Opinion
4583-2013
07-23-2018
US BANK NATIONAL ASSOCIATION AS TRUSTEE FOR RASC 2005-AHL 1, Plaintiff(s), v. Carolyn AHMED, "John Doe 1-5" and "Jane Doe 1-5", said names being fictitious, it being the intention of Plaintiff to designate any and all occupants, tenants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the Complaint, Defendant(s).
McCabe, Weisberg & Conway, P.C., Attorneys for Plaintiff, 145 Huguenot Street, Suite 210, New Rochelle, New York 10801 John J. Caracciolo, Esq., Attorney for Defendant, 1 Hewitt Square # 144, East Northport, New York 11731
McCabe, Weisberg & Conway, P.C., Attorneys for Plaintiff, 145 Huguenot Street, Suite 210, New Rochelle, New York 10801
John J. Caracciolo, Esq., Attorney for Defendant, 1 Hewitt Square # 144, East Northport, New York 11731
Peter H. Mayer, J.
Upon the reading and filing of the following papers in this matter: (1) Notice of Motion by the defendant, dated December 30, 2015, and supporting papers; (2) Affirmation in Opposition by the plaintiff, dated February 15, 2016, and supporting papers; (3) Reply Affirmation by the plaintiff, dated March 17, 2016, and supporting papers; (5) Other; and now
UPON DUE DELIBERATION AND CONSIDERATION BY THE COURT of the foregoing papers, the motion is decided as follows: it is
ORDERED that the motion (001) by the defendant, Carolyn Ahmed, which seeks dismissal of the plaintiff's complaint pursuant to CPLR § 213, § 3211 and 3212 is hereby granted; and it is further
ORDERED that counsel for the movant shall promptly serve a copy of this Order upon counsel for all parties via First Class Mail, and shall promptly thereafter file the affidavit of such service with the Suffolk County Clerk.
On June 24, 2005, defendant Carolyn Ahmed executed a Note for a Mortgage in the amount of $318,750 from Home Funds Direct, which was secured as a lien against the property located at 294 Jamaica Avenue, Medford, New York. After Ms. Ahmed's default in timely making loan payments, plaintiff commenced a prior foreclosure proceeding against Ms. Ahmed on March 21, 2006 under Suffolk County index number 8743/2006. Plaintiff later commenced this current foreclosure action by filing of the summons and complaint on February 13, 2013. Defendant now moves for an order dismissing this action with prejudice, on the grounds that this current action is barred by the six-year statute of limitations applicable to foreclosure actions.
Pursuant to CPLR 3211(a)(5), a party may move for dismissal "on the ground that ... the cause of action may not be maintained because of ... [a] statute of limitations." An action to foreclose a mortgage bears a six-year statute of limitations (see CPLR § 213[4] ; 53 PL Realty, LLC v. U.S. Bank Nat. Ass'n , 153 AD3d 894, 61 NYS3d 120 [2d Dept 2017] ; Kashipour v. Wilmington Savings Fund Society, FSB , 144 AD3d 985, 41 NYS3d 738 [2d Dept 2016]. Generally, a mortgage foreclose action may be brought to recover unpaid amounts due within the six-year period immediately preceding the action (see CPLR 213[4] ; Nationstar Mortgage, LLC v. Weisblum , 143 AD3d 866, 39 NYS3d 491 [2d Dept 2016] ).
When a defendant moves to dismiss an action pursuant to CPLR 3211(a)(5) on the ground that it is barred by the statute of limitations, the defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired (see U.S. Bank National Ass'n v. Joseph , 159 AD3d 968, 73 NYS3d 238 [2d Dept 2018] ; Wells Fargo Bank, NA v. Burke , 125 AD3d 765, 5 NYS3d 107 [2d Dept 2015] ). The burden then shifts to the plaintiff to submit evidentiary facts to establish the statute of limitations has not expired, that it is tolled, or that an exception to the limitations period applies (Id. ; Lake v. New York Hosp. Med. Ctr. of Queens , 119 AD3d 843, 989 NYS2d 365 [2d Dept 2014] ; Zaborowski v. Local 74, Serv. Empls. Intl. Union, AFL-CIO , 91 AD3d 768, 936 NYS2d 575 [2d Dept 2012] ; Baptiste v. Harding-Marin , 88 AD3d 752, 930 NYS2d 670 [2d Dept 2011] ; Lessoff v. 26 Court Street Assocs., LLC , 58 AD3d 610, 872 NYS2d 144 [2d Dept 2009] ).
