Opinion
Index No. 67859/2021
08-29-2023
Nationstar Mortgage, LLC D/B/A MR. COOPER, Plaintiff, v. Sylvain Naar; BANK OF AMERICA, NA, and "JOHN DOE," said name being fictitious, it being the intention of Plaintiff to designate any and all occupants of premises being foreclosed here, and any parties, corporations or entities, if any, having or claiming any interest of lien upon them mortgaged premises, Defendants.
Attorney for Plaintiff: Margaret J. Cascino, Esq. McGlinchey Stafford PLLC Attorneys for Defendant: Mary Kathryn Aufrecht, Esq. Clair Gjertsen & Weathers PLLC
Unpublished Opinion
Attorney for Plaintiff: Margaret J. Cascino, Esq. McGlinchey Stafford PLLC
Attorneys for Defendant: Mary Kathryn Aufrecht, Esq. Clair Gjertsen & Weathers PLLC
William J. Giacomo, J.
In a foreclosure action on a residential mortgage, (1) plaintiff moves (a) to amend the caption, (b) for summary judgment pursuant to CPLR 3212 against defendant Sylvain Naar for the relief demanded in the complaint, (c) pursuant to Real Property Actions and Proceedings Law § 1321 appointing a referee to compute the amount due and owing to plaintiff; and (2) defendant Sylvain Naar cross-moves pursuant to CPLR 3211 (a)(5) and CPLR 3212 for an order dismissing the complaint due to the expiration of the statute of limitations.
Papers Considered/NYSCEF DOC NO. 10; 32-84
1. Notice of Appearance
2. Notice of Motion/Affidavit of Service/Affirmation of Settlement Conference Compliance/Supporting papers to Motion/ Statement of Material Facts/Affirmation of Ellis M. Oster, Esq/ Exhibits 1-4
3. Defendant's Notice to Admit/Exhibit A/Affidavit of Service
4. Plaintiff's Responses to Notice to Admit
5. Notice of Cross Motion/ Affirmation of Mary Aufrecht, Esq. in Opposition and in Support/Affidavit of Sylvain Naar/Response to Statement of Material Facts/Exhibits A-S
6. Plaintiff's' Memorandum of Law in Opposition
7. Affirmation of Mary Aufrecht, Esq. in Reply
FACTUAL AND RELEVANT PROCEDURAL
BACKGROUND
Plaintiff commenced this action to foreclose a mortgage lien on real property on or about December 23, 2021 by filing a summons, complaint, certificate of merit and notice of pendency. Defendant Bank of America appeared by filing a notice of appearance on January 31, 2022 and submitting a claim to and demand for surplus monies. Defendant Sylvain Naar (hereinafter, defendant) joined issue with the filing of his answer with counterclaims on or about February 23, 2022.
On October 10, 2001, defendant executed a note in the amount of $275,000 and consolidated mortgage as security for the note, to lender Fleet National Bank. The consolidated mortgage encumbers the property located at 1A Livingston Road, Scarsdale, New York. The consolidated mortgage and note were transferred and assigned to various lenders until ultimately they were transferred to plaintiff as memorialized by an Assignment of Mortgage executed on September 27, 2021 and recorded on October 5, 2021. Plaintiff states that a notice of default was mailed to defendant on June 4, 2021. Plaintiff alleges that this action was brought for failure of defendant to make mortgage payments pursuant to the terms of the consolidated mortgage and note.
Plaintiff argues that it is entitled to summary judgment on its mortgage foreclosure action as it has produced the mortgage documents underlying the transaction and undisputed evidence of nonpayment, and requests appointment of a referee to compute. Plaintiff has submitted the affidavit of Tracy Armstrong (Armstrong), Doc Ex Associate of Nationstar Mortgage LLC, stating that the Mortgage Loan is in default and is due for the November 1, 2015 payment and all subsequent payments. Plaintiff avers that it attached business records to Armstrong's affidavit, detailing the nature of the default and the amounts due and owing to plaintiff.
