holding borrower may not bring claim "based upon purported noncompliance with certain provisions of the PSA"Summary of this case from Jacinto v. Ditech Fin. LLC
2013-06986, Index No. 31648/09.
Hinshaw & Culbertson, LLP, New York, N.Y. (Schuyler Kraus and Annemarie D'Amour of counsel), for appellant. Kenneth S. Pelsinger, Levittown, N.Y., for respondents.
Hinshaw & Culbertson, LLP, New York, N.Y. (Schuyler Kraus and Annemarie D'Amour of counsel), for appellant.
Kenneth S. Pelsinger, Levittown, N.Y., for respondents.
RUTH C. BALKIN, J.P., L. PRISCILLA HALL, SHERI S. ROMAN, and JEFFREY A. COHEN, JJ.
Opinion In an action to foreclose a mortgage, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Saitta, J.), dated April 29, 2013, as denied that branch of its motion which was for summary judgment on the complaint insofar as asserted against the defendant Rotimi Erobobo.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the plaintiff's motion which was for summary judgment on the complaint insofar as asserted against the defendant Rotimi Erobobo is granted.
On July 17, 2006, Rotimi Erobobo executed a note to secure a loan from Alliance Mortgage Banking Corporation (hereinafter Alliance), to purchase real property located in Brooklyn. Erobobo gave a mortgage to Alliance to secure that debt, thus encumbering the subject premises. Wells Fargo Bank, N.A. (hereinafter the plaintiff), as trustee for ABFC 2006–OPT3, ABFC Asset–Backed Certificates, Series 2006–OPT3 (hereinafter the trust), alleges that it was assigned the note and mortgage on July 18, 2008. Erobobo allegedly defaulted on the mortgage in September 2009, and, in December 2009, the plaintiff commenced this action against Erobobo, among others, to foreclose the mortgage. Erobobo's pro se answer contained a general denial of all allegations, and set forth no affirmative defenses. The plaintiff thereafter moved for summary judgment on the complaint, submitting the mortgage, the unpaid note, and evidence of Erobobo's default. In opposition, Erobobo, now represented by counsel, contended that the plaintiff lacked standing because the purported July 18, 2008, assignment of the note and mortgage to the plaintiff failed to comply with certain provisions of the pooling and servicing agreement (hereinafter the PSA) that governed acquisitions by the trust, and was thus void under New York law. The plaintiff replied that Erobobo waived his right to assert a defense based on lack of standing by not asserting that defense in his answer or in a pre-answer motion to dismiss the complaint, and that, in any event, Erobobo's contention was without merit.
The Supreme Court concluded that Erobobo's challenge to the plaintiff's possession, or its status as an assignee, of the note and mortgage did not implicate the defense of lack of standing, but merely disputed an element of the plaintiff's prima facie case, i.e., its contention that it possessed or was duly assigned the subject note and mortgage. On the merits, the court concluded that Erobobo raised a triable issue of fact as to whether the purported assignment of the note and mortgage to the plaintiff violated certain provisions of the PSA governing the trust, and was therefore void under EPTL 7–2.4. The plaintiff appeals. We reverse.
The plaintiff established its prima facie entitlement to judgment as a matter of law by producing the mortgage, the unpaid note, and evidence of the defendant's default (see Deutsche Bank Natl. Trust Co. v. Islar, 122 A.D.3d 566, 567, 996 N.Y.S.2d 130 ; Solomon v. Burden, 104 A.D.3d 839, 961 N.Y.S.2d 535 ; Argent Mtge. Co., LLC v. Mentesana, 79 A.D.3d 1079, 915 N.Y.S.2d 591 ; Wells Fargo Bank, N.A. v. Webster, 61 A.D.3d 856, 877 N.Y.S.2d 200 ).
In opposition, Erobobo failed to raise a triable issue of fact. Even affording a liberal reading to Erobobo's pro se answer (see Boothe v. Weiss, 107 A.D.2d 730, 484 N.Y.S.2d 598 ; Haines v. Kerner, 404 U.S. 519, 520–521, 92 S.Ct. 594, 30 L.Ed.2d 652 ), there is no language in the answer from which it could be inferred that he sought to assert the defense of lack of standing. Nor did Erobobo raise this defense in a pre-answer motion to dismiss the complaint. Accordingly, the defendant waived the defense of lack of standing (see CPLR 3211[a] ; [e]; Matter of Fossella v. Dinkins, 66 N.Y.2d 162, 167–168, 495 N.Y.S.2d 352, 485 N.E.2d 1017 ; Bank of N.Y. Mellon Trust Co. v. McCall, 116 A.D.3d 993, 985 N.Y.S.2d 255 ; Aames Funding Corp. v. Houston, 57 A.D.3d 808, 872 N.Y.S.2d 134 ; Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 A.D.3d 239, 244, 837 N.Y.S.2d 247 ), and could not raise that defense for the first time in opposition to the plaintiff's motion for summary judgment (see Wells Fargo Bank Minn., N.A. v. Mastropaolo, 42 A.D.3d at 240, 837 N.Y.S.2d 247 ). In any event, Erobobo, as a mortgagor whose loan is owned by a trust, does not have standing to challenge the plaintiff's possession or status as assignee of the note and mortgage based on purported noncompliance with certain provisions of the PSA (see Bank of N.Y. Mellon v. Gales, 116 A.D.3d 723, 725, 982 N.Y.S.2d 911 ; Rajamin v. Deutsche Bank Natl. Trust Co., 757 F.3d 79, 86–87 [2d Cir.] ).
Erobobo's contention that the plaintiff is not a “holder in due course” of the note and mortgage, as that term is employed in the UCC, is raised for the first time on appeal, and is not properly before this Court for appellate review (see Goldman & Assoc., LLP v. Golden, 115 A.D.3d 911, 912–913, 982 N.Y.S.2d 519 ; Muniz v. Mount Sinai Hosp. of Queens, 91 A.D.3d 612, 618, 937 N.Y.S.2d 244 ).
Accordingly, the Supreme Court should have granted that branch of the plaintiff's motion which was for summary judgment on the complaint insofar as asserted against Erobobo.