Opinion
23285/09.
Decided October 22, 2010.
Plaintiff, HSBC's counsel, Alissa L. Baader, Esq., Shapiro Dicaro, LLP, Rochester, New York.
Defendant Joseph Squitieri. Pro Se.
By notice of motion filed on June 29, 2010 under motion sequence number one, the above captioned plaintiff (hereinafter "HSBC") moves i) pursuant to CPLR § 3212 for an order granting it summary judgment against defendant Joseph Squitieri (hereinafter "Squitieri), ii) pursuant to CPLR § 3215 for an order granting it default judgment against all parties in default of answering the complaint, iii) for an order of reference pursuant to RPAPL § 1351.
Squitieri appeared pro se and opposes plaintiff's motion. Squitieri also cross moves by notice of motion filed on July 20, 2010 under motion sequence number two to dismiss the complaint i) pursuant to CPLR § 3211 (a) (3) on the basis that the plaintiff lacks the legal capacity to sue, ii) pursuant to § CPLR 3211 (a) (8) on the basis that the court lacks personal jurisdiction over Squitieri, and iii) pursuant to CPLR § 3211 (a) (10) on the basis that plaintiff has failed to join necessary parties. Plaintiff opposes Mr. Squitieri's motion.
BACKGROUND
Plaintiff commenced this action by filing its summons with notice and mortgage foreclosure complaint with the Kings County Clerk's office on September 14, 2009. Squitieri joined issue by his answer filed with the Kings County Clerk's office on December 22, 2009.
MOTION PAPERS
HSBC's motion papers consist of a notice of motion annexed to which there are seven exhibits labeled A through G. Exhibit A contains several documents, the first of which is a note executed by Squitieri as borrower in which he promises to pay $472,000 to lender Delta Funding Corporation. The second document contained within exhibit A is a mortgage executed by Squitieri as mortgagor and Mortgage Electronic Registration Systems ("MERS") "as a nominee for lender [Delta Funding Corporation]". This mortgage document states, "For purposes of recording this mortgage, MERS is the mortgagee of record." The third document contained within exhibit A is an assignment of th mortgage from MERS "as nominee for Delta Funding Corporation" to HSBC. This assignment was entered into on May 30, 2008. The fourth document contained within exhibit A is a loan modification agreement. The fifth and final document contained within exhibit A is a copy of a notice of a mechanic's lien upon the property which is the subject of the instant foreclosure proceeding. Exhibit B contains an affidavit of service of the summons and notice and mortgage foreclosure complaint upon Joseph Squitieri. Exhibit C contains copies of the summons and notice and mortgage foreclosure complaint as well as a copy of the notice of pendency. Exhibit D contains affidavits of service upon Rosana Sciaccia; JAG Heating and Transporting, Inc.; City of New York Parking Violations Bureau; City of New York Environmental Control Board; United States of America; Natasha Edwards as John Doe #
1; Christina A. Edwards as John Doe #
2; Lalen Dingle as John Doe #
3; Elly Dingle as John Doe #
4; Shrell Reid as John Doe #
5; Zawadi Rucks as John Doe #
6. Exhibit E is the answer to the foreclosure complaint of Joseph Squitieri. Exhibit F is a copy of a limited power of attorney executed by HSBC as trustee in which HSBC appoints Ocwen Loan Servicing, LLC as its true and lawful attorney-in-fact for enumerated purposes. Exhibit G is a copy of a default notification letter from Ocwen Loan Servicing, LLC to Joseph Squitieri.
Joseph Squitieri submitted an affidavit of his own in opposition to HSBC's motion.
HSBC submitted an attorney's affirmation in reply to Squitieri's opposition.
Joseph Squitieri's cross-motion papers consist of a notice of cross-motion and an affidavit of Joseph Squitieri.
HSBC submitted an affirmation in opposition to Squitieri's cross motion.
LAW AND APPLICATION
In order to establish prima facie entitlement to summary judgment in a foreclosure action, a plaintiff must submit the mortgage and unpaid note, along with evidence of default. Capstone Business Credit, LLC v. Imperial Family Realty, LLC , 70 AD3d 882 , 895 NYS2d 199 (2nd Dept 2010). The Second Department has also required a showing that the mortgage was valid. Washington Mut. Bank, FA v. Peak Health Club, Inc. , 48 AD3d 793 , 853 NYS2d 112 (2nd Dept. 2008).