When a mortgage is payable in installments, separate causes of action accrue for each unpaid installment and the statute of limitations begins to run on the date each installment becomes due, unless the mortgage debt is accelerated (see Wells Fargo Bank, N.A. v. Burke , 94 AD3d 980, 943 NYS2d 540 [2d Dept 2012] ; Esther M. Mertz Trust v. Fox Meadow Partners, Ltd. , 288 AD2d 338, 734 NYS2d 77 [2d Dept 2001] ; Wells Fargo Bank, N.A v. Cohen , 80 AD3d 753, 915 NYS2d 569 [2d Dept 2011] ; Loiacono v. Goldberg , 240 AD2d 476, 658 NYS2d 138 [2d Dept 1997] ). However, where an installment payment mortgage is properly accelerated, the entire amount is due and the six year statute of limitations begins to run on the entire mortgage debt (see CPLR 213[4] ; NMNT Realty Corp. v. Knoxville 2012 Trust , 151 AD3d 1068, 58 NYS3d 118 [2d Dept 2017] ; Wells Fargo Bank, N.A. v. Burke , 94 AD3d 980, 943 NYS2d 540 [2d Dept 2012] ; EMC Mtge. Corp. v. Patella , 279 AD2d 604, 720 NYS2d 161 [2d Dept 2001] ; Federal Natl. Mtge. Assn. v. Mebane , 208 AD2d 892, 618 NYS2d 88 [2d Dept 1994] ).
A notice of acceleration served upon the borrower must be "clear and unequivocal" that the lender has elected to accelerate the entire mortgage debt (see Sarva v. Chakravorty , 34 AD3d 438, 826 NYS2d 74 [2d Dept 2006] ; Wells Fargo Bank, N.A. v. Burke , 94 AD3d 980, 943 NYS2d 540 [2d Dept 2012] ). The filing of a foreclosure summons and complaint and lis pendens serves as such notice (see Clayton National, Inc. v. Guldi , 307 AD2d 982, 763 NYS2d 493 [2d Dept 2003] ). Here, the prior action was filed on March 21, 2006, thereby effectively accelerating the mortgage and starting the six-year foreclosure statute of limitations clock on any subsequent action; however, defendant filed a petition for bankruptcy on August 14, 2007, which was dismissed on December 7, 2007 (3 mos, 23 days), and then filed another bankruptcy petition on January 29, 2008, which was dismissed on June 3, 2008 (4 mos, 5 days).
Section 362 of the 1978 Bankruptcy Code provides that the filing of a petition in bankruptcy "operates as a stay, applicable to all entities, of ... the commencement or continuation ... of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title" ( 11 USC § 362 [a][1] ). In addition, CPLR § 204(a) provides that "[w]here the commencement of an action has been stayed by a court or by statutory prohibition, the duration of the stay is not a part of the time within which the action must be commenced" (see U.S. Bank National Assn. v. Joseph , 159 AD3d 968, 73 NYS3d 238 [2d Dept 2018] ; Mercury Capital Corp. v. Shepherds Beach , 281 AD2d 604, 723 NYS2d 48 [2d Dept 2001] ; Torsoe Bros. Constr. Corp. v. McKenzie , 271 AD2d 682, 706 NYS2d 188 [2d Dept 2000] ).
Read in conjunction with CPLR § 204(a), the Bankruptcy Code's automatic stay provision tolls the limitations period for commencement or continuation of a foreclosure action (see U.S. Bank National Assn. v. Joseph , 159 AD3d 968, 73 NYS3d 238 [2d Dept 2018] ; Lubonty v. U.S. Bank National Assn. , 159 AD3d 962, 74 NYS3d 279 [2d Dept 2018). Accordingly, the time period during which bankruptcy stays are in effect are not counted in the calculation of the running of the statute of limitations (id. ). As applied to this case, except for the defendant's bankruptcy filings, the six-year statute of limitations would have run in March 2012. Defendant's combined bankruptcy filings, however, tolled the statute for a total of 7 months and 28 days, thereby extending the limitation period to November 2012. Plaintiff commenced this new action on February 13, 2013, outside the November 2012 limitation period.
