Citimortgage, Inc. v. Etienne

• Decision Date: 08 May 2019
• Docket Number: 2016–10177,Index No. 6778/14
• Citation: 101 N.Y.S.3d 59,172 A.D.3d 808
• Court: New York Supreme Court — Appellate Division
• Parties: CITIMORTGAGE, INC., Respondent, v. Radamens ETIENNE, et al., Defendants, OKL Property Corp., Appellant.

172 A.D.3d 808

101 N.Y.S.3d 59

CITIMORTGAGE, INC., Respondent,

v.Radamens ETIENNE, et al., Defendants,OKL Property Corp., Appellant.

2016–10177

Index No. 6778/14

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

Argued—February 1, 2019

May 8, 2019

Berg & David, PLLC, Brooklyn, N.Y. (Abraham David of counsel), for appellant.

Akerman, LLP, New York, N.Y. (Jordan M. Smith and Joseph DeFazio of counsel), for respondent.

WILLIAM F. MASTRO, J.P., LEONARD B. AUSTIN, ROBERT J. MILLER, JOSEPH J. MALTESE, JJ.

DECISION & ORDER

ORDERED that the appeal from so much of the order as, in effect, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant Radamens Etienne, and for an order of reference, is dismissed, as the defendant OKL Property Corp. is not aggrieved by those portions of the order (see CPLR 5511 ; Mixon v. TBV, Inc., 76 A.D.3d 144, 156–157, 904 N.Y.S.2d 132 ); and it is further,

ORDERED that the order is affirmed insofar as reviewed; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

In January 2009, the defendant Radamens Etienne (hereinafter the borrower) executed a promissory note in the sum of $ 687,321 in favor of Golden First Mortgage Corporation, which was secured by a mortgage encumbering certain real property located in Kings County. The borrower defaulted on his payment obligations by failing to pay the monthly installment of principal and interest that was due on July 1, 2010, or any monthly installment thereafter. In November 2012, the borrower transferred title to the subject property to the defendant OKL Property Corp. (hereinafter OKL).

The plaintiff subsequently commenced this action against the borrower and OKL, among others, to foreclose the mortgage. The borrower submitted an answer denying the material allegations of the complaint and asserting a number of affirmative defenses, including lack of standing and failure to comply with RPAPL 1304. OKL submitted an answer in which it admitted that it was the "record owner" of the subject property. OKL asserted in its second affirmative defense that the plaintiff lacked standing to commence the action.

The plaintiff subsequently moved, inter alia, for summary judgment on the complaint insofar as asserted against the borrower and OKL, and for an order of reference. OKL opposed the motion and cross-moved, in effect, for summary judgment dismissing the complaint insofar as asserted against it on the grounds that the plaintiff lacked standing and failed to comply with the notice requirements of RPAPL 1304. The borrower did not oppose the plaintiff's motion. In an order dated May 24, 2016, the Supreme Court, among other things, in effect, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the borrower and OKL, and for an order of reference, and denied OKL's cross motion. OKL appeals.

"Relief on an appeal may not, as a general rule, be granted to a nonappealing party" ( Stimmel v. Stimmel, 163 A.D.2d 381, 383, 558 N.Y.S.2d 112 ; see 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 151 n 3, 746 N.Y.S.2d 131, 773 N.E.2d 496 ; Hecht v. City of New York, 60 N.Y.2d 57, 61–62, 467 N.Y.S.2d 187, 454 N.E.2d 527 ; Burro v. Kang, 167 A.D.3d 694, 90 N.Y.S.3d 298 ; Viafax Corp. v. Citicorp Leasing, Inc., 54 A.D.3d 846, 850, 864 N.Y.S.2d 479 ). The corollary to this rule is that "an appellate court's scope of review with respect to an appellant, once an appeal has been timely taken, is generally limited to those parts of the judgment [or order] that have been appealed and that aggrieve the appealing party" ( Hecht v. City of New York, 60 N.Y.2d at 61, 467 N.Y.S.2d 187, 454 N.E.2d 527 ). Generally, as relevant here, "a person is aggrieved when someone asks for relief against him or her, which the person opposes, and the relief is granted in whole or in part" ( Mixon v. TBV, Inc., 76 A.D.3d at 156–157, 904 N.Y.S.2d 132 [emphasis omitted] ). Accordingly, the appeal from so much of the order as granted the plaintiff relief against the borrower must be dismissed, as OKL is not aggrieved by those portions of the order (see CPLR 5511 ; Mixon v. TBV, Inc., 76 A.D.3d at 156–157, 904 N.Y.S.2d 132 ).

