A DISCHARGE OF MORTGAGE

This is what happens after the statute of limitations runs out on a mortgage foreclosure.

BH 263, LLC v Bayview Loan Servicing, LLC, 2019 NY Slip Op 06586, Decided on September 18, 2019, Appellate Division, Second Department:

"In March 2007, nonparty Noel Palmer obtained a loan from Washington Mutual Bank, FA (hereinafter WaMu), secured by a mortgage on real property located in Brooklyn. In July 2008, WaMu commenced an action to foreclose the mortgage (hereinafter the 2008 foreclosure action), and sought, in the complaint, to recover the full balance due. In an order dated September 10, 2013, the Supreme Court directed the dismissal of the complaint in the 2008 foreclosure action as abandoned pursuant to CPLR 3215(c), and vacated the notice of pendency. In April of 2014, the mortgage was assigned to Bayview Loan Servicing, LLC (hereinafter Bayview).

In January 2015, the plaintiff purchased the subject property from Palmer. In March 2016, the plaintiff commenced this action to cancel and discharge the mortgage of record. The plaintiff subsequently moved, inter alia, for summary judgment on the complaint, and Bayview cross-moved for summary judgment dismissing the complaint. The Supreme Court, inter alia, granted the motion and denied the cross motion, and Bayview appeals.

Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor was not in possession of the subject real [*2]property at the time the action to cancel and discharge the mortgage was commenced (see Lubonty v U.S. Bank N.A., 159 AD3d 962, 963, lv granted 32 NY3d 903). An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4]; Lubonty v U.S. Bank N.A., 159 AD3d at 962; Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d 985, 986). "[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" (Lubonty v U.S. Bank N.A., 159 AD3d at 963 [internal quotation marks omitted]; see Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d at 986).

Here, in support of its motion the plaintiff established that it was the current owner of the subject property, that "[a]n acceleration of the full amount of the debt occurred in this instance upon the filing of the summons and complaint in the [2008] foreclosure action" (Milone v US Bank N.A., 164 AD3d 145, 152), i.e., on July 23, 2008, and that, accordingly, the statute of limitations expired six years later, on July 23, 2014 (see id. at 152-153). Thus, by establishing that the commencement of a new foreclosure action would be time-barred by the applicable six-year statute of limitations (see Milone v US Bank N.A., 164 AD3d at 152-153; Deutsche Bank Natl. Trust Co. v Gambino, 153 AD3d 1232, 1234; Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d at 986), the plaintiff met its prima facie burden of demonstrating its entitlement to judgment as a matter of law on the complaint (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Zuckerman v City of New York, 49 NY2d 557, 562). In opposition to the plaintiff's prima facie showing, Bayview failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d at 324). Bayview also failed to demonstrate its prima facie entitlement to judgment as a matter of law dismissing the complaint."

ANOTHER TIME BARRED FORECLOSURE CLAIM

Karpa Realty Group, LLC v Deutsche Bank Natl. Trust Co., 2018 NY Slip Op 05921, Decided on August 29, 2018, Appellate Division, Second Department:

"Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor is not in possession of the subject real property at the time the action to cancel and discharge the mortgage is commenced (see Lubonty v U.S. Bank N.A., 159 AD3d 962, 963). An action to foreclose a mortgage has a six-year statute of [*2]limitations (see CPLR 213[4]; Lubonty v U.S. Bank N.A., 159 AD3d at 963). "[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" (Lubonty v U.S. Bank N.A., 159 AD3d at 963 [internal quotation marks omitted]).

Here, the plaintiff made a prima facie showing of its entitlement to judgment as a matter of law by establishing that the foreclosure action commenced by Deutsche Bank in 2008 was dismissed pursuant to CPLR 3216, and that the commencement of a new foreclosure action would be time-barred by the applicable six-year statute of limitations (see U.S. Bank N.A. v Martin, 144 AD3d 891, 891; JBR Constr. Corp. v Staples, 71 AD3d 952, 953). Thus, in opposition, Deutsche Bank was required to raise a triable issue of fact as to whether the statute of limitations was tolled or revived (see JBR Constr. Corp. v Staples, 71 AD3d at 953).

