The following papers numbered 1-4 were fully submitted on November 17, 2020. Papers Numbered Plaintiff’s Notice of Motion for Summary/Default Judgement, Appointment of a Referee to Compute, and to Vacate a Satisfaction of Mortgage (003), with the Affirmation of Annette Gershovich, Esq. (dated January 14, 2020) (Exhibits Annexed) 1 Defendant’s Notice of Cross-Motion to Dismiss and for Summary Judgment (004), with the Affirmation of Sarah Baldwin, Esq. (dated February 18, 2020) (Exhibits Annexed) and Memorandum of Law (dated February 18, 2020 2 Plaintiff’s Affirmation of Zachary Gold Esq. in Further Support of Motion for Summary Judgment and in Opposition to Cross Motion (dated March 2, 2020) 3 Defendant’s Memorandum of Law in Further Support of Defendant’s Cross-Motion to Dismiss and for Summary Judgment on Defendant’s Counterclaims (dated November 15, 2020) 4 DECISION AND ORDER The court marked motions “003″ and “004″ fully submitted on November 17, 2020, and rules as follows: Plaintiff’s motion for summary judgment, appointment of referee, and vacatur of Satisfaction of Judgment is granted; Defendant’s cross-motion for summary judgment is denied. I. PROCEDURAL HISTORY Plaintiff commenced this action for foreclosure with the filing of a Summons and Complaint on May 11, 2018. Defendant Dorothy Morrison a/k/a Dorothy Ann McGurk (hereinafter “Defendant” or “Defendant McGurk”), filed a Verified Answer with counterclaims on August 20, 2018, and an Amended Answer with counterclaims on September 10, 2019, with Plaintiff filing a Reply to the counterclaims on September 27, 2018. Pursuant to CPLR §3408, Plaintiff and Defendant participated in a settlement conferenced in the Foreclosure Conference Part (“FCP”) on October 23, 2018. The parties participated in a second conference on November 29, 2018, and the matter was then released to the Residential Foreclosure Part (“RFP”). On January 14, 2020, Plaintiff filed a motion seeking an order granting summary judgment, appointing a referee to compute, vacating a Satisfaction of Mortgage recorded with the Richmond County Clerk’s Office on March 23, 2006 (Motion Sequence 003). Defendant filed a cross-motion seeking the dismissal of Plaintiff’s action and in opposition to Plaintiff’s motion on February 18, 2020. II. FACTUAL BACKGROUND Defendants, Dorothy McGurk and Brian McGurk (hereinafter “Mortgagors”), executed and delivered a note in the amount of $177,264.67 on December 30, 2005, in connection with the property located at 81 Robinson Avenue, Staten Island, NY 10312 (hereinafter “Mortgaged Property”). Defendants executed, acknowledged, and delivered to Citifinancial Mortgage Company, Inc. a note, wherein they promised to repay to Citifinancial Mortgage Company, Inc., its successors or assigns, the principal sum with interest. To secure the payment of the sum represented by the note, Defendants executed and delivered to Citifinancial Mortgage Company, Inc. a consolidated, extension and modification agreement (“CEMA”), dated and acknowledged on December 30, 2005. The CEMA was recorded in the office of the Richmond County Clerk on February 3, 2006 (hereinafter “Consolidated Mortgage”). The Consolidated Mortgage, by its terms, consolidated the First Mortgage and the Second Mortgage1 to form a single lien in the amount of $177,264.67. However, on January 31, 2006, Citifinancial executed a Satisfaction and Discharge of the Mortgage and recorded it with the Richmond County Clerk’s Office on March 23, 2006. Thereafter, the Richmond County Clerk’s Office recorded an Assignment of Mortgage on May 16, 2017 assigning the subject mortgage to the Plaintiff. Now, Plaintiff, as claimed assignee, moves for, inter alia, summary judgment against Dorothy McGurk (hereinafter “McGurk”), dismissal of affirmative defenses and counterclaims in Defendant McGurk’s Answer, amending the caption to substitute named parties for the John Doe Defendants, or a default judgment against the non-appearing Defendants, vacatur of the erroneously recorded Satisfaction