DESROSIERS v. BANK NATIONAL ASSOCIATION (2026)

DECISION & ORDER

In an action pursuant to RPAPL 1501(4) to cancel and discharge of record a mortgage, the defendants U.S. Bank National Association and Mortgage Electronic Registration Systems, Inc., appeal from (1) an order of the Supreme Court, Suffolk County (Christopher Modelewski, J.), dated February 8, 2024, and (2) a judgment of the same court dated May 14, 2024.  The order granted the plaintiff's motion for summary judgment on the complaint insofar as asserted against the defendants U.S. Bank National Association and Mortgage Electronic Registration Systems, Inc., and, in effect, for summary judgment dismissing the counterclaim of the defendant U.S. Bank National Association and denied those branches of those defendants' cross-motion which were for summary judgment dismissing the complaint insofar as asserted against them and on the counterclaim of the defendant U.S. Bank National Association.  The judgment, upon the order, is in favor of the plaintiff and against those defendants and directed the Suffolk County Clerk to discharge of record the subject mortgage.

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

ORDERED that the judgment is affirmed;  and it is further,

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

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

In October 2006, Samuel Desrosiers (hereinafter the borrower) executed a note in the sum of $340,000 in favor of Lehman Brothers Bank, FSB (hereinafter Lehman).  The note was secured by a mortgage on certain real property located in Amityville.  The borrower allegedly defaulted on his obligations under the note and mortgage by failing to make the monthly payments due April 1, 2008, and thereafter.

On July 30, 2008, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), as nominee for Lehman, commenced an action against the borrower, among others, to foreclose the mortgage (hereinafter the 2008 action).  A judgment of foreclosure and sale was entered on February 18, 2010.

In an order dated March 7, 2011, the Supreme Court vacated the judgment of foreclosure and sale and directed dismissal of the complaint based upon a finding that service of process was not properly effected upon the borrower.

On August 8, 2022, the borrower commenced this action pursuant to RPAPL 1501(4) to cancel and discharge of record the mortgage and, after issue was joined, moved for summary judgment on the complaint insofar as asserted against U.S. Bank National Association (hereinafter U.S. Bank), the current holder of the mortgage loan, and MERS and, in effect, for summary judgment dismissing the counterclaim of U.S. Bank alleging unjust enrichment.  U.S. Bank and MERS cross-moved, inter alia, for summary judgment dismissing the complaint insofar as asserted against them and on the counterclaim of U.S. Bank alleging unjust enrichment.  Those defendants argued, among other things, that the statute of limitations had not expired because MERS lacked standing to commence the 2008 action and, thus, the statute of limitations had not begun to run.

In an order dated February 8, 2024, the Supreme Court granted the borrower's motion and denied those branches of the cross-motion of U.S. Bank and MERS which were for summary judgment dismissing the complaint insofar as asserted against them and on the counterclaim of U.S. Bank.

In a judgment dated May 14, 2024, the Supreme Court, upon the order, directed the Suffolk County Clerk to discharge of record the mortgage.  U.S. Bank and MERS appeal.

RPAPL 1501(4) provides that “[w]here the period allowed by the applicable statute of limitation for the commencement of an action to foreclose a mortgage ․ has expired, any person having an estate or interest in the real property subject to such encumbrance may maintain an action ․ to secure the cancellation and discharge of record of such encumbrance, and to adjudge the estate or interest of the plaintiff in such real property to be free therefrom” (see Bank of Am., N.A. v Scher, 205 AD3d 985, 987–988).  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;  see Cohen v Deutsche Bank Natl. Trust Co., 229 AD3d 758, 760–761).  “An acceleration of a mortgage debt can occur when a creditor commences an action to foreclose upon a note and mortgage and seeks, in the complaint, payment of the full balance due” (Wells Fargo Bank, N.A. v Lefkowitz, 171 AD3d 843, 844 [internal quotation marks omitted] ).

