Bank of N.Y. for the Certicate Holders of Cwabs 2004-12 v. Hutchinson

2017 NY Slip Op 51224(U)

The Bank of New York as Trustee for the Certicate Holders of CWABS 2004-12, Plaintiff, v. Antoinette Hutchinson; SCHNEUR LEZELL; 861 EASTERN PARKWAY LLC.; NYC DEPT. OF FINANCE; PARKING VIOLATIONS BUREAU; NEW YORK CITY TRANSIT ADJUDICATION BUREAU; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; LEON BROWN; "JOHN DOE" & "MARY DOE", Defendants.

501471/2016

Supreme Court, Kings County

Decided on September 18, 2017

Plaintiff's Attorney:

Davidson Fink, LLP

28 East Main Street

Suite 1700

Rochester, NY 14614

Defendant's Atty:

Leon I. Behar, P.C.

347 Fifth Avenue

Suite 1506

New York, NY 10016

Harriet L. Thompson, J.

FACTS AND PROCEDURAL BACKGROUND

This is the second residential foreclosure action between the above captioned parties. The facts as stated in the motion practice before this Court are not in dispute and are stated below.

The premise herein is a three family owner-occupied multiple dwelling (three or more residential apartments), and is located at 861 Eastern Parkway, Brooklyn, NY 11213-3523.

FIRST ACTION FOR FORECLOSURE AND SALE

On October 26, 2004, ANTOINETTE Hutchinson secured and executed a promissory note for the refinance of the above described property in the amount of $370,000.00 payable on December 1, 2004 at a rate of 5.875 per annum until its maturity on November 1, 2034, and granted Full Spectrum Lending, Inc., its successors and assigns, the Lender, a first mortgage as security for the payment of the promissory note. The mortgage was an adjustable rate mortgage that was recorded in the County Clerk's office on February 1, 2005.

Mortgage Electronic Registration System, Inc. ("MERS"), as nominee for Full Spectrum Lending, Inc., assigned the note and mortgage to Bank of New York as Trustee for the Certificate holders of CWABS 2004-12 by assignment dated March 23, 2006 and recorded on April 17, 2006 in the Office of the County Clerk.

During her ownership and/or occupancy of the subject premises, in or about November 1, 2005, ANTOINETTE Hutchinson defaulted in the payment of the promissory note and the Lender, in accordance with the terms of the note and mortgage, commenced an action in the Supreme Court of the State of New York in the County of Kings to foreclose on the mortgage by service of a summons and complaint, and the filing of a notice of pendency of action. According to the evidence presented to this Court by the Defendant, the summons and complaint was filed in the County Clerk on February 15, 2006 and the notice of pendency of action was also filed on February 15, 2006. It is averred in the seventh paragraph of the summons and complaint, as follows: "ANTOINETTE HUTCHINSON, have/has failed and neglected to comply with the conditions of said mortgage bond or note by omitting and failing to pay items of principal and interest ..and accordingly, the plaintiff elects to call due the entire amount secured by the mortgage described in paragraph "fifth" hereof".

It appears that ANTOINETTE Hutchinson did not appear in the action, and in or about April 18, 2006, the Plaintiff served a Request for Judicial Intervention; and subsequently, served and filed a motion for an order of reference that was granted by the court on May 17, 2006.

By written agreement labeled "Loan modification agreement" (Adjustable Interest Rate) dated November 6, 2006, executed by ANTOINETTE Hutchinson on December 9, 2006 and by the authorized agent of the Plaintiff, Eric Fleisher, on December 18, 2006, the action was resolved. The pertinent provisions of the Loan modification agreement provide that "as of the 1st day of December 2006, the amount payable under the Note or Security Instrument (the "Unpaid Principal Balance") is U.S. $376,027.06 consisting of the amount(s) loaned to the borrower by the Lender and any interest capitalized to date" (¶1). The second provision, states "[t]he borrower promises to pay the Unpaid Principal Balance, plus interest, to the order of the Lender. Interest will be charged on Unpaid Principal Balance from the 1st of November 2006. The Borrower promises to make monthly payments of the principal and interest U.S. $2,283.48 beginning on the 1st day of December 2006" (¶2). Lastly, except as provided above, "the Note and Security Instrument will remain unchanged, and the Borrower and Lender will be bound by, and comply with, all terms and provisions thereof, as amended by this Agreement" (¶6). The interest rate and monthly payments will adjust in accordance with the Note and Adjustable Rate rider under the Note.

By notice dated March 21, 2007, the Plaintiff agreed to cancel the notice of pendency and on April 2, 2007, voluntarily discontinued the action.