In this case, defendant Joseph Squitieri borrowed $472,500 from Delta Funding Corporation on January 11, 2006. The mortgage was recorded in the Office of the City Register, New York City Department of Finance on January 11, 2006. MERS was referred to in the mortgage as nominee of the mortgagee, Delta Funding Corporation, for the purpose of recording the mortgage.
MERS purported to assign the mortgage to plaintiff HSBC on May 30, 2008. The assignment was recorded on May 30, 2008. The assignment was executed by Scott Anderson, Vice President of MERS. However, no resolution or other proof of authority was submitted to the court.
A party cannot foreclose on a mortgage without having title, giving it standing to bring the action. (See Kluge v. Fugazy, 145 AD2d 537, 538 (2nd Dept. 1988), holding that a "foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity". Katz v. East-Ville Realty Co., 249 AD2d 243 (1st Dept. 1998), holding that "[p]laintiff's attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or fact".
"To have a proper assignment of a mortgage by an authorized agent, a power of attorney is necessary to demonstrate how the agent is vested with the authority to assign the mortgage." HSBC BANK USA, NA v. Yeasmin, 19 Misc 3d 1127(A), 866 NYS2d 92 (Table) N.Y.Sup.,2008. "No special form or language is necessary to effect an assignment as long as the language shows the intention of the owner of a right to transfer it". Emphasis added, Id., citing Tawil v. Finkelstein Bruckman Wohl Most Rothman, 223 AD2d 52, 55 (1st Dept 1996); Suraleb, Inc. v. International Trade Club, Inc., 13 AD3d 612 (2nd Dept 2004).
The claim in this case is that the mortgage was assigned by MERS, as the nominee, to plaintiff HSBC. However Plaintiff submits no evidence that mortgagee Delta Funding Corporation authorized MERS to make the assignment. The mortgage itself states that MERS is merely a "nominee". The mortgage document itself is the only document submitted to the court by HSBC which contains any explanation whatsoever of what the appropriate function of MERS might be.
Black's Law Dictionary defines a nominee as "[a] person designated to act in place of another, usually in a very limited way". Agency is a fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. Hatton v. Quad Realty Corp., 100 AD2d 609, 473 NYS2d 827, (2nd Dept 1984). "[A]n agent constituted for a particular purpose, and under a limited and circumscribed power, cannot bind his principal by an act beyond his authority." Andrews v. Kneeland, 6 Cow. 354 N.Y.Sup. 1826.
MERS, as nominee, is an agent of the principal, for limited purposes, and has only those powers which are conferred to it and authorized by its principal. HSBC has failed to present to the court any evidence that MERS was conferred by Delta Funding Corporation power to assign the mortgage.
To allow a purported assignee to foreclosure in the absence of some proof that the original lender authorized the assignment would throw into doubt the validity of title of subsequent purchasers, should the original lender challenge the assignment at some future date.
HSBC has submitted no evidence to demonstrate that the original lender, the mortgagee Delta Funding Corporation, authorized MERS to assign the secured debt to Plaintiff.
Thus, Plaintiff has not made out a prima facie case that it is entitled to foreclose on the mortgage in question. Therefore, its motion for summary judgment against defendant Squitieri is denied.
Plaintiff's motion for a default judgment against the non-answering defendants is also denied because plaintiff has failed to furnish the court with evidentiary proof in admissible form, such as an affidavit of someone with personal knowledge, that the allegations made out against them in the complaint are true. The complaint itself cannot serve as an affidavit because it is verified merely by plaintiff's attorney.
The court now turns to defendant Squitieri's cross-motion. As the court noted above, Mr. Squitieri moves to dismiss the complaint on three separate bases, all contained under CPLR § 3211 (a).
