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PLAINTIFF’S ACTION TO CANCEL AND DISCHARGE THE MORTGAGE ON THE GROUND THAT THE STATUTE OF LIMITATIONS FOR A FORECLOSURE ACTION HAD EXPIRED SHOULD HAVE BEEN DISMISSED, THE BANK UTTERLY REFUTED THE ALLEGATION WITH DOCUMENTS DEMONSTRATING THE DEBT HAD NEVER BEEN ACCELERATED; CLEAR EXPLANATION OF THE REQUIREMENTS FOR DISMISSAL BASED ON DOCUMENTARY EVIDENCE AND ACCELERATION OF A MORTGAGE DEBT (SECOND DEPT).

The Second Department, reversing Supreme Court, over an extensive dissent, determined that the bank’s (Deutsche Bank’s) motion to dismiss the plaintiff’s RPAPL article 15 action to cancel and discharge the mortgage should have been granted. The bank had started foreclosure proceedings in 2007 and plaintiff alleged in the complaint that the statute of limitations had run. However, the 2007 action had been dismissed because the bank did not have standing at the time it was brought. The Second Department determined the documentary proof of the dismissal of the 2007 action demonstrated, as a matter of law, that the debt had never been accelerated and, therefore, the statute of limitations had never started running. The decision provides a succinct and clear explanation of the requirements for a dismissal based on documentary evidence and the requirements for accelerating a mortgage debt:

… [C]ontrary to the plaintiff’s contention and the opinion of our dissenting colleague, the commencement of the foreclosure action, which was dismissed on the ground that Deutsche Bank lacked standing, was ineffective to constitute a valid exercise of the option to accelerate the debt since Deutsche Bank did not have the authority to accelerate the debt at that time … . The plaintiff did not identify the specific time when the mortgage was actually, legally accelerated. Furthermore, the notices of default were nothing more than letters discussing acceleration as a possible future event, which do not “constitute an exercise of the mortgage’s optional acceleration clause” … . …

Consequently, the allegations in the complaint that the debt was accelerated as of April 30, 2007, the date when Deutsche Bank commenced the underlying foreclosure action, or prior to April 30, 2007, when the notices of default were sent, are utterly refuted by the documentary evidence submitted by Deutsche Bank, which included the written assignment of the mortgage [dated after April 30, 2007) “together with the . . . note” and the October 2009 order [dismissing the foreclosure action], in support of that branch of its motion which was pursuant to CPLR 3211(a)(1) to dismiss the complaint … . Moreover, Deutsche Bank, through the evidence it submitted with its motion, demonstrated that the plaintiff’s allegation that the statute of limitations to foreclose the subject mortgage had expired was “not a fact at all,” and that “it can be said that no significant dispute exists regarding it,” warranting dismissal of the complaint pursuant to CPLR 3211(a)(7) … . J & JT Holding Corp. v Deutsche Bank Natl. Trust Co., 2019 NY Slip Op 04366, Second Dept 6-5-19

 

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