Opinion
501471/2016
09-18-2017
The Bank of New York as Trustee for the Certicate Holders of CWABS 2004-12, Plaintiff, v. Antoinette Hutchinson; SCHNEUR LEZELL; 861 EASTERN PARKWAY LLC.; NYC DEPT. OF FINANCE; PARKING VIOLATIONS BUREAU; NEW YORK CITY TRANSIT ADJUDICATION BUREAU; NEW YORK CITY ENVIRONMENTAL CONTROL BOARD; LEON BROWN; "JOHN DOE" & "MARY DOE", Defendants.
Plaintiff's Attorney: Davidson Fink, LLP 28 East Main Street Suite 1700 Rochester, NY 14614 Defendant's Atty: Leon I. Behar, P.C. 347 Fifth Avenue Suite 1506 New York, NY 10016
Plaintiff's Attorney: Davidson Fink, LLP 28 East Main Street Suite 1700 Rochester, NY 14614 Defendant's Atty: Leon I. Behar, P.C. 347 Fifth Avenue Suite 1506 New York, NY 10016 Harriet L. Thompson, J.
FACTS AND PROCEDURAL BACKGROUND
This is the second residential foreclosure action between the above captioned parties. The facts as stated in the motion practice before this Court are not in dispute and are stated below.
The premise herein is a three family owner-occupied multiple dwelling (three or more residential apartments), and is located at 861 Eastern Parkway, Brooklyn, NY 11213-3523. FIRST ACTION FOR FORECLOSURE AND SALE
On October 26, 2004, ANTOINETTE Hutchinson secured and executed a promissory note for the refinance of the above described property in the amount of $370,000.00 payable on December 1, 2004 at a rate of 5.875 per annum until its maturity on November 1, 2034, and granted Full Spectrum Lending, Inc., its successors and assigns, the Lender, a first mortgage as security for the payment of the promissory note. The mortgage was an adjustable rate mortgage that was recorded in the County Clerk's office on February 1, 2005.
Mortgage Electronic Registration System, Inc. ("MERS"), as nominee for Full Spectrum Lending, Inc., assigned the note and mortgage to Bank of New York as Trustee for the Certificate holders of CWABS 2004-12 by assignment dated March 23, 2006 and recorded on April 17, 2006 in the Office of the County Clerk.
During her ownership and/or occupancy of the subject premises, in or about November 1, 2005, ANTOINETTE Hutchinson defaulted in the payment of the promissory note and the Lender, in accordance with the terms of the note and mortgage, commenced an action in the Supreme Court of the State of New York in the County of Kings to foreclose on the mortgage by service of a summons and complaint, and the filing of a notice of pendency of action. According to the evidence presented to this Court by the Defendant, the summons and complaint was filed in the County Clerk on February 15, 2006 and the notice of pendency of action was also filed on February 15, 2006. It is averred in the seventh paragraph of the summons and complaint, as follows: "ANTOINETTE HUTCHINSON, have/has failed and neglected to comply with the conditions of said mortgage bond or note by omitting and failing to pay items of principal and interest ..and accordingly, the plaintiff elects to call due the entire amount secured by the mortgage described in paragraph "fifth" hereof".
It appears that ANTOINETTE Hutchinson did not appear in the action, and in or about April 18, 2006, the Plaintiff served a Request for Judicial Intervention; and subsequently, served and filed a motion for an order of reference that was granted by the court on May 17, 2006.
