U.S. Bank N.A. v. Crockett

61 N.Y.S.3d 193 (Table)

U.S. BANK N.A., as Legal Title Trustee for Truman 2013 SC3 Title Trust, Plaintiff,

v.Gerard CROCKETT, Defendant.

No. 516625/2016.

Supreme Court, Kings County, New York.

June 5, 2017.

Amy E. Polowy, Gross Polowy LLC, Amherst, Attorney for plaintiff.

Solomon Rosengarten, Solomon Rosengarten Attorney at Law, Brooklyn, Attorneys for the defendant.

FRANCOIS A. RIVERA, J.

Recitation in accordance with CPLR 2219(a) of the papers considered on the motion of defendant Gerard Crockett (hereinafter Crockett), filed on December 27, 2016, 2016, under motion sequence number one, for an order dismissing the instant complaint of U.S. Bank N.A., as Legal Title Trustee for Truman 2013 SC3 Title Trust (hereinafter USBNA) pursuant to CPLR 3211(a)(5).

Notice of Motion

Affirmation in support

Affidavit in support

Exhibits A–O

Affirmation in opposition

Exhibits A–I

Affirmation in reply

Exhibits A

BACKGROUND

On September 21, 2016, USBNA commenced the instant residential mortgage foreclosure action by electronically filing a summons, complaint and a notice of pendency (hereinafter the commencement papers) with the Kings County Clerk's office. Crockett is moving to dismiss rather than interposing an answer to the complaint.

The complaint alleges in pertinent part, that on October 31, 2006, Elka Shereshevsky executed and delivered a note (hereinafter the subject note) in favor of Bank of America (hereinafter BOA), USBNA's assignor, in the amount of $1,200,000.00. On the same date, Elka Shereshevsky and Chana Shereshevsky executed and delivered a mortgage (hereinafter the subject mortgage) in favor of BOA on certain real property known as 4809 14th Avenue, Brooklyn, New York 11219, a/k/a Block 5636 Lot 6 (hereinafter the subject property) as security for the amounts due under the subject note.

The borrowers failed to comply with the conditions of the subject note and mortgage by not making payments that were due on October 1, 2010 and subsequent payments. Defendant Crockett is sued because he claims an interest in the subject property by virtue of a deed dated February 25, 2016. A separate action is pending in Kings County Supreme Court under index number 512070/2014 to foreclose on the subject mortgage and USBNA intends to consolidate both actions.

UNDISPUTED FACTS

On June 19, 2009, BOA commenced a prior action in Kings County Supreme Court under index number 15259/2009 to foreclose on the subject note and mortgage (hereinafter the 2009 foreclosure action). On July 31, 2013, BOA filed a stipulation discontinuing the 2009 foreclosure action. On August 8, 2014, BOA assigned the mortgage to USBNA. By deed dated September 17, 2014, Elka Shreshevky conveyed her 50% interest in the subject property to Shabsi Pfeiffer and Gerard Crockett. On December 19, 2014, USBNA commenced an action in Kings County Supreme Court under index number 512070/2014 to foreclosure the subject mortgage and subject note (hereinafter the 2014 foreclosure action). On January 22, 2015, USBNA filed a supplemental summons and amended complaint naming Crockett as a defendant.

On May 18, 2015, Crockett moved to dismiss the 2014 foreclosure action pursuant to CPLR 3211(a)(8) on the basis that he was not served with the summons and complaint. USBNA opposed the motion. By order dated July 17, 2015, a traverse hearing was ordered. By order dated October 20, 2015, the Court dismissed the 2014 foreclosure action as against Crockett based on its findings after the traverse hearing that USBNA had failed to properly serve the commencement papers upon him.

LAW AND APPLICATION

Crockett has moved to dismiss the complaint pursuant to CPLR 3211(a)(5) on the grounds that the action is barred by the statute of limitations. Crockett contends that BOFA, USBNA's predecessor in interest, accelerated the subject note and mortgage on June 19, 2009 with the commencement of the 2009 foreclose action. He further contends that pursuant to CPLR 213(4), the six-year statute of limitations for commencing a new action had expired by June 19, 2015, over a year prior to September 21, 2016, the date the instant action was commenced.

