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

80 Misc.3d 258

195 N.Y.S.3d 392

US BANK NATIONAL ASSOCIATION, AS TRUSTEE, Successor in Interest TO WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee for Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates, Series 2003-1, Plaintiff,

v.John WILLIAMS a/k/a John H. Williams and "John Doe #1" through "John Doe #10," the last ten names being fictitious and unknown to the plaintiff, the person or parties intended being the person or parties, if any, having or claiming an interest in or lien upon the mortgaged premises described in the complaint, Defendants.

Index No. 502097/2019

Supreme Court, Putnam County, New York.

Decided on June 23, 2023

Plaintiff: Frenkel, Lambert, Weiss, Weisman & Gordon

Defendant Williams: Clair Gjertsen & Weathers PLLC

Gina C. Capone, J.

The facts of this residential mortgage foreclosure case are largely undisputed. The Defendant John H. Williams executed a note, on or about March 28, 2003, in favor of Wells Fargo Home Mortgage, Inc., in the sum of $329,600 (NYSCEF Doc 3). The Note was endorsed by Wells Fargo to Wachovia Bank, National Association, as Trustee under the pooling and servicing agreement dated as of August 28, 2003 (NYSCEF Doc 3). By a firmly affixed Allonge, Wachovia, by Wells Fargo, NA, its Attorney in Fact, endorsed the Note in blank (NYSCEF Doc 3). The Note was secured by a Mortgage, executed the same date, against properly known as 21 Westgate Terrace, Carmel, New York 10512. The mortgage was thereafter duly recorded with the Putnam County Clerk's Office on or about September 24, 2003 (NYSCEF Doc 52). According to the Plaintiff's Statement of Undisputed Material Facts, the loan is "currently due for the March 1, 2008, payment and all subsequent payments" (NYSCEF Doc 66, ¶5).

PRIOR LITIGATION

On February 6, 2008, Wells Fargo Bank, NA, commenced a foreclosure action in Putnam County Supreme Court against the Defendant (Index No. 311/2008). That litigation was "discontinued pursuant to an Order to Vacate Judgment of Foreclosure and Sale and to Discontinue the Action and Cancel Lis Pendens" entered on January 19, 2012 (Nicolai, J.) (NYSCEF Doc 73).

A second foreclosure action was commenced by US Bank National Association, as Trustee, successor in interest to Wachovia Bank, National Association as Trustee for Wells Fargo Asset Securities Corporation, Mortgage Asset-Backed Pass-Through Certificates, Series 2003-1 (hereinafter the Plaintiff) against the Defendant on December 26, 2013 (Index No. 2841/2013) (NYSCEF Doc 74).

A third foreclosure action was commenced by the Plaintiff against the Defendant on July 31, 2014 (Index No. 1644/2014) (NYSCEF Doc 75). By Decision and Order of this Court (Grossman, J.), filed August 12, 2015, the two pending foreclosure actions were consolidated (NYSCEF Doc 76). The Plaintiff filed a motion for summary judgment and order of reference, which was granted, unopposed, by Decision and Order dated March 31, 2017. The Plaintiff thereafter filed a motion to confirm the Referee's Report and for a Judgment of Foreclosure and Sale. The Defendant cross-moved to vacate the order granting summary judgment and an order of reference and for summary judgment dismissing the complaint insofar as asserted against the Defendant. The Court (Grossman, J.), in deciding both pending motions, granted the Defendant's motion to the extent of vacating the earlier order granting summary judgment and an order of reference to the Plaintiff and denied the Plaintiff's motion for, inter alia, Judgment of Foreclosure and Sale (NYSCEF Doc 77). The Plaintiff moved for leave to renew the two motions. By Decision and Order dated October 17, 2018, the Court denied the Plaintiff's motion for leave to renew with prejudice, directed the Plaintiff to file a Note of Issue by a specified date, and put the matter over for a Pre-Trial Conference (NYSCEF Doc 78).

The Trial on the Consolidated Foreclosure Actions was held on January 24 and 25th, 2019 (Transcripts at NYSCEF Doc 79). At the close of the Plaintiff's case in chief, the Defendant orally moved for a directed verdict, which the Justice presiding reserved on. Following the completion of the trial, and submission of post-trial memorandums (NYSCEF Doc 80), the Court (Grossman, J.), issued a Decision, Order and Judgment after Trial, dated August 22, 2019, wherein the Court dismissed the Plaintiff's action on the grounds that the Plaintiff had failed to establish due diligence in serving the required notices pursuant to RPAPL § 1303 and 1304 (NYSCEF Doc 40, 81).

