159 A.D.3d 962
N.Y. App. Div.2018Background
- In 2005 Lubonty obtained a mortgage from American Home Mortgage Acceptance, Inc. (AHMA) and later defaulted.
- AHMA commenced a foreclosure on June 11, 2007; that action was dismissed as abandoned. AHMA assigned the mortgage to U.S. Bank in May 2011.
- U.S. Bank filed a second foreclosure on June 9, 2011; that action was dismissed in October 2014 for lack of personal jurisdiction.
- Lubonty sued under RPAPL 1501(4) in November 2014 to cancel and discharge the mortgage, alleging the six-year foreclosure statute of limitations (CPLR 213[4]) ran from June 11, 2007 (acceleration at first foreclosure).
- U.S. Bank moved under CPLR 3211(a)(7) to dismiss, submitting bankruptcy petitions and dismissal/release orders showing automatic stays tolled the limitations period under CPLR 204(a) for over 4½ years, extending U.S. Bank’s foreclosure period to December 2017.
- The Supreme Court (Suffolk County) granted dismissal; the Appellate Division affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the mortgage must be canceled as time-barred under the 6-year foreclosure SOL | Lubonty: SOL began on June 11, 2007 when AHMA accelerated the debt; time has run | U.S. Bank: Bankruptcy petitions filed after each foreclosure triggered automatic stays that tolled the SOL under CPLR 204(a) | Court: SOL was tolled by bankruptcy automatic stays; dismissal proper |
| Whether CPLR 204(a) inapplicable because foreclosures commenced before bankruptcy filings | Lubonty: Stays don’t apply because foreclosures were already pending when bankruptcy petitions were filed | U.S. Bank: Automatic stay still tolls limitations even if foreclosure was previously commenced | Court: Plaintiff’s contention rejected; CPLR 204(a) applies (citing precedent) |
| Whether dismissal on CPLR 3211(a)(7) was proper given evidentiary submissions | Lubonty: Complaint facts should be accepted for motion to dismiss | U.S. Bank: Submitted bankruptcy records showing tolling; showed plaintiff’s alleged material fact was untrue | Court: Court may consider submitted evidence; defendant showed no genuine dispute as to tolling, so dismissal appropriate |
Key Cases Cited
- Leon v. Martinez, 84 NY2d 83 (procedural standard for CPLR 3211(a)(7))
- Guggenheimer v. Ginzburg, 43 NY2d 268 (when evidentiary material is considered on 3211(a)(7))
- 53 PL Realty, LLC v. U.S. Bank N.A., 153 A.D.3d 894 (mortgage acceleration starts SOL)
- EMC Mtge. Corp. v. Patella, 279 A.D.2d 604 (acceleration of entire mortgage causes SOL to run)
- Zuckerman v. 234-6 W. 22 St. Corp., 267 A.D.2d 130 (bankruptcy automatic stay tolls limitations)
- PSP-NC, LLC v. Raudkivi, 138 A.D.3d 709 (CPLR 204(a) tolling by bankruptcy stays)