By written agreement labeled "Loan modification agreement" (Adjustable Interest Rate) dated November 6, 2006, executed by ANTOINETTE Hutchinson on December 9, 2006 and by the authorized agent of the Plaintiff, Eric Fleisher, on December 18, 2006, the action was resolved. The pertinent provisions of the Loan modification agreement provide that "as of the 1st day of December 2006, the amount payable under the Note or Security Instrument (the "Unpaid Principal Balance") is U.S. $376,027.06 consisting of the amount(s) loaned to the borrower by the Lender and any interest capitalized to date" (¶1). The second provision, states "[t]he borrower promises to pay the Unpaid Principal Balance, plus interest, to the order of the Lender. Interest will be charged on Unpaid Principal Balance from the 1st of November 2006. The Borrower promises to make monthly payments of the principal and interest U.S. $2,283.48 beginning on the 1st day of December 2006" (¶2). Lastly, except as provided above, "the Note and Security Instrument will remain unchanged, and the Borrower and Lender will be bound by, and comply with, all terms and provisions thereof, as amended by this Agreement" (¶6). The interest rate and monthly payments will adjust in accordance with the Note and Adjustable Rate rider under the Note.
By notice dated March 21, 2007, the Plaintiff agreed to cancel the notice of pendency and on April 2, 2007, voluntarily discontinued the action.
SECOND ACTION FOR FORECLOSURE AND SALE
In or about August 1, 2008, ANTOINETTE Hutchinson defaulted in the payment of the above modification agreement, as amended, of the underlying promissory note and the Lender commenced this action in the Supreme Court of the State of New York in the County of Kings to foreclose on the mortgage and note by service of a summons and complaint, and the filing of a notice of pendency of action. The summons and complaint, dated January 28, 2016, was filed in the Supreme Court on February 2, 2016.
The summons and complaint alleges that ANTOINETTE Hutchinson defaulted in the payment of the note and mortgage on August 1, 2008. As in the prior summons and complaint, the pertinent paragraph provides as follows: "the defendant have failed and neglected to comply with the terms and provisions of said mortgage, bond/note/loan agreement by omitting to pay the items of principal and interest and accordingly, the plaintiff hereby elects to call due the entire amount secured by the mortgage ." (¶7).
The Defendant retained the law office of Leon Behar, PC., as counsel. Mr. Behar, Esq., by letter dated February 16, 2016 to Ms. Olin, Esq., attorney for the Plaintiff, maintains that the subject action is barred by the six-year statute of limitations. Mr. Behar, Esq., cites supporting case law in support of his claims and demanded the immediate withdrawal of the summons and complaint. He further states that the failure of the Plaintiff to withdraw the pending action would result in the service of a motion to dismiss and for sanctions against the Plaintiff and Plaintiff' attorneys for frivolous conduct.
After several email exchanges between the respective attorneys, the Plaintiff refused to discontinue or withdraw the action. The Plaintiff's contention is that the action was not barred by the statute of limitations and the Defendant's claims were "without merit". This motion for summary judgment ensued.
The Defendant moves pursuant to CPLR§3212 for summary judgment, sanctions and legal fees. After a recitation of the facts above by ANTOINETTE Hutchinson in a supporting affidavit, her attorney, by affirmation, contends that based on the acceleration of the mortgage in the first foreclosure action that was voluntarily discontinued in 2007, the instant action is time barred by CPLR§213(4). Defendant argues that "Plaintiff alleges that the mortgage default took place on August 1, 2008. However, Plaintiff failed to commence this action until January 28, 2016, more than seven years after the alleged default, and is therefore time—barred by the six (6) year statute of limitations" (Affirmation of Leon Behar, Esq., at ¶18). The Defendant's claim is that "NY courts have consistently dismissed such actions as time barred, whereas here, a lender commences a foreclosure action and thereby accelerates the balance due on the mortgage, subsequently discontinues it, and thereafter refiles a new foreclosure action", the action is time barred by the above statute. (Affirmation of Leon Behar, Esq., at ¶20). Defendant relies on U S. Bank v. Parris, Index No: 66885/2014 (Sup Ct. Suffolk County), Ellery Beaver LLC. v. HSBC Bank, Index No:506700/2014 (Sup Ct., Kings, County), and other case authority to support dismissal.
Additionally, the Defendant seeks sanctions against the Plaintiff for abuse of process, malicious prosecution, and attorney's fees.
