MTGLQ Inv'rs v. Witherspoon

• Docket Number: 118355
• Decision Date: 06 June 2023
• Parties: MTGLQ INVESTORS, L.P., Plaintiff/Appellant, v. JOE H. WITHERSPOON, Defendant/Appellee, and CINDY D. WITHERSPOON and OTHER OCCUPANTS OF THE PREMISES, Defendants.
• Court: Oklahoma Supreme Court

2023 OK 62

MTGLQ INVESTORS, L.P., Plaintiff/Appellant,
v.
JOE H. WITHERSPOON, Defendant/Appellee,

and CINDY D. WITHERSPOON and OTHER OCCUPANTS OF THE PREMISES, Defendants.

No. 118355

Supreme Court of Oklahoma

June 6, 2023

THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

ON CERTIORARI FROM THE COURT OF CIVIL APPEALS, DIVISION III

Benjamin G. Kemble, Akerman, LLP, San Antonio, Texas, for Appellant.

Joe H. Witherspoon, pro se, Appellee.

KANE, C.J.

¶0 Plaintiff/Appellant MTGLQ Investors, L.P. brought a mortgage foreclosure action against Defendant/Appellee Joe H. Witherspoon and Defendant Cindy D. Witherspoon. The trial court found the statute of limitations had expired and granted summary judgment in favor of the Witherspoons. MTGLQ appealed, and Division III of the Court of Civil Appeals affirmed. We granted certiorari and hold that (1) pursuant to 12A O.S.2011, § 3-118 (a), the statute of limitations begins to run when the note holder exercises the option to accelerate an installment note, and (2) voluntary dismissal of a foreclosure action decelerates the loan as a matter of law. As a result, the foreclosure action is not barred by the statute of limitations, and the Witherspoons are not entitled to judgment as a matter of law.

¶1 We granted Plaintiff/Appellant MTGLQ Investors, L.P.'s petition for certiorari to address (1) when the statute of limitations begins to run if the note holder exercises the option to accelerate the maturity date of the entire loan balance after the borrower defaults on an installment obligation; and (2) whether the note holder's voluntary dismissal of a foreclosure action decelerates the installment loan as a matter of law. We hold that, pursuant to 12A O.S.2011, § 3-118 (a), the statute of limitations begins to run at the time the note holder exercises the option to accelerate, not on the date of default. We further hold that the note holder's voluntary dismissal of a mortgage foreclosure action decelerates or abandons acceleration as a matter of law.

FACTS AND PROCEDURAL HISTORY

¶2 In 2004, the Defendant/Appellee Joe H. Witherspoon and Defendant Cindy D. Witherspoon (collectively, the Witherspoons) obtained an installment loan in the amount of $66,400.00 from a mortgage company. The promissory note ("Note") was secured by a mortgage ("Mortgage"). The Mortgage was a standard Fannie Mae/Freddie Mac uniform security instrument containing an optional acceleration clause.

¶3 On July 1, 2014, Bank of New York Mellon (BNYM), as the holder of the Note, filed a petition to foreclose the Mortgage. BNYM alleged that the Witherspoons defaulted on the Note and Mortgage by failing to pay the monthly installment due on December 1, 2010 and that they had failed to make any subsequent payments. BNYM asserted that it had elected to accelerate the debt and declare the entire balance due and payable. On October 13, 2014, BNYM voluntarily dismissed the foreclosure action without prejudice.

¶4 After a series of transfers and assignments, MTGLQ became the holder of the Note and Mortgage on June 4, 2018. On August 21, 2018, MTGLQ sent the Witherspoons a Notice of Intent to Foreclose. The letter informed the Witherspoons that they had defaulted on the Note and Mortgage by failing to pay the monthly installment due on January 1, 2013 and that failure to cure the default by paying all past due payments on or before September 25, 2018 "may result in acceleration of the sums secured by this [Mortgage], foreclosure by judicial proceeding and sale of the Property." Then, on December 7, 2018, MTGLQ filed the present foreclosure action. In the Petition, MTGLQ alleged that the Witherspoons defaulted by failing to pay the installment due on January 1, 2013 and that they had failed to make any subsequent payments. MTGLQ asserted that it had elected to accelerate the debt and declare the entire balance due and payable.

¶5 MTGLQ and the Witherspoons filed motions for summary judgment. The Witherspoons argued BNYM accelerated the loan when they defaulted on December 1, 2010 and that MTGLQ filed its petition to foreclose on December 7, 2018, which was more than six years after BNYM accelerated the debt and, therefore, the claim was barred by the statute of limitations. See 12A O.S.2011, § 3-118. MTGLQ responded that when BNYM dismissed the foreclose action, the note decelerated as a matter of law. The trial court granted summary judgment to the Witherspoons. MTGLQ appealed, and the Court of Civil Appeals affirmed the judgment, holding that the six-year statute of limitations began to run on the date of default and that dismissal did not decelerate the note. We granted MTGLQ's petition for certiorari.

STANDARD OF REVIEW

¶6 Summary judgment is reviewed de novo. Rickard v. Coulimore, 2022 OK 9, ¶ 4, 505 P.3d 920, 922. Summary judgment is appropriate only when there is no genuine controversy as to any material fact...