It is ordered that this motion by the plaintiff for partial summary judgment on its first cause of action against defendant Flynn and for dismissal of the affirmative defenses and counterclaims asserted in his answer is considered under CPLR 3212 and RPAPL article 13 and is granted.
On November 21, 2008 the plaintiff commenced this hybrid action to foreclose a February 26, 2007 mortgage given by defendant Flynn to secure a note of the same date in the amount of $2,000,000 in connection with his purchase of residential real property located in the Town of Southampton. In the separate, second cause of action set forth in its complaint, the plaintiff demands declaratory relief pursuant to RPAPL 1501 to effect an extinguishment or subordination of the liens and encumbrances owned by the remaining known defendants listed in the caption. For the reasons set forth below, the instant motion, which is limited to a demand for partial summary judgment on the plaintiffs first cause of action against the mortgagor defendant Flynn, is granted.
It is well established that a plaintiff who seeks summary judgment on its claims for foreclosure and sale establishes a prima facie case for such relief by production of copies of the mortgage, the unpaid note and evidence of a default under the terms thereof (see CPLR 3212; RPAPL 1321; North Bright Capital, LLC v 705 Flatbush Realty, LLC,
It was thus incumbent upon Flynn to submit proof that factually rebuts the plaintiffs prima facie showing or demonstrates that one or more of the affirmative defenses asserted in his answer requires a trial (see Neighborhood Hous. Servs. of N.Y. City, Inc. v Meltzer,
Flynn’s first asserted defense, namely, that the plaintiff lacks standing or the capacity to sue by reason of its non-ownership of the subject note and mortgage, is refuted by the record. It is well settled law that in cases wherein “the plaintiff is the assignee of the mortgage and underlying note at the time the foreclosure action was commenced, the plaintiff has standing to maintain the action” (Countrywide Home Loans, Inc. v Gress,
Flynn’s challenges to the ineffectiveness of the assignment by Mortgage Electronic Registration Systems, Inc. (MERS), the nominee of the original lender, are unavailing. Flynn alleges that the MERS assignment did not effect a valid transfer of the note, notwithstanding its recitation of an assignment of the note, as well as the mortgage, because MERS never had an ownership interest in the note at the time of the assignment. The plaintiff counters by relying on the language of the mortgage indenture itself which names MERS as mortgagee of record and nominee of the lender, its successors and assigns, and confers upon it broad authority to act with respect to the mortgage in all ways that the original lender, its successors and assigns could act, including the right to foreclose, and to take any action required of the lender, including, but not limited, to releasing or discharging the mortgage.
Some support for the plaintiffs claim that the language of the mortgage itself confers standing upon a foreclosing plaintiff can be found in the case of Mortgage Elec. Registration Sys., Inc. v Coakley (
*805 “Morever, further support for MERS’s standing . . . may be found on the face of the mortgage instrument itself . . . Coakley expressly agreed without qualification that MERS had the right to foreclose in the event of a default (see Fairbanks Capital Corp. v Nagel,289 AD2d 99 , 100 [2001]; Airlines Reporting Corp. v S & N Travel,238 AD2d 292 , 293 [1997]; College Mgt. Co. v Belcher Oil Co. of NY.,159 AD2d 339 , 341 [1990])” (id. at 675).
This court is aware of only one other New York appellate case authority wherein the court addressed the propriety of the prosecution of a mortgage foreclosure action by a nominee or other agent of the owner of the note and mortgage at the time of the commencement of the action. In Fairbanks Capital Corp. v Nagel (
In a more recent case entitled Crum v LaSalle Bank, N.A. (— So 3d —,
The defendant’s reliance upon Matter of Merscorp, Inc. v Romaine (
The notable trial court decision issued in LaSalle Bank Natl. Assn. v Lamy (
This court finds that where, as here, an entity such as MERS is identified in the mortgage indenture as the nominee of the lender and as the mortgagee of record and the mortgage indenture confers upon such nominee all of the powers of such lender, its successors and assigns, a written assignment of the note and mortgage by MERS, in its capacity as nominee, confers good title to the assignee and is not defective for lack of an ownership interest in the note at the time of the assignment. In such cases, MERS is acting as the nominee of the owner of the note and of the mortgage, in which MERS is additionally designated as the mortgagee of record. No disconnect between the note and mortgage occurs when MERS acts, at the time of the assignment, as the nominee of the original lender or a successor owner or holder of the note and mortgage. Consequently, a MERS assignment does not violate this State’s long-standing rule that a transfer of a mortgage without a concomitant transfer of the debt is void (see Merritt v Bartholick,
Here, the plaintiff established that the written assignment of the note and qualifying mortgage by MERS, as nominee of the original lender, was complete and predated the commencement of this action. The defendant’s claim that the plaintiffs assignment was defective due to the lack of an ownership interest in the note on the part of the assignor, MERS, is thus rejected as unmeritorious. Flynn’s first affirmative defense containing a challenge to the plaintiffs standing and/or capacity to sue is thus dismissed.
The remaining affirmative defenses asserted in the answer of defendant Flynn are similarly without merit. Flynn’s conclusory claims that the statute of frauds, the doctrine of unclean hands, that the plaintiffs damages were caused by its own wrongful conduct and that documentary evidence bars the plaintiffs claims for foreclosure and sale are belied or unsupported by the record and are otherwise without basis in fact or law. Moreover, the plaintiffs contention that Flynn effectively abandoned these affirmative defenses by his failure to assert them in opposition to the plaintiffs motion is meritorious. Accordingly, affirmative defenses numbered second through fifth set forth in Flynn’s answer are dismissed.
The record adduced on this motion sufficiently established that none of the counterclaims asserted in the defendant’s answer have merit and no factual issues requiring a trial were raised by Flynn’s opposing papers. Flynn’s first counterclaim, which contains no affirmative demands for relief, alleges that the plaintiff lacks standing because it failed to notify him of the assignment of the mortgage. Such a claim presumes a duty on the part of the plaintiff to undertake such notification. However, no such duty exists. The plain language of the mortgage indenture itself advised Flynn of the possibility of future assignments and of the fact he would not necessarily receive notice thereof. The first counterclaim is thus wholly lacking in merit.
Finally, the court rejects Flynn’s newly asserted demand for a settlement conference. The plaintiff has demonstrated that defendant Flynn is not entitled to a mandatory conference of the type contemplated by the provisions of CPLR 3408 (see LaSalle Bank N.A. v Novetti,
In view of the foregoing, the instant motion is granted. Partial summary judgment in favor of the plaintiff against the answering defendant Flynn on the plaintiffs first cause of action for a judgment of foreclosure and sale is hereby granted.
Notes
Noted parenthetically is that this long-standing New York rule is at odds with the generally prevailing common-law rule that a transfer of the mortgage also transfers the debt unless the parties otherwise agree or such transfer is precluded by an applicable provision of the Uniform Commercial Code (see Restatement [Third] of Property [Mortgages] § 5.4 [b]).