U.S. Bank Nat'l Ass'n v. Forrest

2019 NY Slip Op 30769(U)

U.S. Bank National Association, as trustee, in trust forregistered holders of First Franklin Mortgage Loan Trust,Mortgage Loan Asset-Backed Certificates, Series 2007-FF1, Plaintiff, v. Laurence Forrest a/k/a Larry P. Forrest a/k/a Lawrence Forrest a/k/a Laurence P. Forresta/k/a Laurence S.P. Forrest; Desiree Forrest; American Express Centurion Bank,"JOHN DOE", said name being fictitious, it being the intention of Plaintiff to designate anyand all occupants of premises being foreclosed herein, and any parties, corporations or entities,if any, having or claiming an interest in or lien upon the mortgaged premises, Defendants.

Index No. 500141/2018

SUPREME COURT OF THE STATE of NEW YORK COUNTY OF PUTNAM

March 11, 2019

NYSCEF DOC. NO. 74

To commence the 30 day statutory time period for appeals as of right (CPLR 5513[a]), you are advised to serve a copy of this order, with notice of entry, upon all parties

DECISION AND ORDER

Seq. Nos. 1-2

Motion Date: 10/17/18

GROSSMAN, J.S.C.

The following documents, numbered 1 to 39, were read on Plaintiff's Notice of Motion, dated August 17, 2018, seeking, inter alia, summary judgment and an order of reference, and Defendants Laurence Forrest and Desiree Forrest's Notice of Cross Motion, dated September 18, 2018, seeking an Order, granting them quiet title under RPAPL Article 15.¹

PAPERS

NUMBERED

Notice of Motion/Affirmation in Support/Exhs. A-H/Affidavit in

Support/Exhs. 1-14/Proposed Order/Affidavit of Service/

Memorandum of Law

1-28

Notice of Cross Motion/Affirmation/Affidavit/Exhs. A-E

29-36

Reply Affirmation/Exh. A/Memorandum of Law

37-39

Upon consideration of all of the foregoing, and for the following reasons, the motions are determined as follows:

On May 8, 2008, Bank of America, National Association as Successor by Merger to Lasalle Bank National Association, as Trustee for First Franklin Mortgage Loan Trust, Mortgage Loan Asset-backed Certificates, Series 2007-FF1 commenced a foreclosure action against Defendants Laurence Forrest and Desiree Forrest by filing a Summons, Complaint and Notice of Pendency against property known as 65 Scout Hill Road, Mahopac, New York 10541, also known as Section: 52.20, Block: 1, Lot: 10.² On July 22, 2009, Jay B. Hashmall was appointed Referee. On June 22, 2012, a second Notice of Pendency was filed (Notice of Motion, Exh. G).

On March 26, 2014, Bank of America moved for an Order, canceling the lis pendens, discharging the referee and discontinuing the action. In support of that motion, Plaintiff submitted a stipulation signed by Plaintiff's counsel, Defendants' counsel and the Referee (Notice of Motion, Exh. G). Defendants opposed the motion only to the extent that they should not be penalized for Plaintiff's extensive delay in moving this Court to discontinue the action. Specifically, Defendants' counsel signed the stipulation on September 4, 2012, and therefore, according to Defendants, the accruing interest should be tolled since Plaintiff inexplicably waited approximately 1.5 years before filing the instant motion. Defendants also noted that a prior stipulation of discontinuance had beensigned on October 22, 2009, but it, too, was never submitted to the Court. Plaintiff did not respond to this claim (Notice of Motion, Exh. G).

On June 10, 2014, this Court granted Plaintiff's motion for a discontinuance. However, the Court did so with prejudice because it agreed that Plaintiff's delay in moving to discontinue the 2008 foreclosure action was unreasonable and unexcused. The Court granted nunc pro tunc Defendants' motion for an order tolling the accrual of the interest commencing from September 4, 2012 - the last date signed on the second stipulation (Notice of Motion, Exh. G at 2-3). The Court's Decision and Order was filed with the County Clerk on June 23, 2014 (Notice of Motion, Exh. G).

On March 31, 2009, the Note and Mortgage were assigned to U.S. Bank National Association, as trustee, in trust for registered holders of First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-FF1 (Notice of Motion, Exh. A).

On February 19, 2018, Plaintiff U.S. Bank National Association, as trustee, in trust for registered holders of First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-FF1 commenced the instant foreclosure action against Defendants. According to the Complaint, Plaintiff alleged that Defendants "have failed and neglected to comply with the conditions of said mortgage, bond or note by omitting and failing to pay the monthly payments of principal, interest, taxes, assessments, water rates, insurance premiums, escrow and/or other charges, and accordingly, the plaintiff has duly elected and does hereby elect to call due the entire amount presently secured by the mortgage described in paragraph 'FIFTH' hereof" (Notice of Motion, Exh. A, Complaint at ¶8).

