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MTGLQ INVESTORS, L.P., Plaintiff, v. Charles RODGERS, Jr., New York City Environmental Control Board, South Shore Ambulatory Surgery Ctr LLC, New York State Department of Taxation and Finance, “John Doe 1 to John Doe 25”, said names being fictitious, the persons or parties intended being the persons, parties, corporations or entities, if any, having or claiming an interest in or lien upon the mortgaged premises described in the complaint, Defendants.
The following papers numbered E67-E85, E98-E99, E102-E103, E106 read on this motion by Plaintiff for an order for the following: a) granting Plaintiff Summary Judgment striking the Defendants’ Verified Answer and dismissing its respective affirmative defenses; b). Dismissing the Counterclaims interposed the Answer; c) Appointing a Referee to compute the amount due to Plaintiff under the Note and Mortgage pursuant to RPAPL § 1321 and CPLR Rule 4311; d) Amending the caption of this action; and e) Granting a default judgment against the non-answering and non-appearing Defendants; and the cross motion by Defendant Charles Rodgers, Jr. for an order dismissing this action pursuant to CPLR § 3211(a); CPLR § 1303; CPLR § 3120; CPLR § 1303 and various interest.
Notice of Motion-Affirmation-Affidavit-Exhibits E67-E85
Notice of Cross Motion-Affidavit-Exhibits E102
Affirmation in Opposition to the Cross Motion in Reply the Cross Motion E103
Reply to Cross Motion-Exhibits E106
Upon the foregoing papers, it is ordered that Plaintiff's motion is denied and Defendant’ scross motion is granted for the following reasons:
It is undisputed that Plaintiff's predecessor in interest commenced a prior action against Defendant on September 11, 2009. On January 24, 2018, Plaintiff commenced this action by filing a Summons and Complaint wherein it alleged that on September 14, 2007 Defendant Charles Rodgers, Jr. (“Defendant”) executed a Note in the amount of $399,000.00. As collateral for the Note, Defendant executed a Mortgage on the subject property, which was recorded on October 30, 2007. Thereafter, on August 12, 2010 the Mortgage was assigned to One West Bank FSB, and subsequently on October 22, 2013, was assigned to the Plaintiff. Thereafter, on July 30, 2018 Defendant filed an Answer, wherein he denied the allegations alleged in the Complaint, asserted four affirmative defenses (statute of limitations, standing, failure to state a cause of action, and lack of personal jurisdiction), and two counterclaims (quiet title, and cancel and discharge the mortgage pursuant to RPAPL 1501(4), and attorney's fees and costs pursuant to RPL 282). Defendant annexed the following two Exhibits to his Answer: an order, dated January 10 or 12, 2017 (the handwritten date in the order is not clear) and filed on January 17, 2018, directing that the action entitled OneWest Bank FSB v Charles Rodgers Jr., et al., Index Number 24553/09 (“2009 action”) is discontinued and cancelling the Lis Pendens; and Plaintiff's motion seeking to cancel the Lis Pendens and discontinue the 2009 action. Subsequently, Plaintiff filed a Verified Reply to the Counterclaims
In first branch the motion, Plaintiff moves for summary judgment striking Defendants’ Verified Answer and dismissing the affirmative defenses and counterclaims asserted therein, and for an order of reference. In support thereof, Plaintiff submitted an affidavit from Dawn Horne, Document Executive Specialist for Selene Finance LP, along with inter alia the following documents annexed to her affidavit: Power of Attorney; Note and Mortgage; Assignments; Note possession; business records; notice of default; 90 day notice and 1306 notice; “Lender's Notice of Revocation Regarding Prior Election to Accelerate”, dated September 10, 2015, Mortgage statements; and affidavits of service. Based therein, Plaintiff argues, among other things, that the instant action is not time-barred, because the acceleration of the loan in 2009 was de-accelerated within six years after the 2009 action was commenced.
Defendant opposes, and cross moves for an order dismissing this action pursuant to CPLR3211(a), 3303 and 3120. Defendant claims that the Court issued an order on August 12, 2015 and entered in September 2015 dismissing the 2009 action. In reply, Plaintiff argues that this action should not be dismissed as time barred because the 2009 action, which accelerated the loan, “was in fact deaccelerated” on September 10, 2015 when it mailed a Notice to Defendant. In reply, Defendant claims that he never received a notice or any communication that Plaintiff intended to revoke its prior acceleration of the loan.
A mortgage foreclosure action is subject to a six-year statute of limitations (see CPLR213). “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” (Everhome Mtge. Co. v Aber, 195 AD3d 62 [2d Dept. 2021]). “However, even if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt’ ” (id. [internal quotation omitted]). “One of the ways to accelerate a mortgage debt is through the commencement of a foreclosure action” (Wilmington Sav. Fund Soc'y v Rashed, 195 AD3d 774 [2d Dept. 2021]). “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” (Deutsche Bank Natl. Trust Co. v Blank, 189 AD3d 1678, 1680 [2nd Dept. 2020]).
