Opinion
100224/2018
01-15-2020
CITIBANK, N.A., not in Its Individual Capacity, but Solely as Trustee of NRZ Pass-Through Trust VI, Plaintiff, v. Mary MARINO a/k/a Mary Lou Marino, Individually, and as Executrix of the Estate of John T. Mulcahy a/k/a John T. Mulcahy, Sr., United States of America — Internal Revenue Service, New York State Department of Taxation and Finance, "John Doe No.1" Through "John Doe #12," the Last Twelve Names Being Fictitious and Unknown to Plaintiff, the Persons or Parties Intended Being the Tenants, Occupants, Persons or Corporations, if Any, Having or Claiming an Interest in or Lien Upon the Premises Described in the Complaint, Defendants.
Roach & Lin, P.C., Syosset (Michael C. Manniello of counsel), for plaintiff. William L. Nikas, Hudson Falls, for defendant Mary Marino a/k/a Mary Lou Marino, Individually and Executrix of the Estate of John T. Mulcahy a/k/a John T. Mulcahy, Sr.
Roach & Lin, P.C., Syosset (Michael C. Manniello of counsel), for plaintiff.
William L. Nikas, Hudson Falls, for defendant Mary Marino a/k/a Mary Lou Marino, Individually and Executrix of the Estate of John T. Mulcahy a/k/a John T. Mulcahy, Sr.
Robert J. Muller, J.
On September 23, 1988, John T. Mulcahy, Sr. (hereinafter decedent) executed a Revolving Loan Agreement with Household Finance Realty Corp. of NY (hereinafter Household Finance), which Agreement had a credit limit of $25,000.00 and was secured by a mortgage on real property located at 740 County Line Road in the Town of Kingsbury, Washington County. The mortgage was signed by decedent and defendant Mary Marino (hereinafter defendant), both of whom held title to the property. Decedent passed away on September 29, 2001. Household Finance subsequently assigned the mortgage to plaintiff by assignment dated February 20, 2018 and recorded that same date.
Plaintiff commenced this foreclosure action on August 20, 2018 against defendant, in her individual capacity and as executrix of decedent's estate. Issue was then joined with defendant asserting a counterclaim that the action is barred by the statute of limitations and that plaintiff should therefore "be required to file a satisfaction of ... mortgage with the Washington County Clerk's Office." Presently before the Court is (1) plaintiff's motion for, inter alia , summary judgment granting the relief requested in the complaint, striking the answer and appointing a referee; and (2) defendant's cross motion for summary judgment dismissing the complaint as against her. The motion and cross motion will be addressed ad seriatim.
"A plaintiff can establish entitlement to summary judgment by producing evidence of the mortgage, the unpaid note and the [borrower's] default" ( Wells Fargo Bank, N.A. v. Walker , 141 AD3d 986, 987 [2016] ; see Deutsche Bank Natl. Trust Co. v. Monica , 131 AD3d 737, 738 [2015] ; Wells Fargo Bank, NA v. Ostiguy , 127 AD3d 1375, 1376 [2015] ).
Here, plaintiff has submitted a copy of the Revolving Loan Agreement and the mortgage. The Revolving Loan Agreement states, in pertinent part: "The term of the loan is 15 years. As a result, you will be required to repay the entire principal balance and any accrued interest then owing 15 years from the date on which the loan is made." The mortgage likewise states that "[t]he right to secure future advances ... terminate[s] fifteen years from the date of [the mortgage]." The term of the loan thus expired on September 23, 2003.
Plaintiff has also submitted the affidavit of Cindy Vazquez, a Foreclosure Specialist employed by Fay Servicing, LLC, servicer and attorney-in-fact for plaintiff, which states that "[t]he [n]ote and [m]ortgage were modified by [l]oan [m]odification" and attaches an unsigned Loan Maturity Extension Agreement (hereinafter LMEA) apparently sent to decedent on or about November 2, 2016. According to Vazquez, decedent defaulted on his loan payments, with the payment due for September 14, 2015 being "[t]he last payment received from or on behalf of [decedent]." Plaintiff has also submitted a copy of the payment history relative to the loan, which appears to demonstrate that the last payment was received on February 29, 2016. This payment history does not identify who made the payments; it simply lists the loan number, transaction date, transaction amount and ending balance. Finally, plaintiff has submitted a Lost Loan Modification Affidavit executed by its counsel. Notably, counsel does not include any details about the LMEA in the Affidavit and concedes that "[t]he statements made [therein] are based on [his] communications with Fay Servicing, LLC" and not on his own personal knowledge.
