Wells Fargo Bank, Nat'l Ass'n v. Islam

188 A.D.3d 1116

136 N.Y.S.3d 356

WELLS FARGO BANK, National Association, etc., Respondent,

v.Abul Fazal T. ISLAM, etc., Appellant, et al., Defendants.

2018-01761

Index No. 704337/17

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

Argued—March 2, 2020

November 18, 2020

DECISION & ORDER

In an action to foreclose a mortgage, the defendant Abul Fazal T. Islam appeals from an order of the Supreme Court, Queens County (Howard G. Lane, J.), entered December 5, 2017. The order, insofar as appealed from, denied that branch of that defendant's motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as time-barred.

ORDERED that the order is reversed, on the law, with costs, and that branch of the motion of the defendant Abul Fazal T. Islam which was pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as time-barred is granted.

On June 3, 2005, the defendant Abul Fazal T. Islam (hereinafter the defendant) executed a note in favor of Fremont Investment & Loan, which was secured by a mortgage on real property located in Queens. On or about July 24, 2008, the plaintiff, as successor in interest to the note, commenced an action against the defendant, among others, to foreclose the mortgage, alleging that the defendant failed to make the payment that was due on August 1, 2007. On or about June 25, 2013, the plaintiff discontinued the prior action.

On March 30, 2017, the plaintiff commenced the instant action to foreclose the same mortgage, alleging that the defendant failed to make the payment due on May 1, 2011. The defendant moved, inter alia, pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as time-barred, arguing that the plaintiff never affirmatively revoked its 2008 acceleration of the debt and that more than six years had elapsed prior to the commencement of this action. In an affidavit submitted in support of the motion, the defendant averred that he never received notice that the 2008 action was discontinued and he believed that the property had been foreclosed upon. The defendant did not understand why, in 2013, he began receiving statements from a new servicer, as the locks had been changed and he could not enter the property. The defendant averred: "I have never received a letter from Plaintiff informing me of its intention to revoke acceleration of the mortgage debt."

In opposition to the motion, the plaintiff submitted an attorney's affirmation, in which it argued that "the prior acceleration was timely revoked when [the plaintiff] voluntarily discontinued the prior foreclosure action, without prejudice." The plaintiff argued that the discontinuance "necessarily returned [the defendant's] loan to installment status." Noting that the two complaints alleged different dates of default, the plaintiff's attorney affirmed that "the default date was advanced and has a different unpaid balance."

In an order entered December 5, 2017, the Supreme Court denied the defendant's motion, holding that the plaintiff's "voluntary discontinuance [of the 2008 action] served as a revocation of plaintiff's election to accelerate." The defendant appeals. We reverse insofar as appealed from.

"On a motion to dismiss a complaint pursuant to CPLR 3211(a)(5) on statute of limitations grounds, the moving defendant must establish, prima facie, that the time in which to commence the action has expired" ( Rakusin v. Miano, 84 A.D.3d 1051, 1052, 923 N.Y.S.2d 334 ; see Stewart v. GDC Tower at Greystone, 138 A.D.3d 729, 730, 30 N.Y.S.3d 638 ). "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" ( U.S. Bank N.A. v. Bernice 380 Corp., 186 A.D.3d 1750, 1752, 130 N.Y.S.3d 515 ; see Stewart v. GDC Tower at Greystone, 138 A.D.3d at 730, 30 N.Y.S.3d 638 ).

An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4] ). With respect to a mortgage payable in installments, separate causes of action accrue for each installment that is not paid, and the statute of limitations begins to run on the date each installment becomes due (see Freedom Mtge. Corp. v. Engel, 163 A.D.3d 631, 632, 81 N.Y.S.3d 156, lv granted in part 33 N.Y.3d 1039, 103 N.Y.S.3d 12, 126 N.E.3d 1052 ; Nationstar Mtge., LLC v. Weisblum, 143 A.D.3d 866, 867, 39 N.Y.S.3d 491 ). "However, ‘even 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’ " ( Freedom Mtge. Corp. v. Engel, 163 A.D.3d at 632, 81 N.Y.S.3d 156, quoting EMC Mtge. Corp. v. Patella, 279 A.D.2d 604, 605, 720 N.Y.S.2d 161 ; see Kashipour v. Wilmington Sav. Fund Socy., FSB, 144 A.D.3d 985, 986, 41 N.Y.S.3d 738 ). "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" ( HSBC Bank USA, N.A. v. Gold, 171 A.D.3d 1029, 1030, 98 N.Y.S.3d 293 [internal quotation marks omitted]; see Milone v. U.S. Bank N.A., 164 A.D.3d 145, 154, 83 N.Y.S.3d 524 ; Deutsche Bank Natl. Trust Co. v. Adrian, 157 A.D.3d 934, 935, 69 N.Y.S.3d 706 ).

