Opinion
Index No. 611917/2022
03-04-2024
NATIONSTAR MORTGAGE, LLC, DBA MR. COOPER, Plaintiff v. GIUSEPPE OLIVERI, CHRISTINA OLIVERI, JOHN DOES 1-7, AND JANE DOES 1-6, Defendant.
Unpublished Opinion
PRESENT: HON ELIZABETH FOX-MCDONOUGH, J.S.C.
HON. ELIZABETH FOX-MCDONOUGH, J.S.C
Upon the foregoing papers, the motion of Defendant, Christina Oliveri ("Christina"), pursuant to CPLR 3212 for summary judgment dismissing the complaint, and Plaintiff's cross-motion for summary judgment dismissing Christina's eighth affirmative defense, alleging expiration of the statute of limitations, are consolidated for disposition and determined as hereinafter set forth.
Factual and Procedural Background
On August 8, 2006, Defendant, Giuseppe Oliveri ("Giuseppe"), executed a note in the amount of $348,140 in favor of First Rate Capital Corp. ("First Rate"), which was secured by a mortgage on real property located at 218 North Maple Street, Massapequa, New York. On June 8, 2009, the mortgage was assigned to EMC Mortgage Corporation ("EMC"), and on or about June 9, 2009, EMC commenced an action against Giuseppe and Christina, among others, to foreclose the mortgage ("the 2009 action"). In the complaint in the 2009 action, EMC elected to call due the entire amount secured by the mortgage (NYSCEF Doc. No. 47). By order entered May 4, 2011 (Adams, J.), EMC's motion for leave to enter a default judgment and for an order of reference was denied, and the 2009 action was dismissed as abandoned pursuant to CPLR 3215(c) ("the 2011 dismissal order") (NYSCEF Doc. No. 58).
On June 27, 2012, JPMorgan Chase Bank, National Association, as successor in interest to EMC, commenced an action to foreclose the mortgage ("the 2012 action") (NYSCEF Doc. No. 49). Federal National Mortgage Association ("FNMA") was substituted as the plaintiff in that action. After a judgment of foreclosure and sale had been entered, the 2012 action was discontinued by order entered September 20, 2018 (Adams, J.) (NYSCEF Doc. No. 30). On January 29, 2020, FNMA assigned the mortgage to U.S. Bank Trust, N.A.
On October 13, 2020, U.S. Bank Trust, N.A. assigned the mortgage to Plaintiff. On September 8, 2022, Plaintiff commenced this action to foreclose the mortgage (NYSCEF Doc. No. 1). Answers were interposed by Giuseppe and Christina, which asserted as an affirmative defense, expiration of the statute of limitations (NYSCEF Doc. Nos. 37, 40).
Analysis
Christina now moves for summary judgment dismissing the complaint contending that this action is time-barred since the debt was accelerated in 2009 and the demand for payment in full was never revoked since the 2009 action was dismissed for failure to prosecute; the 2012 action was discontinued more than six years after the demand for payment in full had been made; and pursuant to the recently enacted Foreclosure Abuse Prevention Act ("FAPA") a discontinuance of a foreclosure action does not revoke the demand for payment in full automatically.
Plaintiff opposes the motion and cross-moves for summary judgment dismissing Christina's eighth affirmative defense, alleging expiration of the statute of limitations. Plaintiff argues that it did not commence this action in reliance on its voluntary discontinuance of the 2012 action. Rather, Plaintiff contends that this action is timely commenced pursuant to the savings provision of CPLR 205(a), since it was commenced within six months after the 2009 action was terminated. According to Plaintiff, the 2011 dismissal order was served with notice of entry by Defendants on September 23, 2021 (NYSCEF Doc. No. 59). On October 5, 2021, Plaintiff filed a notice of appeal of the 2011 dismissal order (NYSCEF Doc. No. 60), and on April 5, 2022, Plaintiff's appeal was dismissed for failure to perfect. Since this action was commenced on September 8, 2022, and all of the defendants were served by September 28, 2022 (NYSCEF Doc. No. 61), Plaintiff contends it is entitled to the savings provision of CPLR 205(a), and this action is timely commenced. Plaintiff contends that it is entitled to rely on CPLR 205(a), and that CPLR 205-a, which was enacted as part of FAPA, does not govern this case, because FAPA was meant to apply prospectively, and a retroactive application of CPLR 205-a would violate Plaintiff's due process rights.