Plaintiff indicates that this "last payment received ... was for the monthly payment due for September 14, 201[5]."
With that said, plaintiff has established — in sum — that decedent died in September 2001, the term of the loan expired in September 2003, there was a default in payments in September 2015 and then, in November 2016, decedent was sent a LEMA. Considering the rather extraordinary inconsistencies inherent in these facts, it is surprising — to say the least — that plaintiff has presented them with no explanation whatsoever, save for a Lost Loan Modification Affidavit without probative value (see Roemer v. Allstate Indem. Ins. Co. , 163 AD3d 1324, 1327 [2018] ; see CPLR 3212 [b] ; Hill v. Country Club Acres, Inc. , 134 AD3d 1267, 1268 [2015] ). Most notably, plaintiff has failed to explain how or why payments continued for more than 13 years after the term of the loan expired. Indeed, there is no allegation that a loan modification was signed prior to expiration of the loan, nor that a modification was signed prior to decedent's death. Rather, the LEMA sent in November 2016 is the only modification mentioned in the motion papers. Under the circumstances, the Court finds that plaintiff has entirely failed to demonstrate its entitlement to summary judgment (see Roemer v. Allstate Indem. Ins. Co. , 163 AD3d 1324, 1327 [2018] ; Hill v. Country Club Acres, Inc. , 134 AD3d 1267, 1268 [2015] ).
With respect to those aspects of plaintiff's motion which seek (1) a default judgment as against defendants United States of America Internal Revenue Service and New York State Department of Taxation and Finance (hereinafter collectively referred to as the nonappearing defendants), both of whom were named as potential judgment creditors (see RPAPL 1311 [3] ); and (2) the appointment of a referee, the Court finds that plaintiff is not entitled to any such relief.
Plaintiff has failed to submit "proof of the facts constituting the claim" against the non-appearing defendants, as required under CPLR 3215 (f). It is unclear whether in fact the non-appearing defendants even have a lien against decedent's estate. Further, the appointment of a referee is inappropriate given plaintiff's failure to demonstrate its prima facie entitlement to summary judgment.
With respect to that aspect of plaintiff's motion which seeks amendment of the caption so as to remove all John Doe defendants, the Court finds that plaintiff is entitled to the requested relief. Plaintiff has submitted proof that there are no tenants residing at the property nor any other parties who must be joined in the action.
Based upon the foregoing, plaintiff's motion is granted to the extent that the caption is amended so as to remove all John Doe defendants and the motion is otherwise denied.
Turning now to the cross motion, defendant contends that this action is barred by the six-year statute of limitations (see CPLR 213 [4] ).
"As the party asserting the statute of limitations defense, defendant ‘[bears] the initial burden of establishing prima facie that the time to sue [has] expired, and thus [is] required to establish, among other things, when ... plaintiff's cause of action accrued’ " ( Bank of America, N.A. v. Gulnick , 170 AD3d 1365, 1365 [2019], quoting Haynes v. Williams , 162 AD3d 1377, 1378 [2018] [internal quotation marks, ellipsis, brackets and citations omitted], lv denied 32 NY3d 906 [2018] ; see Matter of Baird , 58 AD3d 958, 959 [2009] ). With that said, the Court of Appeals has held that
"where the claim is for payment of a sum of money allegedly owed pursuant to a contract, the cause of action accrues when the party making the claim possesses a legal right to demand payment. In other words, the statute of limitations [is] triggered when the party that was owed money had the right to demand payment, not when it actually made the demand" ( Hahn Automotive Warehouse, Inc. v. American Zurich Ins. Co. , 18 NY3d 765, 770-771 [2012] [internal quotation marks, brackets and citations omitted]; accord Bank of America, N.A. v. Gulnick , 170 AD3d at 1366 ; see CPLR 206 [a] ; Gower v. Weinberg , 184 AD2d 844, 845 [1992] ).
Notably, "[t]his rule applies even though the party that is owed money does not have knowledge of the event giving rise to a cause of action" ( Bank of America, N.A. v. Gulnick , 170 AD3d at 1366 ; see Wendover Fin. Servs. v. Ridgeway , 137 AD3d 1718, 1719 [2016], lv denied 140 AD3d 1715 [2016] ; Gower v. Weinberg , 184 AD2d at 845 ). "A contrary rule providing that a cause of action accrues only when a demand is made would permit a plaintiff ‘to extend the statute of limitations indefinitely by simply failing to make a demand’ " ( Bank of America, N.A. v. Gulnick , 170 AD3d at 1366, quoting Hahn Automotive Warehouse, Inc. v. American Zurich Ins. Co. , 18 NY3d at 771 [internal quotation marks and citation omitted]; see State of New York v. City of Binghamton , 72 AD2d 870, 871 [1979] ).