Plaintiff argues that defendant's affirmative defenses fail. As pertinent for these motions, plaintiff claims that, contrary to defendant's sixteenth defense, this action is not barred by the statute of limitations. Plaintiff states that the mortgage loan does not mature until November 1, 2031 and that there has been no proper acceleration prior to the commencement of this action. In addition, plaintiff is only seeking monthly installments due from November 1, 2015. In consideration of the tolling due to the Executive orders during Covid, the instant foreclosure action brought on December 23, 2021 is within the six-year statute of limitations.
Defendant opposes plaintiff's motion for summary judgment and cross-moves for an order dismissing this action on the grounds that the statute of limitations has run. Defendant states that JP Morgan Chase Bank, National Association, which is plaintiff's predecessor in interest, commenced a mortgage foreclosure action on the same note and mortgage on January 25, 2010. In pertinent part, plaintiff filed an RJI on December 15, 2017 and a motion to discontinue the 2010 action, was denied by the Court (Honorable Charles D. Wood), by decision and order dated February 1, 2018. The matter was instead referred to the foreclosure settlement conference part. After a mandatory appearance conference on June 14, 2018, plaintiff was ordered to file a Notice of Discontinuance/Motion to Discontinue/Stipulation of Discontinuance by June 26, 2018. After plaintiff failed to file its motion to discontinue by June 26, 2018, the Court (Honorable Kathie E. Davidson), dismissed the 2010 action for failure to comply with prior court orders directing plaintiff to resume prosecution pursuant to 22 NYCRR 202.27. Thereafter, on July 31, 2018, the Court (Honorable Sam D. Walker), granted plaintiff's motion to discontinue and cancel lis pendens. By decision and order dated December 21, 2018, Judge Walker denied defendant's motion to reargue his decision.
The record indicates that, pursuant to letters dated November 2, 2015, the prior mortgage servicer for the loan allegedly notified defendant and defendant's counsel as follows, in relevant part:
"We are the mortgage servicer on the above referenced loan. Under the terms of the Mortgage ('Security Instrument') securing your loan, and/or Note, your loan obligations may have been previously accelerated by the prior Mortgage servicer, and all sums secured by the Security Instrument declared immediately due and payable.
"PLEASE BE ADVISED THAT TO THE EXTENT ANY PREVIOUS ACCELERATION MAY BE APPLICABLE, WE HEREBY REVOKE ANY PRIOR ACCELERATION OF THE LOAN, WITHDRAWING ANY PRIOR DEMAND FOR IMMEDIATE PAYMENT OF ALL SUMS SECURED BY THE SECURITY INSTRUMENT AND RE-INSTITUTE THE LOAN AS AN INSTALLMENT LOAN. Sincerely, SETERUS, INC. 14523 SW MILLIKAN WAY, SUITE 20."
In sum, defendant argues that this action is untimely based upon the previous court decisions and the newly enacted Foreclosure Abuse Prevention Act (FAPA). According to defendant, as the initiation of a foreclosure action acts to accelerate the subject mortgage debt, the statute of limitations started to run as of January 25, 2010, when the initial foreclosure action was commenced. The Court dismissed the 2010 foreclosure action in June 2018 and then canceled the notice of pendency the following month. As this new action was commenced on December 23, 2021, it is barred by the six-year statute of limitations. Defendant alleges that, pursuant to the FAPA, which he argues should be applied retroactively, the de-acceleration letters dated November 2, 2015, cannot act to unilaterally de-accelerate the mortgage debt.
Alternatively, even if the FAPA does not apply to the instant action, defendant argues that the November 2, 2015 deacceleration letters should still not be considered by this Court, as they were sent during the pendency of the 2010 action and cannot be considered a clear and unambiguous deacceleration of a mortgage debt. In addition, defendant argues that he was never put on notice of the deacceleration letters as they were allegedly sent to the property and to defendant's counsel, but not to the defendant's residence. Defendant asserts that he vacated the property in 2002 and has been receiving his notice of mortgage statements in Florida.
