HSBC Bank USA, Nat'l Ass'n v. Szoffer

• Decision Date: 20 April 2017
• Parties: HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee for MortgageIT Securities Corp. Mortgage Loan Trust, Series 2007–1, Mortgage Pass–Through Certificates, Respondent, v. Mordechai SZOFFER et al., Appellants, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

149 A.D.3d 1400

52 N.Y.S.3d 721

HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee for MortgageIT Securities Corp. Mortgage Loan Trust, Series 2007–1, Mortgage Pass–Through Certificates, Respondent,

v.Mordechai SZOFFER et al., Appellants, et al., Defendants.

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

April 20, 2017.

Law Offices of Allen Kolber, Suffern (Allen A. Kolber of counsel), for appellants.

Reed Smith, LLP, New York City (Joseph B. Teig of counsel), for respondent.

Before: McCARTHY, J.P., EGAN JR., LYNCH, DEVINE and CLARK, JJ.

EGAN JR., J.

Appeal from an order of the Supreme Court (Meddaugh, J.), entered October 2, 2015 in Sullivan County, which, among other things, granted plaintiff's motion for summary judgment.

In April 2007, defendant Mordechai Szoffer, president of defendant Royal Property Care, Inc., executed a note and mortgage covering certain real property located in the hamlet of South Fallsburg, Sullivan County. Although Szoffer was the obligor on the note and mortgage, Royal Property was the record owner of the property. Szoffer failed to make the required payments beginning in April 2009 and, in July 2009, the subject mortgage was assigned to plaintiff. Plaintiff thereafter commenced this mortgage foreclosure action against, among others, Szoffer and Royal Property (hereinafter collectively referred to as defendants). Following joinder of issue, plaintiff moved for, among other things, summary judgment; defendants opposed the motion and cross-moved to dismiss the complaint-contending that plaintiff lacked standing. Supreme Court, among other things, granted plaintiff's motion for summary judgment, prompting this appeal.

We affirm. "A plaintiff establishes its entitlement to summary judgement in a mortgage foreclosure action by submitting the mortgage and unpaid note, along with evidence of default in payments" (Citibank, NA v. Abrams, 144 A.D.3d 1212, 1214, 40 N.Y.S.3d 653 [2016] [citations omitted]; see Nationstar Mtge., LLC v. Alling, 141 A.D.3d 916, 917, 35 N.Y.S.3d 541 [2016] ; HSBC Bank USA, N.A. v. Sage, 112 A.D.3d 1126, 1127, 977 N.Y.S.2d 446 [2013], lvs. dismissed 22 N.Y.3d 1172, 985 N.Y.S.2d 472, 8 N.E.3d 849 [2014], 23 N.Y.3d 1015, 992 N.Y.S.2d 774, 16 N.E.3d 1253 [2014] ). Here, in support of its motion for summary judgment, plaintiff tendered, among other things, the mortgage, the note (endorsed in blank), the assignment agreement, portions of the applicable pooling and servicing agreement (together with a schedule identifying the subject loan as part of the pool of loans held in trust by plaintiff) and proof of defendants' default, including the relevant demand letters and notices. Plaintiff also submitted an affidavit from one of the officers of its servicing agent, who, upon reviewing all of the pertinent business records, averred that plaintiff was in default commencing with the April 1, 2009 mortgage payment and all subsequent payments thereafter due. "Such proof was sufficient to demonstrate [plaintiff's] prima facie entitlement to judgment as a matter of law, thereby shifting the burden to defendant[s] to raise a question of fact as to a bona fide defense to foreclosure" (Nationstar Mtge., LLC v. Alling, 141 at 918, 35 N.Y.S.3d 541 [citations omitted]; see HSBC Bank USA, N.A. v. Sage, 112 A.D.3d at 1127, 977 N.Y.S.2d 446 ).

In opposition, defendants submitted an attorney's affidavit, together with case law and proof of mortgage assignments that were unrelated to the property at issue, and argued that plaintiff lacked standing. However, the record makes clear—and defendants readily concede—that they failed to raise lack of standing in their answer or in the context of a timely pre-answer motion to dismiss, thereby waiving this defense (see CPLR 3211[a] [3] ; [e]; HSBC Mtge. Corp. [USA] v. Johnston, 145 A.D.3d 1240, 1241, 43 N.Y.S.3d 575 [2016] ; Nationstar Mtge., LLC v. Alling, 141 A.D.3d at 917, 35 N.Y.S.3d 541 ). To the extent that defendants argue that Supreme Court could—and should—have raised this issue sua sponte and dismissed the underlying complaint, courts have been consistent in holding that "a party's lack of standing does not constitute a jurisdictional defect and does not warrant a sua sponte dismissal of the complaint by the [trial] court" (Onewest Bank, FSB v. Prince, 130 A.D.3d 700, 701, 14 N.Y.S.3d 66 [2015] ; accord Consumer Solutions, LLC v. Charles, 137 A.D.3d 952, 953, 27 N.Y.S.3d 216 [2016] ; Nationstar Mtge., LLC v. Wong, 132 A.D.3d 825, 825–826, 18 N.Y.S.3d 669 [2015] ; see Marcon Affiliates, Inc. v. Ventra, 112 A.D.3d 1095, 1095–1096, 977 N.Y.S.2d 438 [2013] ). Finally, while defe...