FEDERAL NATIONAL MORTGAGE ASSOCIATION v. METZ (2023)

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Nassau County (Thomas A. Adams, J.), entered January 29, 2019.  The order, insofar as appealed from, in effect, searched the record and awarded summary judgment to the defendants dismissing the complaint as time-barred.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs.

In 2018, the plaintiff commenced this action against the defendant Bryan Metz, among others, to foreclose a mortgage on real property located in Glen Cove. Metz served an answer in which he asserted various affirmative defenses, including expiration of the statute of limitations.

The plaintiff subsequently moved, inter alia, for summary judgment on the complaint insofar as asserted against Metz, to strike Metz's answer, and for an order of reference.  Metz opposed the motion, arguing that the action was time-barred by virtue of the commencement of a prior foreclosure action in 2009.  By order entered January 29, 2019, the Supreme Court, among other things, in effect, searched the record and awarded summary judgment to the defendants dismissing the complaint as time-barred.  The plaintiff appeals.

An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4]).  Even if a mortgage is payable in installments, once a noteholder elects to accelerate the debt, the entire amount is due and the statute of limitations begins to run on the entire debt (see Freedom Mtge. Corp. v. Engel, 37 N.Y.3d 1, 21, 146 N.Y.S.3d 542, 169 N.E.3d 912;  U.S. Bank N.A. v. Doura, 204 A.D.3d 721, 723, 166 N.Y.S.3d 51).  “[T]o be valid, an election to accelerate must be made by an unequivocal overt act that discloses the noteholder's choice, such as the filing of a verified complaint seeking foreclosure and containing a sworn statement that the noteholder is demanding repayment of the entire outstanding debt” (Freedom Mtge. Corp. v. Engel, 37 N.Y.3d at 22, 146 N.Y.S.3d 542, 169 N.E.3d 912 [internal quotation marks omitted];  see U.S. Bank N.A. v. Doura, 204 A.D.3d at 723, 166 N.Y.S.3d 51).

Here, contrary to the Supreme Court's conclusion, the record failed to demonstrate, as a matter of law, that a valid election to accelerate the entire balance of the subject debt was made in conjunction with the commencement of the 2009 foreclosure action, so as to start the statute of limitations running at that time.  Since neither party submitted to the court the complaint in the 2009 action, there was no evidence to demonstrate that the plaintiff in that prior action elected to call due the entire amount secured by the subject mortgage (see U.S. Bank, N.A. v. Heirs & Distributees of the Estate of Morris Kaplan, 197 A.D.3d 593, 594, 148 N.Y.S.3d 914;  U.S. Bank, N.A. v. DeGroat, 186 A.D.3d 1454, 1455, 128 N.Y.S.3d 866;  Solomon v. HSBC Bank USA, N.A., 185 A.D.3d 860, 863, 128 N.Y.S.3d 515;  Wells Fargo Bank, N.A. v. Lefkowitz, 171 A.D.3d 843, 844, 97 N.Y.S.3d 696).  In the absence of such proof, the court erred in concluding, as a matter of law, that the instant action was time-barred.

Accordingly, we reverse so much of the order as, in effect, searched the record and awarded summary judgment to the defendants dismissing the complaint.

BRATHWAITE NELSON, J.P., IANNACCI, CHRISTOPHER and WARHIT, JJ., concur.