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A MORTGAGE DEBT CAN BE ACCELERATED ONLY BY AN UNEQUIVOCAL OVERT ACT, I.E., COMMENCING A FORECLOSURE ACTION OR A DOCUMENT MAKING IT CLEAR THE ENTIRE DEBT IS IMMEDIATELY DUE (NOT THAT IT WILL BE DUE IN THE FUTURE); A MORTGAGE DEBT CAN BE DE-ACCELERATED BY A VOLUNTARY DISCONTINUANCE, EVEN IF ITS PURPOSE IS TO STOP THE STATUTE OF LIMITATIONS FROM RUNNING (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over a partial dissent and a concurrence, clarified how courts should handle two recurring issues in the sea of foreclosures which have inundated the courts: (1) how is the mortgage debt accelerated such that the entire amount becomes due and the six-year statute of limitations for a foreclosure action starts running; and (2) how is the debt de-accelerated such that the statute of limitations for a foreclosure action stops running and the borrower can resume monthly installment payments? The Court of Appeals held that acceleration of the debt must be done by an unequivocal overt act. In the Vargas case, the foreclosure action did not refer to the correct loan, which had been modified and did not therefore accelerate the debt. In the Wells Fargo case, the letter did not ask for immediate payment of the entire debt and therefore did not accelerate the debt. As for de-acceleration, that can be accomplished by voluntarily discontinuing the foreclosure action:

There are sound policy reasons to require that an acceleration be accomplished by an “unequivocal overt act.” * * *

[Re: Acceleration, the Vargas case] … [W]here the deficiencies in the [foreclosure] complaints were not merely technical or de minimis and rendered it unclear what debt was being accelerated—the commencement of these [foreclosure] actions did not validly accelerate the modified loan … . * * *

[Re: Acceleration, the Wells Fargo case] … [T]he letter did not seek immediate payment of the entire, outstanding loan, but referred to acceleration only as a future event, indicating the debt was not accelerated at the time the letter was written.  * * *

[Re: De-acceleration or Revocation of the Acceleration ] … [W]hen a bank effectuated an acceleration via the commencement of a foreclosure action, a voluntary discontinuance of that action—i.e., the withdrawal of the complaint—constitutes a revocation of that acceleration. In such a circumstance, the noteholder’s withdrawal of its only demand for immediate payment of the full outstanding debt, made by the “unequivocal overt act” of filing a foreclosure complaint, “destroy[s] the effect” of the election … . …

We reject the theory … that a lender should be barred from revoking acceleration if the motive of the revocation was to avoid the expiration of the statute of limitations on the accelerated debt. A noteholder’s motivation for exercising a contractual right is generally irrelevant. Freedom Mtge. Corp. v Engel, 2021 NY Slip Op 01090, CtApp 2-18-21

 

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FAMILY COURT DID NOT FOLLOW THE PROCEDURE MANDATED BY THE UNIFORM CHILD CUSTODY JURISDICTION AND ENFORCEMENT ACT BEFORE RULING OHIO HAD JURISDICTION IN THE CUSTODY MATTER; MOTHER’S NEW YORK FAMILY OFFENSE PETITION SHOULD NOT HAVE BEEN DISMISSED BECAUSE NEW YORK HAS SUBJECT MATTER JURISDICTION OVER FAMILY OFFENSES OCCURRING IN OHIO (THIRD DEPT).

The Third Department, reversing Family Court, determined: (1) Family Court did not follow the procedure required by the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) before ruling that Ohio had jurisdiction based on father’s custody petition there and dismissing mother’s New York child support and custody petitions: and (2) Family Court should not have dismissed mother’s New York family offense petition, even though the majority of alleged offenses occurred in Ohio:

Family Court failed to satisfy the procedural mechanisms required by the UCCJEA when a custody petition is pending in another state. After becoming aware of the Ohio proceeding, Family Court properly communicated with the Ohio court … . The extent of these communications is unclear; however, they apparently resulted in the transmittance of the Ohio order to Family Court. Although the contents of the Ohio order strongly implied that the Ohio court intended to retain jurisdiction, as evidenced by its scheduling of the matter for trial, this did not absolve Family Court of its obligation to create a record of its communications and to provide that record to the parties … . Family Court’s brief summary of its determination following the communication, which was not placed on the record in the presence of the parties, does not satisfy this statutory mandate … . Moreover, although it was a permissible exercise of discretion for Family Court not to permit the parties to participate in its communication with the Ohio court … , the court was then required to allow the parties an opportunity to present facts and legal arguments before it rendered a decision, which it failed to do … . Thus, “[i]nasmuch as we cannot discern from the record whether Family Court erred in determining that it lacked jurisdiction and, on that basis, dismissing the mother’s custody petition, we reverse and remit” for Family Court to render a determination after creating an appropriate record and, if required, affording the parties an opportunity to present facts and legal arguments … . …

