Daldan, Inc. v. Deutsche Bank Nat'l Trust Co.

188 A.D.3d 989

137 N.Y.S.3d 407

DALDAN, INC., respondent,

v.DEUTSCHE BANK NATIONAL TRUST COMPANY, etc., appellant.

2018–07043

2019–05342

Index No. 1465/17

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

Submitted—September 17, 2020

November 18, 2020

Akerman LLP, New York, N.Y. (Jordan M. Smith and Natasayi Mawere of counsel), for appellant.

Stern & Stern (Richland & Falkowski, PLLC, Washingtonville, N.Y. [Daniel H. Richland ], of counsel), for respondent.

ALAN D. SCHEINKMAN, P.J., HECTOR D. LASALLE, VALERIE BRATHWAITE NELSON, ANGELA G. IANNACCI, JJ.

DECISION & ORDER

ORDERED that the appeal from the order is dismissed; and it is further,

ORDERED that the judgment is affirmed; and it is further,

ORDERED that one bill of costs is awarded to the respondent.

The appeal from the order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647 ). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1] ).

On October 27, 2006, Mario Valero executed a note in favor of Mortgage Lenders Network USA, Inc. (hereinafter MLN), in the principal sum of $520,000. The note was secured by a mortgage on certain real property in Brooklyn (hereinafter the property). The mortgagee was listed as Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for MLN. On August 19, 2007, MERS assigned the mortgage to the defendant, Deutsche Bank National Trust Company (hereinafter the Bank). On August 22, 2007, the Bank commenced an action to foreclose the mortgage (hereinafter the prior foreclosure action). The complaint alleged that Valero had defaulted on the note by failing to make the payment due on May 1, 2007, and stated that the Bank was electing to call due the entire amount secured by the mortgage. While that action was pending, Valero deeded the property to the plaintiff, Daldan, Inc. (hereinafter Daldan). On January 28, 2015, the Supreme Court granted Valero's motion to dismiss the prior foreclosure action due to lack of personal jurisdiction and the Bank's failure to prosecute the action.

On April 28, 2017, Daldan commenced the instant action to quiet title pursuant to Real Property Actions and Proceedings Law (hereinafter RPAPL) article 15 and to secure the cancellation and discharge of the mortgage (hereinafter the Quiet Title Action). The Bank filed an answer, and asserted a counterclaim against Daldan for unjust enrichment. In an order dated April 5, 2018, the Supreme Court granted Daldan's motion for summary judgment on the complaint, striking the Bank's defenses, and dismissing the Bank's counterclaim. The Supreme Court subsequently entered a judgment in Daldan's favor canceling, vacating, and discharging the mortgage. The Bank appeals.

Pursuant to RPAPL 1501(4), a person having an estate or interest in real property subject to a mortgage may maintain an action to secure the cancellation and discharge of the encumbrance, and to adjudge the estate or interest free of it, if the applicable statute of limitations for commencing a foreclosure action has expired (see RPAPL 1501[4] ; Ditmid Holdings, LLC v. JPMorgan Chase Bank, N.A., 180 A.D.3d 1002, 1003, 120 N.Y.S.3d 393 ; Milone v. U.S. Bank N.A., 164 A.D.3d 145, 151, 83 N.Y.S.3d 524 ). An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4] ). " ‘The law is well settled that, 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’ " ( Ditmid Holdings, LLC v. JPMorgan Chase Bank, N.A., 180 A.D.3d at 1003, 120 N.Y.S.3d 393, quoting EMC Mtge. Corp. v. Patella, 279 A.D.2d 604, 605, 720 N.Y.S.2d 161 ).

Here, in support of its motion, Daldan established that it was the current owner of the property, that an acceleration of the full amount of the subject debt occurred on August 22, 2007, when the Bank commenced the prior foreclosure action and elected to call due the entire amount secured by the mortgage (see Bank of N.Y. Mellon v. Ahmed, 181 A.D.3d 634, 635, 121 N.Y.S.3d 114 ; Nationstar Mtge., LLC v. Dorsin, 180 A.D.3d 1054, 1055, 119 N.Y.S.3d 435 ), and that, accordingly, the statute of limitations expired six years later (see CPLR 213[4] ). Thus, by establishing that the commencement of a new foreclosure action would be time-barred by the applicable six-year statute of limitations, the plaintiff met its prima facie burden of demonstrating its entitlement to judgment as a matter of law on the complaint (see Ditmid Holdings, LLC v. JPMorgan Chase Bank, N.A., 180 A.D.3d at 1003, 120 N.Y.S.3d 393 ; 1081 Stanley Ave., LLC v. Bank of N.Y. Mellon Trust Co., N.A., 179 A.D.3d 984, 986, 118 N.Y.S.3d 643 ).

In opposition, the Bank failed to raise a triable issue of fact. Contrary to the Bank's contention, its failure to serve the complaint in the prior foreclosure action on Valero did not negate acceleration (see Beneficial Homeowner Serv. Corp. v. Tovar, 150 A.D.3d 657, 658, 55 N.Y.S.3d 59 ; see also Albertina Realty Co. v. Rosbro Realty Corp., 258 N.Y. 472, 180 N.E. 176 ). Moreover, the dismissal of the prior foreclosure action did not constitute an affirmative act by the Bank revoking its election to accelerate the mortgage debt (see MSMJ Realty, LLC v. DLJ Mtge. Capital, Inc., 157 A.D.3d 885, 887, 69 N.Y.S.3d 870 ; Kashipour v. Wilmington Sav. Fund Socy., FSB, 144 A.D.3d 985, 987, 41 N.Y.S.3d 738 ).

Also contrary to the Bank's contention, the time during which the prior foreclosure action was pending did not toll the running of the statute of limitations pursuant to CPLR 204(a), as RPAPL 1301(3) did not prevent the Bank from discontinuing that...