Defendant requests that, if the cross motion is denied, plaintiff's motion for summary judgment should also be denied on the basis that plaintiff fails to establish its standing. Plaintiff has produced a lost note affidavit, which is allegedly not sufficiently detailed to establish plaintiff's ownership of the note. Further, plaintiff purportedly failed to satisfy a condition precedent to commencing the instant action as it failed to prove its compliance with the notice of default. According to defendant, although Nationstar submitted an affidavit detailing its standard mailing practices, Covius was actually the entity who performed the mailings. Finally, although plaintiff attached a loan history, defendant alleges that it is confusing and that it is impossible to discern the date of default.
In opposition, plaintiff does not dispute the procedural history of the action. Nonetheless, plaintiff argues that, although there was a prior foreclosure action on the property, the documentation submitted established that the prior lender sent deacceleration letters to both defendant and his counsel. According to plaintiff, these letters notified defendant and his counsel that the prior acceleration of the mortgage loan was revoked. Plaintiff believes that the FAPA should not be applied retroactively, as it would violate plaintiff's substantive and procedural due process rights, and would also violate the Contracts Clause of the United States Constitution. With respect to its own motion for summary judgment, plaintiff reiterates, among other things, that it complied with the notice provisions under the mortgage and that the lost note affidavit presented proof of ownership of the note.
DISCUSSION
"The proponent of a motion for summary judgment must demonstrate that there are no material issues of fact in dispute, and that it is entitled to judgment as a matter of law." Dallas-Stephenson v Waisman, 39 A.D.3d 303, 306 (1st Dept 2007). The movant's burden is "heavy," and "on a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party." William J. Jenack Estate Appraisers & Auctioneers, Inc. v Rabizadeh, 22 N.Y.3d 470, 475 (2013) (internal quotation marks and citation omitted). Upon proffer of evidence establishing a prima facie case by the movant, "the party opposing a motion for summary judgment bears the burden of produc[ing] evidentiary proof in admissible form sufficient to require a trial of material questions of fact." People v Grasso, 50 A.D.3d 535, 545 (1st Dept 2008) (internal quotation marks and citation omitted). "A motion for summary judgment should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility." Ruiz v Griffin, 71 A.D.3d 1112, 1115 (2d Dept 2010) (internal quotation marks and citation omitted).
In order to establish a prima facie case in an action to foreclose a mortgage, a plaintiff must produce the mortgage, the note, and evidence of default. JPMorgan Chase Bank, N.A. v Weinberger, 142 A.D.3d 643, 644 (2d Dept 2016).
"On a motion to dismiss a complaint pursuant to CPLR 3211 (a) (5) on the ground that the complaint is barred by the applicable statute of limitations, the defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired." Barry v Cadman Towers, Inc., 136 A.D.3d 951, 952 (2d Dept 2016). If the defendant is able to satisfy that burden, the burden is shifted "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." Id.
Pursuant to CPLR 213(4), an action to foreclose a mortgage is subject to a six-year statute of limitations. "Even if the mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and payable, and the statute of limitations begins to run on the entire debt." GMAT Legal Title Trust 2014-1 v Kator, 213 A.D.3d 915, 916 (2d Dept 2023). It is well settled that "[a]cceleration may occur, inter alia, by the commencement of a foreclosure action." Bayview Loan Servicing, LLC v Paniagua, 207 A.D.3d 691, 692 (2d Dept 2022).
