BUT DOES THE MORTGAGE REMAIN AS A LIEN?

U.S. Bank N.A. v Joseph, 2018 NY Slip Op 02155, Decided on March 28, 2018, Appellate Division, Second Department:

"The appellants moved to dismiss the complaint insofar as asserted against them as time-barred pursuant to CPLR 3211(a)(5). They pointed out that almost nine years had elapsed since the acceleration of their loan, well beyond the six-year statute of limitations. The plaintiff opposed the motion, arguing, among other things, that the action was not time-barred because the limitations period had been sufficiently tolled under CPLR 204(a) by the bankruptcy stays and the temporary restraining order that was in effect during the pendency of the Josephs' motion to dismiss the first foreclosure action. The Supreme Court denied the appellants' motion.

"On a motion to dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired" (Wells Fargo Bank, N.A. v Burke, 155 AD3d 668, 669; see Island ADC, Inc. v Baldassano Architectural Group, P.C., 49 AD3d 815, 816). "The burden then shifts to the nonmoving party to raise a question of fact as to the applicability of an exception to the statute of limitations, as to whether the statute of limitations was tolled, or as to whether the action was actually commenced within the applicable limitations period" (Singh v New York City Health & Hosps. Corp. [Bellevue Hosp. Ctr. & Queens Hosp. Ctr.], 107 AD3d 780, 781 [citation omitted]).

An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4]). 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 (see Nationstar Mtge., LLC v Weisblum, 143 AD3d 866, 867; Wells Fargo Bank, N.A. v Burke, 94 AD3d 980, 982; Wells Fargo Bank, N.A. v Cohen, 80 AD3d 753, 754; Loiacono v Goldberg, 240 AD2d 476, 477). Once a mortgage debt is accelerated, however, the statute of limitations begins to run on the entire debt (see Amrusi v Nwaukoni, 155 AD3d 814; Stewart Tit. Ins. Co. v Bank of N.Y. Mellon, 154 AD3d 656, 659; Beneficial Homeowner Serv. Corp. v Tovar, 150 AD3d 657, 658).

Here, it is undisputed that the six-year statute of limitations began to run on February 1, 2006, when the plaintiff accelerated the mortgage debt (see Amrusi v Nwaukoni, 155 AD3d at 817). Moreover, since the plaintiff did not commence this action until January 14, 2015, more than six years later, the appellants sustained their initial burden of demonstrating, prima facie, that this action was untimely (see U.S. Bank N.A. v Martin, 144 AD3d 891, 891-892).

In opposition, the plaintiff failed to raise a question of fact as to whether the limitations period was tolled for sufficient periods to bring the action within the six-year limitations period. Under CPLR 204(a), "[w]here the commencement of an action has been stayed by a court or by statutory prohibition, the duration of the stay is not a part of the time within which the action must be commenced" (see Mercury Capital Corp. v Shepherds Beach, 281 AD2d 604, 604; Torsoe Bros. Constr. Corp. v McKenzie, 271 AD2d 682, 682). The bankruptcy stay of 11 USC § 362(c) operates under CPLR 204(a) to stay the commencement, or continuation, of a foreclosure action (see U.S. Bank, N.A. v McKenna, 149 AD3d 1136, 1137; U.S. Bank N.A. v Martin, 144 AD3d at 893; Mercury Capital Corp. v Shepherds Beach, 281 AD2d at 604). Thus, the periods during which bankruptcy stays were in effect were not part of the time counted in the calculation of the running [*3]of the statute of limitations, at least as to Barbara Joseph (see Deutsche Bank Natl. Trust Co. v Karlis, 138 AD3d 915, 917; Mercury Capital Corp. v Shepherds Beach, 281 AD2d at 604; Zuckerman v 234-6 W. 22 St. Corp., 267 AD2d 130, 130). Contrary to the plaintiff's contention, however, the time during which the temporary restraining order was in effect when the Josephs moved to dismiss the first foreclosure action did not toll the running of the statute of limitations. That order prevented the plaintiff from selling the property at auction, but only in the context of the first foreclosure action. The temporary restraining order did not prevent the plaintiff from discontinuing the first foreclosure action and commencing a new action (cf. Citibank, N.A. v McGlone, 270 AD2d 124, 125). Thus, the plaintiff was not entitled under CPLR 204(a) to have the time during which the temporary restraining order was in effect excluded from the statute of limitations, and the total time elapsed from the acceleration of the mortgage debt until the second foreclosure action was commenced exceeded six years, even when the periods attributable to the bankruptcy stays are excluded. Accordingly, the Supreme Court should have granted the appellants' motion pursuant to CPLR 3211(a)(5) to dismiss the complaint insofar as asserted against them as time-barred."