Mortg. Elec. Registration Sys., Inc. v. Holmes
| Decision Date | 26 August 2015 |
| Docket Number | 2014-03808 |
| Citation | 2015 N.Y. Slip Op. 06662,131 A.D.3d 680,17 N.Y.S.3d 31 |
| Parties | MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., etc., appellant, v. Caroline HOLMES, et al., respondents. |
| Court | New York Supreme Court — Appellate Division |
Stiene & Associates, P.C., Huntington, N.Y. (Charles W. Marino of counsel), for appellant.
MARK C. DILLON, J.P., THOMAS A. DICKERSON, JEFFREY A. COHEN, and COLLEEN D. DUFFY, JJ.
In an action to foreclose a mortgage, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Queens County (Grays, J.), entered October 21, 2013, as denied its unopposed motion for leave to substitute U.S. Bank National Association as the named plaintiff, for leave to enter a default judgment against the defendants, for an order of reference, and to amend the caption and, sua sponte, directed the dismissal of the complaint without prejudice.
ORDERED that on the Court's own motion, the notice of appeal from so much of the order as, sua sponte, directed the dismissal of the complaint without prejudice is deemed an application for leave to appeal from that portion of the order, and leave to appeal from that portion of the order is granted (see CPLR 5701[c] ); and it is further,
ORDERED that the order is reversed insofar as appealed from, on the law, without costs or disbursements, and the plaintiff's unopposed motion for leave to substitute U.S. Bank National Association as the named plaintiff, for leave to enter a default judgment against the defendants, for an order of reference, and for leave to amend the caption, is granted, and the matter is remitted to the Supreme Court, Queens County, for further proceedings consistent herewith.
On March 1, 2005, the plaintiff, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for Alliance Mortgage Banking Corp. (hereinafter Alliance), commenced this action to foreclose a mortgage encumbering certain residential property after the borrower, the defendant Caroline Holmes, defaulted on the repayment of her mortgage loan. Although Holmes answered the complaint pro se and, later, by counsel, served an amended answer, she never asserted the plaintiff's lack of standing as a defense. The remaining defendants failed to appear, except for the State of New York, which filed a notice of appearance, and waived all but certain filings such as the referee's report and transcripts of surplus money proceedings. In October 2012, the plaintiff and Holmes entered into a stipulation, pursuant to which Holmes agreed to withdraw her amended answer, including the defenses and counterclaims asserted therein, and to permit the action to proceed ex parte. Thereafter, on or about July 1, 2013, the plaintiff moved to substitute U.S. Bank National Association (hereinafter U.S. Bank) as the plaintiff in place of MERS, as nominee for Alliance. The plaintiff also moved for leave to enter a default judgment, for an order of reference to compute the sums due under the note, and for leave to amend the caption.
In the order appealed from, the Supreme Court denied the plaintiff's unopposed motion, concluding that the plaintiff lacked standing. The court, sua sponte, directed the dismissal of the complaint.
The Supreme Court should have granted that branch of the plaintiff's unopposed motion which was for leave to substitute U.S. Bank as the named plaintiff (see United Fairness, Inc. v. Town of Woodbury, 113 A.D.3d 754, 755, 979 N.Y.S.2d 365 ). CPLR 1018 provides, in relevant part, that “[u]pon any transfer of interest, the action may be continued by or against the original parties, unless the court directs the person to whom the interest is transferred to be substituted or joined in the action.” “Leave to amend a pleading should be freely given (see CPLR 3025[b] ), provided the amendment is not palpably insufficient, does not prejudice or surprise the opposing party, and is not patently devoid of merit” (Maspeth Fed. Sav. & Loan Assn. v. Simon–Erdan, 67 A.D.3d 750, 751, 888 N.Y.S.2d 599, quoting Ruby Land Dev. v. Toussie, 4 A.D.3d 518, 519, 771 N.Y.S.2d 701 ; see United Fairness, Inc. v. Town of Woodbury, 113 A.D.3d at 755, 979 N.Y.S.2d 365 ). Here, the substitution of U.S. Bank as the plaintiff is proper since, by its nature, the substitution would not result in surprise or prejudice to the defendants (see United Fairness, Inc. v. Town of Woodbury, 113 A.D.3d at 755, 979 N.Y.S.2d 365 ; Matter of Highland Hall Apts., LLC v. New York State Div. of Hous. & Community Renewal, 66 A.D.3d 678, 682, 888 N.Y.S.2d 67 ).
The Supreme Court also should have granted that branch of the plaintiff's motion which was for an order of reference. In support of its unopposed motion, the plaintiff submitted documentary proof showing that the defendants failed to answer the complaint within the time allowed, that the proposed substituted plaintiff was the holder of the mortgage and note, that Holmes defaulted thereon, and that, as a preliminary step in obtaining a judgment of foreclosure, the appointment of a referee to compute the amount due on the mortgage would be proper (see RPAPL 1321 ; HSBC Bank v. Alexander, 124 A.D.3d 838, 839, 4 N.Y.S.3d 47 ; HSBC Bank USA, N.A. v. Taher, 104 A.D.3d 815, 816, 962 N.Y.S.2d 301 ; Bank of N.Y. v. Alderazi, 99 A.D.3d 837, 837–838, 951 N.Y.S.2d 900 ; Aurora Loan Servs., LLC v. Shahmela Shah Sookoo, 92 A.D.3d 705, 707, 941 N.Y.S.2d 503 ; Emigrant Mtge. Co., Inc. v. Fisher, 90 A.D.3d 823, 824, 935 N.Y.S.2d 313 ).
Furthermore, the Supreme Court also erred in denying that branch of the plaintiff's unopposed motion which was for leave to enter a default...
To continue reading
Request your trial