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New York’s Appellate Division Holds Reverses a Lower Court’s Dismissal of Plaintiff’s Foreclosure Action

July 1, 2022 by Oran Schwager

In Wilmington Sav. Fund Soc’y, FSB v. Heampstead Prop. Ventures II, LLC, 2022 NY Slip Op 03142 (N.Y. App. Div. May 11, 2022), we successfully appealed a lower court order which dismissed a foreclosure complaint as time-barred by the statute of limitations.

The facts relevant to the appeal are straight forward. In 2007, a borrower took out a $320,000 mortgage on real property located in Hempstead, Long Island. The borrower eventually defaulted on his obligations, prompting Countrywide Home Loans, Inc. (“Countrywide”), the holder of the mortgage at the time, to initiate foreclosure proceedings on December 11, 2007. Countrywide later moved to discontinue the prior action, which was granted by court order dated June 10, 2013. A subsequent foreclosure action was commenced on May 7, 2019, against Heampstead Property Ventures II, LLC (hereinafter Heampstead Property Ventures), among others. The action proceeded in the ordinary course and plaintiff filed a motion seeking, inter alia, summary judgment. In opposition to the motion, Heampstead Property Ventures argued that summary judgment should be denied because the action was time-barred and on November 25, 2019, the lower court dismissed the action on those grounds.

In our appeal of the dismissal, we successfully argued that it was improper for the lower court to search the record and, in effect, award summary judgment in favor of Heampstead Property Ventures. We also addressed the merits of the untimeliness claims and argued that the voluntary discontinuance of the prior action revoked the acceleration of the debt. The Appellate Division agreed and the lower court’s order was reversed, on the law, with costs.

To read the Appellate Court’s Order, click HERE.

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