| U.S. Bank N.A. v Joseph |
| 2018 NY Slip Op 02155 [159 AD3d 968] |
| March 28, 2018 |
| Appellate Division, Second Department |
[*1]
| U.S. Bank National Association, as Trustee for the StructuredAsset Investment Loan Trust, 2005-HE3 Care of America's Servicing Company,Respondent, v Barbara Joseph, Also Known as Barbara Caldwell, et al., Appellants, etal., Defendants. |
Young Law Group, PLLC, Bohemia, NY (Ivan E. Young of counsel), for appellants.
Woods Oviatt Gilman, LLP (Reed Smith, LLP, New York, NY [Brian P. Matthews andAndrew B. Messite], of counsel), for respondent.
Appeal from an order of the Supreme Court, Suffolk County (William B. Rebolini, J.), datedNovember 18, 2015. The order denied the motion of the defendants Barbara Joseph andChristopher Joseph pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar as assertedagainst them as time-barred.
Ordered that the order is reversed, on the law, with costs, and the motion of the defendantsBarbara Joseph and Christopher Joseph pursuant to CPLR 3211 (a) (5) to dismiss the complaintinsofar as asserted against them as time-barred is granted.
In May 2005, Hilton Joseph and Barbara Joseph (hereinafter together the Josephs) borrowedmoney from BNC Mortgage Corporation, evidenced by a note. To secure payment on the note,the Josephs executed a mortgage on residential property in Central Islip. The Josephs defaultedon the payments on the note and, on February 1, 2006, the plaintiff accelerated the mortgage debtand commenced a mortgage foreclosure action (hereinafter the first foreclosure action). TheJosephs did not answer the complaint and, upon the plaintiff's motion, a referee was appointedand a judgment of foreclosure and sale was entered.
On March 19, 2007, Barbara Joseph filed for bankruptcy. On May 4, 2007, her bankruptcypetition was dismissed. On July 3, 2007, she filed a second bankruptcy petition, but on July 20,2008, the bankruptcy court lifted the automatic stay of the foreclosure sale. The stay wasreimposed on March 19, 2009, but was lifted again on September 3, 2009, and Barbara Joseph'ssecond bankruptcy petition was dismissed on December 17, 2009. In all, the first foreclosureaction was stayed by the bankruptcy proceedings for approximately one year and sevenmonths.
On December 30, 2010, the Josephs moved in the Supreme Court, by order to show cause, tovacate the judgment of foreclosure and sale and to dismiss the first foreclosure action on theground that they had not been properly served and, thus, the court lacked personal jurisdictionover them. The order to show cause contained a temporary restraining order preventing theplaintiff from selling the property at auction "pending the determination of [the] motion. . . until a hearing can be held and/or this Court issues a decision on the motion."The Josephs' motion was not decided [*2]until January 28, 2013,when the court, after a hearing, determined that the plaintiff had failed to establish that theJosephs had been properly served with the complaint, and granted their motion to vacate thejudgment of foreclosure and sale and to dismiss the complaint. At the time the first action wasdismissed, excluding the periods during which the bankruptcy stays were in effect, less than sixyears had elapsed since the plaintiff accelerated the mortgage debt. The plaintiff did not take anappeal from the order granting the motion to dismiss the complaint in the first foreclosureaction.
On January 14, 2015, almost two years after the first foreclosure action was dismissed, theplaintiff commenced this action (hereinafter the second foreclosure action) against BarbaraJoseph and Christopher Joseph (hereinafter together the appellants), among others. Theappellants were then the owners of the property, because, in 2014, Hilton Joseph had transferredhis interest in the property to the appellants, as wife and husband.
The appellants moved to dismiss the complaint insofar as asserted against them astime-barred pursuant to CPLR 3211 (a) (5). They pointed out that almost nine years had elapsedsince the acceleration of their loan, well beyond the six-year statute of limitations. The plaintiffopposed the motion, arguing, among other things, that the action was not time-barred because thelimitations period had been sufficiently tolled under CPLR 204 (a) by the bankruptcy stays andthe temporary restraining order that was in effect during the pendency of the Josephs' motion todismiss the first foreclosure action. The Supreme Court denied the appellants' motion.
