Everhome Mortgage Company v. Aber

• Decision Date: 09 June 2021
• Docket Number: 2017–07729,Index No. 507839/15
• Citation: 195 A.D.3d 682,151 N.Y.S.3d 55
• Parties: EVERHOME MORTGAGE COMPANY, etc., appellant, v. Nuchem ABER, et al., respondents, et al., defendants.
• Court: New York Supreme Court — Appellate Division

195 A.D.3d 682

151 N.Y.S.3d 55

EVERHOME MORTGAGE COMPANY, etc., appellant,

v.Nuchem ABER, et al., respondents, et al., defendants.

2017–07729

Index No. 507839/15

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

Argued—February 4, 2020

June 9, 2021

McGlinchey Stafford, PLLC, New York, N.Y. (Kristen D. Romano of counsel), for appellant.

Zeltser Law Group, PLLC, Brooklyn, N.Y. (Naomi Zeltser and Kenneth Berman of counsel), for respondents.

MARK C. DILLON, J.P., ROBERT J. MILLER, BETSY BARROS, FRANCESCA E. CONNOLLY, VALERIE BRATHWAITE NELSON, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Kings County (Noach Dear, J.), dated June 6, 2017. The order granted the motion of the defendant Equity Recovery Corporation pursuant to CPLR 3211(a)(5) to dismiss the amended complaint insofar as asserted against it as time-barred, to cancel a notice of pendency filed against the subject property, and for summary judgment on its counterclaim pursuant to RPAPL article 15 to cancel and discharge of record the mortgage, and denied, as academic, the plaintiff's cross motion, inter alia, for summary judgment on the amended complaint insofar as asserted against the defendants Nuchem Aber and Equity Recovery Corporation, to strike their answer and dismiss their counterclaims, and for an order of reference.

ORDERED that the order is affirmed, with costs.

I. Introduction

On this appeal, we consider whether the plaintiff raised a genuine question of fact in opposition to the motion of the defendant Equity Recovery Corporation (hereinafter Equity) for dismissal of the amended complaint as time-barred (see CPLR 3211[a][5] ) and for summary judgment on its counterclaim pursuant to RPAPL article 15 to cancel and discharge of record the mortgage (see CPLR 3212 ). For the reasons stated herein, the Supreme Court properly determined, inter alia, that the plaintiff failed to meet its burden.

II. Facts

In April 2003, the defendant Nuchem Aber executed a note in the sum of $368,000 in favor of Fairmont Funding, Ltd. (hereinafter Fairmont), which was secured by a mortgage on residential property. Aber allegedly failed to make monthly payments due May 1, 2008, and thereafter. On or about April 13, 2009, Fairmont purportedly assigned the note to the plaintiff. On April 30, 2009, the plaintiff commenced a foreclosure action against, among others, Aber (hereinafter the first action). On December 30, 2009, the subject property was transferred to Equity. By order dated October 3, 2013, the Supreme Court directed dismissal of the first action without prejudice based upon the plaintiff's failure to appear for a court conference.

On June 24, 2015, the plaintiff commenced this second foreclosure action (hereinafter the second action) against, among others, Aber and Equity (hereinafter together the defendants). The following day, the plaintiff filed an amended summons and an amended complaint. Aber and Equity served an amended answer asserting, inter alia, a defense based upon the expiration of the statute of limitations, and a counterclaim pursuant to RPAPL article 15 to cancel and discharge of record the mortgage. Thereafter, Equity moved pursuant to CPLR 3211(a)(5) to dismiss the amended complaint insofar as asserted against it as time-barred, to cancel the notice of pendency, and for summary judgment on its counterclaim. The plaintiff cross-moved, inter alia, for summary judgment on the amended complaint insofar as asserted against the defendants, to strike their answer and dismiss their counterclaims, and for an order of reference. In an order dated June 6, 2017, the Supreme Court granted Equity's motion and denied the plaintiff's cross motion as academic. The plaintiff appeals, and we affirm.

III. Analysis

"An action to foreclose a mortgage is subject to a six-year statute of limitations" ( Bank of N.Y. Mellon v. Craig, 169 A.D.3d 627, 628, 93 N.Y.S.3d 425 ; see CPLR 213[4] ). "With respect to a mortgage payable in installments, separate causes of action accrue for each installment that is not paid, and the statute of limitations begins to run on the date each installment becomes due" ( Bank of N.Y. Mellon v. Craig, 169 A.D.3d at 628, 93 N.Y.S.3d 425 ; see Nationstar Mtge., LLC v. Weisblum, 143 A.D.3d 866, 867, 39 N.Y.S.3d 491 ). "However, ‘even if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt’ " ( Bank of N.Y. Mellon v. Craig, 169 A.D.3d at 628, 93 N.Y.S.3d 425, quoting EMC Mtge. Corp. v. Patella, 279 A.D.2d 604, 605, 720 N.Y.S.2d 161 ; see Freedom Mtge. Corp. v. Engel, 37 N.Y.3d 1, 21-23, 146 N.Y.S.3d 542, 169 N.E.3d 912 ).