The Plaintiff, in opposition, does not dispute the above factual and procedural history. The Plaintiff, not the Defendant, produced a copy of the aforementioned loan modification agreement and informed the Court that the first foreclosure action was discontinued by the Plaintiff based on the amicable resolution of the case. The Plaintiff states that "the 2006 foreclosure was resolved by bringing the loan current through a loan modification agreement dated December 18, 2006, the account was de-accelerated and 2006 Foreclosure properly discontinued March 21, 2007 " (Affirmation of Larry T. Powell, Esq., at ¶4). Counsel argues that the Defendant has selective memory; failed to notify the Court of this agreement, has reaffirmed the debt by making payments until the new date of default and based on the intentional failure to disclose this fact, the motion should be denied. The Plaintiff argues that the Defendant is responsible for the presentation of a complete record, not a selective record as provided here, and the failure to produce such records for the Court is fatal to the motion for summary judgment.
Substantively, the Plaintiff argues that the loan modification agreement acted to de-accelerate the loan, tolling and reviving the running of the statute of limitations. "[T]he running of the statute of limitations can be suspended or revived. For example, a writing acknowledging the mortgage debt and expressly or by implication promising to repay it would interrupt the running of the statute. Such a proper writing starts the statute of limitations running anew from that point" (citations omitted) (Affirmation of Larry T. Powell, Esq., at ¶16). Further, the loan modification agreement, coupled with their continued payments to date of the default oo August 1, 2008, and the prior de-acceleration within the six years of acceleration in 2006, all toll and revive the applicable statute of limitation. " (Affirmation of Larry T. Powell, Esq., at ¶17). The Plaintiff argues that the Defendant's claims have no merit and the Court should have no judicial sympathy for the Defendant since the Defendant voluntarily entered into the modification agreement- a binding and enforceable contract. Lastly, the Plaintiff states, in anticipation that the Defendant would introduce new evidence in the reply, warns the Court, if the Defendant does so, to disregard it as improper.
In reply, the Defendant reiterates the facts above alleging that "since the instant action was not commenced until January 28, 2016, or nearly eight years after the alleged default, the six year statute of limitations has expired, and Plaintiff is therefore time barred from bringing the instant action" (Affirmation of Leon Behar, Esq., at ¶6). He claims that the Plaintiff desperately relies on a document that was not previously available to the Defendant. "However, as any first grader knows, the difference between February 2, 2016 and August 1, 2008, is equal to seven years and six months and is NOT with the applicable six-year statute of limitations. (Affirmation of Leon Behar, Esq., at ¶8). MOTION FOR SUMMARY JUDGMENT
It is now necessary to direct our attention to the Defendant's motion for summary judgment. A brief look at CPLR §3212 is appropriate. CPLR §3212(b) provides that a "motion for summary judgment shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party "[T]he Motion shall be denied if any party shall show facts sufficient to require a trial of any issue of fact. If it shall appear that any party other than the moving party is entitled to a summary judgment, the court may grant such judgment without the necessity of a Cross-Motion."
It has been well-settled that on a motion for summary judgment, "the movant must submit evidentiary proof in admissible form which establishes that she is entitled to judgment as a matter of law, and to defeat the motion, the opponent must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which she rests her claim or must demonstrate acceptable excuse for his failure to meet the requirements of tender in admissible form." (Zuckerman v. City of New York, 49 NY2d 557, 562 (1980)). Thus, to defeat the motion, it is incumbent on the opponent "to assemble, lay bare and reveal his or her proof .that their defenses are real and capable of being established at trial It is insufficient to merely set forth averments of factual or legal conclusions. [Internal citation omitted]."
