Was Suit Barred By Passage of Time After Assignor’s Acceleration Notice?
In January 2007, Stanley Caldwell and Sheila Caldwell executed a note in the amount of $210,000, in favor of JPMorgan Chase Bank, N.A. The note was secured by a mortgage on residential property located in Mastic Beach. In June 2011, JPMorgan commenced an action to foreclose the mortgage. In the complaint, JPMorgan elected to call due the entire amount secured by the mortgage. In July 2015, the 2011 action was voluntarily discontinued.
In October 2017, U.S. Bank National Association, as assignee of JP Morgan, commenced an action to foreclose the same mortgage. The Caldwells interposed an answer asserting several affirmative defenses, including expiration of the statute of limitations. Thereafter, the Bank moved for summary judgment on the complaint against the Caldwells. The Caldwells opposed the motion and asked the court to search the record and award them summary judgment dismissing the complaint. Supreme Court denied the motion and, in effect, denied the Caldwells’ request to search the record and award them summary judgment. Both the Bank and the Caldwells appealed..
An action to foreclose a mortgage is subject to a six-year statute of limitations. Where the mortgage debt is accelerated, the entire balance of the debt accrues and the statute of limitations begins to run on the full amount due.
Here, in support of its motion, the Bank acknowledged that the mortgage debt was accelerated on June 17, 2011, when the 2011 action was commenced and JP Morgan, its predecessor in interest, elected in the complaint to call due the entire amount secured by the mortgage. The Bank’s action was commenced more than six years later. And the Bank failed to establish that the prior acceleration was revoked and the statute of limitations was reset. Under the Foreclosure Abuse Prevention Act of 2022. the voluntary discontinuance of a foreclosure action did not in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period to commence an action and to interpose a claim, unless expressly prescribed by statute. Thus, the voluntary discontinuance of the 2011 action did not serve to reset the statute of limitations.
To the extent that the Bank relied upon certain notices sent to the Caldwells and the discontinuance of the lis pendens, CPLR 203(h) provides that once a foreclosure cause of action has accrued, “no party may, in form or effect, unilaterally waive, postpone, cancel, toll, revive, or reset the accrual thereof, or otherwise purport to effect a unilateral extension of the limitations period prescribed by law to commence an action and to interpose the claim, unless expressly prescribed by statute.” Thus, the Bank’s unilateral acts could not have reset the statute of limitations.
As the evidence submitted on the Banks motion established that the action was time-barred and no triable issue of fact was raised, Supreme Court should have granted the Caldwells’ request to search the record and award them summary judgment dismissing the Bank’s complaint.