Wilmington Sav. Fund Soc'y v. Matamoro
| Decision Date | 20 October 2021 |
| Docket Number | s. 2019-00715,2019-10294,Index No. 10521/14 |
| Parties | Wilmington Savings Fund Society, FSB, etc., respondent, v. Joanne Matamoro, et al., appellants, et al., defendants. |
| Court | New York Supreme Court |
Submitted - January 19, 2021
D67175 T/htr
APPEAL by the defendants Joanne Matamoro and Andreas Jennings, in an action to foreclose a mortgage, from (1) an order of the Supreme Court (David B. Vaughn, J.), dated March 4, 2016, and entered in Kings County, and (2) an order of the same court dated October 31, 2018. The order dated March 4, 2016, denied those defendants' motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them. The order dated October 31, 2018, denied those defendants' motion pursuant to CPLR 2221 for leave to reargue and renew their prior motion.
The Virgo Law Firm, Brooklyn, NY (Samantha Virgo of counsel), for appellants.
Friedman Vartolo, LLP, New York, NY (Zachary Gold of counsel), for respondent.
HECTOR D. LASALLE, P.J. MARK C. DILLON BETSY BARROS FRANCESCA E CONNOLLY, JJ.
This appeal implicates the extent to which there is interplay between a CPLR 3211(a) motion to dismiss in the context of a residential mortgage foreclosure action, the attorney certification requirements of CPLR 3012-b, and the moving party's burden of proof. For reasons analyzed below, we hold that a defendant moving to dismiss a complaint on the ground of the plaintiff's lack of standing does not meet the affirmative burden of proof by merely relying upon any defects that might exist with the certificate of merit submitted by the plaintiff's attorney under CPLR 3012-b, or otherwise, if the certificate of merit fails to address all potential aspects of standing.
On July 18, 2014, the plaintiff commenced this action against the defendants Joanne Matamoro and Andreas Jennings (hereinafter together the defendants), among others, to foreclose a mortgage. The complaint alleged that on March 26, 2007, the defendants executed a note in favor of nonparty Fieldstone Mortgage Company, Inc. (hereinafter Fieldstone), which was secured by a mortgage in favor of nonparty Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for Fieldstone. The complaint further alleged that the defendants failed to make the payments due on the note on April 1, 2012, and thereafter. The complaint alleged that on March 20, 2013, MERS assigned the mortgage and the "indebtedness evidenced by the [n]ote" to nonparty J.P. Morgan Mortgage Acquisition Corp. (hereinafter J.P. Morgan), and that on September 27, 2013, J.P. Morgan assigned the mortgage and the "indebtedness evidenced by the [n]ote" to the plaintiff.
The summons and complaint was accompanied by a certificate of merit pursuant to CPLR 3012-b, which was executed by the plaintiff's counsel on July 15, 2014. Various exhibits were annexed to the certificate of merit, including a purported copy of the note and mortgage dated March 26, 2007, an assignment of the note and mortgage to J.P. Morgan dated March 20, 2013, an assignment of the note and mortgage from J.P. Morgan to the plaintiff dated September 27, 2013, and evidence of various related document recordings.
The defendants did not immediately answer the complaint. Instead, they moved pursuant to CPLR 3211(a)(1), (3), and (7) to dismiss the complaint on various grounds, including that the plaintiff lacked standing. The defendants argued, inter alia, that the plaintiff lacked standing at the time of commencement of the action, as the copy of the note annexed to the certificate of merit did not contain any indorsement or allonge conferring any rights upon the plaintiff. They argued that the chain of assignments was defective because MERS did not have the authority to assign the note. Further, the defendants contended that the certificate of merit contained certain language defects, and that the plaintiff's counsel had failed to ensure that there was a reasonable basis to commence the action, providing an independent basis for the dismissal of the complaint under CPLR 3012-b(e).