To defeat the summary judgment motion, the opposing party must show that there is a material question of fact that requires a trial (CityFinancial Co. (De) v. McKenny, 27 AD3d 224, 226 [1st Dept., 2006]; Machinery Funding Corp. v. Stan Loman Enterprises, Inc., 91 AD2d 528 (1st Dept., 1982); See also Tabor v. Logan, 114 AD2d 897, 895 (2d Dept., 1985); Santiago v. Filstein, 35 AD3d 184, 185-186 (1st Dept., 2006); Mazurek v. Metropolitan Museum of Art, 27 AD3d 227, 228 (1st Dept., 2006); Smalls v. AJI Industry Inc., 10 NY3d 733, 735 (2008); Melendez v. Parkchester Medical M.D. Servs., P.C., 76 AD3d 927 [1st Dept., 2010]). If there is any doubt as to the existence of a triable fact, the motion for summary judgment must be denied. Rotuba Extruders v. Ceppos, 46 NY2d 223, 231 (1978). STATUTE OF LIMITATIONS
NY CPLR 213(4) provides, in pertinent part, that the following actions must be commenced within six years . "an action upon a bond or note, the payment of which is secured by a mortgage upon real property, or upon a bond or note and mortgage so secured, or upon a mortgage or real property, or any interest therein."
The six-year statute of limitation for the commencement of a foreclosure action has been determined to begin to run on the occurrence of any of the following events:
1. the due date for each unpaid installment on the mortgage; or
2. the time the lender is entitled to demand full payment or loan maturity; or
3. when the mortgage has been accelerated by a proper and timely demand; or
4. on service of the summons and complaint in which the acceleration is clear and unequivocal.
The above rule of law was determined in the seminal case of Saini v. Cinelli Enterprises, Inc., 289 AD2d 770, 771, 733 N.Y.S.2d 824, 826 (3d Dept., 2001) and its progeny. See such cases as Weisel v. Rubinstein, 820 N.Y.S.2d 847, 2006 NY Slip Op. 51107(U) reaffirming that "if part payment of a debt otherwise outlawed by the statute of limitations is made under circumstances from which a promise to honor the obligation may be inferred, it will be effective to make the time limited for bringing an action start anew from the time of such payment (citation omitted)" and finding that debtor made payments in which the debtor unqualifiedly and absolutely acknowledges that additional amounts are due denying dismissal for expiration of the statute of limitations. See also 1077 Madison v. March, 2015 WL 6455145, finding that the statute of limitations in a mortgage foreclosure actions begins to run six years from the date of each unpaid installment or the time the mortgagee is entitled to demand full payment or when the mortgage has been accelerated by a demand or action is brought. Once the mortgage is accelerated, the statute of limitations begins to run on the entire mortgage debt. Loiacono v. Goldberg, 240 AD2d 476, 658 N.Y.S.2d 138, 139 (2nd Dept., 1997). In that case, the mortgage was accelerated on May 5, 2014, after service of a notice of default on February 1, 2008. Thus, six years had not passed and the action was timely.
Even more recently, in Wells Fargo Bank, N.A. v. Machell, 55 Misc 3d 1214(A), 2017 NY Slip Op. 50579 (U), the Court acknowledged that the notion of "de-accelerating" and revoking an election to accelerate appears to be a creature of the Appellate Division, Second Department. The Court reasoned that there was one Third Department case, in the matter of Lavin v. Elmakiss, 302 AD2d 638, 639 (3rd Dept., 2003, that "partially" reaffirms this "de-acceleration" principle. The Court explicitly opines that "another trial court in the 3rd Dept. builds and adds to this rule establishing that "the revocation should be clear, unequivocal, and give actual notice to the borrower of the lender's election to revoke in sum, akin to the manner plaintiff gave notice to exercise the option to accelerate" (Bank of New York Mellon v. Slavin, 54 Misc 3d 311, 315 (Sup. Rensselaer Cty., 2016, Zwack, J) citing Mebane, supra, 208 AD2d at 894, Wells Fargo N.A. v. Burke, 94 AD3d 980 (2nd Dept., 2012). The Court found that the Plaintiff's attempt to "de-accelerate" and revoke the election to accelerate three days prior to the date of the expiration of the statute of limitations failed due to the lack of "actual notice" to the borrower. The Court did not find that "de-accelerate" was a misnomer but was not applicable to that case.
