Opinion
2017–02305 2017–02306 Index No. 506979/14
06-12-2019
U.S. BANK NATIONAL ASSOCIATION, etc., Respondent, v. Marie AUGUSTE, Appellant, et al., Defendants.
C. Steve Okenwa, P.C., New York, NY, for appellant. Eckert Seamans Cherin & Mellott, LLC, White Plains, N.Y. (Morgan R. McCord of counsel), for respondent.
C. Steve Okenwa, P.C., New York, NY, for appellant.
Eckert Seamans Cherin & Mellott, LLC, White Plains, N.Y. (Morgan R. McCord of counsel), for respondent.
WILLIAM F. MASTRO, J.P., MARK C. DILLON, JOSEPH J. MALTESE, VALERIE BRATHWAITE NELSON, JJ.
DECISION & ORDER ORDERED that the orders are affirmed, with one bill of costs.
The defendant Marie Auguste borrowed the sum of $ 640,000 from nonparty First United Mortgage Banking Corp. (hereinafter First United) on September 14, 2006, secured by a mortgage on property in Brooklyn.
The plaintiff previously commenced an action to foreclose the mortgage on May 24, 2007. By order dated November 27, 2007, the Supreme Court directed dismissal of that action on the ground that the plaintiff failed to establish standing. The plaintiff had submitted a purported assignment of the mortgage, which was dated July 9, 2007, but stated that it was effective on November 22, 2006. The Court held that "such an attempt to retroactively assign the mortgage is insufficient to establish the plaintiff's ownership interest at the time the action was commenced."
The plaintiff commenced the instant action to foreclose the mortgage on July 29, 2014. The plaintiff attached the note to the complaint. The plaintiff further submitted an allonge to the note, signed by the president of First United, endorsing the note in blank.
The plaintiff moved for summary judgment on the complaint insofar as asserted against Auguste and for an order of reference. Auguste cross-moved to dismiss the complaint insofar as asserted against her as time-barred and based on lack of standing. By order dated January 3, 2017, the Supreme Court granted the plaintiff's motion for summary judgment and for an order of reference, and denied Auguste's cross motion to dismiss the complaint insofar as asserted against her. In another order, also dated January 3, 2017, the court also granted the plaintiff's motion for summary judgment and appointed a referee to ascertain and compute the amount due to the plaintiff. Auguste appeals from both orders.
We agree with the Supreme Court's denial of that branch of Auguste's cross motion which was to dismiss the complaint insofar as asserted against her as time-barred. A mortgage foreclosure action is subject to a six-year statute of limitations (see CPLR 213[4] ; NMNT Realty Corp. v. Knoxville 2012 Trust , 151 A.D.3d 1068, 1069, 58 N.Y.S.3d 118 ). "[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" ( Nationstar Mtge., LLC v. Weisblum , 143 A.D.3d 866, 867, 39 N.Y.S.3d 491 [internal quotation marks omitted]; see Wells Fargo Bank, N.A. v. Burke , 94 A.D.3d 980, 982, 943 N.Y.S.2d 540 ; EMC Mtge. Corp. v. Patella , 279 A.D.2d 604, 605, 720 N.Y.S.2d 161 ). Acceleration occurs, inter alia, "when a creditor commences an action to foreclose upon a note and mortgage and seeks, in the complaint, payment of the full balance due" ( Milone v. U.S. Bank N.A. , 164 A.D.3d 145, 152, 83 N.Y.S.3d 524 ; see Clayton Natl. v. Guldi , 307 A.D.2d 982, 982, 763 N.Y.S.2d 493 ). "[A]n acceleration of a mortgaged debt, by either written notice or the commencement of an action, is only valid if the party making the acceleration had standing at that time to do so" ( Milone v. U.S. Bank N.A. , 164 A.D.3d at 153, 83 N.Y.S.3d 524 ).
Auguste contends that the commencement of the prior action in 2007 accelerated the debt, and that the commencement of the instant action, seven years later, was beyond the statute of limitations. Where, as here, the prior action is dismissed on the ground that the plaintiff lacked standing, the purported acceleration is a nullity, and the statute of limitations does not begin to run at the time of the purported acceleration (see Wells Fargo Bank, N.A. v. Burke , 94 A.D.3d at 983, 943 N.Y.S.2d 540 ; EMC Mtge. Corp. v. Suarez , 49 A.D.3d 592, 593, 852 N.Y.S.2d 791 ). Thus, we agree with the Supreme Court's determination that the commencement of the prior action in 2007 did not accelerate the debt, and that the instant action was timely.
We also agree with the Supreme Court's determination granting the plaintiff's motion for summary judgment on the complaint insofar as asserted against Auguste, and for an order of reference. "In moving for summary judgment in an action to foreclose a mortgage, a plaintiff establishes its prima facie entitlement to judgment as a matter of law by producing the mortgage, the note, and evidence of the default in payment" ( Deutsche Bank Natl. Trust Co. v. Logan , 146 A.D.3d 861, 862, 45 N.Y.S.3d 189 ). Where, as here, a plaintiff's standing to commence a foreclosure action is placed in issue by a defendant, the plaintiff must prove its standing as part of its prima facie showing that it is entitled to summary judgment (see U.S. Bank N.A. v. Cohen , 156 A.D.3d 844, 845, 67 N.Y.S.3d 643 ). A plaintiff has standing to maintain a mortgage foreclosure action where it is the holder or assignee of the underlying note at the time the action is commenced (see U.S. Bank, N.A. v. Collymore , 68 A.D.3d 752, 753–754, 890 N.Y.S.2d 578 ). "Either a written assignment of the underlying note or the physical delivery of the note prior to the commencement of the foreclosure action is sufficient to transfer the obligation, and the mortgage passes with the debt as an inseparable incident" ( Dyer Trust 2012–1 v. Global World Realty, Inc. , 140 A.D.3d 827, 828, 33 N.Y.S.3d 414 ).
Here, contrary to Auguste's contention, the plaintiff established, prima facie, that it had standing to prosecute this action by demonstrating that it was in physical possession of the note and the blank-endorsed allonge, which were annexed to the complaint, at the time this action was commenced (see Deutsche Bank Natl. Trust Co. v. Logan , 146 A.D.3d at 862–863, 45 N.Y.S.3d 189 ; JPMorgan Chase Bank, N.A. v. Weinberger , 142 A.D.3d 643, 645, 37 N.Y.S.3d 286 ). Moreover, "[t]here is simply no requirement that an entity in possession of a negotiable instrument that has been endorsed in blank must establish how it came into possession of the instrument in order to be able to enforce it (see UCC 3–204 [2] ). Moreover, it is unnecessary to give factual details of the delivery in order to establish that possession was obtained prior to a particular date" ( JPMorgan Chase Bank, N.A. v. Weinberger , 142 A.D.3d at 645, 37 N.Y.S.3d 286 ).
In view of the foregoing, Auguste's remaining contention has been rendered academic.
MASTRO, J.P., DILLON, MALTESE and BRATHWAITE NELSON, JJ., concur.