Nancy Esposito, etc., respondent, v. John LaMura, appellant, et al., defendants. (2026)

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

Nancy Esposito, etc., respondent, v. John LaMura, appellant, et al., defendants.

2025-01593

Decided: July 29, 2026

CHERYL E. CHAMBERS, J.P. DEBORAH A. DOWLING LILLIAN WAN JAMES P. MCCORMACK, JJ.

Wickham, Bressler, Gordon & Geesa, P.C., Mattituck, N.Y. (Eric J. Bressler of counsel), for appellant. Law Offices of David A. Antwork, P.C., Merrick, N.Y. (Yale Pollack of counsel), for respondent. Upon the defendant's purported default in failing to pay the principal and interest, the decedent commenced this action to foreclose the mortgage. The defendant interposed an answer, which was later amended with leave of the Supreme Court. The amended answer asserted three counterclaims. The first counterclaim was to recover damages for the decedent's alleged bad faith administration of the building loan; it is alleged that the decedent hindered the construction of the single-family home by, among other things, failing to remit payment on a timely basis to builders. The second counterclaim was to recover damages for the conversion of certain personalty that the decedent agreed to hold for the defendant pending completion of the single-family home but thereafter refused to return despite the defendant's demands. The third counterclaim was for reformation of the building loan agreement to eliminate interest on the ground that the decedent allegedly made false promises to the defendant, upon which the defendant relied due to their close personal friendship, that no interest would be charged on the building loan and that documents to the contrary would not be enforced. Generally speaking, in a foreclosure action “[l]eave to amend a caption to substitute an assignee for the plaintiff may properly be granted upon evidence that the mortgage and underlying debt were assigned to the assignee” (Austin 26 Dental Group, PLLC v Sino Northeast Metals (U.S.A.), Inc., 230 AD3d 545, 548; see Nationstar Mtge., LLC v Grunwald, 203 AD3d 1170, 1173). However, for a party “to be relieved from continuing liability after an assignment, the other contracting party ․ not only ha[s] to consent to the assignment, but also ha[s] to accept the assignee ․ in place of the assignor, thereby releasing the assignor” (Taylor Bldg. Mgt., Inc. v Priority Payment Sys., LLC, 91 AD3d 848, 849; cf. J.C. Tarr, Q.P.R.T. v Delsener, 70 AD3d 774, 779).

Argued—January 9, 2026

DECISION & ORDER

In an action to foreclose a mortgage, the defendant John LaMura appeals from an order of the Supreme Court, Suffolk County (Christopher Modelewski, J.), dated February 5, 2025. The order granted the plaintiff's motion pursuant to CPLR 1018 to substitute Strategic Corporate Consulting, Ltd., as the plaintiff in the action and to amend the caption accordingly.

ORDERED that the order is reversed, on the facts and in the exercise of discretion, with costs, and the plaintiff's motion pursuant to CPLR 1018 to substitute Strategic Corporate Consulting, Ltd., as the plaintiff in the action and to amend the caption accordingly is denied.

On or about July 29, 2008, the defendant John LaMura (hereinafter the defendant) entered into a building loan agreement with Frank J. Esposito (hereinafter the decedent) pursuant to which the defendant would receive up to $800,000 for the construction of a single-family home, with the funds to be advanced at such times and in such amounts as the decedent approved, subject to certain other conditions. The defendant agreed to repay the principal advanced under the terms of the building loan agreement, with interest, pursuant to the terms of a building loan mortgage note also dated July 29, 2008. As collateral security for the repayment of the building loan, the defendant executed and delivered to the decedent a mortgage agreement also dated July 29, 2008, which referenced both the building loan agreement and the building loan mortgage note.

Upon the decedent's death, the parties entered into a stipulation amending the caption substituting “Nancy Esposito, Executrix of the Estate of Frank J. Esposito” as the plaintiff in this action.

In March 2022, the plaintiff, as assignor, and Strategic Corporate Consulting, Ltd. (hereinafter Strategic), as assignee, executed an assignment of the mortgage and the “bond(s) or note(s) or obligation(s) described in said mortgage, and the moneys due and to grow due thereon with the interest.” In September 2022, the plaintiff and Strategic executed an assignment of the plaintiff's “right[,] title and interest in and to the within action.”

In December 2024, the plaintiff moved pursuant to CPLR 1018 to substitute Strategic as the plaintiff in the action and to amend the caption accordingly. The defendant opposed the motion. In an order dated February 5, 2025, the Supreme Court granted the motion. The defendant appeals.

“[U]pon any transfer of interest, [an] action may be continued by or against the original parties unless the court directs the person to whom the interest is transferred to be substituted or joined in the action” (Greenpoint Mtge. Funding, Inc. v Recinos, 241 AD3d 796, 797 [internal quotation marks omitted]; see CPLR 1018). “A motion for substitution may be made by the successors or representatives of a party or by any party” (CPLR 1021; see Greenpoint Mtge. Funding, Inc. v Recinos, 241 AD3d at 797). “The determination to substitute or join a party pursuant to CPLR 1018 is within the discretion of the trial court” (Greenpoint Mtge. Funding, Inc. v Recinos, 241 AD3d at 797–798 [internal quotation marks omitted]; see HSBC Bank USA, N.A. v. Gias, 215 AD3d 810, 812).

Here, the defendant asserted multiple counterclaims against the decedent and has not consented to the plaintiff's assignment of its liability under those counterclaims to Strategic. Moreover, at least one of the defendant's counterclaims, to recover damages for the conversion of certain personalty, is wholly independent of the plaintiff's cause of action to foreclose the mortgage. The defendant's counterclaim to recover damages for the decedent's alleged bad faith administration of the building loan likewise could potentially result in recovery by the defendant irrespective of whether the plaintiff prevails on its cause of action to foreclose the mortgage. Under these circumstances, the Supreme Court improvidently exercised its discretion in granting the plaintiff's motion pursuant to CPLR 1018 to substitute Strategic as the plaintiff in the action and to amend the caption accordingly.

CHAMBERS, J.P., DOWLING, WAN and MCCORMACK, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court

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