"On a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (5) on the ground thatit is barred by the statute of limitations, a defendant bears the initial burden of establishing, primafacie, that the time in which to sue has expired" (Wells Fargo Bank, N.A. v Burke, 155 AD3d 668, 669 [2017]; see Island ADC, Inc. v BaldassanoArchitectural Group, P.C., 49 AD3d 815, 816 [2008]). "The burden then shifts to thenonmoving party to raise a question of fact as to the applicability of an exception to the statute oflimitations, as to whether the statute of limitations was tolled, or as to whether the action wasactually commenced within the applicable limitations period" (Singh v New York City Health &Hosps. Corp. [Bellevue Hosp. Ctr. & Queens Hosp. Ctr.], 107 AD3d 780, 781[2013] [citation omitted]).
An action to foreclose a mortgage is subject to a six-year statute of limitations (seeCPLR 213 [4]). With respect to a mortgage payable in installments, separate causes of actionaccrue for each installment that is not paid and the statute of limitations begins to run on the dateeach installment becomes due (seeNationstar Mtge., LLC v Weisblum, 143 AD3d 866, 867 [2016]; Wells Fargo Bank, N.A. v Burke, 94AD3d 980, 982 [2012]; WellsFargo Bank, N.A. v Cohen, 80 AD3d 753, 754 [2011]; Loiacono v Goldberg,240 AD2d 476, 477 [1997]). Once a mortgage debt is accelerated, however, the statute oflimitations begins to run on the entire debt (see Amrusi v Nwaukoni, 155 AD3d 814 [2017]; Stewart Tit. Ins. Co. v Bank of N.Y.Mellon, 154 AD3d 656, 659 [2017]; Beneficial Homeowner Serv. Corp. v Tovar, 150 AD3d 657, 658[2017]).
Here, it is undisputed that the six-year statute of limitations began to run on February 1,2006, when the plaintiff accelerated the mortgage debt (see Amrusi v Nwaukoni, 155AD3d at 817). Moreover, since the plaintiff did not commence this action until January 14, 2015,more than six years later, the appellants sustained their initial burden of demonstrating, primafacie, that this action was untimely (seeU.S. Bank N.A. v Martin, 144 AD3d 891, 891-892 [2016]).
In opposition, the plaintiff failed to raise a question of fact as to whether the limitationsperiod was tolled for sufficient periods to bring the action within the six-year limitations period.Under CPLR 204 (a), "[w]here the commencement of an action has been stayed by a court or bystatutory prohibition, the duration of the stay is not a part of the time within which the actionmust be commenced" (see Mercury Capital Corp. v Shepherds Beach, 281 AD2d 604,604 [2001]; Torsoe Bros. Constr. Corp. v McKenzie, 271 AD2d 682, 682 [2000]). Thebankruptcy stay of 11 USC § 362 (c) operates under CPLR 204 (a) to stay thecommencement, or continuation, of a foreclosure action (see U.S. Bank N.A. v McKenna, 149 AD3d 1136, 1137 [2017];U.S. Bank N.A. v Martin, 144 AD3d at 893; Mercury Capital Corp. v ShepherdsBeach, 281 AD2d at 604). Thus, the periods during which bankruptcy stays were in effectwere not part of the time counted in the calculation of the running [*3]of the statute of limitations, at least as to Barbara Joseph (see Deutsche Bank Natl. Trust Co. vKarlis, 138 AD3d 915, 917 [2016]; Mercury Capital Corp. v Shepherds Beach,281 AD2d at 604; Zuckerman v 234-6 W. 22 St. Corp., 267 AD2d 130, 130 [1999]).Contrary to the plaintiff's contention, however, the time during which the temporary restrainingorder was in effect when the Josephs moved to dismiss the first foreclosure action did not toll therunning of the statute of limitations. That order prevented the plaintiff from selling the propertyat auction, but only in the context of the first foreclosure action. The temporary restraining orderdid not prevent the plaintiff from discontinuing the first foreclosure action and commencing anew action (cf. Citibank v McGlone, 270 AD2d 124, 125 [2000]). Thus, the plaintiff wasnot entitled under CPLR 204 (a) to have the time during which the temporary restraining orderwas in effect excluded from the statute of limitations, and the total time elapsed from theacceleration of the mortgage debt until the second foreclosure action was commenced exceededsix years, even when the periods attributable to the bankruptcy stays are excluded. Accordingly,the Supreme Court should have granted the appellants' motion pursuant to CPLR 3211 (a) (5) todismiss the complaint insofar as asserted against them as time-barred. Mastro, J.P., Balkin,Connolly and Christopher, JJ., concur.