In Ditmid Holdings, LLC. Vs. JP Morgan Chase Bank, N.A., AD2nd, 2/26/2020, 2020 WL912994, 2020 N.Y. Slip Op. 01326, the Appellate Division, affirmed the lower Court’s decision granting the Plaintiff’s motion for summary judgment.https://law.justia.com/cases/new-york/appellate-division-second-department/2020/2017-02354.html This was an action under RPAPL Section 1501(4) to cancel and discharge a recorded mortgage. On or about February 20, 2008, Washington Mutual commenced a foreclosure on the subject property. Pursuant to the terms of the note and mortgage alleged the default in payment and elected to call the full amount due. A second action to foreclose was filed on December 8, 2009. In November 2013, the Supreme Court directed dismissal of the complaint in the Washington Mutual foreclosure action as abandoned under CPLR 3215(c) and the JPMorgan action was dismissed for failure to appear at a scheduled conference.
On November 6, 2014, the plaintiff commenced this action against JP Morgan to cancel and discharge the mortgage. After issue was joined, plaintiff moved for summary judgment, defendant opposed and cross moved for summary judgment. The Supreme Court granted Plaintiff’s motion and denied JPMorgan’s cross motion. JPMorgan appealed from the January 26, 2017 decision. The law is well settled that, even if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt” (EMC Mtge. Corp. v. Patella, 279 A.D.2d 604, 605, 720 N.Y.S.2d 161; see BH 263, LLC v. Bayview Loan Servicing, LLC, 175 A.D.3d at 1376, 109 N.Y.S.3d 142; Bank of N.Y. Mellon v. Dieudonne, 171 A.D.3d 34, 37, 96 N.Y.S.3d 354).
JPMorgan’s attempted to use a letter written by Salaii (original mortgagor) as acknowledgment of the debt. However, the Court found that the letter was not an unqualified acknowledgment of the debt, but a request settlement. Therefore, it was insufficient to reset the statute of limitations. Additionally, the Court found that the reinstatement provisions in section 19 of the mortgage did not prevent the mortgagee from validly accelerating the mortgage debt. (see Bank of N.Y. Mellon v. Dieudonne, 171 A.D.3d at 39, 96 N.Y.S.3d 354). Therefore, the Appellate Division agreed with the Supreme Court’s decision.
Another cautionary tale, that correspondence in contemplation of settlement cannot be used as the sword or the shield, as well as, another application of the Dieudonne decision.
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