U.S. Bank Nat'l Ass'n v. Clement

• Decision Date: 11 July 2018
• Docket Number: Index No. 709246/14,2015–07318
• Parties: U.S. BANK NATIONAL ASSOCIATION, etc., appellant, v. Ruth CLEMENT, etc., respondent, et al., defendants.
• Court: New York Supreme Court — Appellate Division

163 A.D.3d 742

81 N.Y.S.3d 116

U.S. BANK NATIONAL ASSOCIATION, etc., appellant,

v.Ruth CLEMENT, etc., respondent, et al., defendants.

2015–07318

Index No. 709246/14

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

Argued—February 16, 2018

July 11, 2018

Shapiro DiCaro & Barak, LLC (Reed Smith LLP, New York, N.Y. [Andrew B. Messite and Joseph B. Teig ], of counsel), for appellant.

Ruth Clement, Lawrenceville, New Jersey, respondent pro se.

JOHN M. LEVENTHAL, J.P., JEFFREY A. COHEN, ROBERT J. MILLER, JOSEPH J. MALTESE, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Queens County (Valerie Brathwaite Nelson, J.), dated June 25, 2015. The order granted the motion of the defendant Ruth Clement, in effect, pursuant to CPLR 3211(a)(1) and (3) to dismiss the complaint insofar as asserted against her for lack of standing.

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Ruth Clement, in effect, pursuant to CPLR 3211(a)(1) and (3) to dismiss the complaint insofar as asserted against her for lack of standing is denied.

In August 2005, the defendant Ruth Clement (hereinafter the defendant) borrowed the sum of $491,200 from First United Mortgage Banking Corp. (hereinafter First United). The loan was memorialized by a note and secured by a mortgage delivered to First United. The defendant allegedly defaulted on the loan by failing to pay the installment due on October 1, 2009. Thereafter, the plaintiff, U.S. Bank National Association, commenced this residential mortgage foreclosure action against the defendant, among others. The defendant filed a pre-answer motion, in effect, pursuant to CPLR 3211(a)(1) and (3) to dismiss the complaint insofar as asserted against her for lack of standing. The Supreme Court granted the motion, and the plaintiff appeals.

Relief pursuant to CPLR 3211(a)(1) requires documentary evidence which utterly refutes the plaintiff's factual allegations, conclusively establishing a defense as a matter of law (see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 ; Endless Ocean, LLC v. Twomey, Latham, Shea, Kelley, Dubin & Quartararo, 113 A.D.3d 587, 588, 979 N.Y.S.2d 84 ). On a defendant's motion pursuant to CPLR 3211(a)(3) 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" ( New York Community Bank v. McClendon, 138 A.D.3d 805, 806, 29 N.Y.S.3d 507 ; see CPLR 3211[a][3] ; Arch Bay Holdings, LLC–Series 2010B v. Smith, 136 A.D.3d 719, 719, 24 N.Y.S.3d 533 ). "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 52, 60, 13 N.Y.S.3d 163 ; see New York Community Bank v. McClendon, 138 A.D.3d at 806, 29 N.Y.S.3d 507 ).

A plaintiff has standing in a mortgage foreclosure action when it is the holder or assignee of the underlying note, either by physical delivery or execution of a written assignment prior to the commencement of the action with the filing of the complaint (see Aurora Loan Servs., LLC v. Taylor, 25 N.Y.3d 355, 361, 34 N.E.3d 363 ; Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d 683, 684, 37 N.Y.S.3d 25 ). "A ‘holder’ is ‘the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession’ " ( Deutsche Bank Natl. Trust Co. v. Brewton, 142 A.D.3d at 684, 37 N.Y.S.3d 25, quoting UCC 1–201[b][21] ; see Deutsche Bank Natl. Trust Co. v. Webster, 142 A.D.3d 636, 638, 37 N.Y.S.3d 283 ). Where the instrument is endorsed in blank, it may be negotiated by delivery (see UCC 3–202[1] ; 3–204[2] ).

Here, in support of her motion, the defendant submitted, inter alia, a copy of the complaint, to which was annexed a copy of the note and mortgage. The note had been endorsed in blank by First United. The defendant argued that the note and mortgage...