Court Denies Defendants’ Motion To Dismiss In Commercial Foreclosure Action

On September 27, 2024, Justice Margaret A. Chan denied defendants’ motion to dismiss a commercial foreclosure action in Aareal Capital Corp. et al. v. 462BDWy Land, L.P. et al., Index No. 850639/2023. The defendants moved to dismiss based on defective verification and plaintiffs’ alleged lack of standing. The Court denied the motion, explaining:

Here, plaintiffs have sufficiently verified the Complaint. Plaintiffs' verification complies with CPLR 3020 because it was made by an officer of ACC, one of the plaintiffs who is acquainted with the facts of a group of parties united in interest. Furthermore, plaintiffs are united in their legal interest in the outstanding mortgages with each seeking to collect on the requested demand (NYSCEF # 2). And even if plaintiffs were not united in interest, plaintiffs' verification fits within the exception listed under CPLR 3020(d)(l). Specifically, by being a domestic corporation, it is adequate for the verification to be made by an officer thereof to be deemed a verification by the party (CPLR 3020). Plaintiffs' verification here complies with this requirement because it is made by ACC's Managing Director; thus, the Complaint has been adequately verified by a party under CPLR 3020 (see id; NYSCEF # 2).

Conversely, defendants have failed to show that plaintiffs verification triggered the additional requirements of CPLR 3021. As discussed, CPLR 3021's additional requirements only come into play when the affidavit of verification is "made by someone other than the party" (CPLR 3021). But as explained above, because plaintiffs' verification fits within the exception listed under CPLR 3020(d)(l), it is deemed a verification by the party and does not need to fulfill these additional requirements (id; CPLR 3020[d][l]). Accordingly, plaintiffs' verification here is sufficient, and defendants' motion to dismiss on this ground is denied.

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Here, plaintiffs have sufficiently established their standing to foreclose at the pleading stage by alleging that each is the holder of their own Notes on both mortgages and were the holders of such prior to the commencement of the action and the notes are attached as exhibits (see NYSCEF #!s 7·9, 14·16) see also One West Bank FSB v Carey, 104 AD3d 444 [1st Dept 2013]). These notes serve as sufficient evidence that the plaintiffs were the holders of said notes when the action was commenced and sufficient [sic] defeat defendants' motion to dismiss (see Bank of New York Mellon, 162 AD3d at 502 [holding that a copy of note attached to complaint was enough to establish standing to foreclose mortgage]).

The attorneys at Schlam Stone & Dolan litigate foreclosure actions. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such actions.