In reply, Christina contends FAPA applies to pending actions, and is constitutional, but in any event, the Court need not reach the constitutionality of FAPA. According to Christina, since the primary basis for dismissal in the 2011 dismissal order was for lack of personal jurisdiction, with noncompliance with CPLR 3215(c) as an alternative basis for dismissal, Plaintiff is not entitled to rely on CPLR 205(a). In addition, Christina contends that Plaintiff cannot rely on CPLR 205(a) since it was not the original plaintiff in the 2009 action.
"A defendant who seeks dismissal of a complaint on the ground that it is barred by the statute of limitations bears the initial burden of proving, prima facie, that the time in which to commence an action has expired. The burden then shifts to the plaintiff to present evidence raising a triable issue of fact as to whether the action falls within an exception to the statute of limitations or whether the statute of limitations has been tolled" (Cammarato v 16 Admiral Perry Plaza, LLC, 216 A.D.3d 903, 904 [2d Dept 2023] [internal quotation marks omitted]).
"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. Acceleration occurs, inter alia, by the commencement of a foreclosure action wherein the plaintiff elects in the complaint to call due the entire amount secured by the mortgage" (GMAT Legal Trust 2014-1 v Kator, 213 A.D.3d 915, 916 [2d Dept 2023] [internal citations omitted]).
Here, Christina demonstrated that the mortgage debt was accelerated when EMC commenced the 2009 action on or about June 9, 2009, and elected in the complaint to declare immediately due the entire amount secured by the mortgage (see U.S. Bank N.A. v Armand, 220 A.D.3d 963, 966 [2d Dept 2023]). Since Plaintiff did not commence this action until September 8, 2022, more than six years later, Christina established, prima facie, that this action was time-barred (see id.) .
In opposition, Plaintiff contends that this action is timely commenced, since when it commenced the action CPLR 205(a) was in effect, and provided,
"[i]f an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if the plaintiff dies, and the cause of action survives, his or her executor or administrator, may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period. Where a dismissal is one for neglect to prosecute the action made pursuant to rule thirty-two hundred sixteen of this chapter or otherwise, the judge shall set forth on the record the specific conduct constituting the neglect, which conduct shall demonstrate a general pattern of delay in proceeding with the litigation."
Plaintiff contends that at the time this action was commenced, where dismissal of the prior action was for abandonment under CPLR 3215(c) , the order dismissing the prior action had to include "findings of specific conduct demonstrating a general pattern of delay in proceeding with the litigation" (Wells Fargo Bank, N.A. v Eitani, 148 A.D.3d 193, 198 [2d Dept 2017]). As Plaintiff contends, the 2011 dismissal order did not set forth findings of specific conduct demonstrating a general pattern of delay.
Contrary to Christina's contention, the Court finds that the 2011 dismissal order was based on CPLR 3215(c), and not a determination that the Court lacked personal jurisdiction over the defendants in that action.
FAPA, which went into effect on December 30, 2022 (L 2022, ch 821 §10), provides that it "shall take effect immediately and shall apply to all actions commenced on an instrument described under subdivision [CPLR 213(4)] in which a final judgment of foreclosure and sale has not been enforced," and further provides that the savings provision of CPLR 205(a) no longer applies to mortgage foreclosure actions (see CPLR 205[c]). Instead FAPA codified a new savings statute, CPLR 205-a, which provides
" [i]f an action upon an instrument described under [CPLR 213(4)] is timely commenced and is terminated in any manner other than ... a dismissal of the complaint for any form of neglect, including, but not limited to those specified in . . . [CPLR 3215] . . ., the original plaintiff, or, if the original plaintiff dies and the cause of action survives, his or her executor or administrator, may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months following the termination, provided that the new action would have been timely commenced within the applicable limitations period prescribed by law at the time of the commencement of the prior action and that service upon the original defendant is completed within such sixmonth period."
