The Appellate Division Second Department has issued a recent decision in Bank of N.Y. v Hutchinson 2021 NY Slip Op 00284 Decided on January 20, 2021, further clarified the application of the statute of limitations and whether plaintiff must attest to payments under a prior action modification.
In this case, the plaintiff filed foreclosure for failure to make monthly payments due August 1, 2008 and all payments thereafter. The defendant moved for summary judgment alleging that the action was barred by the six year statute of limitations and alleged that the mortgage debt was accelerated by virtue of the commencement of an action on February 15, 2006. The 2006 action was voluntarily discontinued on April 2, 2007, and the instant action was commenced February 2, 2016. The plaintiff submitted a loan modification from November 2006 and consent to cancel lis pendens.
The court determined that, to the extent the plaintiff sought to collect unpaid principal and interest payments due before February 2, 2010, it was barred by the six-year limitations period. The court also denied those branches of the defendant’s motion which were for summary judgment on her first, second, and third counterclaims, for abuse of process, malicious prosecution, and attorney’s fees, respectively, and pursuant to 22 NYCRR 130.1-1 for sanctions. The defendant appealed.
Here, the Court found that the defendant met their initial burden and that the burden the shifted to the plaintiff. Supreme Court’s determination that the plaintiff’s submission of the loan modification agreement, which “clearly and unambiguously demanded a resumption of monthly installment payments on the note”, and the consent to cancel lis pendens, was sufficient to raise a triable issue of fact as to whether the plaintiff had revoked its election to accelerate the full balance of the mortgage debt within six years from February 15, thereby warranting denial of summary judgment to the defendant. Plaintiff was not required to submit proof of installment payments made under the loan modification agreement. The defendant’s unsubstantiated and conclusory claim that she was prejudiced because she relied on the voluntary discontinuance of the 2006 action to enter into a contract to sell the property to a third party, was deemed insufficient to invalidate the revocation. Therefore, the Supreme Court’s order was affirmed.
If you have any questions regarding this case, please contact Deborah Gallo, Director of Operations, at firstname.lastname@example.org.