In Citimortgage, Inc. etc. v. Salko, 179 A.D. 3rd 1009, 2020 WL 465495, 2020 N. Y. Slip Op. 00566, following dismissal of the first complaint for lack of jurisdiction for improper service, mortgagee’s successor brought a foreclosure action against mortgages, and the mortgage counterclaims against mortgagee for alleging violations of the FDCPA. In the Appellate Divisions review, they held that denial of the cross motion that conditioned discontinuance of the foreclosure on tolling mortgage interest, late fees and expenses from the alleged default, or payment of attorney’s fees, was warranted. However, the trial court’s sua sponte order removing the previous acceleration of the mortgage debt and directing the mortgage remain as an installment contract was not warranted.https://law.justia.com/cases/new-york/appellate-division-second-department/2020/2018-02512.html
In March 2005, Salko executed a note in the principal amount of $937,500 in favor of ABN AMRO Mortgage Group, Inc. On May 20, 2011, CitiMortgage, Inc.as successor by merger to ABN AMRO, commenced an action against the Salkos, among others, to foreclose the mortgage. The defendant served an answer and, thereafter, moved to dismiss the complaint insofar as asserted against him for lack of personal jurisdiction due to improper service. In an order dated April 18, 2012, the Supreme Court granted the defendant’s motion, which was unopposed, and dismissed the complaint insofar as asserted against him.
In June 2014, the plaintiff commenced this action to foreclose the mortgage against the defendant only, with the intention of consolidating this action with the 2011 action against the remaining defendants.
The Salkos interposed an answer with affirmative defenses and a counterclaim alleging, inter alia, violations of the FDCPA. In March 2017, the plaintiff moved to discontinue this action without prejudice and to dismiss or sever the Salkos‘ counterclaim, asserting that it had determined that it could not prove its compliance with RPAPL 1304. The defendant cross-moved to condition the discontinuance of the action on the payment of counsel fees to him, the tolling of all mortgage interest, late fees, and expenses from the date of the alleged default on the mortgage loan, and the severance and continuation of the counterclaim.
“In an action of an equitable nature, the recovery of interest is within the court’s discretion. The exercise of that discretion will be governed by the particular facts in each case, including any wrongful conduct by either party” (Prompt Mtge. Providers of N. Am., LLC v. Zarour, 155 A.D.3d 912, 915, 64 N.Y.S.3d 106 [internal quotation marks omitted]; see CPLR 5001[a]; BAC Home Loans Servicing, L.P. v. Jackson, 159 A.D.3d 861, 862, 74 N.Y.S.3d 59; Citicorp Trust Bank, FSB v. Vidaurre, 155 A.D.3d 934, 934–935, 65 N.Y.S.3d 237; U.S. Bank N.A. v. Williams, 121 A.D.3d 1098, 1102, 995 N.Y.S.2d 172; Dayan v. York, 51 A.D.3d 964, 965, 859 N.Y.S.2d 673).
Here, the Appellate Court found the equities supported denying those branches of the motion for tolling of interest, late fees, expenses, legal fees etc. (which was requested) However, they found the Supreme Court’s sua sponte, revocation of the acceleration and mortgage remaining as an installment contract exceeds the discretion of the Court and modified the Orders accordingly.
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