U.S. Bank Nat'l Ass'n v. Joseph

• Court: New York Supreme Court — Appellate Division
• Citation: U.S. Bank Nat'l Ass'n v. Joseph, 159 A.D.3d 968, 73 N.Y.S.3d 238 (N.Y. App. Div. 2018)
• Decision Date: 28 March 2018
• Docket Number: Index 600378/15,2016–00233
• Parties: U.S. BANK NATIONAL ASSOCIATION, etc., respondent, v. Barbara JOSEPH, etc., et al., appellants, et al., defendants.

159 A.D.3d 968

73 N.Y.S.3d 238

U.S. BANK NATIONAL ASSOCIATION, etc., respondent,

v.Barbara JOSEPH, etc., et al., appellants, et al., defendants.

2016–00233

Index 600378/15

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

Argued - December 1, 2017

March 28, 2018

Young Law Group, PLLC, Bohemia, N.Y. (Ivan E. Young of counsel), for appellants.

Woods Oviatt Gilman, LLP (Reed Smith, LLP, New York, N.Y. [Brian P. Matthews and Andrew B. Messite ], of counsel), for respondent.

WILLIAM F. MASTRO, J.P., RUTH C. BALKIN, FRANCESCA E. CONNOLLY, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

Appeal from an order of the Supreme Court, Suffolk County (William B. Rebolini, J.), dated November 18, 2015. The order denied the motion of the defendants Barbara Joseph and Christopher Joseph pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against them as time-barred.

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendants Barbara Joseph and Christopher Joseph pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against them as time-barred is granted.

In May 2005, Hilton Joseph and Barbara Joseph (hereinafter together the Josephs) borrowed money from BNC Mortgage Corporation, evidenced by a note. To secure payment on the note, the Josephs executed a mortgage on residential property in Central Islip. The Josephs defaulted on the payments on the note and, on February 1, 2006, the plaintiff accelerated the mortgage debt and commenced a mortgage foreclosure action (hereinafter the first foreclosure action). The Josephs did not answer the complaint and, upon the plaintiff's motion, a referee was appointed and a judgment of foreclosure and sale was entered.

On March 19, 2007, Barbara Joseph filed for bankruptcy. On May 4, 2007, her bankruptcy petition was dismissed. On July 3, 2007, she filed a second bankruptcy petition, but on July 20, 2008, the bankruptcy court lifted the automatic stay of the foreclosure sale. The stay was reimposed on March 19, 2009, but was lifted again on September 3, 2009, and Barbara Joseph's second bankruptcy petition was dismissed on December 17, 2009. In all, the first foreclosure action was stayed by the bankruptcy proceedings for approximately one year and seven months.

On December 30, 2010, the Josephs moved in the Supreme Court, by order to show cause, to vacate the judgment of foreclosure and sale and to dismiss the first foreclosure action on the ground that they had not been properly served and, thus, the court lacked personal jurisdiction over them. The order to show cause contained a temporary restraining order preventing the plaintiff from selling the property at auction "pending the determination of [the] motion ... until a hearing can be held and/or this Court issues a decision on the motion." The Josephs' motion was not decided until January 28, 2013, when the court, after a hearing, determined that the plaintiff had failed to establish that the Josephs had been properly served with the complaint, and granted their motion to vacate the judgment of foreclosure and sale and to dismiss the complaint. At the time the first action was dismissed, excluding the periods during which the bankruptcy stays were in effect, less than six years had elapsed since the plaintiff accelerated the mortgage debt. The plaintiff did not take an appeal from the order granting the motion to dismiss the complaint in the first foreclosure action.

On January 14, 2015, almost two years after the first foreclosure action was dismissed, the plaintiff commenced this action (hereinafter the second foreclosure action) against Barbara Joseph and Christopher Joseph (hereinafter together the appellants), among others. The appellants were then the owners of the property, because, in 2014, Hilton Joseph had transferred his interest in the property to the appellants, as wife and husband.

The appellants moved to dismiss the complaint insofar as asserted against them as time-barred pursuant to CPLR 3211(a)(5). They pointed out that almost nine years had elapsed since the acceleration of their loan, well beyond the six-year statute of limitations. The plaintiff opposed the motion, arguing, among other things, that the action was not time-barred because the limitations period had been sufficiently tolled under CPLR 204(a) by the bankruptcy stays and the temporary restraining order that was in effect during the pendency of the Josephs' motion to dismiss the first foreclosure action. The Supreme Court denied the appellants' motion.

"On a motion to dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired" ( Wells Fargo Bank, N.A. v. Burke, 155 A.D.3d 668, 669, 64 N.Y.S.3d 228 ; see Island ADC, Inc. v Baldassano Architectural Group, P.C., 49 A.D.3d 815, 816, 854 N.Y.S.2d 230 ). "The burden then shifts to the nonmoving party to raise a question of fact as to the applicability of an exception to the statute of limitations, as to whether the statute of limitations was tolled, or as to whether the action was actually commenced within the applicable limitations period" ( Singh v. New York City Health & Hosps. Corp. [Bellevue Hosp. Ctr. & Queens Hosp. Ctr.], 107 A.D.3d 780, 781, 970 N.Y.S.2d 33 [citation omitted] ).

An action to foreclose a mortgage is subject to a six-year statute of limitations (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 (see Nationstar Mtge., LLC v. Weisblum, 143 A.D.3d 866, 867, 39 N.Y.S.3d 491 ; Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d 980, 982, 943 N.Y.S.2d 540 ; Wells Fargo Bank, N.A. v. Cohen, 80 A.D.3d 753, 754, 915 N.Y.S.2d 569 ; Loiacono v. Goldberg, 240 A.D.2d 476, 477, 658 N.Y.S.2d 138 ). Once a mortgage debt is accelerated, however, the statute of limitations begins to run on the entire debt (see Amrusi v. Nwaukoni, 155 A.D.3d 814, 65 N.Y.S.3d 62 ; Stewart Tit. Ins. Co. v. Bank of N.Y. Mellon, 154 A.D.3d 656, 659, 61 N.Y.S.3d 634 ; Beneficial Homeowner Serv. Corp. v Tovar, 150...