HOF I Grantor Trust 5 v. M&M Props. Ventures LLCHOF I Grantor Trust 5 v. M&M Props. Ventures LLC
Plaintiff‘s Notice of Motion, Affirmation, Affidavits & Exhibits ........................ 1
Answering Defendants’ Notice of Cross-Motion & Affirmation ........................ 2
Plaintiff‘s Affirmation in Opposition to Cross-Motion and in Further Support of Motion & Exhibits .......................................................................... 3
Plaintiff moves for an order granting summary judgment in its favor pursuant to
On August 18, 2021, M&M, a New York limited liability company, executed a mortgage note in the amount of $997,762.50 and a building loan mortgage note in the amount of $314,500.00. On the same day, M&M executed mortgages in favor of plaintiff‘s predecessors as security for the notes, secured by the property located at 18 Twin Ponds Road, Kings Point, New York. Both notes and both mortgages were signed by defendants Rahman and Mathai as agents of M&M. Rahman and Mathai also executed commercial guaranties of the mortgages in their individual capacities. M&M defaulted on the mortgages on May 18, 2023.
Plaintiff was assigned the notes and mortgages pursuant to assignments dated October 12, 2023. Plaintiff‘s motion is supported by affidavits submitted by (1) a director and real estate counsel for Loan Servicer LLC, a loan servicer for plaintiff pursuant to a loan servicing agreement effective October 12, 2023 signed by plaintiff‘s “deputy chief credit officer“; and (2) the vice-president of Superior Loan Servicing, a sub-servicer pursuant to a subservicing agreement entered into with Loan Servicer LLC.
None of the documents submitted by plaintiff reflect the identity of the trustee of plaintiff or that such trustee authorized this action. Nor do the loan servicing agreements expressly provide that either Loan Servicer LLC or Superior Loan Servicing have authority to commence and prosecute legal actions on behalf of the plaintiff—although Loan Servicer is provided authority to execute affidavits necessary for foreclosure proceedings “or other related enforcement actions by Lender ....”
LEGAL ANALYSIS
This court first addresses the cross-motion as it may dispose of the matter.
In their cross-motion to dismiss, the Answering Defendants argue that plaintiff, as a trust, lacks capacity to sue, and this action must therefore be dismissed. Answering Defendants further challenge plaintiff‘s standing on the grounds that the allonges through which the notes were endorsed to plaintiff were not “so firmly affixed thereto as to become part thereof” in accordance with
Even if the allonges were not sufficiently attached to the notes, plaintiff has established its standing in this foreclosure action through proof that the mortgages and notes were assigned to it in writing prior to the commencement of this action. See, e.g., GECMC 2007-C1 Ditmars Lodging, LLC v. Mohola, LLC, 84 A.D.3d 1311 (2d Dept. 2011); Mtge. Stanley Private Bank, N.A. v. Ceccarelli, 210 A.D.3d 478 (1st Dept. 2022). Cf. Deutsche Bank Nat‘l Trust Co. v. Idarecis, 133 A.D.3d 702 (2d Dept. 2015).
Whether plaintiff has capacity to sue as a trust presents a more challenging issue. “Capacity to sue is a threshold matter allied with, but conceptually distinct from, the question of standing. As a general matter, capacity concerns a litigant‘s power to appear and bring its grievance before the court. Capacity to sue can be derived from an express statutory grant, as in the case of a business corporation or unincorporated association, or can be inferred, even in the absence of statutory authority, where the power to sue and be sued is a necessary incident of the party‘s responsibilities. Where there is no statutory authority to sue, and such authority is not necessarily implied from the entity‘s other powers, however, there is no capacity, and a petition or complaint must be dismissed.” Matter of Village of Chestnut Ridge v. Town of Ramapo, 45 A.D.3d 74, 80 (2d Dept. 2007) (internal citations and quotations omitted). A party moving to dismiss based on lack of capacity to sue must make a prima facie showing that the plaintiff lacks such capacity. See Keegan v. Moriarty-Morris, 153 A.D.3d 683 (2d Dept. 2017).
In reply, plaintiff argues that it has standing to sue as the assignee and holder of the notes at issue. Plaintiff further argues that it is a real party in interest based on its holding of the notes and cites to NYCTL 1996-1 Trust v. 209 Holding Corp., 269 A.D.2d 580 (2d Dept. 2000) to support its argument that it has standing. Such argument does not, however, address whether it has capacity to sue, which the courts in NYCTL 1996-1 Trust and Natixis Real Estate Cap. Trust 2007-HE2 also did not address. Instead, the court in Natixis Real Estate Cap. Trust 2007-HE2 found that the applicable documents creating the plaintiff servicing entity gave it authority to sue; but the issue of whether a plaintiff has the capacity to sue as a trust was not addressed.
Plaintiff‘s naked argument that it is not an express trust governed by
Plaintiff here does not point to any other legal basis on which it has capacity to sue. Therefore, while plaintiff may have standing to foreclose on the mortgage at issue, this court is not persuaded that plaintiff has capacity to maintain this action, and the action must be dismissed. See Matter of Village of Chestnut Ridge, 45 A.D.3d at 80; Keegan, 153 A.D.3d at 684; Ronald Henry Land Tr. v. Sasmor, 44 Misc.3d 51 (App. Term 2014); see also
Therefore, plaintiff‘s motion for summary judgment is denied and the cross-motion to dismiss granted. See U.S. Bank, N.A. v. Primiano, 140 A.D.3d 857 (2d Dept. 2016).
Any relief requested not specifically addressed herein is denied.
This constitutes the decision and order of this court.
Dated: October 8, 2025
Mineola, New York
LEONARD D. STEINMAN, J.S.C.