David Siegel, in his practice commentaries to McKinney's Consolidated Laws of New York, Annotated, instructs as follows, "CPLR 3211 § (e) requires that a motion to dismiss a cause of action under CPLR § 3211 (a) be made before service of the responsive pleading is required' . . . When the defendant must respond to a cause of action contained in the complaint that accompanied a summons, the responding time is 20 or 30 days, depending on the place and method of service. If the defendant is responding to a cause of action contained in the complaint that accompanied a summons, the responding time is 20 or 30 days, depending on the place and method of service. If the defendant is responding to a cause of action contained in a subsequent pleading, the responding time is a straight 20 days. These are the rules spelled out by the interplay of CPLR §§ 320 and 3012 . . . These periods, which dictate how long the defendant has to respond, therefore dictate as well how long he has to move to dismiss under CPLR § 3211 in lieu of pleading." ( See, David Siegel, Mckinney's Laws of New York, Annotated, Practice Commentary C3211:52 ).
However, Siegel continues, "The time limitations of CPLR § 3211 (e) operate only on the motion to dismiss a cause of action under subdivision (a). And there are three grounds even under CPLR § 3211 (a) that are excepted from the time requirement. A motion predicated on paragraph 2, 7, or 10 of subdivision (a) may be made at any time — the objections of lack of subject matter jurisdiction, failure to state a cause of action, and failure to join a necessary party — and may be made notwithstanding the service of an answer even though the objection was not even included in the answer as a defense." ( See, David Siegel, Mckinney's Laws of New York, Annotated, Practice Commentary C3211:53 ).
Thus, those parts of defendant Squitieri's cross-motion made pursuant to CPLR §§ 3211 (a) (3) and 3211 (a) 8) are untimely and must be denied, as Mr. Squitieri failed to so move within the time by which his responsive pleading was required to have been served ( See, § CPLR 3211 (e)). However, the court may properly consider that part of his motion made pursuant to CPLR § 3211 (a) (10).
In support of his motion, pursuant to CPLR § 3211 (a) (10), Mr. Squitieri merely states "The true lender has not been made petition in this case, and the Court should not proceed in the absence of that person'".
David Siegel, in his practice commentaries to McKinney's Consolidated Laws of New York, Annotated, instructs as follows, "Paragraph 10 [of CPLR § 3211 (a)] permits a dismissal when it is shown that a person indispensable to the action has not been, and cannot be, made a party. It is the very last step on the long CPLR road that replaces the indispensable party' doctrine of prior law. As the CPLR is set up, this provision should be rarely used. To avoid the often arbitrary results that ensued under prior law, in which an unjoined and unjoinable person could be labeled indispensable' right off and the action quickly dismissed because of his absence, the CPLR even avoids the use of the word indispensable'. It speaks in the softer terms of a person who ought to be' a party. See CPLR § 1001 (a). Most importantly, it unambiguously instructs the court to look very carefully at the case before reaching any decision on the issue. If the person who should be made a party but hasn't been, the court's choice is simply to order him joined. CPLR § 1001(b). This the court can do at any time, on motion or sua sponte. CPLR § 1003. The joinder resolves the problem by the best route possible. It is only where the person is not subject to the court's jurisdiction, and will not appear voluntarily, that the next step is taken. The next step is the court's heaviest obligation. It must examine carefully all of the factors enumerated in CPLR § 1001 (b) to see whether there is any possible procedural alternative it can come up with short of a dismissal and yet fair to parties and nonparties alike. Most often, an imaginative judge can find some alternative and thereby avoid a dismissal. It is only when no fair procedural alternative appears that the further step must be taken by the court: deciding whether such person is really indispensable' to the litigation. The only time a court should dismiss the case for nonjoinder of a person is where a series of factors all coincide: 1) The person is not subject to jurisdiction and will not appear voluntarily; 2) no CPLR § 1001 (b) alternative is available; and 3) such person is so essential to the litigation that it cannot justly proceed in his absence." ( See, David Siegel, Mckinney's Laws of New York, Annotated, Practice Commentary C3211:53 ).
As Squitieri has failed to present to the court anything indicating that the above three requirements for dismissal of an action pursuant to CPLR § 3211 (a) (10) have been met, his cross-motion must be denied.
In summary, plaintiff's motion and defendant's cross motion are denied.
The foregoing constitutes the decision and order of the court.