Here, the defendant demonstrated that the six-year statute of limitations began to run on or about July 24, 2008, when the plaintiff accelerated the mortgage debt through its commencement of the 2008 foreclosure action (see Freedom Mtge. Corp. v. Engel, 163 A.D.3d at 632–633, 81 N.Y.S.3d 156 ; U.S. Bank N.A. v. Martin, 144 A.D.3d 891, 891–892, 41 N.Y.S.3d 550 ). Since the plaintiff did not commence the instant action until March 30, 2017, more than six years after the commencement of the 2008 action, the defendant established, prima facie, that the instant action was untimely (see Deutsche Bank Trust Co. Ams. v. Smith, 170 A.D.3d 660, 660–661, 93 N.Y.S.3d 613 ; 21st Mtge. Corp. v. Osorio, 167 A.D.3d 823, 825, 90 N.Y.S.3d 274 ; U.S. Bank Trust, N.A. v. Aorta, 167 A.D.3d 807, 809, 89 N.Y.S.3d 717 ).

In opposition, the plaintiff failed to raise a question of fact as to the timeliness of this action. "[A] lender's mere act of discontinuing an action, without more, does not constitute, in and of itself, an affirmative act revoking an earlier acceleration of the debt" ( Christiana Trust v. Barua, 184 A.D.3d 140, 146–147, 125 N.Y.S.3d 420 ; see Bank of N.Y. Mellon v. Yacoob, 182 A.D.3d 566, 123 N.Y.S.3d 145 ; HSBC Bank, N.A. v. Vaswani, 174 A.D.3d 514, 515, 101 N.Y.S.3d 852 ; Federal Natl. Mtge. Assn. v. Schmitt, 172 A.D.3d 1324, 1326, 99 N.Y.S.3d 717 ; Aquino v. Ventures Trust 2013–I–H–R by MCM Capital Partners, 172 A.D.3d 663, 100 N.Y.S.3d 386 ; Bank of N.Y. Mellon v. Craig, 169 A.D.3d 627, 629, 93 N.Y.S.3d 425 ; U.S. Bank Trust, N.A. v. Aorta, 167 A.D.3d at 809, 89 N.Y.S.3d 717 ; Freedom Mtge. Corp. v. Engel, 163 A.D.3d at 633, 81 N.Y.S.3d 156 ; Beneficial Homeowner Serv. Corp. v. Tovar, 150 A.D.3d 657, 658, 55 N.Y.S.3d 59 ; cf. NMNT Realty Corp. v. Knoxville 2012 Trust, 151 A.D.3d 1068, 1070, 58 N.Y.S.3d 118 [described in Christiana Trust v. Barua, 184 A.D.3d at 147 n. 1, 125 N.Y.S.3d 420 as an "outlier"] ).

None of the other facts relied upon by the plaintiff establish that the 2008 acceleration of the loan balance was affirmatively revoked. "[D]e-acceleration notices must ... be clear and unambiguous to be valid and enforceable" ( Milone v. U.S. Bank N.A., 164 A.D.3d 145, 153, 83 N.Y.S.3d 524 ; see Christiana Trust v. Barua, 184 A.D.3d at 146, 125 N.Y.S.3d 420 ). While the plaintiff points to the fact that the defendant purportedly received billing statements after the first action was discontinued and that the second complaint alleged a different date of default, these facts do not establish that a clear and unambiguous notice of revocation of the acceleration was given to the defendant. The plaintiff, who would presumably have access to copies of any notices or billing statements sent to the defendant, offered none of these documents in opposition to the defendant's motion. Speculation that something outside the record might establish a clear and unequivocal de-acceleration is insufficient to raise a question of fact. Although we agree with our dissenting colleague's assertion that, in opposition to a CPLR 3211(a)(5) motion, a plaintiff need not establish the action's timeliness "as a matter of law" (dissenting op at 5), in order to raise a question of fact it was incumbent on the plaintiff to proffer a "version of the facts in evidentiary form" that, if found by a fact-finder to be true, establishes a valid de-acceleration ( Ehrlich v. Am. Moninger Greenhouse Mfg. Corp., 26 N.Y.2d 255, 259, 309 N.Y.S.2d 341, 257 N.E.2d 890 [it is "essential" that a party seeking to raise a triable issue of fact "state (its) version of the facts in evidentiary form"]; see Mallad Constr. Corp. v. County Fed. Sav. & Loan Assn., 32 N.Y.2d 285, 290, 344 N.Y.S.2d 925, 298 N.E.2d 96 ; Kramer v. Harris, 9 A.D.2d 282, 283, 193 N.Y.S.2d 548 ).

Accordingly, the Supreme Court should have granted that branch of the defendant's motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against him as time-barred.

BALKIN, J.P., LEVENTHAL and CONNOLLY, JJ., concur.

MILLER, J., dissents, and votes to affirm the order insofar as appealed from, with the following memorandum:

I agree that the plaintiff has failed to affirmatively establish, as a matter of law, that the action is timely. However, a plaintiff is not required to make such a showing in response to a motion pursuant to CPLR 3211(a). Rather, a plaintiff need only produce evidence that raises a question of fact in opposition to the defendant's prima facie case. Since the record in...