Here, defendant has submitted an affidavit which attaches a copy of decedent's death certificate. A copy of the Revolving Loan Agreement is also included in the record, which provides as follows: "We have the right to require you to pay your entire balance plus all other accrued but unpaid charges immediately and to cancel your credit privileges under this Agreement because of ... your death." As set forth above, the Revolving Loan Agreement further provides that "term of the loan is 15 years."
Under the circumstances, plaintiff's cause of action accrued on September 29, 2001, the date of decedent's death (see CPLR 206 [a] ; Hahn Automotive Warehouse, Inc. v. American Zurich Ins. Co. , 18 NY3d at 770-771 ; Bank of America, N.A. v. Gulnick , 170 AD3d at 1366 ; Gower v. Weinberg , 184 AD2d at 845 ). Further, even if the statute of limitations period had not been triggered by decedent's death, the cause of action would have accrued no later than September 23, 2003, when the term of the loan expired. Indeed, as noted above there is no allegation that a loan modification was signed prior to expiration of the loan. To the extent that this action was not commenced until August 20, 2018, defendant has amply established her prima facie entitlement to summary judgment dismissing the complaint as against her (see CPLR 213 [4] ; Bank of America, N.A. v. Gulnick , 170 AD3d at 1366 ).
In opposition, plaintiff contends that the statute of limitations was tolled until February 29, 2016 as a result of the partial payments made on the loan. "A debtor's partial payment toward a mortgage debt may renew the statute of limitations in a foreclosure action if the creditor ‘show[s] that there was a payment by the debtor or the debtor's agent of an admitted debt, made and accepted as such, accompanied by circumstances amounting to an absolute and unqualified acknowledgment by the debtor of more being due, from which a promise may be inferred to pay the remaining balance’ " ( Wells Fargo Bank N.A. v. Grover , 165 AD3d 1541, 1542 [2018], quoting Saini v. Cinelli Enters. , 289 AD2d 770, 771 [2001] [internal quotation marks, brackets and citations omitted], lv denied 98 NY2d 602 [2002] ; see General Obligations Law § 17-107[1], [2] [b] ; Petito v. Piffath , 85 NY2d 1, 7 [1994] ; see generally Lew Morris Demolition Co. v. Board of Educ. of City of NY , 40 NY2d 516, 521 [1976] ).
Here, none of the payments made after decedent's death could possibly constitute decedent's absolute and unqualified acknowledgment of more being due under the loan (see Lew Morris Demolition Co. v. Board of Educ. of City of NY , 40 NY2d at 521 [1976] ; Chase v. Houghton , 41 AD3d 1062, 1063 [2007] ). Suffice it to say one who is dead cannot make such an acknowledgment. Further, plaintiff has neither alleged nor demonstrated that the payments were made by decedent's estate. As noted above, the payment history does not identify who made the payments. Plaintiff has therefore failed to raise a triable issue of fact as to whether the statute of limitations was tolled by partial payments on the loan.
Although plaintiff does not explicitly argue that defendant should be equitably estopped from asserting a statute of limitations defense, this argument can certainly be inferred from plaintiff's contentions and, as such, it will be addressed. "The doctrine of equitable estoppel applies where it would be unjust to allow a defendant to assert a statute of limitations defense" ( Zumpano v. Quinn , 6 NY3d 666, 673 [2006] ; accord Jacobson Dev. Group, LLC v. Yews, Inc. , 174 AD3d 868, 870 [2019] ). "Thus, the defense of the statute of limitations may be barred where it is the defendant's affirmative wrongdoing ... which produced the long delay between the accrual of the cause of action and the institution of the legal proceeding" (id. , quoting General Stencils v. Chiappa , 18 NY2d 125, 128 [1966] ; accord Jacobson Dev. Group, LLC v. Yews, Inc. , 174 AD3d at 870 ; see North Coast Outfitters, Ltd. v. Darling , 134 AD3d 998, 999 [2015] ). "[E]quitable estoppel will apply ‘where plaintiff was induced by fraud, misrepresentations or deception to refrain from filing a timely action’ " ( Zumpano v. Quinn , 6 NY3d at 674, quoting Simcuski v. Saeli , 44 NY2d 442, 449 [1978] ; accord Jacobson Dev. Group, LLC v. Yews, Inc. , 174 AD3d at 870-871 ; see State of NY Workers' Compensation Bd. v. Wang , 147 AD3d 104, 112-113 [2017] ). Plaintiff must also "demonstrate reasonable reliance on ... defendant's misrepresentations" ( Zumpano v. Quinn , 6 NY3d at 674 ; accord Jacobson Dev. Group, LLC v. Yews, Inc. , 174 AD3d at 870 ; see Simcuski v. Saeli , 44 NY2d at 449 ).