… [A]lthough the majority of the acts alleged in the family offense petition occurred in Ohio, Family Court’s jurisdiction is not subject to the same geographic limitations as placed on that of the criminal courts, as nothing “requires the predicate acts of a family offense to have occurred in a particular county, state, or country in order for the Family Court to possess subject matter jurisdiction” … . Matter of Vashon H. v Bret I.2021 NY Slip Op 01103, Third Dept 2-18-21

 

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CLASS CERTIFICATION FOR PERSONS DENIED PUBLIC ASSISTANCE BASED ON THE FAIR MARKET VALUE (FMV) OF THEIR VEHICLES WAS PROPER; THE OPT-IN PROCEDURE SHOULD BE USED TO IDENTIFY CLASS MEMBERS (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Lynch, determined the opt-in procedure should be used to identify members of the class who were denied public assistance based upon the fair market value (FMV) of their cars. The class certification by Supreme Court was found proper:

In our prior decision regarding this matter, we affirmed so much of Supreme Court’s judgment as annulled a determination of the Office of Temporary and Disability Assistance (hereinafter OTDA) denying petitioner’s application for public assistance … . We agreed with Supreme Court that the methodology that OTDA was using to calculate whether an applicant had available resources from an automobile — which focused on the fair market value (hereinafter FMV) of the applicant’s vehicle in excess of the statutory exemption (see Social Services Law § 131-n [e]) regardless of whether the applicant had any equity interest therein — was “irrational and unreasonable” … . * * *

… [T]he opt-in approach would prove more efficient … . … In those instances where the opt-in notice is returned as undeliverable, OTDA should then be required to conduct a manual file review. Matter of Stewart v Roberts, 2021 NY Slip Op 01105, Third Dept 2-18-21

 

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OVERRULING PRECEDENT, THE FAILURE TO TIMELY FILE A CERTIFICATE OF MERIT IN A MEDICAL MALPRACTICE ACTION IS NOT A GROUND FOR DISMISSAL OF THE ACTION; IT IS NOT NECESSARY TO DEMONSTRATE THE ACTION HAS MERIT OR AN EXCUSE FOR THE FAILURE TO FILE IN SEEKING AN EXTENSION TO FILE THE CERTIFICATE (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kennedy, overruling precedent, determined that the failure to timely file a certificate of merit pursuant to CPLR 3012-a in a medical malpractice action does not require dismissal of the action. In addition, a showing that the action has merit and an excuse for failing to file are not necessary when seeking an extension for filing:

Had the legislature intended to permit dismissal for failure to comply with CPLR 3012-a, the statute would empower the court to do so … . Accordingly, the sanction of dismissal is not authorized and to the extent that this Court’s decisions in Blasoff v New York City Health & Hosps. Corp. (147 AD3d 481), Grad v Hafliger (68 AD3d 543), George v St. John’s Riverside Hosp. (162 AD2d 140), and Perez v Lenox Hill Hosp. (159 AD2d 251) are not in accord with the foregoing, they should no longer be followed.

Moreover, generally, a showing of a meritorious action and a reasonable excuse is required to vacate a pleading default and the failure to make this showing necessarily mandates dismissal of the pleading. However, since this sanction is improper in the context of a CPLR 3012-a violation, it follows that the failure to comply with this provision is not a pleading default and a plaintiff is not required to make this showing … .Accordingly, a showing of a meritorious action through the submission of an affidavit of merit and a reasonable excuse for failing to comply with CPLR 3012-a is not required to obtain an extension of time to comply with the statute. Fortune v New York City Health & Hosps. Corps., 2021 NY Slip Op 01122, First Dept 2-18-21

 

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PLAINTIFF MORTGAGE COMPANY DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION AND THERE WAS A QUESTION OF FACT WHETHER PLAINTIFF NEGOTIATED IN GOOD FAITH PURSUANT TO CPLR 3408 (f) (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the plaintiff mortgage company did not demonstrate standing to bring the foreclosure action and did not establish it had negotiated in good faith pursuant to CPLR 3408 (f):