SECOND ACTION FOR FORECLOSURE AND SALE

In or about August 1, 2008, ANTOINETTE Hutchinson defaulted in the payment of the above modification agreement, as amended, of the underlying promissory note and the Lender commenced this action in the Supreme Court of the State of New York in the County of Kings to foreclose on the mortgage and note by service of a summons and complaint, and the filing of a notice of pendency of action. The summons and complaint, dated January 28, 2016, was filed in the Supreme Court on February 2, 2016.

The summons and complaint alleges that ANTOINETTE Hutchinson defaulted in the payment of the note and mortgage on August 1, 2008. As in the prior summons and complaint, the pertinent paragraph provides as follows: "the defendant have failed and neglected to comply with the terms and provisions of said mortgage, bond/note/loan agreement by omitting to pay the items of principal and interest and accordingly, the plaintiff hereby elects to call due the entire amount secured by the mortgage ." (¶7).

The Defendant retained the law office of Leon Behar, PC., as counsel. Mr. Behar, Esq., by letter dated February 16, 2016 to Ms. Olin, Esq., attorney for the Plaintiff, maintains that the subject action is barred by the six-year statute of limitations. Mr. Behar, Esq., cites supporting case law in support of his claims and demanded the immediate withdrawal of the summons and complaint. He further states that the failure of the Plaintiff to withdraw the pending action would result in the service of a motion to dismiss and for sanctions against the Plaintiff and Plaintiff' attorneys for frivolous conduct.

After several email exchanges between the respective attorneys, the Plaintiff refused to discontinue or withdraw the action. The Plaintiff's contention is that the action was not barred by the statute of limitations and the Defendant's claims were "without merit". This motion for summary judgment ensued.

The Defendant moves pursuant to CPLR§3212 for summary judgment, sanctions and legal fees. After a recitation of the facts above by ANTOINETTE Hutchinson in a supporting affidavit, her attorney, by affirmation, contends that based on the acceleration of the mortgage in the first foreclosure action that was voluntarily discontinued in 2007, the instant action is time barred by CPLR§213(4). Defendant argues that "Plaintiff alleges that the mortgage default took place on August 1, 2008. However, Plaintiff failed to commence this action until January 28, 2016, more than seven years after the alleged default, and is therefore time—barred by the six (6) year statute of limitations" (Affirmation of Leon Behar, Esq., at ¶18). The Defendant's claim is that "NY courts have consistently dismissed such actions as time barred, whereas here, a lender commences a foreclosure action and thereby accelerates the balance due on the mortgage, subsequently discontinues it, and thereafter refiles a new foreclosure action", the action is time barred by the above statute. (Affirmation of Leon Behar, Esq., at ¶20). Defendant relies on U S. Bank v. Parris, Index No: 66885/2014 (Sup Ct. Suffolk County), Ellery Beaver LLC. v. HSBC Bank, Index No:506700/2014 (Sup Ct., Kings, County), and other case authority to support dismissal.

Additionally, the Defendant seeks sanctions against the Plaintiff for abuse of process, malicious prosecution, and attorney's fees.

The Plaintiff, in opposition, does not dispute the above factual and procedural history. The Plaintiff, not the Defendant, produced a copy of the aforementioned loan modification agreement and informed the Court that the first foreclosure action was discontinued by the Plaintiff based on the amicable resolution of the case. The Plaintiff states that "the 2006 foreclosure was resolved by bringing the loan current through a loan modification agreement dated December 18, 2006, the account was de-accelerated and 2006 Foreclosure properly discontinued March 21, 2007 " (Affirmation of Larry T. Powell, Esq., at ¶4). Counsel argues that the Defendant has selective memory; failed to notify the Court of this agreement, has reaffirmed the debt by making payments until the new date of default and based on the intentional failure to disclose this fact, the motion should be denied. The Plaintiff argues that the Defendant is responsible for the presentation of a complete record, not a selective record as provided here, and the failure to produce such records for the Court is fatal to the motion for summary judgment.

Substantively, the Plaintiff argues that the loan modification agreement acted to de-accelerate the loan, tolling and reviving the running of the statute of limitations. "[T]he running of the statute of limitations can be suspended or revived. For example, a writing acknowledging the mortgage debt and expressly or by implication promising to repay it would interrupt the running of the statute. Such a proper writing starts the statute of limitations running anew from that point" (citations omitted) (Affirmation of Larry T. Powell, Esq., at ¶16). Further, the loan modification agreement, coupled with their continued payments to date of the default oo August 1, 2008, and the prior de-acceleration within the six years of acceleration in 2006, all toll and revive the applicable statute of...