171 A.D.3d 34
N.Y. App. Div.2019Background
- Plaintiff Bank of New York Mellon commenced a mortgage foreclosure against defendant Alice Dieudonne in October 2016; Dieudonne moved to dismiss under CPLR 3211(a)(5) as time-barred.
- A prior foreclosure action had been commenced by the plaintiff in June 2010; plaintiff filed that summons and complaint after satisfying conditions in the mortgage.
- The mortgage is a standard Fannie Mae/Freddie Mac uniform form containing: (1) an acceleration clause (paragraph 22) permitting lender to accelerate if specified conditions are met; and (2) a reinstatement/de‑acceleration clause (paragraph 19) giving borrower a contractual right to “de‑accelerate” if certain requirements are satisfied.
- Plaintiff argued the borrower’s reinstatement right meant acceleration was subject to a condition precedent and the statute of limitations did not begin until the borrower’s de‑acceleration right was extinguished.
- Defendant argued the plaintiff validly accelerated the entire debt by commencing the 2010 foreclosure, starting the statute of limitations on the full balance; she established the action was time‑barred when filed in 2016.
- The Appellate Division affirmed dismissal: paragraph 22 set out the lender’s conditions to accelerate, paragraph 19’s reinstatement right was not a condition precedent to acceleration, and the statute of limitations began when plaintiff exercised its option to accelerate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the mortgage’s reinstatement clause (para. 19) operates as a condition precedent to the lender’s right to accelerate the entire debt | Reinstatement right meant lender’s acceleration was subject to condition precedent; statute of limitations did not run until borrower’s de‑acceleration right was extinguished | Lender validly exercised option to accelerate (by filing 2010 foreclosure) under paragraph 22; reinstatement clause does not negate acceleration | Reinstatement clause is not a condition precedent to acceleration; acceleration valid when plaintiff complied with paragraph 22 and filed suit in 2010; statute of limitations began then |
Key Cases Cited
- Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d 980 (App. Div. 2012) (acceleration option requires clear affirmative action; foreclosure filing can suffice)
- Nationstar Mortgage, LLC v. Weisblum, 143 A.D.3d 866 (App. Div. 2016) (separate accrual for each installment absent valid acceleration)
- EMC Mortgage Corp. v. Patella, 279 A.D.2d 604 (App. Div. 2001) (once validly accelerated, entire debt is due and limitations runs on full amount)
- Jacobus v. Colgate, 217 N.Y. 235 (N.Y. 1916) (cause of action accrues when enforcement becomes possible)
- Hahn Automotive Warehouse, Inc. v. American Zurich Ins. Co., 18 N.Y.3d 765 (N.Y. 2012) (conditions precedent principles; language like "if/unless/until" can create unmistakable condition)
- Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685 (N.Y. 1995) (terms such as "if," "unless," "until" signal conditions)