In addition, in Bank of New York Mellon v. Slavin, 54 Misc 3d 311, 315 (Sup. Rensselaer Cty., 2016, Zwack, J), the Supreme Court held that the mortgagee's failure to comply with a trial loan modification agreement did not revoke acceleration of mortgage's debt where the plan specifically preserved the previous foreclosure action. As important, the foreclosure action was never withdrawn by the mortgagee, but rather was dismissed sua sponte by the court. Rather than seeking to revoke its election to accelerate, the mortgagee's failed attempt to revive the prior foreclosure, coupled with the trial plan did not include an acknowledgment by mortgagor of the mortgage debt or promise to repay the debt, was insufficient to act as a waiver or toll, for that matter. of the statute of limitation.
There are many cases in the Second Department that have explicitly discussed the statute of limitations and its application to each of the above commencement dates, especially the effect of prior litigation between the parties.
For mortgages payable in installments, like any debt based on breach of contract, the statute of limitations begins to run on the date that each installment becomes due. Loiacono v. Goldberg, 240 AD2d 476, 477, 658 N.Y.S.2d 138 (2nd Dept., 1997).
In addition, the statute of limitations begins to run on the entire debt on the date of the loan's maturity. So, in such a case, the Lender is precluded from the collection of the unpaid principal balance and installments six years prior to the date of maturity of the loan, if the loan has not been accelerated. See Quackenbush v. Mapes, 123 AD2d 242, 107 N.Y.S.2d 1047 (1st Dept., 1908). The Court stated that the "statute of limitations was triggered when the party that was owed the money had a right to demand payment, not when it actually made the demand". (See Hahn Automotive Warehouse, Inc. v. American Zurich Ins. Co., 18 N.Y.S3d 765, 771 (2012) and Wendover Fin. Servs. V. Ridgeway, 137 AD3d 1718, 1719, 28 N.Y.S.3d 535 (4th Dept., 2016)). This is particularly true with reverse mortgages since the lender is entitled to demand full payment on the date that the borrower dies.
The statute of limitations begins to run on the entire unpaid balance or debt including interest on the date the mortgage is accelerated. Loiacono v. Goldberg, 240 AD2d 476, 477, 658 N.Y.S.2d 138 (2nd Dept., 1997). "Even if the mortgage is payable in installments, once the mortgage debt is accelerated, the entire amount is due, and the statute of limitation begins to run on the entire debt". Nationstar Mtge., LLC v. Weisblum, 143 A.D.23d at 867, quoting EMC Mtge. Corp. v. Petella, 279 AD2d 604, 605(2nd Dept., 2001); Wells Fargo Bank, N.A. v. Burke, 94 AD3d at 982; Plaia v. Safonte, 45 AD3d 747, 748; Koeppel v. Carlandia Corp., 21 AD3d 884; Federal Nat'l Mtge. Assos. v. Mebane, 208 AD2d 892, 894).
The election to accelerate the mortgage must consist of a notice of election to the borrower or some overt act that is clear and unequivocal of such election. See Goldman Sachs Mortgage Co., v. Mares, 45 Misc 3d 1218(A), (Tompkins Cty. Supt. Court, 2014) aff'd 135 AD3d 1121, 23 N.Y.S.3d 444 (3rd Dept., 2016) in which the default notice that stated that the failure to pay the sums due may result in acceleration of the entire mortgage did not constitute a clear and unequivocal acceleration of the mortgage; Sarva v. Chakravorty, 34 AD3d 438, 439, 826 N.Y.S.2d 74 (2nd Dept., 2006), default notice stating the lender's wanting "to get paid in full" insufficient to constitute acceleration of the loan; 21st Mortgage Corp., v. Osorio, 51 Misc 3d 1219(A) (Sup. Court, Queens Cty, 2016), finding that a default notice discussing possible future events does not constitute acceleration.