In opposition, the plaintiff submitted an affidavit of a representative of its loan servicer, Roundpoint Mortgage Servicing Corporation (hereinafter Roundpoint). The representative established her familiarity with Roundpoint's record-keeping practices, and averred that the note and mortgage had been transferred by assignment to the plaintiff prior to the commencement of the action. A copy of the assignment she relied upon was attached to her affidavit. It was the same assignment from J.P. Morgan to the plaintiff dated September 27, 2013, that had earlier been attached to the certificate of merit. In an affirmation, the plaintiff's counsel also opposed the dismissal motion by arguing that the defendants failed to demonstrate that J.P. Morgan did not have physical possession of the note at the time of its assignment to the plaintiff, and that the dismissal motion was otherwise premature.
In an order dated March 4, 2016, the Supreme Court denied the defendants' motion to dismiss the complaint, determining that the plaintiff had standing by virtue of physically possessing the note which had previously been held by J.P. Morgan. The court made this determination despite the fact that the plaintiff had argued in opposing the defendants' motion to dismiss that it had standing based upon an assignment of the underlying note from J.P. Morgan. The plaintiff had only raised the issue of physical possession of the note as a failure of the defendants' burden of proof.
After their motion was denied, the defendants served a verified answer dated April 22, 2016, containing 19 affirmative defenses and a counterclaim. The affirmative defenses included the plaintiff's lack of standing.
On August 7, 2017, the plaintiff moved for summary judgment on the complaint and an order of reference. In support of the motion, the plaintiff produced, for the first time, a copy of the note with an indorsement in blank executed by a representative of Fieldstone. The defendants cross-moved for summary judgment dismissing the complaint insofar as asserted against them. In an order dated March 20, 2018, the Supreme Court denied both the motion and the cross motion, which order is not on appeal here.
On May 9, 2018, the defendants moved for leave to reargue and renew their prior motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them. They contended, inter alia, that the Supreme Court had misapprehended a fact when it concluded that the plaintiff had physical possession of the note at the time the action was commenced. The defendants' attorney noted in her supporting affirmation that the plaintiff had annexed to the papers in support of their motion for summary judgment a copy of the note that was indorsed in blank by a representative of Fieldstone. She stated that the copy of the note submitted with the motion for summary judgment "was not in likeness of" the copy of the note that accompanied the certificate of merit. In particular, she noted that the copy of the note that accompanied the certificate of merit did not have any indorsement. Parenthetically, this Court has compared the two notes dated March 26, 2007, and but for the indorsement in blank on the latter, finds their form and content to be identical. The defendants maintained that the absence of the indorsement in blank on the version of the note that accompanied the certificate of merit necessitated the dismissal of the action. In opposition, the plaintiff contended, among other things, that the defendants failed to meet their burden of proving the absence of standing in their earlier motion to dismiss, and that in any event, standing had been earlier established through the affidavit of Roundpoint's representative that the note had been assigned to the plaintiff by J.P. Morgan prior to the commencement of the action.
In an order dated October 31, 2018, the Supreme Court denied the motion on the ground that standing had already been addressed by the court's determination of the prior motion and cross motion for summary judgment. Presumably, the court meant that having previously found there to be questions of fact as to standing in denying the parties' motion and cross motion for summary judgment, no basis existed to grant a CPLR 3211(a) dismissal of the complaint upon reargument.
The defendants appeal from both the order dated March 4, 2016, denying their motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against them, and the order dated October 31, 2018, denying their motion for leave to reargue and renew. We affirm, though for reasons different than those relied upon by the Supreme Court.
The enactment of CPLR 3012-b has a somewhat unique history, and appellate courts have had only limited occasions to address its meaning and mechanics.
The bursting of the housing bubble in 2008 caused a significant influx of residential mortgage foreclosure actions in New York courts in the years that followed. Some of those actions reflected "robo-signing" abuses, where foreclosure attorneys filed and served initiatory papers without undertaking the requisite due diligence for determining that the commenced cases had merit (Correspondence of Helene E. Weinstein dated July 19, 2013 Bill Jacket for CPLR 3012-b, L 2013, ch 306, sec 1). Robo-signing resulted in the commencement of actions where the standing of the plaintiffs was not pre-established, if it could be established at all, and caused the creation of "shadow dockets" where many thousands of...
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