Supreme Court, Appellate Division, Second Department, New York.

WELLS FARGO BANK MINNESOTA, National Association, as Trustee, without Recourse, Plaintiff-Appellant, v. Joseph MASTROPAOLO, Defendant- Respondent. No. 2006-00417. April 3, 2006. Appellant's Reply Brief Samit G. Patel, Esq., Fein, Such & Crane, LLP, Attorneys for Plaintiff-Appellant, Wells Fargo Bank Minnesota, National Association, as Trustee, Without Recourse, 747 Chestnut Ridge Road, Suite 200, Chestnut Ridge New York 10977, (845) 371-4700. APPELLANT'S REPLY BRIEF TABLE OF CONTENTS ARGUMENT ... 1 I. THE TRIAL COURT ABUSED ITS DISCRETION IN DISMISSING APPELLANT'S COMPLAINT FOR LACK OF STANDING SINCE RESPONDENT WAIVED THIS DEFENSE ... 1 II. THE TRIAL COURT ERRED IN DISMISSING THE ACTION WITH PREJUDICE ... 4 ARGUMENT I. THE TRIAL COURT ABUSED ITS DISCRETION IN DISMISSING APPELLANT'S COMPLAINT FOR LACK OF STANDING SINCE RESPONDENT WAIVED THIS DEFENSE. Respondent alleges that according to certain cases, the trial court has discretion to dismiss the complaint for lack of standing as "standing goes to the jurisdictional basis of a court's authority to adjudicate a dispute." Axelrod v. New York State Teachers' Retirement System, 154 A.D.2d 827, 546 N.Y.S.2d 489 (3d Dep't. 1989); Eaton Associates, Inc. v. Egan, 142 A.D.2d 330, 535 N.Y.S.2d 998 (3d Dep't. 1988); Stark v. Goldberg, 297 A.D.2d 203, 746 N.Y.S.2d 280 (1st Dep't. 2002). In all of these cases, the actions were dismissed sua sponte for lack of standing due to lack of injury or grievance to the claimants. Axelrod, 546 N.Y.S.2d at 489; Eaton Associates, Inc., 535 N.Y.S.2d at 998; Stark, 746 N.Y.S.2d at 280. [FN1] FN1. The Stark action was "properly subject to sua sponte dismissal despite the lack of any assertion by defendants of an objection to plaintiffs' standing." 746 N.Y.S.2d at 280 (emphasis added). The corresponding quote in Respondent's Brief conveniently omitted the emphasized word "any". This word suggests that there was absolutely no assertion of lack of standing by defendants, in Stark. However, here the record reveals that respondents did raise such an objection in their Affirmation in Opposition to Appellant's Summary Judgment Motion, which objection precludes a sua sponte dismissal. Here, the defense raised by Respondent in his Affirmation in Opposition to Appellant's Summary Judgment Motion ("Affirmation in Opposition") is not jurisdictional. As discussed in Appellant's Brief, pages 5 through 7, Respondent alleged in his Affirmation in Opposition that Appellant was not entitled to sue by virtue of not having "legal title" to the mortgage. This is exactly the defense set forth in CPLR s. 321 l(a)(3). It is respectfully submitted that if the intent of the legislature was to deem this particular defense to be jurisdictional, as alleged by Respondent, then CPLR s. 321 l(a) (3) would not exist, and instead the "lack of legal capacity to sue" defense would fall within, for example, CPLR s. 3211(a)(2), for lack of subject matter jurisdiction. The fact is, "lack of legal capacity to sue" under CPLR s. 3211(a)(3), is a defense separate altogether from lack of subject matter jurisdiction (or lack of any jurisdiction), just as the legislature intended. If CPLR s. 3211(a)(3) does not apply in this case, then when, if ever, would it apply? Additionally, unlike the facts of the cases cited by Defendant, here the trial court did not sua sponte dismiss the action for lack of standing and here there is no issue

regarding lack of injury or grievance on Plaintiffs part. Instead, Respondent actually filed an Answer contesting the foreclosure action, which Answer also failed to raise the defense of lack of standing. Afterwards, respondent filed an Affirmation in Opposition in which Respondent for the first time, raised the defense of lack of standing to the Court for a determination. Thus, the Trial Court was obliged to entertain Respondent's defense of lack of standing only insofar as that defense was presented in his Affirmation in Opposition. Thus, in contrast to the cases cited by Respondent, the Trial Court here did not on its own motion decide that Appellant lacked standing. The Trial Court should not have considered that defense on its merits as Respondent waived it. Under Respondent's reasoning, a trial court can dismiss an action sua sponte for any of the grounds set forth in CPLR s. 3211(a) even if such grounds are not raised in an Answer, as may be required by CPLR s. 3211(e). See also, Eschen Steel & Iron Works Co., Inc. v. Brady & Co., 94 A.D.2d 605, 461 N.Y.S.2d 843, 844 (1st Dep't. 1983) (holding that Special Term erred in dismissing, on its own motion, a complaint as time barred in absence of any such defense pleaded in the answer). The consequence would be a complete nullification of: CPLR s. 3211(e), the legislature's intent in enacting said provision, and the public interest in avoiding, inter alia, otherwise costly and unnecessary litigation. There are separate subdivisions to CPLR s. 321 (e) for a reason, and this Court should find that pursuant to subdivision 3 that section, Respondent waived the defense of lack of standing. II. THE TRIAL COURT ERRED IN DISMISSING THE ACTION WITH PREJUDICE. Respondent alleges that "[t]he Court below was within its discretion to dismiss the Complaint with prejudice", citing Mansfield Contracting Corp. v. Prassas, 183 A.D.2d 878, 584 N.Y.S.2d 129 (2d Dep't. 1992), and Suciu v. City of New York, 239 A.D.2d 338, 657 N.Y.S.2d 1007 (2d Dep't. 1997). However, Respondent fails to point out that both of the cited cases were dismissed with prejudice by the trial court due to a "five-year delay" in Suciu, supra, and a "five-year period of inactivity" in Mansfield Contracting Corp., supra. Here, as stated in Appellant's Brief, Appellant did not incur any such delay. The cases cited by Respondent are simply based on facts (specifically, the length of any alleged delay) entirely different than those in the instant case, and thus those cases obviously had different outcomes. Respondent cannot suggest that any delay incurred herein was on the order of years or even months. Notwithstanding any such alleged delay, the trial court here failed to perform any analysis whatsoever which would explain to the parties, the reason why the action was dismissed with prejudice. Thus, it is respectfully submitted that the action in the trial court should not have been dismissed with prejudice. WHEREFORE, for the foregoing reasons, Appellant respectfully requests that this Court reverse the Order of the Supreme Court, County of Richmond, denying Plaintiffs motion for summary judgment, so as to grant Plaintiff summary judgment and that this Court remand the case to allow Plaintiff to complete the foreclosure action; or, in the alternative, Appellant respectfully requests that this Court reverse that portion of said Order dismissing the action with prejudice, and grant Plaintiff leave to file a new action. Appendix not available.