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 (EMC Mtge. Corp. v. Patella, 279 AD2d 604, 605 (2nd Dept., 2001); Federal National Mtg. Assoc. v. Mebane, 208 AD2d 892, 894; Kahsipour v. Wilmington Sav. Fund Socy., FSB, 144 AD3d 985; Clayton Nat'l, Inc., v. Guldi, 307 AD2d 982; Lavin v. Elmakiss, 302 AD2d 638). See also the recent case of U.S. National Bank v. Barnett, 15 AD3d 791 (2017 NY Slip Op. 04490) in which the court dismissed the action of the grounds of the expiration of the statute of limitations finding that "the mortgage debt was accelerated on May 15, 2007, when the plaintiff commenced the first action to foreclose the mortgage. Thus, the six-year statute of limitation expired prior to the commencement of the second action on July 19, 2013". More importantly, "while the lender may revoke its election to accelerate the mortgage , the record in this case is barren of any affirmative act of revocation occurring during the six year limitations period subsequent to the initiation of the prior action" citing Kahsipour v. Wilmington Sav. Fund Socy., FSB, 144 AD3d 985; Clayton Nat'l, Inc., v. Guldi, 307 AD2d 982; Lavin v. Elmakiss, 302 AD2d 638.
There are multiple cases in which the appellate courts have determined that acceleration was not "real" acceleration. For example, see EMC Mortgage Corp. v. Suarez, 49 AD3d 592, 593, 852 N.Y.S.2d 791 (2nd Dept., 2008) (nullity of acceleration-"recovery limited to only those unpaid installments which accrued within the six year period immediately preceding its commencement of the action"); Wells Fargo Bank, N.A. v. Burke, 94 AD3d 980, 943 N.Y.S.2d 540 (2nd Dept., 2012 )(bank had no authority to accelerate debt); 21st Mortgage v. Adames, 153 AD3d 474, 2017 NY Slip Op 05925, citing Goldman Sachs Mtge Co. Mares, 135 AD3d 1121, 1122-1123, stating that the notice of default dated December 13, 2006 sent prior to the commencement of the 2007 action, was nothing more than a letter discussing acceleration as a possible future event, does not constitute acceleration and "the 2007 action was ineffective to constitute a valid exercise of the option to accelerate since the plaintiff did not have authority to accelerate the debt or sue to foreclose at that time". See also 53 PL Realty, LLC v. U S Bank National Assoc., 153 AD3d 894, 2017 Slip Op. 06345b, finding that "the mortgage foreclosure action commenced by the Defendant's predecessor in interest and the order dismissing that action pursuant to CPLR §3216 which demonstrated that the mortgage was accelerated in 2008 more than six years before the commencement of this action" in 2016 and thus, time barred.
Case authority provides that the following events did not constitute acceleration: voluntary discontinuance except under facts as provided below (See NMNT Realty Corp. v. Knoxville 2012 Trust, 151 AD3d 1068 (2015-03210)(Index No. 13279/13; Saini v. Cinelli Enterprises, Inc., 289 AD2d 770, 733 N.Y.S.2d 824 (3rd Dept., 2001); Petito v. Piffath, 85 NY2d 1, 647 N.E.2d 732 (1994); court dismissal (Kashipour v. Wilmington Sav. Fund Socy., FSB, 144 AD3d 985; Clayton Nat'l, Inc., v. Guldi, 307 AD2d 982; EMC Mtge. Corp. v. Patella, 279 AD2d 604, 605 (2nd Dept., 2001)); Citibank , N. A. v. McGlone, 270 AD2d 124, 125, 704 N.Y.S.2d 576, 577-78 (1st Dept., 2000); acceptance of partial payment (UMLIC, LLC. v. Mellace, 19 AD3d 684, 799 N.Y.S.2d 61 (2d Dept., 2005); acceptance of post acceleration payments (Lavin v. Elmakiss, 302 AD2d 638, 639, 754 N.Y.S.2d 741 (3rd Dept., 2003); service of a new 90 day notice (Beneficial Homeowner Service Corp. v. Tovar, Index No. 61092/2014. NYLJ 120725043582 at*1).
