CitiMortgage, Inc. v. Ramirez

• Decision Date: 24 December 2020
• Docket Number: 531159
• Citation: 192 A.D.3d 70,136 N.Y.S.3d 572
• Parties: CITIMORTGAGE, INC., Appellant, v. Jose RAMIREZ, Respondent.
• Court: New York Supreme Court — Appellate Division

192 A.D.3d 70

136 N.Y.S.3d 572

CITIMORTGAGE, INC., Appellant,

v.Jose RAMIREZ, Respondent.

531159

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

Calendar Date: November 16, 2020

Decided and Entered: December 24, 2020

Akerman LLP, New York City (Jordan M. Smith of counsel), for appellant.

The Legal Project, Albany (Debra J. Willsey of counsel), for respondent.

Before: Garry, P.J., Lynch, Clark, Mulvey and Reynolds Fitzgerald, JJ.

OPINION AND ORDER

Mulvey, J. Appeal from an order of the Supreme Court (Versaci, J.), entered January 15, 2020 in Schenectady County, which granted defendant's motion to dismiss the complaint.

In September 2003, defendant, in exchange for a loan to purchase a residence, executed a note secured by a mortgage on that real property. The note and mortgage were later assigned to plaintiff. After defendant failed to make some payments, on May 5, 2010 plaintiff commenced a foreclosure action against defendant, which Supreme Court (Drago, J.) dismissed on October 30, 2013 for failure to prosecute. In April 2015, Supreme Court (Buchannan, J.) denied plaintiff's motion to vacate the dismissal. In 2017, plaintiff commenced a second foreclosure action. Supreme Court (Versaci, J.) dismissed that action as time-barred, as the statute of limitations on the mortgage foreclosure claim began to run on May 5, 2010 – the date the mortgage was accelerated – and expired in May 2016. The court also discharged the mortgage.

In May 2019, plaintiff commenced the present action, seeking a money judgment against defendant in the amount of the unpaid balance of the note. Defendant moved pre-answer to dismiss the complaint on the grounds that it was barred by, among other things, the doctrine of res judicata and the statute of limitations. Supreme Court, finding that plaintiff is collaterally estopped from relitigating the issue of whether the statute of limitations period was tolled, granted defendant's motion and dismissed the complaint (see CPLR 3211[a][5] ). Plaintiff appeals.

Collateral estoppel does not bar this action. A finding of collateral estoppel requires that "(1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits" ( Conason v. Megan Holding, LLC, 25 N.Y.3d 1, 17, 6 N.Y.S.3d 206, 29 N.E.3d 215 [2015] [internal quotation marks and citations omitted]; see Tydings v. Greenfield, Stein & Senior, LLP, 11 N.Y.3d 195, 199, 868 N.Y.S.2d 563, 897 N.E.2d 1044 [2008] ). However, the doctrine of collateral estoppel "does not apply to bar relitigation of a pure question of law" ( Avon Dev. Enters. Corp. v. Samnick, 286 A.D.2d 581, 582, 730 N.Y.S.2d 295 [2001] ; see American Home Assur. Co. v. International Ins. Co., 90 N.Y.2d 433, 440, 661 N.Y.S.2d 584, 684 N.E.2d 14 [1997] ). Generally, determinations as to statutes of limitations – including which statute applies and whether any toll interrupts the running of the applicable statute – constitute questions of law, although a factual question may exist regarding the proper calculation under the circumstances (see Avon Dev. Enters. Corp. v. Samnick, 286 A.D.2d at 582, 730 N.Y.S.2d 295 ; cf. Tydings v. Greenfield, Stein & Senior, LLP, 11 N.Y.3d at 200, 868 N.Y.S.2d 563, 897 N.E.2d 1044 ; compare Saphir Intl., SA v. UBS PaineWebber Inc., 25 A.D.3d 315, 316, 807 N.Y.S.2d 58 [2006] [noting that, in situations involving discovery of a condition, the statute of limitations issue is a mixed question of law and fact]).