The Foreclosure Abuse Prevention Act (FAPA), effective December 30, 2022, amended and codified new statutes. As relevant here, CPLR 203 was amended to include CPLR 203(h), which states as follows:
"(h) Claim and action upon certain instruments. Once a cause of action upon an instrument described in subdivision four of section two hundred thirteen of this article has accrued, no party may, in form or effect, unilaterally waive, postpone, cancel, toll, revive, or reset the accrual thereof, or otherwise purport to effect a unilateral extension of the limitations period prescribed by law to commence an action and to interpose the claim, unless expressly prescribed by statute."
FAPA § 8, codified at CPLR 3217(e), states the following:
(e) Effect of discontinuance upon certain instruments. In any action on an instrument described under subdivision four of section two hundred thirteen of this chapter, the voluntary discontinuance of such action, whether on motion, order, stipulation or by notice, shall not, in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period to commence an action and to interpose a claim, unless expressly prescribed by statute.
Section 10 of FAPA states the following:
"This act shall take effect immediately and shall apply to all actions commenced on an instrument described under subdivision four of section two hundred thirteen of the civil practice law and rules in which a final judgment of foreclosure and sale has not been enforced."
Prior to the enactment of the FAPA, the Court of Appeals held that "where acceleration occurred by virtue of the filing of a complaint in a foreclosure action, the noteholder's voluntary discontinuance of that action constitutes an affirmative act of revocation of that acceleration as a matter of law, absent an express, contemporaneous statement to the contrary by the noteholder." Freedom Mtge. Corp. v Engel, 37 N.Y.3d 1, 32 (2021). However, the Appellate Division, Second Department has held that that the "FAPA had the effect of nullifying this particular holding in Engel." GMAT Legal Title Trust 2014-1 v Kator, 213, A.D.3d 915, 917 (2d Dept 2023).
Here, defendant has made a prima facie showing of entitlement as a matter of law by showing that the six-year statute of limitations was triggered when a prior lender filed the foreclosure action in 2010. See e.g. U.S. Bank N.A. v Doura, 204 A.D.3d 721, 723 (2d Dept 2022) ("Here, in support of their cross motion, the defendants established, prima facie, that the mortgage debt was accelerated when the plaintiff's predecessor in interest commenced the prior action and elected in the complaint to call due the entire amount secured by the mortgage"). Defendant further established that the instant action was commenced in 2021, more than six years later.
In opposition, plaintiff fails to raise a triable issue of fact and also cannot meet its burden on its own motion for summary judgment that this action is not time-barred. Plaintiff argues that, even if the 2010 foreclosure action triggered the statute of limitations, the lender timely withdrew its acceleration by mailing the deacceleration letters in 2015. In sum, plaintiff argues that its prior acceleration was timely revoked and cites NMNT Realty Corp. v Knoxville (151 A.D.3d 1068, 1069-1070 [2d Dept 2017]) ("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").
However, plaintiff's argument that the November 2, 2015 letters deaccelerated the debt is without merit. As indicated in the FAPA, once a cause of action upon a mortgage has accrued, no party may unilaterally waive, cancel or "purport to effect a unilateral extension of the limitations period..." CPLR 203 (h); see also CPLR 3217(e). Therefore, the deacceleration letters, allegedly notifying defendant that plaintiff was revoking any prior acceleration, do not operate to cancel or extend the statute of limitations. The letters appear to be unilateral stipulations. Defendant provides an affidavit stating that he has never entered into a repayment plan, modification agreement, forbearance or any other arrangement with Plaintiff and/or its predecessors-in-interest where payments were made on the subject loan since the original date of default of June 1, 2009. In opposition, plaintiff does not provide any evidence otherwise.
The Court notes that, even prior to the enactment of FAPA, a notice of deacceleration had to be "clear and unambiguous to be valid and enforceable." Bank of NY Mellon v Yacoob, 182 A.D.3d 566, 568 (2d Dept 2020) (internal quotation marks omitted). Here, however, plaintiff has failed to establish an "unequivocal withdrawal of its prior demand for payment of the loan in full...." Deutsche Bank Natl. Trust Co. v Blank, 189 A.D.3d 1678, 1682 (2d Dept 2020). According to plaintiff, defendant nor his counsel affirm that the deacceleration letters were not received.Nonetheless, the record indicates that after the letters were sent the action was still pending; the parties appeared for a status conference on May 17, 2018 and the trial readiness report and order indicated that the matter was ready for trial in the above referenced action.