Here, plaintiff has demonstrated that payments on the loan were made until February 29, 2016. With that said, however, plaintiff has failed to demonstrate or even allege: (1) that it was actually defendant making these payments; (2) that the payments were made to delay the institution of a legal proceeding; and (3) that it reasonably relied on these payments in delaying the institution of a legal proceeding. With respect to this last factor, irrespective of whether Household Finance — plaintiff's predecessor in interest — was aware of decedent's death in 2001, it certainly was aware that the term of the loan expired in 2003. As a result, it was unreasonable for Household Finance to continue accepting payments on the loan until 2016 without at least undertaking an investigation. As set forth above, the LMEA sent in November 2016 is the only loan modification so much as mentioned by plaintiff.
Under the circumstances, the Court finds that plaintiff has failed to raise a triable issue of fact with respect to whether defendant should be equittably estopped from asserting a statute of limitations defense (see Jacobson Dev. Group, LLC v. Yews, Inc. , 174 AD3d at 870 ; Zumpano v. Quinn , 6 NY3d at 674 ).
Based upon the foregoing, defendant's cross motion for summary judgment is granted in its entirety and the complaint dismissed as against her.
To the extent that the cross motion does not seek summary judgment with respect to defendant's counterclaim, the counterclaim is hereby severed and preserved for future prosecution (see CPLR 407 ).
Therefore, having considered the Notice of Motion, dated May 28, 2019; Affirmation of Michael C. Manniello, Esq. with exhibits attached thereto, dated May 28, 2019, submitted in support of the motion; Affidavit of Cindy Vazquez with exhibits attached thereto, sworn to April 17, 2019, submitted in support of the motion; Notice of Cross Motion, dated June 18, 2019; Affidavit of William L. Nikas, Esq. with exhibits attached thereto, sworn to June 18, 2019, submitted in opposition to the motion and in support of the cross motion; Affidavit of Mary Marino, sworn to June 18, 2019, submitted in opposition to the motion and in support of the cross motion; Affirmation of Micheal C. Manniello, Esq. with exhibit attached thereto, dated July 26, 2019, submitted in further support of the motion and in opposition to the cross motion; and Affirmation of William L. Nikas, Esq., dated July 30, 2019, submitted in further support of the cross motion; and oral argument having been heard on November 21, 2019 with Michael C. Manniello, Esq. appearing on behalf of plaintiff and William L. Nikas, Esq. appearing on behalf of defendant, it is hereby
ORDERED that plaintiff's motion is granted to the extent that the caption is amended so as to remove all John Doe defendants and the motion is otherwise denied; and it is further
ORDERED that the caption shall hereinafter read as follows:
STATE OF NEW YORK
SUPREME COURT COUNTY OF WASHINGTON
_____________________________________________
CITIBANK, N.A., NOT IN ITS INDIVIDUAL
CAPACITY, BUT SOLELY AS TRUSTEE OF NRZ PASS-THROUGH TRUST VI, Index No. 100224/2018
Plaintiff,
RJI No. 57-1-2019-0222
v.
MARY MARINO A/K/A MARY LOU MARINO,
INDIVIDUALLY, AND AS EXECUTRIX OF
THE ESTATE OF JOHN T. MULCAHY A/K/A
JOHN T. MULCAHY, SR., UNITED STATES OF
AMERICA — INTERNAL REVENUE SERVICE,
NEW YORK STATE DEPARTMENT OF
TAXATION AND FINANCE,
Defendants.
_____________________________________________
; and it is further
ORDERED that defendant's cross motion to dismiss the complaint as against her is granted in its entirety; and it is further
ORDERED that defendant's counterclaim is severed and preserved for future prosecution.
The original of this Decision and Order has been e-filed by the Court. Counsel for defendant is directed to obtain a filed copy of the Decision and Order for service with notice of entry in accordance with CPLR 5513.