“Lack of Standing” Defense Waived by Not Asserting It In the Answer—“Lack of Standing” Not a Jurisdictional Defect—Sua Sponte Dismissal for “Lack of Standing” Not Warranted

In reversing Supreme Court’s denial of plaintiff-bank’s unopposed motions in a foreclosure action, the Second Department noted that defendant homeowner had waived the “lack of standing” defense by not asserting it in her answer, and, in any event, “lack of standing” is not a jurisdictional defense for which the court’s sua sponte dismissal of the complaint was warranted:

The Supreme Court abused its discretion in, sua sponte, directing the dismissal of the complaint for the plaintiff’s lack of standing. A court’s power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances exist to warrant dismissal … . Here, the court was not presented with extraordinary circumstances warranting sua sponte dismissal of the complaint. [The homeowner] had waived the defense of lack of standing by failing to assert it in her amended answer, which she withdrew in any event, the State waived the defense by serving and filing a limited notice of appearance, and the remaining defendants waived the defense by failing to appear or answer… . Furthermore, a party’s lack of standing does not constitute a jurisdictional defect and does not warrant a sua sponte dismissal of the complaint by the court … . Mortgage Elec. Registration Sys., Inc. v Holmes, 2015 NY Slip Op 06662, 2nd Dept 8-26-15