MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC v. COAKLEY (2007)

In an action to foreclose a mortgage, the defendant Carrie Coakley appeals from an order of the Supreme Court, Suffolk County (Emerson, J.), dated January 23, 2006, which denied her motion pursuant to CPLR 3211(a) to dismiss the complaint on the ground, inter alia, that the plaintiff lacked standing to commence the action.

ORDERED that the order is affirmed, with costs.

In August 2005, the plaintiff, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), commenced this action to foreclose a mortgage made by the defendant Carrie Coakley in favor of First National Bank of Arizona (hereinafter First National) dated January 8, 2005, to secure her indebtedness in the sum of $1,495,000 pursuant to a promissory note dated January 7, 2005, with respect to the premises known as 98 Bridies Path, Southampton, New York (hereinafter the premises).   Coakley moved pursuant to CPLR 3211(a) to dismiss the complaint on the ground, inter alia, that MERS lacked standing to commence the foreclosure action.   The Supreme Court disagreed and denied the motion.   We affirm.

Contrary to the defendant's contentions, the promissory note was a negotiable instrument within the meaning of the Uniform Commercial Code (hereinafter UCC) (see UCC 3-104;  Slutsky v. Blooming Grove Inn, 147 A.D.2d 208, 212, 542 N.Y.S.2d 721).   The record shows that the promissory note was indorsed by First National over to the First National Bank of Nevada, then indorsed by First National Bank of Nevada in blank, and ultimately transferred and tendered to MERS.   Therefore, at the time of the commencement of this action, MERS was the lawful holder of the promissory note (see UCC 3-204[1];  Franzese v. Fidelity N.Y. FSB, 214 A.D.2d 646, 625 N.Y.S.2d 275), and of the mortgage, which passed as an incident to the promissory note (see Payne v. Wilson, 74 N.Y. 348, 354-355;  see also Weaver Hardware Co. v. Solomovitz, 235 N.Y. 321, 139 N.E. 353;  Matter of Falls, 31 Misc. 658, 660, 66 N.Y.S. 47, affd. 66 App.Div. 616, 73 N.Y.S. 1134).   Accordingly, MERS had standing to bring the action.

Moreover, further support for MERS's standing to commence the action may be found on the face of the mortgage instrument itself.   Pursuant to the clear and unequivocal terms of the mortgage instrument, Coakley expressly agreed without qualification that MERS had the right to foreclose upon the premises in the event of a default (see Fairbanks Capital Corp. v. Nagel, 289 A.D.2d 99, 100, 735 N.Y.S.2d 13;  Airlines Reporting Corp. v. S & N Travel, 238 A.D.2d 292, 293, 656 N.Y.S.2d 299;  College Mgt. Co. v. Belcher Oil Co. of N.Y., 159 A.D.2d 339, 341, 552 N.Y.S.2d 616).

The defendant's remaining contentions are without merit.