The plaintiff was not in possession of the note at the time of commencement of the action. Further, the plaintiff failed to submit evidence establishing, prima facie, that it was authorized to act on behalf of FHLBC to commence the foreclosure action, since the plaintiff did not submit any power of attorney, servicing agreement, or other agreement authorizing the plaintiff to commence this action … . Moreover, the affidavits relied upon by the plaintiff contained only conclusory assertions that the plaintiff was the loan servicer, without asserting the existence of any agreement delegating to the plaintiff the authority to commence this action on FHLBC’s behalf in 2012. * * *

… [T]here is no evidence that the plaintiff attempted to obtain a waiver of the investor’s self-employment restriction, which, according to the plaintiff’s own denial letter, was the reason for its denial of the defendant’s first and second loan modification applications. …

Since the defendant’s submissions raise a factual issue as to whether the plaintiff failed to negotiate in good faith and deprived him of a meaningful opportunity to resolve this action through loan modification or other potential workout options … , the Supreme Court should have held a hearing to determine this issue before deciding that branch of the defendant’s cross motion which was to dismiss the complaint insofar as asserted against him … . Citimortgage, Inc. v Lofria, 2021 NY Slip Op 01026, Second Dept 2-17-21

 

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AN AMENDED STIPULATED ORDER CONCERNING THE WIFE’S INTEREST IN THE HUSBAND’S LIFE INSURANCE AND 401k IN THE CONTEXT OF AN ONGOING DIVORCE ACTION, ISSUED AFTER THE HUSBAND’S DEATH, WAS WITHOUT EFFECT EVEN THOUGH THE ORGINAL STIPULATED ORDER WAS ISSUED ONE DAY BEFORE THE HUSBAND’S DEATH; THE DIVORCE ACTION ABATED UPON THE HUSBAND’S DEATH (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined that the death of the husband abated the divorce action and an “amended stipulated order” issued after the husband’s death concerning the wife’s interest in the husband’s insurance policy and 401k account was without effect. The original stipulated order had been issued one day before the husband’s death:

It is well settled that “where one party to a divorce action dies prior to the rendering of a judicial determination which dissolves or terminates the marriage, the action abates inasmuch as the marital relationship between the parties no longer exists” … . “Although an exception to this rule exists where the court has made a final adjudication of divorce but has not performed ‘the mere ministerial act of entering the final judgment,’ ” that exception does not apply here inasmuch as the court had merely granted some pretrial orders but had not made any final adjudication of divorce … . In this instance, the husband’s death “abated the . . . action for a divorce and ancillary relief” … . Adams v Margulis, 2021 NY Slip Op 00971, Fourth Dept 2-11-21

 

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THE JUDGE WHO DISMISSED THE ACTION PURSUANT TO CPLR 205 (a) FOR FAILURE TO PROSECUTE DID NOT PLACE ON THE RECORD THE SPECIFIC CONDUCT CONSTITUTING NEGLECT; THEREFORE THE ACTION WAS TIMELY FILED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the action should not have been dismissed because the tolling provisions of CPLR 205 (a) applied. The judge who dismissed the action did not place on the record specific conduct constituting neglect to prosecute demonstrating a general pattern of delay:

… [T]he tolling provisions of CPLR 205 (a) apply inasmuch as the 2012 action was not dismissed for neglect to prosecute. CPLR 205 (a) provides, in relevant part, that “[i]f an action is timely commenced and is terminated in any other manner than by . . . a dismissal of the complaint for neglect to prosecute the action . . . , the plaintiff . . . may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination,” even though the new action would otherwise be barred by the statute of limitations. “Where a dismissal is one for neglect to prosecute the action made pursuant to [CPLR 3216] or otherwise, the judge shall set forth on the record the specific conduct constituting the neglect, which conduct shall demonstrate a general pattern of delay in proceeding with the litigation” … .

Here, it is undisputed that the 2012 action was timely commenced and that the instant action was commenced within six months of the termination of the 2012 action. …

Here, the court did not outline a general pattern of delay by plaintiff in its order dismissing the 2012 complaint or in the attached decision … . Broadway Warehouse Co. v Buffalo Barn Bd., LLC, 2021 NY Slip Op 00963, Fourth Dept 2-11-21

 

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IN THIS DENTAL MALPRACTICE ACTION, PLAINTIFF RAISED ISSUES OF FACT ABOUT THE APPLICABILITY OF THE CONTINUOUS TREATMENT DOCTRINE TO TOLL THE STATUTE OF LIMITATIONS, THE DEVIATION FROM THE STANDARD OF CARE, AND THE LACK OF INFORMED CONSENT (FOURTH DEPT).

