MLCFC 2007-9 Mixed Astoria, LLC v. 36-02 35TH Ave. Dev., LLC

• Decision Date: 09 April 2014
• Citation: MLCFC 2007-9 Mixed Astoria, LLC v. 36-02 35TH Ave. Dev., LLC, 2014 NY Slip Op 2416, 116 A.D.3d 745, 983 N.Y.S.2d 604 (N.Y. App. Div. 2014)
• Parties: MLCFC 2007–9 MIXED ASTORIA, LLC, plaintiff-appellant-respondent, v. 36–02 35TH AVE. DEVELOPMENT, LLC, et al., respondents-appellants, et al., defendants; KZ Annex II, LLC, nonparty-appellant-respondent.
• Court: New York Supreme Court — Appellate Division

116 A.D.3d 745

983 N.Y.S.2d 604

2014 N.Y. Slip Op. 02416

MLCFC 2007–9 MIXED ASTORIA, LLC, plaintiff-appellant-respondent,

v. 36–02 35TH AVE. DEVELOPMENT, LLC, et al., respondents-appellants, et al., defendants;KZ Annex II, LLC, nonparty-appellant-respondent.

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

April 9, 2014.

Herrick Feinstein, LLP, New York, N.Y., and Olshan Frome Wolosky, LLP, New York, N.Y. (Lori Marks–Esterman, Ellen V. Holloman, and Peter M. Sartorius of counsel), for plaintiff-appellant-respondent, and Crowley and Kaufman, P.C., Elmhurst, N.Y., and Olshan Frome Wolosky, LLP, New York, N.Y. (Lori Marks–Esterman, Ellen V. Holloman, and Peter M. Sartorius of counsel), for nonparty-appellant-respondent (one brief filed).

Sweeney Gallo Reich & Bolz, LLP, Rego Park, N.Y. (Michael H. Reich and Rashel M. Mehlman of counsel), for respondents-appellants.

REINALDO E. RIVERA, J.P., PLUMMER E. LOTT, SHERI S. ROMAN, and SYLVIA O. HINDS–RADIX, JJ.

In an action to foreclose a mortgage, (1) the plaintiff appeals from an order of the Supreme Court, Queens County (J. Golia, J.), dated April 16, 2012, which, inter alia, denied that branch of its motion which was for summary judgment on the complaint and denied its application for the appointment of a receiver, (2) the plaintiff and the nonparty KZ Annex II, LLC, appeal from so much of an order of the same court dated October 23, 2012, as denied the nonparty's motion for substitution as the plaintiff in this action and to amend the caption accordingly, and (3) the defendants 36–02 35th Ave. Development, LLC, and Larry Cerullo cross-appeal, as limited by their brief, from so much of the order dated October 23, 2012, as denied their cross motion, in effect, for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff lacked standing.

ORDERED that on the Court's own motion, the notice of appeal from so much of the order dated April 16, 2012, as denied the plaintiff's application for the appointment of a receiver is treated as an application for leave to appeal, and leave to appeal from that portion of the order is granted ( seeCPLR 5701 [c] ); and it is further,

ORDERED that the orders are affirmed insofar as appealed and cross-appealed from, without costs or disbursements.

In an action to foreclose a mortgage, a plaintiff establishes its case as a matter of law through the production of the mortgage, the unpaid note, and evidence of default ( see Argent Mtge. Co., LLC v. Mentesana, 79 A.D.3d 1079, 1080, 915 N.Y.S.2d 591;Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 A.D.3d 239, 244, 837 N.Y.S.2d 247). Where, as here, the issue of standing is raised by a defendant, a plaintiff must prove its standing to be entitled to relief ( see Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 279, 926 N.Y.S.2d 532;U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752, 753, 890 N.Y.S.2d 578). In a mortgage foreclosure action, a plaintiff has standing where it is both the holder of the subject mortgage and of the underlying note at the time the action is commenced ( see Bank of N.Y. v. Silverberg, 86 A.D.3d at 279, 926 N.Y.S.2d 532;Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 108, 923 N.Y.S.2d 609;Wells Fargo Bank, N.A. v. Marchione, 69 A.D.3d 204, 207, 887 N.Y.S.2d 615). Where a note is transferred, a mortgage securing the debt passes as an incident to the note ( see Bank of N.Y. v. Silverberg, 86 A.D.3d at 280, 926 N.Y.S.2d 532). By contrast, an assignment of a mortgage without assignment of the underlying note or bond is a nullity ( see Merritt v. Bartholick, 36 N.Y. 44, 45;Bank of N.Y. v. Silverberg, 86 A.D.3d at 280, 926 N.Y.S.2d 532). “Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation” ( U.S. Bank, N.A. v....