Opinion
2005-14188.
Decided April 20, 2006.
Weber Pullin LLP, Attorneys for Plaintiff Woodbury, New York.
Jules A. Epstein, P.C. Attorneys for Defendant MGDY, Garden City, New York.
Meltzer Lippe Goldstein Breitstone LLP, Attorneys for Defendant GUERCIA, Mineola, New York.
Alvin A. Narin, Esq., Attorney for Defendant Bank of New York, New York, New York.
TX Collect Inc., Defendant (in default), Austin, Texas.
Auto Style Leasing Ltd., Defendant (in default), New York, New York.
Fleet Bank, Defendant (in default), West Seneca, New York.
Citibank South Dakota N.A., Defendant (in default), Sioux Falls, South Dakota.
American General Finance, c/o National Creditors Recovery Corp., Great Neck, New York.
This is an action, pursuant to Article 13 of the Real Property Actions Proceedings Law, to foreclose a mortgage dated July 5, 1988 in the principal amount of $130,675.02 encumbering premises known as 545 Hampton Road, Unit 1, Southampton, New York. The original mortgage was given to Plaintiff herein. The mortgage was assigned to Royal Guard Fence Co., Inc. (apparently owned by one of Defendant Mortgagor's relatives) on August 25, 1995, and was reassigned to Plaintiff by instrument dated May 9, 2001, which was recorded on May 4, 2005. Plaintiff filed both a Summons Verified Complaint and Notice of Pendency with the Clerk of Suffolk County on June 13, 2005 which set forth, among other things, that Defendant JOSEPH GUERCIA had defaulted on his obligation to Plaintiff as of June 1, 1990. Curiously enough, the Verified Complaint did not specify any details whatsoever regarding the underlying obligation (i.e. — due date of note or bond, rate of interest thereon, terms of repayment, whether it was a demand obligation) though it was painfully precise as to the dates of assignment of the mortgage, status of subsequent lienors and judgments and such.
Defendant MGDY ASSOCIATES CORP. (incorrectly sued herein as MGDY CORP.) appeared through the offices of Jules A. Epstein P.C. and timely interposed a Verified Answer asserting Affirmative Defenses sounding in lack of consideration for the mortgage, statute of limitations, laches, unclean hands, equitable estoppel and waiver together with a counterclaim demanding cancellation and discharge of the mortgage. The said Defendant's cross-moving papers are replete with claims of collusion as between Plaintiff and Defendant Mortgagor. They are likewise rife with assertions that Plaintiff and Defendant Mortgagor are closely connected, through business or otherwise.
By Order to Show Cause dated December 22, 2005 (Jones, J.) Plaintiff has made application to this Court for an Order staying prosecution of a related proceeding in the Supreme Court, Suffolk County entitled MGDY Associates Corp. vs. Joseph Guercia, index no. 2005-17530. In response, Defendant MGDY has timely cross-moved, pursuant to CPLR 3212 and RPAPL § 1501(4) for summary judgment dismissing Plaintiff's action and cancelling and discharging the mortgage, premised primarily upon expiration of the applicable statute of limitations. In response thereto, both Plaintiff and Defendant JOSEPH GUERCIA have submitted Affidavits in Opposition whereby they ask the Court to deny the relief sought by MGDY.
In reaching its determination herein, the Court has reviewed, digested and considered all of the submissions received from the various parties, as set forth herein above.