of Mortgage, and for an order of reference. Defendant McGurk opposes Plaintiff’s motion and cross-moves for summary judgment. III. LEGAL ANALYSIS A motion for summary judgment, may be granted only if the movant tenders sufficient evidence in admissible form demonstrating, prima facie, the absence of triable issues of fact (Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]). If that burden is met, the burden shifts to the party opposing the motion to produce evidentiary proof in an admissible form establishing the existence of material issues of fact requiring trial (Zuckerman at 562). Actions to foreclose upon a mortgage are governed by a six-year statute of limitations (CPLR §213[4]; Wells Fargo Bank, N.A. v. Eitani, 148 AD3d 193, 197 [2d Dept 2017]; Wells Fargo Bank, N.A. v. Burke, 94 AD3d 980 [2d Dept 2012]). When a mortgage is payable in installments, which is the typical practice, an acceleration of the entire amount due begins the running of the statute of limitations on the entire debt (U.S. Bank N.A. v. Joseph, 159 AD3d 968 [2d Dept 2018]; Stewart Tit. Ins. Co. v. Bank of N.Y. Mellon, 154 AD3d 656, 659 [2d Dept 2017]; Nationstar Mtge., LLC v. Weisblum, 143 AD3d 866, 867 [2d Dept 2016]; EMC Mtge. Corp. v. Patella, 279 AD2d 604, 605 [2d Dept 2001]). Determining precisely when a mortgage is accelerated is therefore a key aspect in any action or proceeding commenced pursuant to Real Property Actions and Proceedings Law (RPAPL) §1501[4]. An acceleration of a mortgage debt may occur in different ways. One way is in the form of an acceleration notice transmitted to the borrower by the creditor or the creditor’s servicer. To be effective, the acceleration notice to the borrower must be clear and unequivocal (Nationstar Mtge., LLC v. Weisblum, 143 AD3d at 867; Wells Fargo Bank, N.A. v. Burke, 94 AD3d at 983; Sarva v. Chakravorty, 34 AD3d 438, 439 [2d Dept 2006]). A second form of acceleration, which is self-executing, is the obligation of certain borrowers to make a balloon payment under the terms of the note at the end of the pay-back period (Trustco Bank N.Y. v. 37 Clark St., 157 Misc 2d 843, 844, 599 NYS2d 404 [Sup Ct, Saratoga County 1993]). A third form of acceleration exists when a creditor commences an action to foreclose upon a note and mortgage and seeks, in the complaint, payment of the full balance due (Albertina Realty Co. v. Rosbro Realty Corp., 258 NY 472, 476 [1932]; Clayton Natl. v. Guldi, 307 AD2d 982 [2d Dept 2003]). A. STANDING On the branch of its motion for summary judgment, Plaintiff is required to establish prima facie proof of the mortgage, the note, and evidence of the borrower’s default (Rcr Servs. v. Herbil Holding Co., 229 AD2d 379 [2d Dept 1996]; Vil. Bank v. Wild Oaks Holding, 196 AD2d 812 [2d Dept 1993]; Marton Assoc., v. Vitale, 172 AD2d 501 [2d Dept 1991]). Proof supporting a prima facie case on a motion for summary judgment must be in admissible form (CPLR §3212[b]; United States Bank N.A. v. Rowe, 194 AD3d 978 [2d Dept 2021]). Plaintiff is also required to demonstrate its standing since Defendant McGurk raised this affirmative defense in her answer (Wells Fargo Bank, N.A. v. Tricario, 180 AD3d 848 [2nd Dept 2020]; Wells Fargo Bank, N.A. v. McKenzie, 186 AD3d 1582 [2d Dept 2020]). Additionally, based on the affirmative defenses raised, Plaintiff its obliged to prove its compliance with RPAPL §1304, §1306 (U.S. Bank, NA v. Nathan, 173 AD3d 1112 [2d Dept 2019]; HSBC Bank USA, N.A. v. Bermudez, 175 AD3d 667, 669 [2d Dept 2019]). In support of the branch of the motion for summary judgment, Plaintiff submitted the affidavit of Cindy Vazquez (hereinafter “Vasquez”), a foreclosure specialist of Fay Servicing, LLC, attorney-in-fact for the named Plaintiff. Vazquez’s affidavit laid a proper foundation for the admission of Plaintiff’s records into evidence under CPLR §4518 (Bank of NY Mellon v. Gordon, 171 AD3d 197 [2d Dept 2019]). Vazquez sufficiently established that the records of other entities are likewise admissible as they are