Here, the mortgage debt was accelerated upon the commencement of the 2009 action on September 11, 2009 by Plaintiff's predecessor in interest. Although Defendant claims that the Court issued an order dismissing the 2009 action, he did not annex this order to his papers nor did Plaintiff acknowledge that such an order had been issued. In the interests of justice and upon full understanding that Defendant is representing himself Pro Se, this Court has searched the record, and without any assistance from Plaintiff, this Court was able to find the order dismissing the 2009 action. This order was in Defendant's opposition to Plaintiff's prior motion filed under sequence number 1, submitted as an Exhibit. This order, dated August 12, 2015 and filed on September 2,2015 (E-49), issued by Hon. Martin J. Schulman in the 2009 action which directed, in pertinent part, the following:
A Foreclosure Status Conference having been scheduled for 8/12/2015 before the undersigned, and the plaintiff having failed to comply with the terms of the Order dated 6/24/15, it is hereby
ORDERED, that the above-captioned action is dismissed, without prejudice.
Contrary to Defendant's claims, this order did not cancel the mortgage debt, since this order was not a dismissal on the merits and merely dismissed the 2009 action with leave to renew (Everhome Mortg. Co. v. Aber, 195 AD3d 682, 686 (2021) [An order issued in a prior action commenced in April 2003, accelerating the loan was dismissed by the Court due to Plaintiff's failure to appear at a court conference, neither invalidated the acceleration nor revoked it]. The Court further notes that Defendant's claim that the 2018 order discontinuing the 2009 action cancelled the mortgage debt is also without merit. Unfortunately, Plaintiff did not address why its predecessor in interest failed to move to vacate the 2015 dismissal order, and instead moved years later to discontinue the 2009 action. While that motion was granted, the 2018 order discontinuing the 2009 action is a nullity since it is a simple tautology to state that an action that has been dismissed cannot be thereafter discontinued.
To avoid a statute of limitations problem, Plaintiff was obligated to either move to vacate the dismissal order issued in the 2009 action, commence a new action within six years subsequent to the commencement of the 2009 action, or establish that it revoked its predecessor in interest's election to accelerate the mortgage debt through an affirmative act of revocation within the six year statute of the limitations period after the 2009 action was filed. Here, Plaintiff claims that it revoked its predecessor in interest's election to accelerate the loan. In support thereof, Plaintiff relies upon Ms. Horne's affidavit and the Exhibits annexed thereto. Ms. Horne stated that after Plaintiff's predecessor in interest commenced the 2009 action, a “Lender's Notice of Revocation Regarding Prior Election to Accelerate”, dated September 10, 2015, and annexed to her affidavit as Exhibit “H”, was sent to Defendant on September 10, 2015. This Notice stated the following:
Lender's Notice of Revocation Regarding Prior Election to Accelerate Seterus Inc. is the servicer for the above-referenced loan number. Pursuant to Paragraph 22 of the Mortgage dated September 14, 2007, the lender exercised its election to accelerate all sums due and owing under the Note of equal date based on your default on April 1, 2009.
Pursuant to the terms of the Note and Mortgage and your default, a lawsuit was filed against you on September 11, 2009 in the Supreme Court of the State of New York, County of Queens bearing Index No. 24553/2009. At this time, the lender hereby revokes its prior election to accelerate all sums due and owing under the aforementioned loan documents. Lender hereby revokes any and all prior acts of acceleration, including but not limited to, the action bearing Index No. 24553/2009.
According to Ms. Horne, after this Notice was sent to Defendant, the servicer also sent monthly statements to the Defendant each and every month thereafter. Annexed to her affidavit as Exhibit “I” are “some of the Mortgage Statements that were sent to the Borrower dated September 16, 2015., October 16, 2015, November 16, 2015, January 18, 2016 February 16, 2016, September 18., 2017, October 16, 2017, November 16, 2017, December 18, 2017 and January 16, 2018”. As such, Plaintiff claims that pursuant to this Notice “de-acceleration occurred on September 10, 2015, within six years measured from the commencement of the prior foreclosure action on September 11, 2009”. Plaintiff argues that this Notice, along with the mortgage statements sent to Defendant, constitute a “clear and unequivocal demand that the Defendant meet his payment obligations constituting a decertation (sic) and it cannot be deemed pretextual in any way”. Defendant argues, among other things, that he never received this notice which Plaintiff purports de-accelerated the 2009 acceleration of the mortgage debt.