“[S]ervice of a complaint is ineffective to constitute a valid exercise of the option to accelerate a debt where the plaintiff does not have the authority to accelerate the debt or to sue to foreclose at that time” (U.S. Bank Trust, N.A. v Atedgi, 236 AD3d 707, 711 [internal quotation marks omitted] ).  However, CPLR 213(4), as amended by the Foreclosure Abuse and Prevention Act (FAPA) (L 2022, ch 821), provides, in relevant part, that in an action pursuant to RPAPL 1501(4) to cancel and discharge of record a mortgage, “a defendant shall be estopped from asserting that the period allowed by the applicable statute of limitation for the commencement of an action upon the instrument has not expired because the instrument was not validly accelerated prior to, or by way of commencement of a prior action, unless the prior action was dismissed based on an expressed judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated” (CPLR 213[4][b];  see Brennan v Deutsche Bank Trust Co. Ams., 237 AD3d 1027, 1030).

Here, the borrower demonstrated, prima facie, that the statute of limitations began to run on July 30, 2008, when MERS, as nominee for Lehman, commenced the 2008 action and elected in the complaint to “accelerate the mortgage balance and declare the same to be immediately due and payable” (see Citimortgage, Inc. v Gunn, 234 AD3d 922, 923).  The borrower further demonstrated, prima facie, that the instant action was commenced on August 8, 2022, more than six years later (see Cohen v Deutsche Bank Natl. Trust Co., 229 AD3d at 760).

In opposition, U.S. Bank and MERS failed to raise a triable issue of fact.  Their contention that the complaint in the 2008 action did not constitute a valid acceleration of the debt because MERS lacked standing to commence that action is precluded by CPLR 213(4)(b) because the 2008 action was not dismissed “based on an expressed judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated” (id.;  see Brennan v Deutsche Bank Trust Co. Ams., 237 AD3d 1027, 1029).  There is no merit to their contention that FAPA does not apply retroactively (see Van Dyke v U.S. Bank, N.A., 45 NY3d 461;  Article 13 LLC v Ponce De Leon Fed. Bank, 45 NY3d 441).  Their challenges to the constitutionality of the retroactive application of FAPA are also without merit (see Van Dyke v U.S. Bank, N.A., 45 NY3d 461;  Article 13 LLC v Ponce De Leon Fed. Bank, 45 NY3d 441;  FV–1, Inc. v Palaguachi, 234 AD3d 818, 822).

With respect to the counterclaim of U.S. Bank, “ ‘[t]o prove unjust enrichment, a party must show that the other party was enriched at his or her expense, and [that] it is against equity and good conscience to permit that person to retain what is sought to be recovered’ ” (Daniels v Ruggiero, 230 AD3d 563, 565, quoting Delidimitropoulos v Karantinidis, 186 AD3d 1489, 1491;  see Daldan, Inc. v Deutsche Bank Natl. Trust Co., 188 AD3d 989, 991).  However, the voluntary payment doctrine “bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law” (GITSIT Solutions, LLC v Azcuy, 242 AD3d 956, 959, quoting Dillon v U–A Columbia Cablevision of Westchester, 100 NY2d 525, 526;  see Daldan, Inc. v Deutsche Bank Natl. Trust Co., 188 AD3d at 991).

Here, U.S. Bank made no showing that payments it made for real estate taxes, or other payments it made toward the upkeep of the premises, were made accidentally or mistakenly or that it was induced to make such payments by fraud (see GITSIT Solutions, LLC v Azcuy, 242 AD3d at 959).  Thus, it was barred by the voluntary payment doctrine from recovering such payments under the doctrine of unjust enrichment (see id. at 959–960;  Daldan, Inc. v Deutsche Bank Natl. Trust Co., 188 AD3d at 991–992).

The parties' remaining contentions either are without merit or need not be reached in light of our determination.

Accordingly, the Supreme Court properly granted the plaintiff's motion for summary judgment on the complaint insofar as asserted against U.S. Bank and MERS and, in effect, for summary judgment dismissing the counterclaim of U.S. Bank and denied those branches of those defendants' cross-motion which were for summary judgment dismissing the complaint insofar as asserted against them and on the counterclaim of U.S. Bank.

BARROS, J.P., WARHIT, TAYLOR and QUIRK, JJ., concur.