The Current Foreclosure Litigation

The current foreclosure action was commenced by the Plaintiff against the Defendant on December 16, 2019 (NYSCEF Doc 1). The Defendant filed an Answer with Counterclaims on February 14, 2020 (NYSCEF Doc 11). As is relevant to the pending motions, the Defendant asserted three counterclaims. The first counterclaim was pursuant to Article 15 of the RPAPL and sought to cancel and discharge the mortgage allegedly held by the Plaintiff as enforcement of same is barred by the statute of limitations. The second counterclaim asserts that the matter must be dismissed as the action is barred by the doctrine of res judicata. The third counterclaim asserted that the matter must be dismissed as barred by the doctrine of collateral estoppel (NYSCEF Doc 11).

The Court has before it two motions for summary judgment, filed by both the Plaintiff and the Defendant John Williams respectively. The Plaintiff seeks, inter alia, summary judgment on its complaint, an order striking the answer and counterclaims of Defendant Williams, and the appointment of a referee to compute the amount due and owing (NYSCEF Doc 35). The Defendant seeks an order dismissing the Plaintiff's complaint and granting summary judgment in the Defendant's favor pursuant to CPLR 3212 and RPAPL Article 15 on his counterclaims (NYSCEF Doc 68). Each side has filed opposition to the others’ respective motion.

On December 30, 2022, Gov. Hochul signed the Foreclosure Abuse Prevention Act (L 2022, ch 821, § 8 [eff Dec. 30, 2022]; hereinafter FAPA). Counsel for both sides requested leave to supplement their submissions relative to the respective motions to address the new law, and specifically the effect of the law relative to the issue of whether this action was timely commenced, which request was granted by the Court.

The Defendant's Motion for Summary Judgment on its Counterclaims

By Notice of Motion filed November 10, 2022, the Defendant moved to dismiss the complaint insofar as asserted against him and for summary judgment on his counterclaims seeking to cancel and discharge the Plaintiff's mortgage against the property on the grounds that the action is barred, inter alia, by the statute of limitations (see RPAPL § 1501[4] ). Specifically, the Defendant contends that the commencement of the 2008 foreclosure action began the running of the statute of limitations, which expired in 2014, rendering this matter untimely commenced.

Statute of Limitations/ FAPA

The Defendant contends that the Plaintiff's mortgage of record must be discharged pursuant to RPAPL § 1501[4], on the grounds that the applicable statute of limitations has expired. The Foreclosure Abuse Prevention Act (FAPA), signed into law on December 30, 2022, amended, inter alia, CPLR § 3217 to add a new subdivision which provides:

(e) Effect of discontinuance upon certain instruments. In any action on an instrument described under subdivision four of section two hundred thirteen of this chapter, the voluntary discontinuance of such action, whether on motion, order, stipulation or by notice, shall not, in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period to commence an action and to interpose a claim, unless expressly prescribed by statute.

The amendment, inter alia, to CPLR § 3217 by FAPA was specifically designed to address and overrule the Court of Appeals holding in Freedom Mortgage Corp. v. Engel , 37 N.Y.3d 1, 146 N.Y.S.3d 542, 169 N.E.3d 912 (2021), that a voluntary discontinuance constituted an affirmative revocation of acceleration for statute of limitations purposes. At the time the Plaintiff and the Defendant filed their respective motions for summary judgment in this case, Engel was still controlling law. However, now that FAPA has amended CPLR § 3217, the Defendant contends that the law as it currently stands warrants a finding by this Court that this foreclosure action is barred by the expiration of the six-year statute of limitations. In this case, when the first foreclosure action was commenced on or about February 6, 2008, the filing of the summons, complaint, and notice of pendency constituted a valid election to accelerate the debt and triggering the running of the statute of limitations. While that action was subsequently voluntarily discontinued on January 17, 2012 (NYSCEF Doc 89), under the amended CPLR § 3217, that voluntary discontinuance did not "waive, postpone, cancel, toll, extend, revive or reset the limitations period" ( CPLR § 3217[e] ; see also CPLR 203[h] ["(h) Claim and action upon certain instruments. Once a cause of action upon an instrument described in subdivision four of section two hundred thirteen of this article has accrued, no party may, in form or effect, unilaterally waive, postpone, cancel, toll, revive, or reset the accrual thereof, or otherwise purport to effect a unilateral extension of the limitations period prescribed by law to commence an action and to interpose the claim, unless expressly prescribed by statute"]).

According to the Defendant, the six-year statute of limitations on this matter expired on or about February 6, 2014, more than five years before the current action was commenced and, therefore, the Plaintiff is barred from bringing the instant action, summary judgment in the Defendant's favor is warranted on his counterclaim pursuant to RPAPL § 1501[4] and the complaint, insofar as asserted against him, must be...