J.P. Morgan Mortg. Acquisition Corp. v. S. Homes, Inc.
| Decision Date | 23 December 2020 |
| Docket Number | 2018–07023,Index No. 708604/16 |
| Citation | 189 A.D.3d 1381,138 N.Y.S.3d 566 |
| Parties | J.P. MORGAN MORTGAGE ACQUISITION CORP., respondent, v. SOUTH HOMES, INC., et al., appellants, et al., defendants. |
| Court | New York Supreme Court — Appellate Division |
McLaughlin & Stern LLP, Great Neck, N.Y. (Todd Harris Hesekiel and Benjamin S. Kaplan of counsel), for appellants.
Rosenberg & Estis, P.C., New York, N.Y. (Timothy J. Fierst and Jamie C. Krapf of counsel), for respondent.
SHERI S. ROMAN, J.P., COLLEEN D. DUFFY, BETSY BARROS, FRANCESCA E. CONNOLLY, JJ.
DECISION & ORDER
In an action to foreclose a mortgage and cancel and vacate a satisfaction of mortgage, the defendants South Homes, Inc., Marivel D. Luna, and Kevin A. Orellana Luna appeal from an order of the Supreme Court, Queens County (Janice A. Taylor, J.), dated January 2, 2018. The order denied the motion of those defendants pursuant to CPLR 3211(a)(1), (7) and 3016(b) to dismiss the complaint insofar as asserted against them and to vacate a notice of pendency filed by the plaintiff against the real property at issue.
ORDERED that the order is affirmed, with costs.
In July 2016, the plaintiff commenced this mortgage foreclosure action against, among others, the defendant Intazar Shah, in connection with real property owned by Shah in Queens (hereinafter the premises), and to cancel and vacate a satisfaction of the mortgage that was recorded in 2012. The plaintiff alleged that Shah is the obligor on a note in the amount of $394,000 executed by him in favor of Metlife Home Loans, a division of Metlife Bank, N.A. (hereinafter Metlife Home), secured by a mortgage encumbering the premises. The plaintiff further alleged that Mortgage Electronic Registrations Systems, Inc. (hereinafter MERS), as nominee for Metlife Home, assigned the mortgage to Metlife Home by an assignment executed in April 2011, which was recorded on May 12, 2011, and, thereafter, executed a fraudulent satisfaction of the mortgage on January 27, 2012, which was recorded on February 27, 2012. Metlife Home thereafter assigned its mortgage to the plaintiff, by assignment executed May 21, 2014, and recorded on September 11, 2014.
The plaintiff also alleged that the defendants South Homes, Inc., Marivel D. Luna, and Kevin A. Orellano Luna (hereinafter collectively the defendants) purport to have ownership interests in the premises, subject and subordinate to the lien of plaintiff's mortgage. The plaintiff sought a judgment declaring that the defendants have no claim to the mortgaged premises and barring them from pursuing any claim to the premises.
The defendants moved pursuant to CPLR 3211(a)(1), (7) and 3016(b) to dismiss the complaint insofar as asserted against them and to vacate a notice of pendency filed by the plaintiff against the premises. The defendants contended, inter alia, that they acquired their respective interests in the premises after the satisfaction of mortgage was recorded and were entitled to rely upon that satisfaction as presumptively valid. The plaintiff opposed the motion, contending, among other things, that the defendants' reliance on the satisfaction of mortgage was not reasonable and thus they were not bona fide purchasers or encumbrancers for value. In an order dated January 2, 2018, the Supreme Court denied the defendants' motion. The defendants appeal.
We agree with the Supreme Court's determination denying that branch of the defendants' motion which sought dismissal of the complaint insofar as asserted against them pursuant to CPLR 3211(a)(1). "To succeed on a motion to dismiss based upon documentary evidence pursuant to CPLR 3211(a)(1), the documentary evidence must utterly refute the plaintiff's factual allegations, conclusively establishing a defense as a matter of law" ( Gould v. Decolator, 121 A.D.3d 845, 847, 994 N.Y.S.2d 368 ; see Wells Fargo Bank N.A. v. E & G Dev. Corp., 138 A.D.3d 986, 987, 31 N.Y.S.3d 121 ). Here, the defendants' proffered documentary evidence failed to demonstrate as a matter of law that MERS was authorized, as agent of the mortgage assignee, to execute a certificate of discharge of the mortgage on behalf of Metlife Home, and also failed to establish that the defendants' failure to inquire as to the scope of MERS' alleged authority was reasonable (see Real Property Law § 321[1][f][i] ; see generally 150 Beach 120th St., Inc. v. Washington Brooklyn Ltd. Partnership, 39 A.D.3d 722, 723–724, 833 N.Y.S.2d 667 ). An "agent cannot by [its] own acts imbue [itself] with apparent authority" ( 150 Beach 120th St., Inc. v. Washington Brooklyn Ltd. Partnership, 39 A.D.3d at 723, 833 N.Y.S.2d 667, quoting Hallock v. State of New York, 64 N.Y.2d 224, 231, 485 N.Y.S.2d 510, 474 N.E.2d 1178 ). Thus, the defendants "did not utterly refute the plaintiff's factual allegations, conclusively establishing a defense as a matter of law" ( Wells Fargo Bank N.A. v. E & G Dev. Corp., 138 A.D.3d at 988, 31 N.Y.S.3d 121 ; see CPLR 3211(a)(1) ; Gould v. Decolator, 121 A.D.3d at 847, 994 N.Y.S.2d 368 ).
We also agree with the Supreme Court's determination denying that branch of the defendants' motion which was to dismiss the complaint insofar as asserted against them pursuant to CPLR 3211(a)(7). When a court considers evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7), and the motion has not been converted to one for summary judgment, the criterion is whether the plaintiff has a cause of action (see Sokol v. Leader, 74 A.D.3d 1180, 1181, 904 N.Y.S.2d 153 ), and, unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not be granted (see Guggenheimer v....
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