Opinion
2016-06260 Index No. 513762/15
08-28-2019
HERZL DEVELOPMENT GROUP, LLC, appellant, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION, respondent.
Menashe & Associates, LLP, Montebello, N.Y. (Shoshana Schneider of counsel), for appellant. Ras Boriskin, LLC, Westbury, N.Y. (Joseph F. Battista, Bay Shore and Jason W. Creech of counsel), for respondent.
Menashe & Associates, LLP, Montebello, N.Y. (Shoshana Schneider of counsel), for appellant.
Ras Boriskin, LLC, Westbury, N.Y. (Joseph F. Battista, Bay Shore and Jason W. Creech of counsel), for respondent.
WILLIAM F. MASTRO, J.P., JOHN M. LEVENTHAL, SHERI S. ROMAN, ANGELA G. IANNACCI, JJ.
DECISION & ORDER ORDERED that the order is affirmed, with costs.
In June 2005, nonparty Paul Russell executed a note in favor of Countrywide Home Loans, Inc. (hereinafter Countrywide), secured by a mortgage given to Mortgage Electronic Registration Systems, Inc., as nominee for Countrywide, encumbering real property in Brooklyn. Upon Russell's default, Countywide mailed a notice of default dated May 17, 2007. In or about July 2007, Countrywide commenced an action to foreclose the mortgage (hereinafter the 2007 foreclosure action), which was subsequently dismissed for lack of standing. A second action to foreclose the mortgage was dismissed for lack of personal jurisdiction.
Thereafter, in 2014, the plaintiff obtained title to the property and commenced this action pursuant to RPAPL 1501(4), seeking to cancel and discharge the mortgage on the ground that the statute of limitations for commencing an action to foreclose the mortgage had expired. The defendant moved pursuant to CPLR 3211(a)(1) to dismiss the complaint, arguing that documentary evidence demonstrated that the debt was never accelerated, and therefore that the statute of limitations had not expired. By order dated June 9, 2016, the Supreme Court granted the defendant's motion. The plaintiff appeals. "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" ( Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d 980, 982, 943 N.Y.S.2d 540 ; see U.S. Bank N.A. v. Gordon, 158 A.D.3d 832, 835, 72 N.Y.S.3d 156 ). However, once such a mortgage debt is accelerated, the entire amount is due and the statute of limitations begins to run on the entire debt (see Nationstar Mtge., LLC v. Weisblum, 143 A.D.3d 866, 867, 39 N.Y.S.3d 491 ; Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d at 982, 943 N.Y.S.2d 540 ). "Where the acceleration of the maturity of a mortgage debt on default is made optional with the holder of the note and mortgage, some affirmative action must be taken evidencing the holder's election to take advantage of the accelerating provision, and until such action has been taken the provision has no operation" ( Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d at 982–983, 943 N.Y.S.2d 540 ). "Where the holder of the note elects to accelerate the mortgage debt, notice to the borrower must be ‘clear and unequivocal’ " ( Nationstar Mtge., LLC v. Weisblum, 143 A.D.3d at 867, 39 N.Y.S.3d 491, quoting Sarva v. Chakravorty, 34 A.D.3d 438, 439, 826 N.Y.S.2d 74 ).
Here, the documentary evidence submitted by the defendant conclusively demonstrated that the debt was not accelerated either by the May 17, 2007, notice of default or by the complaint in the 2007 foreclosure action, as the plaintiff herein alleged. Although the complaint in the 2007 action expressly "elect[ed] to declare immediately due and payable the entire unpaid balance of the principal" (see Milone v. U.S. Bank N.A., 164 A.D.3d 145, 152, 83 N.Y.S.3d 524 ), Countrywide was found to lack standing in that action, and thus, did not have the authority to accelerate the debt at that time (see J & JT Holding Corp. v. Deutsche Bank Natl. Trust Co., 173 A.D.3d 704, 104 N.Y.S.3d 112 ; U.S. Bank N.A. v. Gordon, 158 A.D.3d 832, 836, 72 N.Y.S.3d 156 ; 21st Mtge. Corp. v. Adames, 153 A.D.3d at 475, 60 N.Y.S.3d 198 ). Further, the May 17, 2007, notice of default, which provided that the debt would be accelerated if the borrower failed to cure the default by a date certain, was "nothing more than a letter discussing acceleration as a possible future event, which does not constitute an exercise of the mortgage's optional acceleration clause" ( 21st Mtge. Corp. v. Adames, 153 A.D.3d at 475, 60 N.Y.S.3d 198 ; see FBP 250, LLC v. Wells Fargo Bank, N.A., 164 A.D.3d 1307, 1309, 85 N.Y.S.3d 177 ; Milone v. U.S. Bank N.A., 164 A.D.3d at 152, 83 N.Y.S.3d 524 ).
The plaintiff's remaining contention is without merit.
Accordingly, we agree with the Supreme Court's determination granting the defendant's motion pursuant to CPLR 3211(a)(1) to dismiss the complaint.
MASTRO, J.P., LEVENTHAL, ROMAN and IANNACCI, JJ., concur.