In resolving a motion to dismiss pursuant to CPLR 3211(a)(5), this Court must accept the facts as alleged in the complaint as true and accord the plaintiff the benefit of every possible favorable inference (Elia v. Perla, ––– N.Y.S.3d –––– 2017 WL 21263732017 N.Y. Slip Op. 03930 [2nd Dept 2017] citing Faison v. Lewis, 25 NY3d 220, 224 [2015] ; Ford v. Phillips, 121 AD3d 1232, 1234 [3rd Dept 2014] ). "To dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is barred by the applicable statute of limitations, a defendant bears the initial burden of demonstrating, prima facie, that the time within which to commence the action has expired" ( Beroza v. Sallah Law Firm, P.C., 126 AD3d 742 [2nd Dept 2015]citing Kitty Jie Yuan v. 2368 W. 12th St., LLC, 119 AD3d 674 [2nd Dept 2014] ). "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" ( Beroza v. Sallah Law Firm, P.C., 126 AD3d 742 [2nd Dept 2015]citing Kitty Jie Yuan v. 2368 W. 12th St., LLC, 119 AD3d 674 [2nd Dept 2014] ).

An action to foreclose a mortgage is governed by a six-year statute of limitations ( CPLR 213[4] ). The statute of limitations "begins to run from the due date of each unpaid installment unless the debt has been accelerated (see EMC Mortgage Corp. v. Patella, 279 A.D.2d 604, 605 [2nd Dept 2001] ). Once a mortgage debt has been accelerated by a demand or commencement of an action, the entire sum becomes due and the statute of limitations beings to run on the entire debt ( Beneficial Homeowner Serv. Corp. v. Tovar, –––N.Y.S.3d –––– 2017 WL 1658610, 2017 N.Y. Slip Op. 03471[2nd Dept 2017]citing EMC Mortgage Corp. v. Patella, 279 A.D.2d 604, 605 [2nd Dept 2001] ).

In support of the motion Crockettt has annexed, among other things, the subject note, the subject mortgage, and the summons and complaint of the 2009 foreclosure action. In the fifth paragraph of the complaint filed in the 2009 foreclosure action BOA unequivocally declared its election to call due the entire amount secured by the subject mortgage. Where the holder of the note elects to accelerate the mortgage debt, notice to the borrower must be "clear and unequivocal" ( Sarva v. Chakravorty, 34 AD3d 438, 439 [2nd Dept 2006] ; see Wells Fargo Bank, N.A. v. Burke, 94 AD3d 980 at 982 [2nd Dept, 2012] ). The filing of the summons and complaint and notice of pendency in the 2009 foreclosure action constituted a valid election to accelerate the maturity of the debt ( Beneficial Homeowner Serv. Corp. v. Tovar, ––– N.Y.S.3d –––– 2017 WL 1658610, 2017 N.Y. Slip Op. 03471[2nd Dept 2017]citing Albertina Realty Co. v. Rosbro Realty Corp., 258 N.Y. 472, 476 [1932] ; Fannie Mae v. 133 Mgt., LLC, 126 AD3d 670 [2nd Dept 2015] ; EMC Mtge. Corp. v. Smith, 18 AD3d 602, 603 [2nd Dept 2005] ).

Crockett's evidentiary showing demonstrates that the instant action was commenced on September 21, 2016, more than six years after BOFA accelerated the subject note and mortgage by the commencement of the 2009 foreclosure action. Crockett has, therefore, met his burden of demonstrating, prima facie, that the time within which to commence the instant action has expired ( Beroza v. Sallah Law Firm, P.C., 126 AD3d 742 [2nd Dept 2015]citing Kitty Jie Yuan v. 2368 W. 12th St., LLC, 119 AD3d 674 [2nd Dept 2014] ).

Consequently, the burden shifts to USBNA to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether it actually commenced the action within the applicable limitations period (Id. ).

USBNA contends that BOA's commencement of the 2009 foreclosure action did not constitute an acceleration of the subject mortgage debt because BOA was not authorized to accelerate the maturity of the debt upon a payment default until judgment was entered. USBNA has cited EMC Mtge. Corp. v. Patella, 279 A.D.2d 604, 605 [2nd Dept 2001] and Federal Natl. Mtge. Assn. v. Mebane, 208 A.D.2d 892, 894 [2nd Dept 1994] for the proposition that a mortgage debt is accelerated when the mortgagee has the right to require payment of the entire amount due and the borrower's right to make monthly payment ends. USBNA then refers to paragraph 19 of the subject mortgage to show that the borrower had the right to stop the foreclosure action and reinstate the mortgage by paying all the arrears, reasonable expenses and attorneys' fees and meeting other conditions either before a judgment is entered enforcing the mortgage or five days before the sale of the subject property, whichever is earlier. USBNA concludes that because the borrower has the ability under the terms of the mortgage agreement to stop the foreclosure action and reinstate the mortgage, the commencement of the action of the foreclosure action cannot be deemed an acceleration of...