Thus, pursuant to CPLR 205-a, a plaintiff is barred from invoking the savings clause, where the earlier termination is for neglect, including abandonment under CPLR 3215(c), and "even if the court failed to 'set forth on the record the specific conduct constituting the neglect, which conduct shall demonstrate a general pattern of delay'" (U.S. Bank N.A. v Fox, 216 A.D.3d 445, 446 [1st Dept 2023], quoting CPLR 205-a).
In U.S. Bank N.A. v Onuoha (216 A.D.3d 1069, 1072 [2d Dept 2023]), prior to the enactment of FAPA, the plaintiff had commenced a second action utilizing the savings provision of CPLR 205(a) after the first action had been dismissed by the Appellate Division, Second Department as abandoned under CPLR 3215(c). The prior Second Department dismissal order (US Bank, N.A. v Onuoha, 162 A.D.3d 1094 [2d Dept 2018]) did not set forth findings of specific conduct demonstrating a general pattern of delay in proceeding with the litigation. However, the Second Department determined that the second action was untimely. In doing so, it noted that FAPA had replaced CPLR 205(a) with CPLR 205-a, and noted "[h]ere, the complaint in the 2008 action was dismissed insofar as asserted against the defendant as abandoned pursuant to CPLR 3215(c) (see U.S. Bank, N.A. v Onuoha, 162 A.D.3d 1094). Therefore, the plaintiff is not entitled to the benefit of the savings provision of CPLR 205(a) or 205-a" (U.S. Bank N.A. v Onuoha, 216 A.D.3d at 1072-1073). In light of this appellate authority directly on point, Plaintiff is not entitled to the benefit of the savings provision of CPLR 205(a) or 205-a (U.S. Bank N.A. v Onuoha, 216 A.D.3d at 1072-1073) .
Plaintiff is also not entitled to the benefit of the savings provision of CPLR 205(a) or 205-a since it was not the plaintiff in the 2009 action (see ACE Sec. Corp, v DB Structured Products, Inc., 38 N.Y.3d 643, 652 [2022]). The assignment to Plaintiff did not occur until October 13, 2020, more than nine years after the 2009 action was dismissed. As such, Plaintiff was not a successor in interest to EMC, or a "true party plaintiff" in the 2009 action, and therefore, could not have had a statutory right, pursuant to CPLR 1018, to continue the 2009 action in EMC's place, even in the absence of a formal substitution (cf. Wells Fargo Bank, N.A. v Eitani, 148 A.D.3d at 198). Plaintiff is not seeking to enforce EMC's rights, but rather seeks to enforce its own separate rights and, therefore, the benefit of CPLR 205(a) (see ACE Sec. Corp., v DB Structured Products, Inc., 38 N.Y.3d at 655) or 205-a is unavailable to save its untimely complaint.
"It is axiomatic that a constitutional question must be bypassed if the constitutional issue can be avoided by deciding the matter in some other fashion" (U.S. Bank Tr., N.A. v Leonardo, 79 Misc.3d 1075, 1081-1082 [Sup Ct, Nassau County 2023]). Here, in light of Plaintiff's failure to establish its entitlement to the benefit of the savings provision of CPLR 205(a), this Court need not reach the issue of the constitutionality of the enactment of CPLR 205-a.
Accordingly, since Plaintiff has failed to raise a triable issue of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether Plaintiff actually commenced the action within the applicable limitations period, Defendant's motion for summary judgment dismissing the complaint is granted. For the same reasons, Plaintiff's cross-motion for summary judgment dismissing Christina's eighth affirmative defense is denied.
Accordingly, it is
ORDERED that the motion of Defendant, Christina Oliveri, pursuant to CPLR 3212 for summary judgment dismissing the complaint is GRANTED; and it is further, ORDERED that Plaintiff's cross-motion for summary judgment dismissing the eighth affirmative defense of Defendant, Christina Oliveri, alleging expiration of the statute of limitations is DENIED; and it is further,
ORDERED that all requests for relief not addressed herein are DENIED. This shall constitute the Decision and Order of the Court.