.S.3d 691 [2d Dept 2022]).

Defendant's remaining affirmative defenses and counterclaims are deemed waived due to her failure to raise them in opposition to plaintiff's motion or in support of her cross-motion (see U.S. Bank N.A. v Okoye-Oyibo, 213 A.D.3d 718, 183 N.Y.S.3d 485 [2d Dept 2023]; HSBC Bank USA, N.A. v Tigani, 185 A.D.3d 796, 128 N.Y.S.3d522 [2d Dept 2020]; Bosco Credit V Trust Series 2012-1 v Johnson, 177 A.D.3d 561, 115 N.Y.S.2d 5 [2d Dept 2019]).

By its submissions, plaintiff has established its prima facie entitlement to summary judgment on the complaint (see CPLR 3212; RPAPL §1321; U.S. Bank N.A v Denaro, 98 A.D.3d 964, 950 N.Y.S.2d 581 [2d Dept 2012]); Capital One, N.A. v Knollwood Props. II, LLC, 98 A.D.3d 707, 950 N.Y.S.2d 482 [...