DEUTSCHE BANK NATIONAL TRUST COMPANY v. 8IN LLC (2026)

DECISION & ORDER

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Nassau County (David P. Sullivan, J.), entered November 8, 2023.  The order, insofar as appealed from, granted the motion of the defendant 8IN, LLC, pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against it as time-barred.

ORDERED that the order is affirmed insofar as appealed from, with costs.

In June 2005, the defendant Harpal Singh Hira (hereinafter Hira) executed a note secured by a mortgage on certain real property located in Hicksville.  The note was subsequently endorsed in blank and delivered to the plaintiff and the mortgage was assigned to the plaintiff in November 2009.

In December 2009, the plaintiff commenced an action against Hira, among others, to foreclose the mortgage (hereinafter the 2009 action).  The plaintiff elected in the complaint in the 2009 action to accelerate the mortgage debt.  On or about December 26, 2016, Hira transferred the deed to the property to IPA Asset Management, LLC (hereinafter IPA), but the deed was not recorded until November 21, 2019.

In an order dated December 1, 2017, the Supreme Court granted the plaintiff's motion to voluntarily discontinue the 2009 action.  In November 2019, IPA commenced an action pursuant to RPAPL 1501(4) to cancel and discharge of record the mortgage (hereinafter the IPA quiet title action).  The plaintiff thereafter moved to dismiss the IPA quiet title action, arguing that the discontinuance of the 2009 action decelerated the mortgage debt and reinstated the mortgage as if the 2009 action had never been commenced and that the statute of limitations never began to run.  In an order dated March 2, 2022, the court granted the motion after determining that pursuant to Freedom Mtge. Corp. v Engel, 37 N.Y.3d 1, 146 N.Y.S.3d 542, 169 N.E.3d 912, the voluntary discontinuance of the 2009 action effected a valid revocation of the plaintiff's acceleration of the mortgage debt and determined that the mortgage between the plaintiff and Hira was still enforceable and valid.  On April 23, 2021, IPA transferred the deed to the property to the defendant 8IN, LLC, which was recorded on June 22, 2021.

In May 2023, the plaintiff commenced this action to foreclose the mortgage against Hira, 8IN, LLC, and another defendant, alleging that Hira defaulted on the mortgage loan on November 1, 2017, and continuing thereafter.  8IN, LLC, moved pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against it as time-barred.  8IN, LLC, argued that in light of the enactment of the Foreclosure Abuse Prevention Act (FAPA) (L 2022, ch 821 [eff Dec. 30, 2022] ), this action was time-barred and the complaint should be dismissed.  In opposition, the plaintiff argued, inter alia, that 8IN, LLC, was, in effect, collaterally estopped from challenging the timeliness of this action based upon the Supreme Court's determination in the IPA quiet title action and that retroactive application of FAPA was precluded and would violate the United States and New York Constitutions.  In an order entered November 8, 2023, the court, among other things, granted 8IN, LLC's, motion.  The plaintiff appeals.

“An action to foreclose a mortgage is governed by a six-year statute of limitations” (U.S. Bank N.A. v. Santos, 218 A.D.3d 827, 828, 193 N.Y.S.3d 271;  see CPLR 213[4] ).  “[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” (Bank of N.Y. Mellon v. Mor, 201 A.D.3d 691, 694, 162 N.Y.S.3d 64;  see U.S. Bank Trust, N.A. v. Boreshesky, 241 A.D.3d 1385, 1386, 242 N.Y.S.3d 657).  “The entire mortgage debt will be deemed to have been accelerated by, as relevant here, the commencement of a mortgage foreclosure action in which the complaint seeks payment of the full outstanding loan balance” (U.S. Bank N.A. v. Connor, 204 A.D.3d 861, 863, 164 N.Y.S.3d 513;  see U.S. Bank Trust, N.A. v. Boreshesky, 241 A.D.3d at 1386–1387, 242 N.Y.S.3d 657).

Here, 8IN, LLC, demonstrated, prima facie, that the six-year statute of limitations began to run in December 2009 when the plaintiff commenced the 2009 action and elected to call due the entire amount secured by the mortgage.  8IN, LLC, further demonstrated that this action was commenced in May 2023, more than six years later (see CPLR 213[4];  U.S. Bank Trust, N.A. v. Boreshesky, 241 A.D.3d at 1388, 242 N.Y.S.3d 657;  U.S. Bank N.A. v. Doura, 204 A.D.3d 721, 723, 166 N.Y.S.3d 51).

Contrary to the plaintiff's contention, the 2017 voluntary discontinuance of the 2009 action did not serve to revoke its prior acceleration of the mortgage debt.  “FAPA amended CPLR 3217, governing the voluntary discontinuance of an action, by adding a new subdivision (e), which provides that ‘[i]n any action on an instrument described under [CPLR 213(4) ], 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’ ” (Deutsche Bank Natl. Trust Co. v. Dagrin, 233 A.D.3d 1065, 1067, 226 N.Y.S.3d 75, quoting CPLR 3217[e];  see U.S. Bank Trust, N.A. v. Boreshesky, 241 A.D.3d at 1388, 242 N.Y.S.3d 657;  cf.  Freedom Mtge. Corp. v. Engel, 37 N.Y.3d 1, 146 N.Y.S.3d 542, 169 N.E.3d 912).

Applying FAPA here, the plaintiff's voluntary discontinuance of the 2009 action did not serve to de-accelerate the mortgage debt or to revive or reset the statute of limitations (see CPLR 3217[e];  U.S. Bank Trust, N.A. v. Boreshesky, 241 A.D.3d at 1388, 242 N.Y.S.3d 657;  Deutsche Bank Natl. Trust Co. v. Dagrin, 233 A.D.3d at 1067, 226 N.Y.S.3d 75).  Therefore, since the plaintiff commenced this action in May 2023, more than six years after the mortgage debt was initially accelerated, this action was time-barred (see U.S. Bank Trust, N.A. v. Boreshesky, 241 A.D.3d at 1388, 242 N.Y.S.3d 657;  Citimortgage, Inc. v. Gunn, 234 A.D.3d 922, 227 N.Y.S.3d 177;  Deutsche Bank Natl. Trust Co. v. Dagrin, 233 A.D.3d at 1067, 226 N.Y.S.3d 75).

The plaintiff's contentions on appeal challenging FAPA's retroactive application and constitutionality under the United States and New York Constitutions are also without merit (see Van Dyke v. U.S. Bank, N.A., 45 N.Y.3d 461, 474, 260 N.Y.S.3d 240, 282 N.E.3d 1183;  Article 13 LLC v. Ponce De Leon Fed. Bank, 45 N.Y.3d 441, 452, 260 N.Y.S.3d 253, 282 N.E.3d 1195; U.S. Bank Trust, N.A. v. Boreshesky, 241 A.D.3d at 1387, 242 N.Y.S.3d 657).

Lastly, we reject the plaintiff's contention on appeal, in effect, that the Supreme Court's determination in the IPA quiet title action must be given collateral estoppel effect, in an attempt to avoid the consequences of FAPA (see U.S. Bank Trust, N.A. v. Boreshesky, 241 A.D.3d at 1388, 242 N.Y.S.3d 657).

Accordingly, the Supreme Court properly granted 8IN, LLC's, motion pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against it as time-barred.

GENOVESI, J.P., WARHIT, GOLIA and HOM, JJ., concur.