184 A.D.3d 140
N.Y. App. Div.2020Background
- In 2006 Barua executed a $312,000 note secured by a mortgage; payments allegedly defaulted beginning April 1, 2009.
- Chase commenced a foreclosure on Nov. 6, 2009 and the complaint expressly elected to accelerate the entire loan balance.
- Chase voluntarily discontinued that 2009 foreclosure (motion granted Oct. 15, 2013).
- Christiana Trust (assignee) filed a second foreclosure on Nov. 10, 2015 and again alleged acceleration.
- Barua moved to dismiss the 2015 complaint as time‑barred under CPLR 213(4); Supreme Court denied, reasoning the discontinuance de‑accelerated the debt.
- Appellate Division reversed: it held the 2015 action was time‑barred (commenced four days after the six‑year period) and ruled that mere discontinuance does not automatically de‑accelerate a mortgage absent a clear, unambiguous affirmative act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a voluntary discontinuance of a prior foreclosure automatically de‑accelerates an earlier acceleration | Discontinuance "erases" prior acceleration; leaves situation as if prior action never filed, so new action restarts acceleration | Prior acceleration remains unless lender clearly and unambiguously revokes it by affirmative act | Discontinuance alone does not de‑accelerate; lender must clearly and unambiguously communicate de‑acceleration (or take equivalent affirmative steps) |
| Whether the Nov. 10, 2015 action was barred by CPLR 213(4) | Timely because discontinuance de‑accelerated earlier demand | Time‑barred—the 2009 acceleration started the six‑year clock; 2015 filing was 4 days late | 2015 action time‑barred as to accelerated debt; dismissal granted under CPLR 3211(a)(5) |
| Whether the RPAPL 1304 90‑day default notice tolls the statute of limitations under CPLR 204(a) | RPAPL 1304 compliance tolled limitations for the 90‑day notice period | RPAPL 1304 is a condition precedent, not a statutory prohibition; it does not toll under CPLR 204(a) | RPAPL 1304 does not toll the SOL under CPLR 204(a) |
| Whether lis pendens filed against the property should be cancelled | Lis pendens valid because action timely | Lis pendens should be cancelled if complaint dismissed as time‑barred | Lis pendens cancelled because complaint dismissed as to Barua |
Key Cases Cited
- Milone v. US Bank N.A., 164 A.D.3d 145 (2d Dept) (de‑acceleration must be clear, unambiguous; party must have standing to de‑accelerate)
- NMNT Realty Corp. v. Knoxville 2012 Trust, 151 A.D.3d 1068 (2d Dept) (voluntary discontinuance can raise triable issue of revocation of acceleration)
- Freedom Mtge. Corp. v. Engel, 163 A.D.3d 631 (2d Dept) (held discontinuance alone insufficient unless it explicitly revokes acceleration)
- Bank of N.Y. Mellon v. Dieudonne, 171 A.D.3d 34 (2d Dept) (acceleration triggers commencement of limitations period)
- EMC Mtge. Corp. v. Patella, 279 A.D.2d 604 (2d Dept) (court dismissal of prior action does not constitute lender's revocation of acceleration)
- Wells Fargo Bank, N.A. v. Burke, 94 A.D.3d 980 (2d Dept) (acceleration notice must be clear and unequivocal)
- Albertina Realty Co. v. Rosbro Realty Corp., 258 N.Y. 472 (N.Y.) (distinguishes the election to accelerate from the notice of that election)
- Kashipour v. Wilmington Sav. Fund Socy., FSB, 144 A.D.3d 985 (2d Dept) (SOL accrues from valid acceleration)