Plaintiff's Application For A Stay
Plaintiff's application seeks a stay of proceedings under index no. 2005-17530. That action was brought by Defendant MGDY under the provisions of CPLR 5206(e), to sell the judgment debtor's homestead free and clear of the homestead exemption of Defendant JOSEPH GUERCIA. Although it is conceded by Plaintiff, albeit somewhat obliquely, that his claim against the real property at issue is superior to that of MGDY, he nevertheless seeks a stay of that proceeding. Plaintiff's counsel, in his Affirmation, seems to imply or otherwise infer that CPLR 5206(e) is somehow defective and that the foreclosure action in favor of Plaintiff would be in the best interests of all parties. Clearly, CPLR 5206(e) provides an appropriate statutory scheme for enforcement of a money judgment and it is axiomatic that public notice of the Sheriff's sale thereunder must be given. Following a sale, it is for the Court to determine the priorities of distribution. In any event, Plaintiff would in no wise be affected by the proceeding under CPLR 5206(e)
The posture of Plaintiff's application appears as though it is more for the benefit of Defendant Mortgagor and subsequent encumbrancers (none of whom have sought the same or similar relief) than for the benefit of Plaintiff and this gives the Court pause to seriously question Plaintiff's motivation in commencing and prosecuting this application for a stay.
It is clear from a reading of CPLR 2201 that the Court has the discretion to grant a stay of proceedings where the same would be just and equitable. That being said, it is clear that the entry of a stay is not mandatory but is dependent upon the application. Here, Plaintiff's application appears facially sufficient. However, a closer examination indicates that the same is specious. It seems to the Court that Plaintiff can hardly be expected to benefit substantially from a stay. Rather, the person who would derive the greatest benefit therefrom is Defendant JOSEPH GUERCIA.
A fair reading of Plaintiff's application, giving the benefit of every doubt to Plaintiff, leads this Court to the inescapable conclusion that the application should be denied.
Defense of Statute Of Limitations
The Answer interposed by the appearing Defendant MGDY sets forth an Affirmative Defense asserting that this action is barred by the applicable Statute of Limitations.
The controlling Statute of Limitations for an action to foreclose a mortgage upon real property is found in CPLR 213(4) which reads, in pertinent part, as follows:
"The following actions must be commenced within six years: . . . (4) an action upon a bond or note, the payment of which is secured by a mortgage upon real property. . ."
According to the express assertions contained within paragraph 24 of Plaintiff's Verified Complaint dated May 19, 2005, Defendant-Mortgagor JOSEPH GUERCIA defaulted upon the underlying obligation secured by Plaintiff's mortgage by failing to remit payment on and after June 1, 1990. The appearing Defendant claims that Plaintiff's right to foreclose the mortgage became time-barred as of June 1, 1996. Plaintiff does not dispute the applicability of CPLR 213(4) to this action but instead states that there were subsequent payments made, thereby vitiating Defendant's claim.
The Affidavit of Plaintiff JOHN TERRANOVA dated January 27, 2006 (and, curiously, notarized by one Stacy Lee Guercia) avers, in direct contravention to Plaintiff's Verified Complaint, that Defendant JOSEPH GUERCIA remitted three payments totaling $40,000.00 between March 6, 1999 and March 17, 2001. In order to buttress this assertion, he attaches copies of three cancelled checks. A cursory examination reveals that the checks are drawn upon the account of one Frances M. Guercia and are drawn to the order of one Susan Terranova. In his Affidavit, Plaintiff gratuitously volunteers that he directed Defendant to make the payments to Plaintiff's former wife on account of an obligation owed to her. However, nowhere is there any affidavit from either the drawer or drawee which would serve to bear out this assertion. More glaring is the fact that these payments were made during the time that the mortgage was held by Royal Guard Fence Co., Inc., thus rendering the veracity of Plaintiff's Affidavit all the more suspect. Plaintiff's Affidavit clearly contravenes Plaintiff's Verified Complaint. This, to the Court, negatively impacts the credibility of Plaintiff, when coupled with the timing of the interposition of the Affidavit.
Interestingly, the Affidavit of Defendant JOSEPH GUERCIA dated January 23, 2006 boldly and barely asserts, in paragraph 6 thereof, that ". . . payments have been made by the undersigned throughout the years on account of said mortgage, including payments made within the past six years." However, there is no indication of to whom and when such payments were made; neither is there any documentation appended which would bear out this claim by Defendant. Indeed, there is not so much as a scintilla of proof adduced which would show that Defendant has made any payment upon the obligation subsequent to May 1, 1990. This Affidavit causes the Court to question why Defendant Mortgagor would attempt to buttress Plaintiff's foreclosure action, which facially is against his best interests. Nor does this Affidavit effectively comport with Plaintiff's Affidavit, and hence is entitled to little, if any, evidentiary weight.