In or about March 2012, plaintiff filed a motion to discontinue the prior action and cancel the lis pendens, which was granted by order of the Hon. W. Gerard Asher on July 5, 2012. Plaintiff argues that such discontinuance constituted a de-acceleration of the mortgage within the statute of limitations period, thereby rendering the new action timely commenced.
While a lender may revoke its prior election to accelerate the mortgage, such revocation can only be accomplished through an affirmative act by the lender, provided such revocation is made within the six-year statute of limitations period subsequent to the initiation of the prior foreclosure action, and provided there is no change in the borrower's position in reliance thereon (see Freedom Mortgage Corporation v. Engel , ––– AD3d ––––, ––– NYS3d ––––, 2018 NY Slip Op 05140 [2d Dept 2018] ; Deutsche Bank Natl. Trust Co. v. Adrian , 157 AD3d 934, 69 NYS3d 706 [2d Dept 2018] ; NMNT Realty Corp. v. Knoxville 2012 Trust , 151 AD3d 1068, 58 NYS3d 118 [2d Dept 2017] ; Kashipour v. Wilmington Savings Fund Society, FSB , 144 AD3d 985, 41 NYS3d 738 [2d Dept 2016] EMC Mtge. Corp. v. Patella , 279 AD2d 604, 720 NYS2d 161 [2d Dept 2001] ). A foreclosure action is dismissible where the lender has made no affirmative act of revocation during the six-year statute of limitations period after the complaint was served in the prior foreclosure action in which the lender notified the borrower of its election to accelerate (see Federal Natl. Mtge. Assn. v. Mebane , 208 AD2d 892, 618 NYS2d 88 [2d Dept 1994] ; Golden v. Ramapo Improvement Corp. , 78 AD2d 648, 432 NYS2d 238 [2d Dept 1980] ).
In order to stop the statute of limitations clock from running, a mortgage holder who has elected to accelerate the entire debt may later revoke the acceleration and decelerate the mortgage, thereby returning it to installment status (see Citimortgage, Inc. v. Ramirez , 59 Misc 3d 1212[A], 2018 NY Slip Op 50525[U] [Sup Ct, New York County 2018] ). To be effective in resetting the statute of limitations clock, such revocation or deceleration must satisfy a five (5)-prong test: 1) the revocation must be evidenced by an affirmative act; (2) the affirmative act must be clear and unequivocal; 3) the affirmative act must give actual notice to the borrower that the acceleration has been revoked; 4) the affirmative act must occur before the expiration of the six (6)-year statute of limitations period; and 5) the borrower must not have changed his or her position in reliance on the acceleration (id. ).
Neither the July 5, 2012 Order of Discontinuance, nor the plaintiff's Affirmation in Support of such Order, provides any evidence of a clear, unequivocal affirmative act by plaintiff, which gives actual notice to the defendant that the acceleration had been revoked. This Court finds that the mere voluntary discontinuance of a foreclosure action, standing alone and without further proof expressing plaintiff's intent, does not constitute an affirmative act revoking the acceleration of the mortgage debt (see BSD 265, LLC v. HSBC Bank USA N.A. , 2017 NY Slip Op 31373(U) [Sup Ct, Kings County 2017] ; see also U.S. Bank, N.A. v. Crockett , 55 Misc 3d 1222[A], 61 NYS3d 193 [Sup Ct, Kings County 2017], citing U.S. Bank N.A. v. Martin , 144 AD3d 891, 41 NYS3d 550 [2d Dept 2016] ).
The defendant has established, prima facie, that this action was commenced outside the applicable statute of limitations. Since the plaintiff has failed to make a proper showing of an affirmative act revoking the prior debt acceleration, thereby halting the running of statute of limitations, the complaint filed on February 13, 2013 was outside the applicable six-year limitations period and must be dismissed as untimely (see CPLR 213[4] ; UMLIC VP, LLC v. Mellace , 19 AD3d 684, 799 NYS2d 61 [2d Dept 2005] ; Clayton Natl., Inc. v. Guldi , 307 AD2d 982, 763 NYS2d 493 [2d Dept 2003] ; EMC Mtge. Corp. v. Patella , 279 AD2d 604, 720 NYS2d 161 [2d Dept 2001] ; Federal Natl. Mtge. Assn. v. Mebane , 208 AD2d 892, 618 NYS2d 88 [2d Dept 1994).
This constitutes the Order and Judgment of the Court.