incorporated into the records that Plaintiff routinely relies upon in its business (U.S. Bank N.A. v. Kropp-Somoza, 191 AD3d 918 [2d Dept 2021]). Vazquez further relied on records referenced and annexed to the motion (Nationstar Mtge., LLC v. Durane-Bolivard, 175 AD3d 1308 [2d Dept 2019]). Vazquez’s affidavit and the referenced documents sufficiently evidenced the note and mortgage. Standing in a foreclosure action is established in one of three ways: [1] direct privity between mortgagor and mortgagee, [2] physical possession of the note prior to commencement of the action that contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff either on its face or by allonge, and [3] assignment of the note to Plaintiff prior to commencement of the action (Wells Fargo Bank, N.A. v. Tricario, 180 AD3d 848 [2d Dept 2020]). As to the latter two circumstances, the note is the dispositive instrument (Aurora Loan Servs., LLC v. Taylor, 25 NY3d 355, 361-362 [2015]). Here, Plaintiff must demonstrate that it held the note when it commenced the action. Since there is no dispute that Plaintiff was not the original lender, one of the two other requisites must be proved. The second circumstance requires Plaintiff to show, in this case, that it was the “holder” of the note at the time the action was commenced. “Holder status is established where the plaintiff possesses a note that, on its face or by allonge, contains an indorsement in blank or bears a special indorsement payable to the order of the plaintiff” (Wells Fargo Bank, NA v. Ostiguy, 127 AD3d 1375, 1376 [2d Dept 2015]). The indorsement must be made either on the face of the note or on an allonge “so firmly affixed thereto as to become a part thereof” (UCC §3-202[2]). In a mortgage foreclosure action, “[t]he attachment of a properly endorsed note to the complaint may be sufficient to establish, prima facie, that the plaintiff is the holder of the note at the time of commencement” (Deutsche Bank Natl. Trust Co. v. Webster, 142 AD3d 636, 638 [2d Dept 2016]). Here, Plaintiff established, prima facie, it had standing as the holder of the note, as evidenced by its attachment of the note along with an allonge containing an endorsement in blank, to the summons and complaint at the time the action was commenced (Nationstar Mtge., LLC v. Balducci, 165 AD3d 959 [2d Dept 2018]). In opposition the Defendant failed to raise a triable issue of fact. B. TIMELINESS OF INSTANT ACTION As background, on August 17, 2011, Plaintiff’s predecessor filed a foreclosure action in this Court, captioned CitiMortgage, Inc. Successor by Merger to CitiFinancial Mortgage Company, Inc. v. Dorothy McGurk et al., Index No. 130667/2001 (hereinafter the “2011 Action”). On October 12, 2011, Defendant McGurk filed a verified answer in that action. After the commencement of the 2011 Action, Defendant McGurk filed a bankruptcy petition in the US Bankruptcy Court for the Eastern District of New York (hereinafter the “Bankruptcy Action”) on November 2, 2011. The Bankruptcy Court granted a motion by U.S. Bank Trust N.A. as Trustee for relief from the automatic stay on October 31, 2012. This Court orally granted a motion to discontinue the 2011 Foreclosure Action by the plaintiff therein on October 7, 2014. The commencement of a foreclosure action (which clearly identifies the debt being accelerated) accelerates the mortgage debt, which triggers the six-year statute of limitations, and once accelerated it may only be revoked (or de-accelerated) by an unequivocal act occurring within the six-year period (Freedom Mortgage Corp. v. Engel, 37 NY3d 1 [2021]; U.S. Bank National Association v. Creative Encounters, LLC, 194 AD3d 1135, 1136 [3d Dept 2021]. Defendant maintains that Plaintiff accelerated the debt in 2011 and failed to revoke the acceleration during the six-year statute of limitations, therefore making this 2017 action time barred by the statute of limitations. However, regardless of whether or not the 2011 Action was a valid acceleration, the addition of 363 days to the