The Fourth Department, reversing Supreme Court in this dental malpractice action, determine there were questions of fact about (1) the applicability of the continuous treatment doctrine to toll the statute of limitations, (2) the deviation from the standard of care, and (3) the lack of informed consent:

The instant case does not involve gaps in treatment longer than the 2½-year statute of limitations … , and “a discharge by a physician [or dentist] does not preclude application of the continuous treatment toll if the patient timely initiates a return visit to complain about and seek further treatment for conditions related to the earlier treatment” … . …

… [B]y submitting the affidavits of her experts, plaintiff raised issues of fact whether defendants deviated from the standard of care and whether such deviation was a proximate cause of plaintiff’s injuries … . …

… [P]laintiff raised an issue of fact whether she would have opted for extraction of several teeth and placement of implants had she been fully informed … . Bellamy v Baron, 2021 NY Slip Op 00953, Fourth Dept 2-11-21

 

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FRAUD WAS NOT ADEQUATELY PLED, THE SIX-YEAR STATUTE OF LIMITATIONS DID NOT APPLY TO THE FRAUD ALLEGATIONS, THE JUDICIARY LAW 487 CAUSE OF ACTION WAS NOT ADEQUATELY PLED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the fraud and Judiciary Law 487 causes of action should have been dismissed. All of the elements of fraud were not pled with particularity, the six-year statute of limitations did not apply because the fraud allegations were identical to the injurious falsehood and tortious interference claims, and the Judiciary Law 487 causes of actions did not relate to any proceedings before the court:

Although fraud claims are generally governed by a six-year statute of limitations (see CPLR 213 [8]), “courts will not apply the fraud [s]tatute of [l]imitations if the fraud allegation is only incidental to the claim asserted; otherwise, fraud would be used as a means to litigate stale claims” … . “In classifying a cause of action for statute of limitations purposes, the controlling consideration is not the form in which the cause of action is stated, but its substance” … . Inasmuch as the gravamen of plaintiffs’ fraud claim is that plaintiffs suffered reputational damages and a loss of goodwill as a result of defendants’ conduct and that [plaintiff] lost its contract … as a result of defendants’ fraudulent scheme, we conclude that the fraud allegation is incidental to the injurious falsehood and tortious interference claims, which were dismissed by the court as time-barred.

… [T]he court erred in denying that part of the motion seeking to dismiss the ninth cause of action, for violations of Judiciary Law § 487 … .Under section 487 (1), an attorney who “[i]s guilty of any deceit or collusion . . . with intent to deceive the court or any party,” is guilty of a misdemeanor and is potentially liable for treble damages to be recovered in a civil action. A violation of the statute may be established by evidence of the defendant’s alleged deceit … but “alleged deceit that is not directed at a court must occur in the course of ‘a pending judicial proceeding’ ” … .

… The complaint failed to allege, however, that [defendant law firm] engaged in egregious misconduct or made a material false statement in the course of a judicial proceeding. The allegedly deceitful memorandum was not directed at the court, and the complaint failed to allege that it was promulgated during a pending judicial proceeding … . Dreamco Dev. Corp. v Empire State Dev. Corp., 2021 NY Slip Op 00952, Fourth Dept 2-11-21

 

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A CORPORATION OPERATING A SKILLED NURSING FACILITY MAY BRING A PLENARY ACTION BASED UPON THE DENIAL OF MEDICAID BENEFITS FOR ONE OF ITS RESIDENTS; NO NEED TO EXHAUST ADMINISTRATIVE REMEDIES AND NOT SUBJECT TO THE FOUR-MONTH STATUTE OF LIMITATIONS (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the corporation that operates a skilled nursing facility may bring a plenary action based on the denial of Medicaid benefits for one of its residents:

Plaintiff, a domestic corporation that operates a skilled nursing facility, commenced this action seeking a declaratory judgment or money damages for expenses it allegedly incurred in providing care for one of its residents after the resident was determined to be ineligible for Medicaid benefits during a penalty period of 11.74 months. Defendant moved to dismiss the complaint on the grounds, inter alia, that plaintiff failed to exhaust its administrative remedies and that the statute of limitations had expired … .

… [A]skilled nursing facility such as plaintiff “may bring a plenary action in its own right against the agency designated to declare Medicaid eligibility” … . In such a plenary action, the facility is “not bound by the patient’s failure to request an administrative appeal of the local agency’s denial of medical assistance” or “by the four-month Statute of Limitations contained in CPLR 217” … . VDRNC, LLC v Merrick, 2021 NY Slip Op 00945, Fourth Dept 2-11-21

 

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