Defendants interposed an Answer, raising twelve affirmative defenses, including, inter alia, statute of limitations, and two counterclaims, including, inter alia, a claim to quiet title (Notice of Motion, Exh. D). In response, Plaintiff generally denied the allegations in the two counterclaims, and raised seventeen affirmative defenses, including, inter alia, that the loan was not accelerated, andthat the borrowers reaffirmed the debt thereby resetting the statute of limitations (Notice of Motion, Exh. E).

On June 19, 2018, the parties stipulated to releasing the action from the foreclosure settlement conference part on consent (Notice of Motion, Exh. F).

On August 17, 2018, Plaintiff filed the instant motion for summary judgment and related relief. Defendants have cross moved for summary judgment, seeking dismissal of the matter and granting them quiet title under RPAPL Article 15, on the grounds that the action is barred by the statute of limitations because more than six (6) years have passed since the acceleration of the mortgage debt by the commencement of the now-discontinued 2008 foreclosure action.

It is well-settled that in order to succeed in its motion for summary judgment in a mortgage foreclosure action, a plaintiff must establish a prima facie case of entitlement through the submission of proof of the existence of the underlying note, mortgage and default in payment after due demand. Wells Fargo Bank, N.A. v. Osias, 156 A.D.3d 942 (2d Dept. 2017); Witelson v. Jamaica Estates Holding Corp. I, 40 A.D.3d 284 (1^st Dept. 2007); Marculescu v. Ovanez, 27 A.D.3d 701 (2d Dept. 2006). "Upon such a showing, the burden shifts to the defendant to produce evidence in admissible form sufficient to raise a material issue of fact requiring a trial." HSBC Bank USA v. Ortega, 42 Misc.3d 1228(A) (Sup. Ct. [Queens] February 24, 2014).

Here, the complaint sufficiently sets forth a valid cause of action in foreclosure. Furthermore, based upon the proof before this Court, Plaintiff has established proper service of the Summons and Complaint, in accordance with CPLR §308. Moreover, the Mortgage and Note signed by Defendants are annexed to the submissions, and the default in payment is established. However, Plaintiff must also establish that it has standing to proceed in this action.

"Standing requires an inquiry into whether a litigant has an interest in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request." Bank ofNew York v. Silverbera, 86 A.D.3d 274, 279 (2d Dept. 2011) (internal quotation marks and citations omitted). "Where, as here, the issue of standing is raised by a defendant, a plaintiff must prove its standing in order to be entitled to relief." Bank of New York v. Silverberg, supra. "In a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced." Id. "Holder status is established where the plaintiff possesses a note that, on its face or by allonge, contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff." Wells Fargo Bank, NA v. Ostiguy, 127 A.D.3d 1375, 1376 (3d Dept. 2015); see also U.S. Bank N.A. v. Brody, 156 A.D.3d 839, 840 (2d Dept. 2017).

"As a general matter, once a promissory note is tendered to and accepted by an assignee, the mortgage passes as an incident to the note." Bank of New York v. Silverberg, supra at 280. "By contrast, a transfer of the mortgage without the debt is a nullity, and no interest is acquired by it." Id. (internal quotation marks and citations omitted). "A mortgage is merely security for a debt or other obligation and cannot exist independently of the debt or obligation," and therefore, "the foreclosure of a mortgage cannot be pursued by one who has no demonstrated right to the debt." Id. (internal quotation marks and citations omitted). "[A]n assignment of a note and mortgage need not be in writing and can be effectuated by physical delivery," and "no special form or language is necessary to effect an assignment as long as the language shows the intention of the owner of a right to transfer it." Id. at 280-81 (internal quotation marks and citations omitted); see also U. S. Bank Nat. Ass'n v. Akande, 136 A.D.3d 887, 889 (2d Dept. 2016). Finally, a plaintiff can establish prima facie that it was in physical possession of the note, which contains an endorsement in blank, by annexing it to the complaint at the time the action was commenced. Bank of America. National Association v. Wheatley, 158 A.D.3d 736 (2d Dept. 2018); JPMorgan Chase Bank, Nat. Ass'n v. Weinberger, 142 A.D.3d 643 (2d Dept. 2016).

Here, Plaintiff established prima facie that it had standing to prosecute this action by demonstrating that it was in physical possession of the Note, which was endorsed in blank, at the time the action was commenced by annexing it to the Complaint. In opposition, Defendants failed to raise a triable issue of fact.

...