six-year statute of limitations as a result of the Bankruptcy Action makes the instant action timely and the validity of the 2011 Action moot. This Court need not make any determination as to Plaintiff’s standing in the 2011 Action to reach the conclusion that the instant action is still timely. Courts are justified in finding a lack of standing in a prior case only when there is a clear adjudication of that issue in the record of the prior case (U.S. Bank N.A. v. Gordon, 158 AD3d 832 [2d Dept 2018]; US Bank Trust, N.A. v. Williams, 168 AD3d 1122 [2d Dept 2019]; Herzl Dev. Group, LLC v. Fed. Natl. Mtge. Assn., 175 AD3d 665 [2d Dept 2019]. No such adjudication was made in the 2011 Action as the case was discontinued on the motion of the Plaintiff therein. Section 362 of the 1978 Bankruptcy Code (11 USC) provides that the filing of a petition in bankruptcy “operates as a stay, applicable to all entities, of […] the commencement of continuation […] of a judicial, administrative, or other action of proceeding against the debtor that was or could have been commenced before the commencement of the case under this title” (11 USC §362[a][1]). The filing of a petition for protection under the Bankruptcy Code imposes “an automatic stay of any mortgage foreclosure actions” (Mercury Capital Corp. v. Shepherds Beach, 281 AD2d 604, 605 [2d Dept 2001]). CPLR §204[a] provides that “[w]here the commencement of an action has been stayed […] by statutory prohibition, the duration of the stay is not a part of the time within which the action must be commenced.” Pursuant to CPLR §204[a], the Bankruptcy Code’s automatic stay tolls the limitations period for foreclosure actions (Lubonty v. U.S. Bank N.A., 34 NY3d 250, 257 [2019], which aff’d 159 AD3d 962, 964, 74 NYS3d 279 [2d Dept 2018]). “In determining whether the statute of limitations on a foreclosure action had expired when plaintiff filed this RPAPL action, the duration of any bankruptcy stay must be excluded, regardless of whether an earlier action on the same claim had been initiated or was pending when the stay was imposed” (Lubonty, 34 NY3d 250, 257 [2019] holding that 11 USC §362[a] is a statutory prohibition within the plain meaning of CPLR 204[a]). Here, it is indisputable that following the commencement of the 2011 Action, Defendant filed a Chapter 7 Voluntary Petition (Bankruptcy Petition No. 1-11-4939-ess) on November 2, 2011. The automatic stay as it pertained to the mortgage in question was not lifted until October 31, 2012, when the Bankruptcy Court granted the Motion for Relief from Stay filed by U.S. Bank Trust N.A. as Trustee. From November 2, 2011 to October 31, 2012, three hundred sixty-three (363) days elapsed. Accordingly, the filing of the Bankruptcy Petition tolled the statute of limitations by 363 days. Plaintiff commenced the 2011 Action on August 17, 2011, whereby the statute of limitations began to run upon acceleration of the mortgage debt. Assuming that Defendant is correct in her argument that the acceleration was never de-accelerated, under normal circumstances, the Plaintiff’s right to commence a foreclosure action in this matter would have expired on August 17, 2017. However, due to Defendant’s bankruptcy filing, CPLR §204[a] and 11 USC §362[a][1] effectively tolled the statute of limitations for a period of 363 days, thereby extending the limitation period to August 15, 2018. The instant action was commenced on May 11, 2018, and is, thus, timely. This Court finds that Plaintiff sufficiently established its entitlement to summary judgment against Defendant McGurk through its submissions. The Plaintiff’s moving papers demonstrate, prima facie, that none of the asserted defenses set forth in the answer of Defendant McGurk are meritorious and Plaintiff is entitled to summary judgment on its causes of actions (EMC Mortg. Corp. v. Riverdale Assocs., 291 AD2d 370 [2d Dept. 2002]). As stated above, the Complaint herein sufficiently sets forth a valid cause of action for foreclosure. Plaintiff submitted a