Plaintiff raises several arguments regarding the FAPA's retroactivity and the alleged resulting violation of plaintiff's constitutional rights. While the Court is unaware of Appellate Division case law specifically addressing these issues, the Appellate Division, Second Department, has consistently applied the FAPA retroactively to pending actions where a foreclosure and sale have not been enforced. See e.g. Bank of NY Mellon v Stewart, 216 A.D.3d 720, 723 (2d Dept 2023) (applying FAPA when addressing statute of limitations); see also ARCPE 1, LLC v DeBrosse, - A.D.3d -, 2023 NY Slip Op 03498 (2d Dept 2023)(Under the [FAPA] "the voluntary discontinuance of the 2010 foreclosure action did not 'in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period to commence an action and to interpose a claim, unless expressly prescribed by statute'").
In addition, under similar circumstances, other New York courts have found the FAPA to be constitutional and not violative of due process. For example, in U.S. Bank Tr., N.A. v Miele, 2023 NY Misc. Lexis 2988, 2023 WL 4112924, at *5-6 (Sup Ct, Westchester County 2023), the Court also addressed the retroactive effect of FAPA on the de-acceleration letters, specifically the application of CPLR 203(h), and held the following, "[i]t is equally undisputed that this action was commenced on January 28, 2016, more than six years after the cause of action accrued. Based upon CPLR 203 [h], plaintiff was unable to unilaterally toll or extend the statute of limitations by sending the purported De-acceleration Letters." See also Article 13, LLC v Ponce de Leon Fed. Bank, 2023 U.S. Dist Lexis 140580, *16, 2023 WL 5179626 (ED NY 2023) (The Court "finds that the FAPA does not violate Defendant's constitutional due process rights").
Plaintiff argues that the retroactive application of the FAPA would violate the Contracts Clause, because mortgages are contracts and plaintiff has a contractual relationship with defendant. Article I, § 10, of the Constitution provides: "No State shall... pass any... Law impairing the Obligation of Contracts." Here, however, as "there was no contractual agreement about de-acceleration or the statute of limitations, the [plaintiff] cannot succeed on this argument." E. Fork Funding LLC v United States Bank, N.A., 2023 U.S. Dist Lexis56719, *12, 2023 WL 2660645 (ED NY 2023). Moreover, the record indicates that plaintiff's predecessor had the opportunity to commence a foreclosure action, yet failed to act. As noted, the Court issued an order of dismissal on the 2010 action for failure to comply with prior court orders directing plaintiff to resume prosecution pursuant to 22 NYCRR 202.27. As a result, plaintiff has failed to establish that a retroactive application of the FAPA would impair its property rights in violation of the Takings Clause or that its substantive or procedural due process rights were violated.
Accordingly, for the reasons set forth above, this action is time barred and must be dismissed.
All other arguments raised on this motion and evidence submitted by the parties in connection thereto have been considered by this court notwithstanding the specific absence of reference thereto.
CONCLUSION
Accordingly, it is hereby
ORDERED that plaintiff's motion for summary judgment pursuant to CPLR 3212 in favor of plaintiff and against defendant Sylvain Naar for the relief demanded in the complaint, among other requested relief (motion sequence 001), is denied; and it is further
ORDERED that defendant Sylvain Naar's cross motion pursuant to CPLR 3211 (a) (5) and CPLR 3212 for an order dismissing the complaint due to the expiration of the statute of limitations (motion sequence 002), is granted, and the complaint is dismissed with costs and disbursements to said defendant as taxed by the Clerk upon submission of an appropriate bill of costs; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.