In support of its motion pursuant to CPLR 3211(a)(5) to dismiss the amended complaint insofar as asserted against it as time-barred, to cancel the notice of pendency, and for summary judgment on its counterclaim, Equity established, prima facie, that the statute of limitations began to run on the entire debt on April 30, 2009, when the plaintiff commenced the first action to foreclose the mortgage and elected in the complaint to call due the entire amount secured by the mortgage (see Bank of N.Y. Mellon v. Craig, 169 A.D.3d at 629, 93 N.Y.S.3d 425 ). Since the plaintiff did not commence this action until June 24, 2015, more than six years later, Equity sustained its initial burden of demonstrating, prima facie, that this action is time-barred (see U.S. Bank N.A. v. Martin, 144 A.D.3d 891, 892, 41 N.Y.S.3d 550 ).

The burden then shifted to the plaintiff to present admissible evidence to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff actually commenced this action within the applicable limitations period (see Bank of N.Y. Mellon v. Dieudonne, 171 A.D.3d 34, 38, 96 N.Y.S.3d 354 ; Bank of N.Y. Mellon v. Craig, 169 A.D.3d at 629, 93 N.Y.S.3d 425 ).

The plaintiff argued that: (1) RPAPL 1304 constitutes a "statutory prohibition" within the meaning of CPLR 204, and therefore, the statute of limitations was tolled by its service of 90–day notices under RPAPL 1304 ; (2) the statute of limitations never began to run because, under paragraph 19 of the mortgage, an acceleration of the mortgage debt cannot occur until judgment is entered; and (3) its commencement of the first action did not accelerate the mortgage debt because questions of fact may exist as to whether it properly accelerated the mortgage debt in accordance with paragraph 22(b) of the mortgage, and therefore, any determination on the issue of whether this action is time-barred is premature. Each of the plaintiff's arguments is without merit.

A. RPAPL 1304 is not a statutory prohibition within the meaning of CPLR 204(a), and therefore, it did not toll the statute of limitations.

CPLR 204(a) provides that "[w]here the commencement of an action has been stayed by a court or by a statutory prohibition, the duration of the stay is not part of the time within which the action must be commenced" (emphasis added). RPAPL 1304, which the plaintiff argues is a "statutory prohibition," requires that "at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower ..., including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower." RPAPL 1304 describes the required content and manner of service of the notice. "Strict compliance with RPAPL 1304 notice to the borrower or borrowers is a condition precedent to the commencement of a foreclosure action" ( Citibank, N.A. v. Conti–Scheurer, 172 A.D.3d 17, 20, 98 N.Y.S.3d 273 [emphasis added]; see Aurora Loan Servs., LLC v. Weisblum, 85 A.D.3d 95, 923 N.Y.S.2d 609 ).

"A statutory prohibition and a condition precedent are separate concepts" ( HSBC Bank USA v. Kirschenbaum, 159 A.D.3d 506, 507, 73 N.Y.S.3d 41 ; see Barchet v. New York City Tr. Auth., 20 N.Y.2d 1, 6, 281 N.Y.S.2d 289, 228 N.E.2d 361 ; Christiana Trust v. Barua, 184 A.D.3d 140, 151–152, 125 N.Y.S.3d 420 ). The salient feature of a "statutory prohibition" is the plaintiff's lack of control. Since a plaintiff has complete control over the acts necessary to effectuate compliance with a condition precedent, a condition precedent is not a statutory prohibition (see HSBC Bank USA v. Kirschenbaum, 159 A.D.3d at 507, 73 N.Y.S.3d 41 ; see also Barchet v. New York City Tr. Auth., 20 N.Y.2d at 6, 281 N.Y.S.2d 289, 228 N.E.2d 361 ). Thus, because the plaintiff had control over when to serve the RPAPL 1304 notice, and could have done so at least 90 days prior to the expiration of the statute of limitations, RPAPL 1304 is not a statutory prohibition within the meaning of CPLR 204(a) (see Barchet v. New York City Tr. Auth., 20 N.Y.2d at 6, 281 N.Y.S.2d 289, 228 N.E.2d 361 ; Christiana Trust v. Barua, 184 A.D.3d at 151–152, 125 N.Y.S.3d 420 ; HSBC Bank USA v. Kirschenbaum, 159 A.D.3d at 507, 73 N.Y.S.3d 41 ). Therefore, the plaintiff's service of 90–day notices in compliance with RPAPL 1304 did not toll the statute of limitations.

B. Paragraph 19 of the mortgage did not prohibit the plaintiff from accelerating the mortgage debt until after judgment was entered.

As in ( Bank of N.Y. Mellon v. Dieudonne, 171 A.D.3d at 40, 96 N.Y.S.3d 354 ), paragraph 19 of the mortgage allows the plaintiff to exercise its right to accelerate the entire mortgage debt "before the defendant's rights under the reinstatement provision in paragraph 19 are exercised or extinguished." Thus, contrary to the plaintiff's contention, paragraph 19 did not prohibit the acceleration of the mortgage debt until the entry of a judgment of foreclosure and sale.

C. The plaintiff failed to raise a question of fact as to the validity of its own election to accelerate the mortgage debt, and failed to show that dismissal was premature.

The plaintiff contends that...