copy of the mortgage, note, and affidavit from Ms. Vazquez establishing Defendant’s default in payment. The Plaintiff demonstrated proper service of the Summons and Complaint and showed by admissible evidence that it had been properly assigned the note and mortgage as of the date of the commencement of the action. As the Plaintiff made a prima face case for summary judgment, the burden shifts to the Defendant to produce evidence in admissible from sufficient to raise a material issue of fact In opposition to the motion, although the defendant’s counsel made several allegations with regard to standing which do not have merit, Defendant McGurk did not submit an affidavit to dispute that she executed the note and mortgage, defaulted on her loan payments, received notice of the default, attempted to cure her default or was not properly served with the Summons and Complaint. This Court finds, therefore, that the Defendant’s assertions in opposing the motion are without merit. Accordingly, this Court finds that Plaintiff’s submissions are sufficient to establish its entitlement to summary judgment and also finds that the allegations set forth in Defendant’s affirmative defenses are insufficient to defeat the motion for summary judgment. Therefore, the Plaintiff’s motion for summary judgment is granted and the affirmative defenses contained in the Defendant’s answer are stricken. Plaintiff may further amend the caption substituting “JOHN DOE #1″ through “JOHN DOE #12″ with “JOHN DOE #1″ through “JOHN DOE #5.” That branch of the motion for a default judgment against the remaining defendants who have not answered or appeared herein is granted. Plaintiff’s application for the appointment of a referee to compute the amounts due under the subject mortgage is also granted. C. SATISFACTION OF MORTGAGE Plaintiff now moves to vacate the Satisfaction of Mortgage dated January 31, 2006, and recorded March 23, 2006, arguing that it was erroneously issued and recorded. Plaintiff asserts that the Satisfaction of Mortgage was prepared and executed wholly in error and in actuality the mortgage obligation was never satisfied. In opposition, Defendant argues that Plaintiff’s cause of action seeking to vacate the Satisfaction of Mortgage is time-barred by a six-year statute of limitations. Defendant argues that Plaintiff’s Second Cause of Action in its Complaint to vacate an erroneous satisfaction must be denied because it is time-barred pursuant to CPLR §213(6). However, neither Defendant’s Answer nor Amended Answer made any mention of the timeliness of Plaintiff’s Second Cause of Action to vacate the erroneous satisfaction. Defendant waived a statute of limitations defense by failing to raise it in her Answer, Amended Answer, or in a timely pre-answer motion to dismiss (CPLR §3211 [a] [5]; [e]; MidFirst Bank v. Ajala, 146 AD3d 875 [2d Dept 2017]; South Point, Inc. v. Rana, 139 AD3d 935, 935-936 [2d Dept 2016]; Ferri v. Ferri, 71 AD3d 949, 950 [2d Dept 2010]). Notwithstanding, a mortgagee may have an erroneous discharge of mortgage, without concomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgage reinstated where there has not been detrimental reliance on the erroneous recording (Citibank, N.A. v. Kenney, 17 AD3d 305, 308 [2d Dept 2005]). Here, Plaintiff established that the Satisfaction of Mortgage was erroneously recorded as Defendant executed a new mortgage in the CEMA, and Defendant had not detrimentally relied upon that recorded discharge (NY Community Bank v. Vermonty, 68 AD3d 1074 [2d Dept 2009]). Instead, Plaintiff was able to show that Defendant continued to pay on the CEMA for six years after the satisfaction was recorded, before defaulting on February 5, 2011. Accordingly, it is hereby ORDERED, that the plaintiff’s motion for summary judgment and order of reference is granted in its entirety; and it is further ORDERED, that the defendant’s cross-motion for summary judgment is denied in its entirety. This constitutes the Decision and Order of the Court. Dated: April 8, 2022
