Bank of N.Y. Mellon v Norton

Aug 16, 2023
2020-09557
Versions:

McCalla Raymer Leibert Pierce, LLC, New York, NY (Charles H. Jeanfreau of counsel), for appellant.

Thomas LaGrotta, Thornwood, NY, for respondents.

In an action to foreclose a mortgage, the plaintiff appeals from an order of the Supreme Court, Westchester County (Joan B. Lefkowitz, J.), dated September 21, 2020. The order granted that branch of the motion of the defendants Christina Norton and Raymond Norton which was pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar as asserted against them as time-barred, and denied the plaintiff‘s cross-motion to compel those defendants to accept its late reply to their counterclaims.

Ordered that the order is affirmed, with costs.

On July 8, 2019, the plaintiff commenced this action against the defendants Christina Norton and Raymond Norton (hereinafter together the defendants), among others, to foreclose a mortgage on real property located in White Plains. The defendants interposed an answer in which they asserted an affirmative defense that the action was time-barred and a counterclaim pursuant to RPAPL 1501 (4) to cancel and discharge of record the mortgage, among other defenses and counterclaims. The plaintiff failed to timely serve a reply to the counterclaims.

The defendants subsequently moved, inter alia, pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar as asserted against them as time-barred. In support of their motion, the defendants submitted a copy of the summons and complaint filed in a prior foreclosure action commenced by the plaintiff against the defendants on April 16, 2013, in which the plaintiff had demanded payment of the entire unpaid balance of the loan. The defendants further submitted a stipulation of discontinuance of the prior action dated July 10, 2013.

The plaintiff opposed the motion and cross-moved to compel the defendants to accept its late reply to their counterclaims. In an order dated September 21, 2020, the Supreme Court granted that branch of the defendants’ motion which was pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar as asserted against them, and denied the plaintiff‘s cross-motion. The plaintiff appeals.

We agree with the Supreme Court‘s determination granting that branch of the defendants’ motion which was pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar as asserted against them, albeit for a different reason from that relied upon by the court. An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213 [4]). “[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” (Bank of N.Y. Mellon v Mor, 201 AD3d 691, 694 [2022]; see U.S. Bank N.A. v Connor, 204 AD3d 861, 862-863 [2022]).

Here, the mortgage was accelerated, and the statute of limitations began to run, on April 16, 2013, when the plaintiff commenced the prior action in which it elected to call due the entire amount secured by the mortgage (see U.S. Bank N.A. v Ford, 208 AD3d 1199, 1201 [2022]; U.S. Bank N.A. v Connor, 204 AD3d at 863). Contrary to the plaintiff‘s contention, pursuant to CPLR 3217, as amended by the Foreclosure Abuse Prevention Act (L 2022, ch 821, § 8 [eff Dec. 30, 2022] [hereinafter the Act]), the voluntary discontinuance of the prior action did not serve to revive or reset the statute of limitations (see CPLR 3217 [e]). Since the instant action was commenced more than six years after April 16, 2013, it is untimely.

The plaintiff‘s contention that the commencement of the prior action in 2013 did not constitute a valid acceleration of the mortgage in light of the purported failure to serve certain required notices is also precluded by amendments enacted under the Act. CPLR 213 (4) (a) now provides that “a plaintiff shall be estopped from asserting that the instrument was not validly accelerated, unless the prior action was dismissed based on an expressed judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated.” Here, the prior action was voluntarily discontinued; there was no expressed judicial determination that the mortgage was not validly accelerated. Thus, the plaintiff is estopped from challenging the validity of the prior acceleration (see id.).

Accordingly, the Supreme Court properly granted that branch of the defendants’ motion which was pursuant to CPLR 3211 (a) (5) to dismiss complaint insofar as asserted against them as time-barred.

The Supreme Court also properly denied the plaintiff‘s cross-motion to compel the defendants to accept its late reply to their counterclaims. In order to compel a party to accept an untimely pleading, the movant must demonstrate both a reasonable excuse for its delay and a potentially meritorious defense to the claims to which it is responding (see id. § 3012 [d]; Belches v City of New York, 191 AD3d 754 [2021]; U.S. Bank N.A. v Barr, 139 AD3d 937 [2016]). Here, the unexplained delay on the part of the plaintiff‘s servicer in reviewing, and executing a verification of, the reply to the defendants’ counterclaims did not constitute a reasonable excuse for the delay in serving the pleading (see Chase Home Fin., LLC v Dasuja, 204 AD3d 638, 640 [2022]; Federal Natl. Mtge. Assn. v Dauphin, 195 AD3d 696, 697 [2021]). Since the plaintiff failed to demonstrate a reasonable excuse for its default, we need not consider whether it offered a potentially meritorious defense to the counterclaims (see Wilmington Sav. Fund Socy., FSB v Helal, 211 AD3d 991, 993 [2022]), although we note that, for the reasons explained above, the plaintiff failed to establish such a defense to the defendants’ first counterclaim pursuant to RPAPL 1501 (4) to cancel the mortgage on the ground that the statute of limitations had run (see CPLR 3217 [e]; 213 [4] [a]).

Accordingly, we affirm the order appealed from. Iannacci, J.P., Chambers, Dowling and Voutsinas, JJ., concur.