Assyag v. Wells Fargo Bank, N.A.

186 A.D.3d 1303

131 N.Y.S.3d 699

Zahi ASSYAG, respondent,

v.WELLS FARGO BANK, N.A., appellant.

2017–10557

Index No. 707845/15

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

Argued - March 3, 2020

September 16, 2020

Reed Smith LLP, New York, N.Y. (Andrew B. Messite and Joseph Teig of counsel), for appellant.

Law Office of Laurence D. Gerowitz, P.C., New York, NY, for respondent.

MARK C. DILLON, J.P., CHERYL E. CHAMBERS, JEFFREY A. COHEN, COLLEEN D. DUFFY, JJ.

DECISION & ORDER

In an action pursuant to RPAPL 1501(4) to cancel and discharge of record a mortgage, the defendant appeals from an order of the Supreme Court, Queens County (Diccia T. Pineda–Kirwin, J.), entered August 9, 2017. The order denied the defendant's motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint is granted.

In November 2007, the plaintiff borrowed the sum of $533,850 from the defendant, Wells Fargo Bank, N.A. (hereinafter Wells Fargo). The subject loan was memorialized by a note and secured by a mortgage encumbering certain real property in Queens. In 2009, the plaintiff defaulted on his payment obligations under the note and mortgage, and Wells Fargo commenced an action on March 24, 2009 (hereinafter the 2009 action), to foreclose the mortgage. In the complaint in the 2009 action, Wells Fargo "elect[ed] to call due the entire amount secured by the mortgage." By judgment entered December 30, 2013, the 2009 action was dismissed without prejudice.

On July 24, 2015, the plaintiff commenced the instant action pursuant to RPAPL 1501(4) to cancel and discharge of record the mortgage. The plaintiff specifically alleged that more than six years had passed since Wells Fargo's acceleration of the mortgage on March 24, 2009, that the 2009 action had been dismissed, and that no new foreclosure action had been commenced within the six year limitations period. Wells Fargo interposed an answer asserting various affirmative defenses, including that it had de-accelerated the mortgage debt prior to the expiration of the statute of limitations.

In May 2017, Wells Fargo moved for summary judgment dismissing the complaint. Wells Fargo argued, through an affidavit of a vice president of loan documentation and annexed documentary evidence, that the acceleration of the note balance had been de-accelerated in a letter to the plaintiff dated March 11, 2015. In an order entered August 9, 2017, the Supreme Court denied the motion. Wells Fargo appeals.

Under RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor was not in possession of the subject real property at the time the action to cancel and discharge the mortgage was commenced (see Halfon v. U.S. Bank, N.A., 169 A.D.3d 653, 654, 93 N.Y.S.3d 675 ; Lubonty v. U.S. Bank N.A., 159 A.D.3d 962, 963, 74 N.Y.S.3d 279, affd 34 N.Y.3d 250, 116 N.Y.S.3d 642, 139 N.E.3d 1222 ). An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4] ; Lubonty v. U.S. Bank N.A., 34 N.Y.3d at 261, 116 N.Y.S.3d 642, 139 N.E.3d 1222 ; HSBC Bank USA, N.A. v. Gold, 171 A.D.3d 1029, 1030, 98 N.Y.S.3d 293 ). "[E]ven 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" ( Lubonty v. U.S. Bank N.A., 159 A.D.3d at 963, 74 N.Y.S.3d 279 [internal quotation marks omitted]; see Kashipour v. Wilmington Sav. Fund Socy., FSB, 144 A.D.3d 985, 986, 41 N.Y.S.3d 738 ).

Here, the full debt was accelerated on March 24, 2009, when Wells Fargo commenced the 2009 action by filing the summons and complaint demanding, inter alia, payment of the full loan balance (see Albertina Realty Co. v. Rosbro Realty Corp., 258 N.Y. 472, 476, 180 N.E. 176 ; U.S. Bank N.A. v. Atia, 178 A.D.3d 747, 749, 114 N.Y.S.3d 389 ). Contrary to the Wells Fargo's contention, paragraph 19 of the mortgage did not prohibit it from validly accelerating the mortgaged debt at that time (see Bank of N.Y. Mellon v. Dieudonne, 171 A.D.3d 34, 39, 96 N.Y.S.3d 354 ).

To be valid, a party's de-acceleration of loan debt must occur within six years of the acceleration (see CPLR 213[4] ), be accomplished by an affirmative act subsequent to the initial foreclosure action's acceleration (see 1081 Stanley Ave., LLC v. Bank of New York Mellon Trust Company, N.A., 179 A.D.3d 984, 118 N.Y.S.3d 643 ; NMNT Realty Corp. v. Knoxville 2012 Trust, 151 A.D.3d 1068, 58 N.Y.S.3d 118 ), and be clear and unambiguous in its meaning (see Milone v. U.S. Bank N.A., 164 A.D.3d 145, 153, 83 N.Y.S.3d 524 ). Here, the sufficiency of the de-acceleration letter is not in dispute, other than its transmittal. Paragraph 15 of the mortgage provided, in relevant part, that any notice to the borrower is given "when mailed by first class mail or when actually delivered to [the borrower's] notice address if sent by other means," and that "[t]he notice address is the address of the Property unless [the borrower] give[s] notice to Lender of a different address." Wells Fargo's vice president of loan documentation averred that Wells Fargo was the holder and servicer of the subject loan, "made the [l]oan, collected and posted payments on the [l]oan, maintained the escrow account for the [l]oan, and handled all aspects of customer service relating to the [l]oan." She further averred that a de-acceleration letter was sent to the plaintiff by both certified mail and regular mail to the property address and to the plaintiff's separate mailing address on file. Wells Fargo concedes on appeal that the certified mailings were not accepted at its destination addresses, meaning that the mailings were not "delivered" to the plaintiff by that method as contractually required for notices transmitted...