"General Obligations Law § 17-101 effectively revives a time-barred claim when the debtor has signed a writing which validly acknowledges the debt" (Lynford v Williams, 34 AD3d 761, 762; see Mosab Constr. Corp. v Prospect Park Yeshiva, Inc., 124 AD3d 732, 733). To constitute a valid acknowledgment, a "writing must be signed and recognize an existing debt and must contain nothing inconsistent with an intention on the part of the debtor to pay it" (Sichol v Crocker, 177 AD2d 842, 843 [internal quotation marks omitted]; see U.S. Bank N.A. v Martin, 144 AD3d at 892-893; Mosab Constr. Corp. v Prospect Park Yeshiva, Inc., 124 AD3d at 733). Contrary to Deutsche Bank's contention, a letter written by Aird that accompanied his second short sale package submitted to Deutsche Bank's loan servicer did not constitute an unqualified acknowledgment of the debt or manifest a promise to repay the debt sufficient to reset the running of the statute of limitations (see U.S. Bank, N.A. v Kess, 159 AD3d 767, 768-769; U.S. Bank N.A. v Martin, 144 AD3d at 892-893; Hakim v Peckel Family Ltd. Partnership, 280 AD2d 645; Sichol v Crocker, 177 AD2d at 843)."

TIME BARRED FORECLOSURE CLAIM

Yadegar v Deutsche Bank Natl. Trust Co., 2018 NY Slip Op 05957, Decided on August 29, 2018, Appellate Division, Second Department:

"Pursuant to RPAPL 1501(4), a person having an estate or an interest in real property subject to a mortgage can seek to cancel and discharge that encumbrance where the period allowed by the applicable statute of limitations for the commencement of an action to foreclose the mortgage has expired, provided that the mortgagee or its successor is not in possession of the subject real property at the time the action to cancel and discharge the mortgage is commenced (see RPAPL 1501[4]; Lubonty v U.S. Bank N.A., 159 AD3d 962, 963). An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4]; Lubonty v U.S. Bank N.A., 159 AD3d at 963). "[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" (Lubonty v U.S. Bank N.A., 159 AD3d at 963 [internal quotation marks omitted]).

Here, the plaintiff met her prima facie burden for summary judgment on her complaint by establishing that the commencement of a new foreclosure action would be time-barred by the applicable six-year statute of limitations (see U.S. Bank N.A. v Martin, 144 AD3d 891, 891; JBR Constr. Corp. v Staples, 71 AD3d 952, 953). Thus, the burden shifted to the defendant to raise a triable issue of fact as to whether the statute of limitations was tolled or revived (see JBR Constr. Corp. v Staples, 71 AD3d at 953).

"General Obligations Law § 17-101 effectively revives a time-barred claim when the debtor has signed a writing which validly acknowledges the debt" (Lynford v Williams, 34 AD3d 761, 762; see Mosab Constr. Corp. v Prospect Park Yeshiva, Inc., 124 AD3d 732, 733). To constitute a valid acknowledgment, a "writing must be signed and recognize an existing debt and must contain nothing inconsistent with an intention on the part of the debtor to pay it" (Sichol v Crocker, 177 AD2d 842, 843 [internal quotation marks omitted]; see U.S. Bank N.A. v Martin, 144 AD3d at 892-893; Mosab Constr. Corp. v Prospect Park Yeshiva, Inc., 124 AD3d at 733).

Contrary to the defendant's contention, the plaintiff's letter accompanying her request for the defendant to authorize a short sale of the property, and the other documents relied on by the defendant, did not constitute an unqualified acknowledgment of the debt sufficient to reset the statute of limitations (see U.S. Bank, N.A. v Kess, 159 AD3d 767, 768; U.S. Bank N.A. v Martin, 144 AD3d at 892-893; Hakim v Peckel Family Ltd. Partnership., 280 AD2d 645; Sichol v Crocker, 177 AD2d at 843). The plaintiff's letter, while arguably acknowledging the existence of the mortgage, disclaimed any intent to pay it with the plaintiff's own funds (see Lew Morris Demolition Co. v Board of Educ. of City of N.Y., 40 NY2d 516, 520-521; U.S. Bank, N.A. v Kess, 159 AD3d at 768-769; Sichol v Crocker, 177 AD2d at 843). Thus, the defendant failed to raise a triable issue of fact in opposition to the plaintiff's motion for summary judgment and, with respect to its cross motion, the defendant failed to establish its prima facie entitlement to summary judgment dismissing the complaint insofar as asserted against it."