It has also been held even without acceleration, a lender is barred from foreclosing more than six years after default. Corrado v. Petrone, 139 AD2d 483, 484-85, 526N.Y.S.2d 845 (2nd Dept., 1988); Phalen-Sobolevsky v. Mullin, 26 AD3d 806, 811 N.Y.S.2d 506 (4th Dept., 2006); LePore v. Shaheen, 32 AD3d 1330, 821 N.Y.S.2d 532 (4th Dept., 2006). However, those cases are distinguishable from the case at bar. None of those cases involved modification of the underlying mortgage loan. Since there were recently fifteen (15) foreclosure cases argued before the Appellate Division as of August 25, 2017, the issue of the validity of the revocation of acceleration or de-acceleration remains an evolving issue of law.
Furthermore, where the entire mortgage has yet to become due (maturity date), the lender will be barred from collecting principal and interest payments due six years prior to acceleration or the commencement of the foreclosure action. Wells Fargo Bank, N.A. b. Cohen, 80 AD2d 753, 754, 915 N.Y.S.2d 569, 571, (2d Dept., 2010); Khoury v. Alger, 174 AD2d 9918, 191, 571 N.Y.S.2d 829 (3rd Dept., 1991).
In this case, the borrower defaulted on the original loan effective October 1, 2005. According to Exhibit "E" of the first summons and complaint (Exhibit "C" of the Defendant's motion herein), the Defendant owed $365,747.38 at a rate of 5.875% plus late fees of $87.54. In the Modification Agreement, the Defendant acknowledged the unpaid principal amount of $376,027.06, the principal amount payable under the Note; a promise to pay the unpaid principal balance, plus interest in monthly payments of $2,283.48 beginning on the 1st day of December 2006. Based on this new agreement, the Plaintiff discontinued the action and cancelled the Notice of Pendency.
First, if the Court were to accept the facts and law as proffered by the Defendant and in accordance with some of the case law above as cited by the Defendant, the loan here having been accelerated on February 15, 2006, this action should have been commenced on or before February 15, 2012, six years after acceleration, and is time barred. In this case, the facts as argued by the Defendant would establish prima facie that the time to commence the action has expired, so the burden shifts to the Plaintiff to raise a question of fact as to whether the statute of limitations is tolled or is otherwise inapplicable. (Zabrowoski v. Local 74, Serv. Employs. Int'l Union AFL-CIO, 91 AD3d at 769; Baptiste v. Harding, 88 AD3d at 753)
Since the Defendant has met that burden, the burden shifts to the Plaintiff to demonstrate that the statute of limitation is tolled or inapplicable. It is the opinion of this Court that the Plaintiff has met that burden. The prior action was voluntarily discontinued based on the modification agreement in which the Defendant acknowledged the debt and entered into a new agreement to pay the debt pursuant to new terms and conditions. This agreement was final and irrevocable and there is no produced evidence in the record to rebut this fact.
More compelling is the fact that after the modification agreement was signed by the parties, the Plaintiff changed its position in this case by revoking its acceleration of the entire mortgage debt in reliance on the Defendant's assumption of new obligations to pay the mortgage debt. In conformity with this fact, the record supports irrefutable claims that from at least January 1, 2007 to July 31, 2008, the Defendant tender monthly installment payments to the Plaintiff and/or its servicing agent under the new terms of the modified note and mortgage.