Here, plaintiff does not dispute Supreme Court's determinations that the statute of limitations is six years, that it began to run on May 5, 2010 with the commencement of the first foreclosure action and that plaintiff's acceleration of the mortgage debt and the debt was never decelerated. The question of whether the statute was tolled during the pendency of the first foreclosure action constitutes a purely legal question. Thus, collateral estoppel does not bar relitigation of that question (see Avon Dev. Enters. Corp. v. Samnick, 286 A.D.2d at 582, 730 N.Y.S.2d 295 ).

The doctrine of res judicata also does not preclude this action.¹ Under that doctrine, "a party may not litigate a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter" ( Matter of Hunter, 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269 [2005] ). Under the transactional analysis approach, "once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy" ( id. [internal quotation marks and citations omitted]; see Maki v. Bassett Healthcare, 141 A.D.3d 979, 981, 35 N.Y.S.3d 587 [2016], appeal dismissed, lv dismissed and lv. denied 28 N.Y.3d 1130, 45 N.Y.S.3d 370, 68 N.E.3d 99 [2017] ). "[R]es judicata bars not only those claims that were actually litigated previously, but also those which might have been raised in the former action" ( Bernstein v. State of New York, 129 A.D.3d 1358, 1359, 10 N.Y.S.3d 752 [2015] [internal quotation marks and citations omitted]; accord Piller v. Princeton Realty Assoc. LLC, 173 A.D.3d 1298, 1303, 104 N.Y.S.3d 344 [2019] ). However, "[t]he holder of a note and mortgage may proceed at law to recover on the note or proceed in equity to foreclose on the mortgage, but must only elect one of these alternate remedies" ( Gizzi v. Hall, 309 A.D.2d 1140, 1141, 767 N.Y.S.2d 469 [2003] ; see Kodsi v. Scotto, 170 A.D.3d 1357, 1358, 95 N.Y.S.3d 650 [2019] ; Wells Fargo Bank, N.A. v. Goans, 136 A.D.3d 709, 709, 24 N.Y.S.3d 386 [2016] ). Due to this required election of remedies, plaintiff could not have raised a cause of action to recover on the note in the context of the second foreclosure proceeding. Accordingly, the outcome of that foreclosure proceeding does not have res judicata effect so as to bar the current action to recover on the note.

Moving to the statute of limitations defense, defendant had the initial burden to establish that the statutory time had expired (see Matter of Steinberg, 183 A.D.3d 1067, 1070, 124 N.Y.S.3d 98 [2020] ). If that burden was met, the burden shifted to plaintiff to "raise a question of fact as to whether the statute of limitations has been tolled" ( id. [internal quotation marks and citation omitted]). Whether the present action is viewed as an action on a note secured by a mortgage or as an action on a contractual obligation, the statute of limitations is six years (see CPLR 213[2], [4] ). That statute of limitations commenced on May 5, 2010, when the loan was accelerated by the first foreclosure action, and the loan was never decelerated (see U.S. Bank N.A. v. Creative Encounters LLC, 183 A.D.3d 1086, 1086–1087, 124 N.Y.S.3d 92 [2020], appeal dismissed 35 N.Y.3d 1062, 129 N.Y.S.3d 42, 152 N.E.3d 822 [2020] ). Defendant met his burden of establishing that this 2019 action, commenced more than six years after the statute of limitations began to run, is time-barred absent a tolling provision (see CPLR 213 ).

With the burden shifted, plaintiff relies on the interplay of two statutes to establish a toll. 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." "[T]his rule has strong roots in the equitable principle that plaintiffs should not be penalized for failing to assert their rights when a court or statute prevents them from doing so" ( Lubonty v. U.S. Bank N.A., 34 N.Y.3d 250, 258, 116 N.Y.S.3d 642, 139 N.E.3d 1222 [2019] ). "[A] toll operates to compensate a claimant for the shortening of the statutory period in which it must commence – or recommence – an action, irrespective of whether the stay has actually deprived the claimant of any opportunity to do so" ( id. at 256, 116 N.Y.S.3d 642, 139 N.E.3d 1222 [emphasis omitted]). Courts have held that a statute that acts as a ...