Both Plaintiff and Defendant Mortgagor, in their respective Affidavits, aver that Defendant MGDY is precluded from raising the statute of limitations as a defense, asserting that the same is a defense that inures personally only to the mortgagor. This argument is also strenuously urged by GUERCIA's counsel. A review of the relevant caselaw fails to support this position. The statute of limitations was successfully invoked by a subsequent grantee in Saliani v. Amrhein, 141 Misc 2d 501 (Sup.Ct. Suffolk Co., 1988). Moreover, the express language of RPAPL § 1501(4) clearly applies the statute of limitations to any party who claims an interest or estate in land that is the subject of an action.
In addition, Plaintiff, although having more than ample opportunity to do so, has failed to produce a copy of the obligation secured by the mortgage. Indeed, Plaintiff has not even stated the essential terms of the obligation, most notably whether it is a demand obligation or one providing for installment payments. In such an instance as this, especially where the credibility of Plaintiff has become highly questionable and suspect, the Court must conclude that the instrument is either unavailable or non-existent.
Giving the benefit of every doubt to Plaintiff, and assuming arguendo that the underlying obligation is one payable in installments, the Verified Complaint avers that Defendant defaulted on June 1, 1990. Applying CPLR 213(4), Plaintiff's action, to be timely, would have to have been commenced on or before June 1, 1996. Once again, assuming arguendo that the obligation is one payable upon demand, the application of CPLR 213(4) dictates that the action would have to have been commenced on or before July 5, 1994. Where a demand obligation is at issue, the limitations period commences at the time that the obligation is undertaken, Ziegler v. Elliot Camp Corp., 271 AD 604 (3rd Dept. 1946), Martin v. Stoddard, 127 NY 61 (1891), Howland v. Edwards, 24 NY 307 (1862). Under either of the foregoing scenarios, Plaintiff's action is time barred.
In light of the foregoing analysis, the Court need not address the remainder of the Affirmative Defenses interposed by MGDY. All of the evidence adduced leads the Court to the inescapable conclusion that Plaintiff's action is time barred.
Cancellation Discharge of the Mortgage
Defendant MGDY has cross-moved for an Order cancelling and discharging Plaintiff's mortgage. The express provisions of RPAPL § 1501(4) expressly allow such relief to be accorded where enforcement of an encumbrance of record is barred by the statute of limitations. See, for example, Corrado v. Petrone, 139 AD2d 483 (2nd Dept. 1988). Plaintiff and Defendant-Mortgagor have failed to demonstrate good cause as to why Defendant MGDY's application should not be granted.
For all the reasons stated herein above, it is, therefore,
ORDERED, that Plaintiff's application for a stay of proceedings now pending under Suffolk County Index No. 2005-17530 shall be and the same is hereby denied in its entirety; and it is further
ORDERED, that the cross-motion of Defendant MGDY ASSOCIATES CORP. is hereby granted in its entirety; and it is further
ORDERED, that the Mortgage recorded with the Clerk of Suffolk County on September 18, 1989 in Liber 15411 of Mortgages at Page327, as assigned of record, encumbering District 0904, Section 010.02, Block 01.00, Lot 001.000, shall be and the same is hereby cancelled, discharged, released and of no further force and effect; and it is further
ORDERED, that the Clerk of Suffolk County, upon payment of the proper fees, shall cause the same to be cancelled, discharged and released of record; and it is further
ORDERED, that this action shall be and the same is hereby dismissed as time barred.
Counsel for the cross-movant is hereby directed to settle judgment upon fifteen (15) days notice.
This shall constitute the decision, judgment and order of this Court.