HSBC Bank USA, Nat'l Ass'n v. Grella

176 A.D.3d 924

111 N.Y.S.3d 310

HSBC BANK USA, NATIONAL ASSOCIATION, etc., Appellant,

v.Lucia GRELLA, Respondent, et al., Defendants.

2017–10856

Index No. 607910/17

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

Submitted—May 14, 2019

October 16, 2019

Shapiro, DiCaro & Barak, LLC, Rochester, N.Y. (Austin T. Shufelt of counsel), for appellant.

Peter Panaro, Massapequa, NY, for respondent.

LEONARD B. AUSTIN, J.P., JOHN M. LEVENTHAL, SHERI S. ROMAN, ROBERT J. MILLER, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Joseph A. Santorelli, J.), dated August 18, 2017. The order granted the motion of the defendant Lucia Grella pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against her.

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant Lucia Grella pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against her is denied.

In 2007, nonparty MortgageIT loaned the defendant Lucia Grella the sum of $424,000. Grella executed a promissory note evidencing the loan, and secured the loan with a mortgage on real property owned by Grella. On October 1, 2010, Grella defaulted in making her monthly mortgage payment. On or about December 12, 2010, the loan servicer sent Grella a notice of default which demanded payment of the arrears, and stated, in relevant part, that "[u]nless the payments on your loan can be brought current by January 11, 2011, it will become necessary to require immediate payment in full (also called acceleration) of your Mortgage Note.... If funds are not received by the above referenced date, we will proceed with acceleration." Thereafter, the note and the mortgage were assigned to the plaintiff.

On May 13, 2011, the plaintiff commenced a mortgage foreclosure action against Grella, among others. Grella did not interpose an answer. Subsequently, Grella moved, inter alia, pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her, based on the plaintiff's failure to seek a default judgment within one year after Grella's failure to answer the complaint. The Supreme Court denied the motion, and on appeal, this Court modified the Supreme Court's order so as to grant that branch of Grella's motion which was pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her (see HSBC Bank USA Natl. Assn. v. Grella , 145 A.D.3d 669, 672, 44 N.Y.S.3d 56 ).

Thereafter, on April 26, 2017, the plaintiff commenced this second foreclosure action against Grella, among others. Grella moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against her on the grounds that the action was time-barred and that the RPAPL 1304 notice sent by the plaintiff was defective. The plaintiff opposed the motion, contending that even if the May 13, 2011, commencement of the first action was deemed an acceleration of the loan that triggered the running of the six-year statute of limitations, the plaintiff commenced this second foreclosure action on April 26, 2017, which was within six years after the commencement of the first action. The plaintiff further argued that its RPAPL 1304 notice was not defective. The Supreme Court granted Grella's motion, and the plaintiff appeals.

In resolving a motion to dismiss a complaint pursuant to CPLR 3211(a)(5), the court must accept the facts as alleged in the complaint as true and accord the plaintiff the benefit of every possible favorable inference (see Faison v. Lewis , 25 N.Y.3d 220, 224, 10 N.Y.S.3d 185, 32 N.E.3d 400 ). Further, "[o]n a motion to dismiss a complaint pursuant to CPLR 3211(a)(5) on the ground that the statute of limitations has expired, the moving defendant must establish, prima facie, that the time in which to commence the action has expired" ( Wells Fargo Bank, N.A. v. Eitani , 148 A.D.3d 193, 197, 47 N.Y.S.3d 80 ; see U.S. Bank N.A. v. Gordon , 158 A.D.3d 832, 834–845, 72 N.Y.S.3d 156 ). If the defendant satisfies this burden, the burden shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff actually commenced the action within the applicable limitations period (see U.S. Bank N.A. v. Gordon , 158 A.D.3d at 835, 72 N.Y.S.3d 156 ). Actions to foreclose a mortgage are governed by a six-year statute of limitations (see CPLR 213[4] ; Milone v. U.S. Bank N.A. , 164 A.D.3d 145, 151, 83 N.Y.S.3d 524 ; Wells Fargo Bank, N.A. v. Eitani , 148 A.D.3d at 197, 47 N.Y.S.3d 80 ). " ‘[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’ " ( Kashipour v. Wilmington Sav. Fund Socy., FSB , 144 A.D.3d 985, 986, 41 N.Y.S.3d 738, quoting EMC Mtge. Corp. v. Patella , 279 A.D.2d 604, 605, 720 N.Y.S.2d 161 ).

Contrary to Grella's contention, the language in the 2010 notice of default did not serve to accelerate the loan, as it "was nothing more than a letter discussing acceleration as a possible future event, which does not constitute an exercise of the mortgage's optional acceleration clause" ( 21st Mtge. Corp. v. Adames , 153 A.D.3d 474, 475, 60 N.Y.S.3d 198 ; see FBP 250, LLC v. Wells Fargo Bank, N.A. , 164 A.D.3d 1307, 1309, 85...