N.Y. Cmty. Bank v. McClendon

• Decision Date: 13 April 2016
• Docket Number: 2014-06634, Index No. 13016/12.
• Citation: N.Y. Cmty. Bank v. McClendon, 2016 NY Slip Op 2790, 138 A.D.3d 805, 29 N.Y.S.3d 507 (N.Y. App. Div. 2016)
• Parties: NEW YORK COMMUNITY BANK, appellant, v. Daphne McCLENDON, respondent, et al., defendants.
• Court: New York Supreme Court — Appellate Division

138 A.D.3d 805

29 N.Y.S.3d 507

2016 N.Y. Slip Op. 02790

NEW YORK COMMUNITY BANK, appellant,

v.Daphne McCLENDON, respondent, et al., defendants.

2014-06634, Index No. 13016/12.

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

April 13, 2016.

Stagg, Terenzi, Confusione & Wabnik, LLP, Garden City, N.Y. (Patrique Denize and Jacqueline M. Della Chiesa of counsel), for appellant.

Daphne McClendon, Brooklyn, N.Y., respondent pro se.

REINALDO E. RIVERA, J.P., JOHN M. LEVENTHAL, THOMAS A. DICKERSON, and ROBERT J. MILLER, JJ.

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Kings County (Schack, J.), dated March 17, 2014, which granted the motion of the defendant Daphne McClendon pursuant to CPLR 3211(a)(3) to dismiss the complaint insofar as asserted against her on the ground that the plaintiff lacked standing to commence the action.

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Daphne McClendon pursuant to CPLR 3211(a)(3) to dismiss the complaint insofar as asserted against her on the ground that the plaintiff lacked standing to commence the action is denied.

The subject mortgage was executed by the defendant Daphne McClendon on November 7, 2008, in favor of AmTrust Bank, to secure a promissory note executed the same day, in the principal sum of $544,000. The note (hereinafter the eNote) was signed by electronic signature. On December 4, 2009, the Office of Thrift Supervision closed AmTrust Bank and appointed the Federal Deposit Insurance Corporation (hereinafter the FDIC) as receiver for the closed bank. Also on December 4, 2009, the FDIC, as receiver for AmTrust Bank, and the plaintiff entered into a purchase and assumption agreement (hereinafter the P & A Agreement), pursuant to which the FDIC sold the plaintiff all “qualified financial contracts to which AmTrust was a party.”

The plaintiff commenced this action to foreclose the subject mortgage in June of 2012, alleging that McClendon had ceased making her monthly mortgage payments in October of 2010, in violation of its terms. McClendon moved pursuant to CPLR 3211(a)(3) to dismiss the complaint insofar as asserted against her on the ground that the plaintiff lacked standing to commence the action. In opposition to the motion, the plaintiff submitted, among other things, the underlying eNote, the attached “eNote Transfer History,” and an affidavit of Ryan A. Sabo, Assistant Vice President of the plaintiff. In the order appealed from, the Supreme Court granted McClendon's motion to dismiss.

A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that, when the action was commenced, it was either the holder or assignee of the underlying note (see Arch Bay Holdings, LLC–Series 2010B v. Smith, 136 A.D.3d 719, 24 N.Y.S.3d 533 ; Wells Fargo Bank, N.A. v. Rooney, 132 A.D.3d 980, 981, 19 N.Y.S.3d 543 ; Aurora Loan Servs., LLC v. Taylor, 114 A.D.3d 627, 628, 980 N.Y.S.2d 475 ; affd. 25 N.Y.3d 355, 12 N.Y.S.3d 612, 34 N.E.3d 363 ). A plaintiff establishes standing where the evidence shows it had physical possession of the note prior to commencement of the foreclosure action (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d at 359–360, 12 N.Y.S.3d 612, 34 N.E.3d 363 ; Wells Fargo Bank, N.A. v. Charlaff, 134 A.D.3d 1099, 24 N.Y.S.3d 317 ). On a defendant's motion to dismiss the complaint based upon the plaintiff's alleged lack of standing, the burden is on the moving defendant to establish, prima facie, the plaintiff's lack of standing as a matter of law (see Arch Bay Holdings, LLC–Series 2010B v. Smith, 136 A.D.3d 719, 24 N.Y.S.3d 533 ; Deutsche Bank Trust Co. Ams. v. Vitellas, 131 A.D.3d 52, 59–60, 13 N.Y.S.3d 163 ; HSBC Bank USA, N.A. v. Roumiantseva, 130 A.D.3d 983, 984, 15 N.Y.S.3d 117 ). “To defeat a defendant's motion, the plaintiff has no burden of establishing its standing as a matter of law; rather, the motion will be defeated if the plaintiff's submissions raise a question of fact as to its standing” (Deutsche Bank Trust Co. Ams. v. Vitellas, 131 A.D.3d at 60, 13 N.Y.S.3d 163 ; see Arch Bay Holdings, LLC–Series 2010B v. Smith, 136 A.D.3d 719, 24 N.Y.S.3d 533 ; HSBC Bank USA, N.A. v. Roumiantseva, 130 A.D.3d at 984, 15 N.Y.S.3d 117 ).

Contrary to the plaintiff's contention, McClendon's motion was not a renewal or reargument of any prior motion and, accordingly, the Supreme Court did not err in considering the motion without considering the requirements for obtaining leave to renew or reargue.

Regarding the eNote transfer history submitted by the plaintiff, an eNote is a “transferable record,” as that term is defined under 15 USC § 7021(a)(1). “Except as otherwise agreed, a person...