Turning to the merits, OKL contends that the Supreme Court should not have awarded the plaintiff summary judgment because the plaintiff failed to establish, prima facie, that it gave proper notice to the borrower in strict accordance with RPAPL 1304. However, the borrower is the only mortgagor and the only person named on the note. Although OKL, as the current owner of the subject property, is a proper party to this foreclosure action, as it may be "subject to the mortgage lien and may have [its] rights in the property cut off due to a default on the mortgage" ( PHH Mtge. Corp. v. Davis, 111 A.D.3d 1110, 1111, 975 N.Y.S.2d 480 ; see generally 2 Bergman on New York Mortgage Foreclosures § 12.04), it does not necessarily follow that OKL may properly assert, either in its own right or on behalf of the borrower, any defense that was or could have been asserted by the borrower. Rather, as relevant here, the notice requirements of RPAPL 1304 were enacted for the benefit and protection of borrowers who are "natural person[s]" ( RPAPL 1304[6][a][1][i] ; see generally Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 107, 923 N.Y.S.2d 609 ). The statutory defense created by RPAPL 1302(2) for noncompliance with RPAPL 1304 is a "personal defense" which could not be raised by OKL, a stranger to the note and underlying mortgage ( Greene v. Rachlin, 154 A.D.3d 814, 816, 63 N.Y.S.3d 78 ; see Ekelmann Group, LLC v. Stuart, 108 A.D.3d 1098, 1100, 969 N.Y.S.2d 638 ; see also NYCTL 1996–1 Trust v. King, 13 A.D.3d 429, 430, 787 N.Y.S.2d 61 ; Home Sav. of Am. v. Gkanios, 233 A.D.2d 422, 423, 650 N.Y.S.2d 756 ; accord Ashkenazy Acquisition Corp. v. Rela Realty Corp., 296 A.D.2d 332, 333, 745 N.Y.S.2d 161 ; Matter of Lee v. Maltais, 250 A.D.2d 951, 953, 672 N.Y.S.2d 943 ; Vincent v. Seaman, 152 A.D.2d 841, 843, 544 N.Y.S.2d 225 ). Accordingly, contrary to OKL's contention, it lacked standing to raise the issue of compliance with RPAPL 1304 as a defense and the merits of that issue are not properly before this Court.

OKL next contends that the plaintiff lacked standing to maintain this action and that the Supreme Court therefore erred in awarding the plaintiff summary judgment insofar as asserted against it. We note that "where, as here, standing is not an essential element of the cause of action, under CPLR 3018(b) a defendant must affirmatively plead lack of standing as an affirmative defense in the answer in order to properly raise the issue in its responsive pleading" ( U.S. Bank N.A. v. Nelson, 169 A.D.3d 110, 114, 93 N.Y.S.3d 138 ; see BAC Home Loans Servicing, LP v. Alvarado, 168 A.D.3d 1029, 93 N.Y.S.3d 127 ). Here, OKL asserted standing as an affirmative defense in its answer. Accordingly, the issue of standing was properly before the court (cf. U.S. Bank N.A. v. Nelson, 169 A.D.3d at 114, 93 N.Y.S.3d 138 ).

Where the issue of standing is raised by a defendant in a mortgage foreclosure action, a plaintiff must prove its standing in order to be entitled to relief against that defendant (see HSBC Bank USA, N.A. v. Roumiantseva, 130 A.D.3d 983, 983–984, 15 N.Y.S.3d 117 ; HSBC Bank USA, N.A. v. Calderon, 115 A.D.3d 708, 709, 981 N.Y.S.2d 598 ; Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 279, 926 N.Y.S.2d 532 ). "A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is either the holder or assignee of the underlying note at...