BLUE CASTLE CAYMAN LTD v. DACOSTA (2026)

DECISION & ORDER

In an action to foreclose a mortgage, the defendants Andrea Dacosta and Simone Pimentel–Ortiz appeal from (1) an order of the Supreme Court, Westchester County (Robert S. Ondrovic, J.), dated February 24, 2025, and (2) an order and judgment of foreclosure and sale (one paper) of the same court dated July 25, 2025. The order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against those defendants and to strike their affirmative defense alleging the expiration of the statute of limitations and denied the cross-motion of those defendants for summary judgment dismissing the complaint insofar as asserted against them. The order and judgment of foreclosure and sale granted the plaintiff's unopposed motion to confirm a referee's report and for a judgment of foreclosure and sale, confirmed the referee's report, and directed the sale of the real property at issue.

ORDERED that the appeal from the order is dismissed; and it is further,

ORDERED that the order and judgment of foreclosure and sale is affirmed; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

In 2013, LoanCare, a division of FNF Servicing, Inc., commenced an action (hereinafter the first action) against the defendants Andrea Dacosta and Simone Pimentel–Ortiz (hereinafter together the defendants), among others, to foreclose a mortgage encumbering certain real property located in Yonkers (hereinafter the property). In the complaint, LoanCare elected to accelerate the entire mortgage debt. In an order dated April 29, 2016, the complaint in the first action was dismissed for failure to prosecute pursuant to CPLR 3215(c).

Thereafter, in October 2018, a subsequent assignee commenced a second foreclosure action (hereinafter the second action) against the defendants, among others, to foreclose the same mortgage. In an order and judgment dated November 30, 2023, after a hearing, the complaint in the second action was dismissed insofar as asserted against the defendants for failure to properly serve the defendants.

In June 2024, the plaintiff commenced this action against the defendants, among others, to foreclose the same mortgage. In their answer, the defendants alleged, among other affirmative defenses, that the action was time-barred. The plaintiff moved, inter alia, for summary judgment on the complaint and to strike the defendants' affirmative defense alleging the expiration of the statute of limitations on the ground, inter alia, that no state statute of limitations applied since prior to the plaintiff's ownership, a note and the mortgage were held by the Government National Mortgage Association (hereinafter GNMA) as one of several predecessors in interest to LoanCare. The plaintiff alleged that GNMA is immune from the application of New York's statute of limitations and that after GNMA held the note and the mortgage, and after several subsequent assignments, the note and the mortgage were assigned to the plaintiff. The defendants opposed the plaintiff's motion and cross-moved for summary judgment dismissing the complaint insofar as asserted against them as time-barred, contending that the statute of limitations began to run in 2013, when the first action was filed.

In an order dated February 24, 2025 (hereinafter the February 2025 order), the Supreme Court, among other things, granted those branches of the plaintiff's motion and, in effect, denied the defendants' cross-motion. In an order and judgment of foreclosure and sale dated July 25, 2025, the court granted the plaintiff's unopposed motion to confirm a referee's report and for a judgment of foreclosure and sale, confirmed the referee's report, and directed the sale of the property. The defendants appeal from the February 2025 order and the order and judgment of foreclosure and sale.

The appeal from the February 2025 order must be dismissed because the right of direct appeal therefrom terminated with the entry of the order and judgment of foreclosure and sale in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the February 2025 order are brought up for review and have been considered on the appeal from the order and judgment of foreclosure and sale (see CPLR 5501[a][1]; Matter of Aho, 39 NY2d at 248).

Although the order and judgment of foreclosure and sale was entered upon the default of the defendants in opposing the plaintiff's motion to confirm the referee's report and for a judgment of foreclosure and sale, the defendants may obtain review of “matters which were the subject of contest” before the Supreme Court (James v Powell, 19 NY2d 249; see Wells Fargo Bank, N.A. v Harrison, 188 AD3d 1298, 1299). Since the defendants opposed the plaintiff's motion, inter alia, for summary judgment on the complaint insofar as asserted against the defendants and cross-moved for summary judgment dismissing the complaint insofar as asserted against them as time-barred, appellate review of the February 2025 order is permitted.

An action to foreclose a mortgage is governed by a six-year statute of limitations (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 AD3d 691, 694). The entire mortgage debt will be deemed to have been accelerated by the commencement of a mortgage foreclosure action in which the complaint seeks payment of the full outstanding loan balance (see U.S. Bank N.A. v Connor, 204 AD3d 861, 863).

Nevertheless, “[t]here is no federal statute of limitations applicable to mortgage foreclosure actions brought by the United States or its federal agencies” (Fleet Natl. Bank v D'Orsi, 26 AD3d 898, 899; see RCR Servs. v Herbil Holding Co., 229 AD2d 379, 380). “That rule applies equally to an assignee of a federal agency, including a commercial lender, and includes the benefit of immunity from a state limitations period” (Fleet Natl. Bank v D'Orsi, 26 AD3d at 899; see RCR Servs. v Herbil Holding Co., 339 AD2d at 380).

Here, the plaintiff established, prima facie, that the mortgage was previously held by GNMA, which is a federal government entity (see 12 UCS § 1717[a][2][A]; RCR Servs. v Herbil Holding Co., 229 AD2d at 380). In support of its motion and in opposition to the defendants' cross-motion, the plaintiff submitted, inter alia, the note, which was endorsed to the Secretary of the United States Department of Housing and Urban Development, the mortgage assignment to GNMA dated April 4, 2012, and recorded on April 5, 2013, and the subsequent assignment of the mortgage to the plaintiff dated February 1, 2022, and recorded on February 18, 2022. Therefore, the plaintiff, as an assignee of a federal agency, demonstrated that New York's statute of limitations was inapplicable and, thus, established its prima facie entitlement to judgment as a matter of law dismissing the defendants' affirmative defense alleging the expiration of the statute of limitations.

The defendants failed to raise a triable issue of fact in opposition to those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants and to strike their affirmative defense alleging the expiration of the statute of limitations or to establish their prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against them. Contrary to the defendants' contention, GNMA had a right, as set forth in the note, to foreclose the mortgage, which was subsequently assigned to the plaintiff (see RCR Servs. v Herbil Holding Co., 229 AD2d at 380).

Accordingly, the Supreme Court properly granted those branches of plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendants and to strike the defendants' affirmative defense alleging the expiration of the statute of limitations and denied the defendants' cross-motion for summary judgment dismissing the complaint insofar as asserted against them as time-barred.

DUFFY, J.P., BARROS, WARHIT and OTTLEY, JJ., concur.