Wells Fargo Bank, N.A. v. Douglas

• Decision Date: 05 August 2020
• Docket Number: Index No. 18103/11,2016–04241
• Citation: 186 A.D.3d 532,129 N.Y.S.3d 102
• Parties: WELLS FARGO BANK, N.A., etc., Respondent, v. Karl DOUGLAS, etc., et al., Appellants, et al., Defendants.
• Court: New York Supreme Court — Appellate Division

186 A.D.3d 532

129 N.Y.S.3d 102

WELLS FARGO BANK, N.A., etc., Respondent,

v.Karl DOUGLAS, etc., et al., Appellants, et al., Defendants.

2016–04241

Index No. 18103/11

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

Submitted—January 6, 2020

August 5, 2020

Richard V. Kanter, Melville, NY, for appellants.

Knuckles Komosinski & Manfro LLP, Elmsford, N.Y. (Jordan J. Manfro and Brett M. Milchman of counsel), for respondent.

MARK C. DILLON, J.P., SYLVIA O. HINDS–RADIX, JOSEPH J. MALTESE, HECTOR D. LASALLE, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, to rescind a satisfaction of a first mortgage, and to restore the first mortgage, the defendants Karl Douglas and Deborah Douglas appeal from an order of the Supreme Court, Nassau County (Thomas A. Adams, J.), entered February 19, 2016. The order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against those defendants and for an order of reference.

ORDERED that the order is affirmed insofar as appealed from, with costs.

On February 5, 2007, the defendants Karl Douglas and Deborah Douglas (hereinafter together the defendants) obtained a loan from Tribeca Lending Corporation (hereinafter Tribeca) in the amount of $3,050,000 secured by a mortgage held by Mortgage Electronic Registration System (hereinafter MERS), as nominee for Tribeca. In March 2009, the defendants obtained a second mortgage loan in the amount of $100,893.52 from Huntington National Bank (hereinafter Huntington), and executed a "Consolidation, Extension, and Modification Agreement" (hereinafter CEMA), pursuant to which the first and second notes and mortgages were consolidated into a single lien in the sum of $3,117,000. MERS, as nominee for Tribeca, executed a satisfaction of the first mortgage, dated July 6, 2009, reflecting the full satisfaction and discharge of the first mortgage; the satisfaction was filed with the Nassau County Clerk.

By a written assignment dated July 28, 2011, and as evidenced by an undated allonge to the consolidated note reflecting the endorsement by Huntington to the plaintiff, the consolidated note and mortgage were assigned and transferred to the plaintiff. The plaintiff commenced the instant action on December 30, 2011, to foreclose the consolidated mortgage, to rescind the satisfaction of the first mortgage, and to restore the first mortgage. The complaint alleged, inter alia, that the satisfaction of mortgage had been "prepared and executed wholly in error and in actuality the mortgage obligation had never been satisfied, and remains unsatisfied." In their answer, the defendants alleged, inter alia, that the plaintiff lacked standing to foreclose and had failed to allege facts sufficient to warrant vacatur of the satisfaction of mortgage.

The plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendants and for an order of reference. In support, the plaintiff submitted the consolidated mortgage, the unpaid consolidated note, the CEMA, evidence of the defendant's default, and evidence that the plaintiff was in possession of the original note, endorsed specifically to the plaintiff, since March 21, 2011, a date more than nine months prior to the commencement of the action (see U.S. Bank, N.A. v. Cardenas, 160 A.D.3d 784, 71 N.Y.S.3d 368 ; U.S. Bank N.A. v. Ellis, 154 A.D.3d 710, 711, 61 N.Y.S.3d 663 ; U.S. Bank N.A. v. Cruz, 147 A.D.3d 1103, 1104, 47 N.Y.S.3d 459 ; PennyMac Corp. v. Chavez, 144 A.D.3d 1006, 1007, 42 N.Y.S.3d 239 ). The defendants opposed the motion, relying upon, inter alia, the satisfaction of the first mortgage. Determining that the plaintiff established its prima facie entitlement to judgment as a matter of law and that the defendants failed to raise a triable issue of fact in opposition, the Supreme Court granted the motion. The defendants appeal.

Contrary to the defendants' contention, the defendants failed to raise a triable issue of fact which would warrant denial of the plaintiff's motion. "A mortgagee may have an erroneous discharge of mortgage, without concomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgage...