HSBC Bank, USA, N.A. v. Bresler

178 N.Y.S.3d 802

HSBC BANK, USA, N.A., Appellant,

v.Gerry–Lynn BRESLER, Also Known as Gerry–Lynn Stohr, et al., Respondents, et al., Defendants.

534589

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

Calendar Date: October 12, 2022

Decided and Entered: November 23, 2022

Fein, Such & Crane, LLP, Westbury (Michael S. Hanusek of counsel), for appellant.

Blatchly & Simonson, PC, New Paltz (Bruce D. Blatchly of counsel), for respondents.

Before: Lynch, J.P., Aarons, Reynolds Fitzgerald, Fisher and McShan, JJ.

OPINION AND ORDER

Fisher, J. Appeal from a judgment of the Supreme Court (James P. Gilpatric, J.), entered December 15, 2021 in Ulster County, which granted motions by defendants Gerry–Lynn Bresler and Steven Bresler for summary judgment dismissing the complaint against them.

In March 2007, defendants Gerry–Lynn Bresler and Steven Bresler (hereinafter collectively referred to as defendants) executed a promissory note in favor of HSBC Mortgage Corporation (USA). The note was secured by a mortgage on real property located in the Town of Woodstock, Ulster County executed in favor of Mortgage Electronic Registration Systems, Inc. as nominee for the lender, and subsequently assigned to Hudson City Savings Bank. Defendants defaulted on the note and, on November 13, 2012, Hudson City commenced an action to foreclose on the mortgage. The mortgage was assigned to plaintiff in June 2016. Supreme Court dismissed the action as abandoned in November 2016 and denied a motion to restore the case to the calendar in February 2018. By correspondence dated September 27, 2018, the mortgage servicer for plaintiff notified defendants that it was revoking any prior acceleration of the loan and withdrawing any prior demand for immediate payment of all sums secured by the mortgage, therefore re-instituting the loan as an installment loan.

On December 28, 2018, plaintiff commenced this second mortgage foreclosure action. Defendants answered and asserted, among other affirmative defenses, that plaintiff's claim was barred by the statute of limitations. Thereafter, defendants separately moved for summary judgment dismissing the complaint against them on various grounds, including that the action was time-barred. Supreme Court granted defendants’ motions, finding, as relevant here, that the de-acceleration notice did not contain language that was clear and unambiguous to establish that the loan was being de-accelerated, and, therefore, the second action was barred by the statute of limitations. Plaintiff appeals.

As relevant here, the six-year statute of limitations begins to run when a mortgage debt has been accelerated by the commencement of an action seeking the entire sum due (see Deutsch Bank Natl. Trust Co. v. Goldwasser, 199 A.D.3d 1281, 1282, 157 N.Y.S.3d 568 [3d Dept. 2021] ; Wells Fargo Bank, N.A. v. Portu, 179 A.D.3d 1204, 1205–1206, 116 N.Y.S.3d 761 [3d Dept. 2020] ). "Once a lender has elected to accelerate a mortgage debt, such an election can be revoked only through an affirmative act occurring within the statute of limitations period" ( U.S. Bank N.A. v. Catalfamo, 189 A.D.3d 1786, 1787–1788, 138 N.Y.S.3d 671 [3d Dept. 2020] [internal quotation marks and citations omitted]; see U.S. Bank N.A. v. Creative Encounters LLC, 194 A.D.3d 1135, 1136, 149 N.Y.S.3d 285 [3d Dept. 2021] ). "Where, as here, the lender's affirmative act of revocation takes the form of a de-acceleration letter or notice, to be valid and enforceable, said notice must be clear and unambiguous" ( U.S. Bank N.A. v. Catalfamo, 189 A.D.3d at 1788, 138 N.Y.S.3d 671 [citations omitted]; see Wells Fargo Bank, N.A. v. Portu, 179 A.D.3d at 1207, 116 N.Y.S.3d 761 ). Determining whether and when a noteholder revoked an election to accelerate a loan can be "critical" in determining whether an action is untimely ( Freedom Mtge. Corp. v. Engel, 37 N.Y.3d 1, 28, 146 N.Y.S.3d 542, 169 N.E.3d 912 [2021] ).

It was undisputed that an acceleration of the full amount of the debt occurred on November 13, 2012, when the prior action was commenced. Since defendants established, as a matter of law, that the acceleration of the mortgage debt occurred more than six years prior to the commencement of the instant action on December 28, 2018, defendants sustained their initial burden of demonstrating, prima facie, that the action was untimely (see U.S. Bank N.A. v. Catalfamo, 189 A.D.3d at 1788, 138 N.Y.S.3d 671 ). The burden shifts to plaintiff to raise a question of fact as to whether the statute of limitations had expired (see Bank of Am., N.A. v. Gulnick, 170 A.D.3d 1365, 1367, 95 N.Y.S.3d 639 [3d Dept. 2019], lv denied 34 N.Y.3d 908, 2020 WL 728411 [2020] ).

In opposition to defendants’ respective motions, plaintiff submitted, among other things, a copy of the September 27, 2018 de-acceleration notice sent by the mortgage servicer, indicating that "we hereby revoke any prior acceleration of the loan, withdrawing any prior demand for immediate payment of all sums secured by the security instrument and re-institute the loan as an installment loan" (emphasis omitted). The notice advised that defendants could resume making monthly payments, which would now be accepted by plaintiff, and further provided that defendants "also have the right to pay the monthly payments that came due prior to and would have come due during the prior acceleration, which has not been revoked."

Although defendants contend, and Supreme Court found, that this subsequent language – "which has not been revoked" – made the entire notice unclear and ambiguous, we disagree. Such statement was advising defendants of their right to satisfy the arrears and their continuing obligation to make monthly payments; the next sentence in the notice warned that, if defendants...