On March 18, 2015, Justice Whelan of the Suffolk County Commercial Division issued a decision in HSBC Bank USA, NA v. Symons, 2015 NY Slip Op. 50339(U), discussing the requirement to plead standing in a mortgage foreclosure action.
In HSBC Bank, the plaintiff, which already had been granted judgment by default in a mortgage foreclosure action against the defendant, moved “for an order granting it leave to amend its complaint to add the allegation that the plaintiff or plaintiff’s agent was in possession of the note at the commencement of the action.” Plaintiff’s justification for the motion was that it wanted “in an abundance of caution to clarify the plaintiff’s compliance with pleading requirements” by specifically alleging that it owned the note and mortgage at the time it commended the action. The court denied the motion, explaining:
Contrary to the contentions of counsel, neither equity nor case law warrant the granting of this motion and there are no statutory or other pleading requirements mandating that the plaintiff allege that it or its agent is the owner of the note and mortgage at the time of the commencement of this action. For it is well established that entitlement to a judgment of foreclosure is established, as a matter of law, where the plaintiff produces both the mortgage and unpaid note, together with evidence of the mortgagor’s default. This standard is, however, enlarged to include a demonstration that the plaintiff is possessed of the requisite standing to pursue its claims where, and only where, the defense of standing is due and timely asserted by a defendant possessed of such defense.
The last stated rule is discernible from the general precept that the standing of a plaintiff is not an element of his or her claim. This is particularly evident in the mortgage foreclosure arena wherein recent appellate case authorities have repeatedly held that a lack of standing is merely an affirmative defense which must be timely raised by a defendant possessed of such defense or it is waived. . . . .
Recent appellate case authorities have repeatedly instructed that once a standing defense has been waived, it may not be resurrected by its assertion in opposition to a motion for summary judgment. Nor may it be used in support of an untimely motion to dismiss pursuant to CPLR 3211. Nor may a waived standing defense be asserted by a party in default in support of an application to vacate such default under CPLR 5015(a)(1).
(Internal quotations and citations omitted) (emphasis added). This decision shows the importance of timely pleading lack of standing as an affirmative defense if the facts warrant.