According to the new summons and complaint, the monthly payment was $4,369.11, allegedly principal and interest, and does not specifically reference the modification agreement. It appears that the summons and complaint are boilerplate pleadings and do not reflect the modification transaction. Similar to the alleged intentional exclusion of the modification agreement by the Defendant in the instant motion, the Plaintiff has also excluded recitation of the proper transactions and occurrences in the pleadings that constitute the basis for the underlying action (see CPLR§ 3013).
In this case then, if the Court accepts as true the contentions of the Plaintiff that the acceleration was revoked by the execution of the modification agreement on December 18, 2006, the statute of limitations was tolled. The record in this case shows that there was "an affirmative act of revocation occurring during the six year limitations period subsequent to the initiation of the prior action". (Kahsipour v. Wilmington Sav. Fund Socy., FSB, 144 AD3d 985; Clayton Nat'l, Inc., v. Guldi, 307 AD2d 982; Lavin v. Elmakiss, 302 AD2d 638).
The time to foreclose on the mortgage debt was tolled until the mortgage debt was accelerated by the commencement of this action by the service of the summons and complaint on February 2, 2016. No evidence was presented by either party of any pre-action notice of acceleration. Therefore, by the service of the summons and complaint which explicitly states that the Plaintiff elects to accelerate the note,this action is timely and is commenced within the six-year statute of limitations. Saini v. Cinelli Enterprises, Inc., 289 AD2d 770, 771, 733 N.Y.S.2d 824, 826 (3d Dept., 2001); Weisel v. Rubinstein, 820 N.Y.S.2d 847, 2006 NY Slip Op. 51107(U); Kahsipour v. Wilmington Sav. Fund Socy., FSB, 144 AD3d 985; Clayton Nat'l, Inc., v. Guldi, 307 AD2d 982; Lavin v. Elmakiss, 302 AD2d 638).
Based on the above, the Court finds that the first affirmative act of "de-acceleration" or revocation of acceleration was the execution of the modification agreement by the parties. Suffice it to say, the Lender is not required to accept or offer such a modification. The intention of the parties was clearly to preserve the property for the Borrower and to secure repayment of the note for the Lender. The final affirmative act of revocation was the discontinuance of the action and cancellation of the notice of pendency and this act was in reliance on a new promise to pay the debt by the borrower. (EMC Mtge. Corp. v. Patella, 279 AD2d 604, 605 (2nd Dept., 2001); Federal National Mtg. Assoc. v. Mebane, 208 AD2d 892, 894; Kahsipour v. Wilmington Sav. Fund Socy., FSB, 144 AD3d 985; Clayton Nat'l, Inc., v. Guldi, 307 AD2d 982; Lavin v. Elmakiss, 302 AD2d 638).
Notwithstanding this finding that this action is properly before the Court, the Plaintiff is barred from the collection of unpaid principal and interest payments due before February 2, 2010, six years before the 2016 acceleration. Thus, all installment payments between the date of the Defendant's default on August 1, 2008 to February 2, 2010 are barred and uncollectible by the Plaintiff in this action, and accordingly, are severed from this action and dismissed with prejudice as a matter of fact and law. Wells Fargo Bank, N.A. v. Cohen, 80 AD2d 753, 754, 915 N.Y.S.2d 569, 571, (2d Dept., 2010); Khoury v. Alger, 174 AD2d 9918, 191, 571 N.Y.S.2d 829 (3rd Dept., 1991).
The Court has reviewed the other contentions by the Defendant and finds that under the above analysis, there are no grounds to impose sanctions for abuse of process or malicious prosecution against the Plaintiff or Counsel for the Plaintiff and therefore, is denied. Similarly, any claims for attorney's fees by the Defendant is also denied.
For the above stated reasons, the Defendant's motion for summary judgment to dismiss the summons and complaint is granted in part, as set forth above, and is denied, in part.
This constitutes the Decision and Order of this court. Dated: September 18, 2017 Hon. Harriet L. Thompson Acting Justice of the Supreme Court