“[A]bsent a provision in the operative agreements setting forth precisely what a noteholder must do to revoke an election to accelerate, revocation can be accomplished by an ‘affirmative act’ of the noteholder within six years of the election to accelerate (Freedom Mtge. Corp. v Engel, 37 NY3d1 ). It is well settled “that de-acceleration notices must be clear and unambiguous and may not be issued as a pretext to avoid the onerous effect of an approaching statute of limitations. In other words, to validly de-accelerate, a borrower's right to make the monthly payments that became due between the time the loan was accelerated and the time the acceleration was revoked, together with the right to make future monthly installment payments must actually be revived” (Deutsche BankNatl. Trust Co. v Blank, 189 AD3d 1678 [2d Dept. 2020] [internal quotations omitted]; see also Freedom Mtge. Corp. v Engel, supra [“For example, an express statement in a forbearance agreement that the noteholder is revoking its prior acceleration and reinstating the borrower's right to pay in monthly installments has been deemed an affirmative act of de-acceleration”] [internal quotations omitted]). Thereby, “a de-acceleration letter is not pretextual if ․ it contains an express demand for monthly payments on the note, or, in the absence of such express demand, it is accompanied by copies of monthly invoices transmitted to the homeowner for installment payments, or is supported by other forms of evidence” demonstrating that the borrower was made aware that the lender would accept the tender of monthly payment (Deutsche Bank Natl. Trust Co. v Blank, supra).
Here, the Court finds that the September 10, 2015 Notice was not clear and unambiguous, and was merely issued as a pretext to avoid the approaching statute of limitations. This Notice did not contain an express demand for monthly payments on the Note. Furthermore, the Mortgage Statements Ms. Horne claims were sent to Defendant were not annexed to the Notice, and the earliest statement is dated September 16, 2015, which is after the expiration of the statute of limitations. Notably, Ms. Horne merely stated that the Notice and Mortgage Statements were sent to Defendant and failed to attest that she personally mailed these documents to Defendant or was familiar with Plaintiff's mailing practices and procedures, or in any other manner show these documents were mailed. Further, Ms. Horne also failed to annex proof in admissible form that the Notice and Mortgage Statements were mailed to Defendant by certified mail and regular mail. Consequently, Plaintiff failed to establish prima facie that it effectively de-accelerated the loan, and that the instant action is not time barred. Accordingly, Plaintiff's motion is denied.
Although not specifically stated, it appears that Defendant is moving for, among other things, to dismiss this action pursuant to CPLR 3211(a)(5) insofar as it is time-barred, and for summary judgment upon his Counterclaims. In light of the foregoing, the branch of Defendants’ motion seeking to summary judgment dismissing the Complaint as time barred is granted.
In his first Counterclaim, Defendant seeks to quiet title, and cancel and discharge the mortgage pursuant to RPAPL 1501(4). “Under RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor was not in possession of the subject real property at the time the action to cancel and discharge the mortgage was commenced” (Assyag v Wells Fargo Bank, N.A., 186 AD3d 1303 [2d Dept. 2020]). “[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the statute of limitations begins to run on the entire debt” (id.).
Here, the Court finds that the Defendant has demonstrated his prima facie entitlement to summary judgment on his first Counterclaim. As set forth above, enforcement of the subject Note is time barred. The Court also finds that the Plaintiff has failed to raise any triable issues of fact. Accordingly, the branch of the cross-motion seeking summary judgment on the Defendant's first Counterclaim is granted.
The remaining branch of the cross-motion seeking summary judgment on Defendant's second Counterclaim for reasonable attorneys’ fees, costs, and disbursements pursuant to RPL 282(1) is granted. Where, as here, the defendant/mortagagor is the prevailing party in a foreclosure action, she is entitled to an award of attorneys’ fees and expenses for the successful defense of the action pursuant to RPL 282(1) (21st Mtge. Corp. v Nweke, 165 AD3d 616 [2d Dept. 2-18). The Court finds that the Plaintiff's claims that the Defendant will not be able to successfully defend himself in this action and that he has failed to demonstrate that the Plaintiff breached any term of the mortgage transaction, is without merit.
Based upon the foregoing, the Plaintiff's motion is denied, and the Defendant's cross-motion is granted. Accordingly, it is
ORDERED, the Complaint is dismissed, and it is
ORDERED, that the County Clerk of the County of Queens is directed, upon the payment of the proper fees, is directed to cancel and discharge a certain Notice of Pendency filed in this action on May 5, 2021 against the property known as BLOCK 12905, LOT 34 and said Clerk is hereby directed enter upon the margin of said record of the same, a notice of cancellation referring to this order, and it is
ORDERED, a hearing shall be held with respect to Defendant's second counterclaim for attorney's fees and costs pursuant to RPL 282 on September 22, 2022 at 10:00 AM in Part 36 at the Courthouse located at 25-10 Court Square, Long Island City, New York.
Robert I. Caloras, J.
Response sent, thank you
Docket No: Index No. 701167/18
Decided: June 13, 2022
Court: Supreme Court, Queens County, New York.
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