U.S. Bank Nat'l Ass'n v. Francis

189 A.D.3d 1511

139 N.Y.S.3d 239

U.S. BANK NATIONAL ASSOCIATION, etc., appellant,

v.Pauline FRANCIS, respondent, et al., defendants.

2018–10969

2019–00580

Index No. 710551/17

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

Submitted—June 11, 2020

December 23, 2020

Parker Ibrahim & Berg LLP, New York, N.Y. (Robert N. Pollock and Ben Z. Raindorf of counsel), for appellant.

Andrea S. Gross, St. Albans, NY, for respondent.

REINALDO E. RIVERA, J.P., LEONARD B. AUSTIN, ANGELA G. IANNACCI, LINDA CHRISTOPHER, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from (1) an order of the Supreme Court, Queens County (Cheree´ A. Buggs, J.), entered July 5, 2018, and (2) an order of the same court entered December 19, 2018. The order entered July 5, 2018, granted the motion of the defendant Pauline Francis pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against her. The order entered December 19, 2018, denied the plaintiff's motion pursuant to CPLR 2221 for leave to renew and reargue its opposition to the motion of the defendant Pauline Francis to dismiss the complaint insofar as asserted against her.

ORDERED that the order entered July 5, 2018, is affirmed; and it is further,

ORDERED that the appeal from so much of the order entered December 19, 2018, as denied that branch of the plaintiff's motion which was for leave to reargue is dismissed, as no appeal lies from an order denying reargument; and it is further,

ORDERED that the order entered December 19, 2018, is affirmed insofar as reviewed; and it is further,

ORDERED that one bill of costs is awarded to the defendant Pauline Francis.

On October 6, 2006, the defendant Pauline Francis (hereinafter the defendant) executed an adjustable rate balloon note in favor of BNC Mortgage, Inc. (hereinafter BNC). The note was secured by a mortgage on certain real property located in Far Rockaway. BNC assigned the mortgage to Deutsche Bank National Trust Company (hereinafter Deutsche Bank). On January 13, 2010, Deutsche Bank commenced a foreclosure action against, among others, the defendant (hereinafter the 2010 action) and accelerated the debt. On July 3, 2013, Deutsche Bank assigned the mortgage to the plaintiff, U.S. Bank National Association (hereinafter U.S. Bank), and on November 13, 2014, Deutsche Bank voluntarily discontinued the 2010 action.

On August 1, 2017, U.S. Bank commenced this foreclosure action (hereinafter the 2017 action) against, among others, the defendant. The defendant made a pre-answer motion pursuant to CPLR 3211(a)(5) to dismiss the 2017 action on the ground that it was time-barred. U.S. Bank opposed the defendant's motion, arguing, inter alia, that Deutsche Bank's voluntary discontinuance of the 2010 action revoked the acceleration of the debt and, thus, reset the statute of limitations as if the debt had never been accelerated.

In an order entered July 5, 2018, the Supreme Court concluded that U.S. Bank failed to demonstrate that the acceleration of the debt was revoked as it failed to submit an affidavit of an individual with personal knowledge to demonstrate mailing of the de-acceleration notices, and that it therefore failed to demonstrate that the statute of limitations was tolled. Since U.S. Bank did not commence the 2017 action within six years of the acceleration of the debt by the 2010 action, the court determined that the 2017 action was time-barred and granted the defendant's motion to dismiss.

Thereafter, U.S. Bank moved, among other things, for leave to renew its opposition to the defendant's motion to dismiss. In support of that branch of its motion, U.S. Bank proffered new evidence demonstrating that the note was transferred to it in 2006 and contended that Deutsche Bank therefore lacked standing either to commence the 2010 action or to accelerate the debt. In an order entered December 19, 2018, the court, inter alia, denied that branch of U.S. Bank's motion which was for leave to renew. U.S. Bank appeals from both orders.

An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4] ). In the case of an installment loan, a separate cause of action accrues as to each missed payment, but once the debt is accelerated, the limitations period begins to run on the entire debt (see Deutsche Bank Natl. Trust Co. v. Gordon, 179 A.D.3d 770, 772, 117 N.Y.S.3d 688 ; HSBC Bank, N.A. v. Vaswani, 174 A.D.3d 514, 515, 101 N.Y.S.3d 852 ). "A lender may revoke its election to accelerate the mortgage, but it must do so by an affirmative act of revocation occurring during the six-year statute of limitations period subsequent to the initiation of the prior foreclosure action" ( Deutsche Bank Natl. Trust Co. v. Gordon, 179 A.D.3d at 773, 117 N.Y.S.3d 688 [internal quotation marks omitted]; see Christiana Trust v. Barua, 184 A.D.3d 140, 145, 125 N.Y.S.3d 420 ; HSBC Bank, N.A. v. Vaswani, 174 A.D.3d at 515, 101 N.Y.S.3d 852 ).

Contrary to U.S. Bank's contention, the voluntary discontinuance of a foreclosure action, without more, is insufficient to establish that a bank has revoked the acceleration of the debt (see Christiana Trust v. Barua, 184 A.D.3d at 146–147, 125 N.Y.S.3d 420 ; HSBC Bank, N.A. v. Vaswani, 174 A.D.3d at 515, 101 N.Y.S.3d 852 ; U.S. Bank Trust, N.A. v. Aorta, 167 A.D.3d 807, 809, 89 N.Y.S.3d 717 ; Freedom Mtge. Corp. v. Engel, 163 A.D.3d 631, 633, 81 N.Y.S.3d 156 ).

Additionally, where a lender relies on correspondence to demonstrate that a debt has been de-accelerated, it must provide proof of mailing, and here, U.S. Bank failed to do so (see 1081 Stanley Ave., LLC v. Bank of N.Y. Mellon Trust Co., N.A., 179 A.D.3d 984, 987, 118 N.Y.S.3d 643 ; U.S. Bank Trust, N.A. v. Aorta, 167 A.D.3d at 809, 89 N.Y.S.3d 717 ). Further, the 90–day notices pursuant to RPAPL 1304 were insufficient to revoke...