UPON DUE DELIBERATION AND CONSIDERATION BY THE COURT of the foregoing papers, the motion is decided as follows: it is

ORDERED that the motion by the plaintiff, U.S. Bank National Association, as Trustee for [*2]Securitized Asset Backed Receivables LLC Trust 2006-NC1, for an order of reference in this mortgage foreclosure action is denied, with leave to renew upon proper papers, which comply with the requirements set forth in CPLR 3215(f), including but not limited to an affidavit of merit by a party and copies of all assignments of the subject mortgage, sufficient to establish the plaintiff's ownership rights in the subject mortgage at the time the action was commenced; and it is further

ORDERED that movant shall serve a copy of this Order upon all appearing parties, or their attorney(s) if represented by counsel, pursuant to CPLR 2103(b)(l), (2) or (3), and shall thereafter file the affidavit(s) of service with the Clerk of the Court; and it is further

ORDERED that a copy of this Order and proof of service of same shall be annexed as exhibits to any motion to renew.

With regard to the proof necessary on an application for judgment by default, CPLR 3215(f) states, in relevant part, that "[o]n any application for judgment by default, the applicant shall file proof of service of the summons and the complaint . . . and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party . . . Where a verified complaint has been served, it may be used as the affidavit of the facts constituting the claim and the amount due; in such case, an affidavit as to the default shall be made by the party or the party's attorney." With regard to a judgment of foreclosure, an order of reference is simply a preliminary step towards obtaining such a judgment (Home Sav. of Am., F.A. v. Gkanios, 230 AD2d 770, 646 NYS2d 530 [2d Dept 1996]).

In this matter, the plaintiff's proofs include an affidavit of facts by Sean Nix, Attorney-in-Fact of Wells Fargo Home Mortgage, the purported servicing agent of the plaintiff; however, neither Sean Nix, nor Wells Fargo Home Mortgage are parties to this action and there is no evidence that either is authorized to act on behalf of the plaintiff for purposes of satisfying the proofs required by statute. Without an affidavit by the plaintiff regarding the facts constituting the claim and amounts due or, in the alternative, an affidavit by the plaintiff that its agent has the authority to set forth such facts and amounts due, the statutory requirements are not satisfied (see, CPLR §3215[f]). In the absence of either a proper affidavit by the party or a complaint verified by the party, not merely by an attorney with no personal knowledge, the entry of judgment by default is erroneous (see, Peniston v Epstein,10 AD3d 450, 780 NYS2d 919 [2d Dept 2004]; Grainger v Wright, 274 AD2d 549, 713 NYS2d 182 [2d Dept 2000]; Finnegan v. Sheahan, 269 AD2d 491, 703 NYS2d 734 [2d Dept 2000]; Hazim v. Winter, 234 AD2d 422, 651 NYS2d 149 [2d Dept 1996]; Mullins v. DiLorenzo, 199 AD2d 218; 606 NYS2d 161 [1st Dept 1993]). Therefore, the plaintiff's motion must be denied.

Even if there were a proper affidavit from the plaintiff, the flaws in the assignment of mortgage would also preclude the granting of an order of reference at this time. The moving papers establish that the original lender stated in the subject December 1, 2005 mortgage was Continental Mortgage Bankers, Inc. DBA Financial Equities ("Lender"). Under the provisions of the mortgage, Mortgage Electronic Registration Systems, Inc. ("MERS") is stated to be "a separate corporation that is acting solely as nominee for Lender and Lender's successors and assigns." In that capacity, the [*3]mortgage also empowers MERS, "if necessary to comply with law or custom ... (A) to exercise any or all of those rights [of the Lender], including, but not limited to, the right to foreclose and sell the Property; and (B) to take any action required of the Lender including, but not limited to, releasing and canceling this Security Instrument."

Pursuant to the mortgage provisions, "MERS, Inc. as Nominee for Continental Mortgage Bankers, Inc. D/B/A Financial Equities" ("MERS/Continental") purportedly assigned the mortgage to the plaintiff on January 4, 2007. The Notice of Pendency and Complaint, however, were filed on January 3, 2007, prior to the date of assignment. Therefore, the plaintiff did not have an ownership interest in the subject mortgage at the time of the filing. A plaintiff has no foundation in law or fact to foreclose upon a mortgage in which the plaintiff has no legal or equitable interest (Katz v East-Ville Realty Co., 249 AD2d 243, 672 NYS2d 308 [1st Dept 1998]). Although language in the purported assignment states that the assignment is "effective as of July 14, 2006," such attempt at retroactivity is insufficient to establish the plaintiff's ownership interest at the time the action was commenced. Indeed, foreclosure of a mortgage may not be brought by one who has no title to it and absent an effective transfer of the debt, the assignment of the mortgage is a nullity (Kluge v Fugazy, 145 AD2d 537, 536 NYS2d 92 [2d Dept 1988]).

The Court also notes that the assignment was executed by Jessica Diglio with apparent authority for MERS/Continental, "by Druckman & Sinel, LLP as Attorney in Fact for MERS, Inc. a/k/a MERS." First, the plaintiff submits no Power of Attorney or other evidence to show that Druckman & Sinel, LLP is authorized to execute the assignment on behalf of MERS. Second, despite holding itself out to be the attorney-in-fact for MERS, Druckman & Sinel, LLP is counsel for plaintiff in this action. Notably, in addition to naming the borrowers as defendants, this action names MERS/Continental as a defendant and subordinate mortgagee. The perception, therefore, is that Druckman & Sinel, LLP has placed itself in the unfortunate position of dual and conflicting representative capacities, in that it transferred ownership rights of the subject property from its former client (defendant MERS/Continental) to its current client (the plaintiff) and then sued the former client for the benefit of the current client. Under such circumstances, Druckman & Sinel, LLP is exhorted to follow the Disciplinary Rules and Ethical Considerations applicable to conflicts of interest.

This constitutes the Decision and Order of the Court.

Dated:

Peter H. Mayer, J.S.C.