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Bank of N.Y. Mellon v. Shurko
Citation: 2022 NY Slip Op 05976Docket: 2018-12887
Court: Appellate Division of the Supreme Court of the State of New York; October 26, 2022; New York; State Appellate Court
Original Court Document: View Document
In Bank of N.Y. Mellon v. Shurko, 2022 NY Slip Op 05976, decided on October 26, 2022, the Appellate Division, Second Department upheld two orders from the Supreme Court of Kings County. The first order granted the plaintiff (Bank of New York Mellon) summary judgment against defendant Adam Plotch, striking his answer and affirmative defenses, and allowed for an order of reference. The second order also granted similar relief to the plaintiff, referring the case to a referee to determine the amount owed. The background involves a mortgage foreclosure action initiated by Wells Fargo in 2009, which was discontinued. Subsequently, the Bank of New York, as Wells Fargo's successor, filed a new foreclosure action in 2010. During this time, the condominium's Board of Managers obtained a judgment for unpaid common charges, leading to a public auction in April 2015 where Plotch successfully bid on the property. In December 2015, the court denied the Bank of New York's foreclosure motion as untimely and allowed Plotch to intervene and dismiss the complaint. The current action by Bank of New York Mellon commenced in May 2016 against the borrower, Plotch, and the Condo Board, with Plotch asserting affirmative defenses, including a statute of limitations claim. The plaintiff's April 2018 motion for summary judgment was granted, affirming the lower court's decision with costs awarded to the plaintiff. The defendant sought dismissal of the amended complaint on the basis that the action was time-barred under CPLR 3211(a)(1) and (5). On September 12, 2018, the Supreme Court granted the plaintiff's motions for summary judgment against the defendant, striking his answer and affirmative defenses, and denied the defendant's cross-motion to dismiss the complaint. A second order, also dated September 12, 2018, granted the same relief to the plaintiff and referred the matter to a referee for amount computation. The defendant appealed both orders. The action to foreclose a mortgage is governed by a six-year statute of limitations outlined in CPLR 213(4). Once a mortgage debt is accelerated, the entire amount becomes due, starting the statute of limitations on the total debt. The filing of a foreclosure complaint accelerates the debt, but a voluntary discontinuance of that action can revoke the acceleration unless explicitly stated otherwise. Here, the defendant had standing to raise a statute of limitations defense, but the plaintiff demonstrated that the action was timely initiated. Despite the mortgage debt being accelerated in May 2009, it was de-accelerated less than six years later when the prior action was voluntarily discontinued in September 2009. The debt was again accelerated in June 2010 with a new action, but the current action commenced in May 2016 was within the six-year limit. A notice of intent to accelerate from April 2010 did not constitute actual acceleration. The plaintiff also established the borrower’s default through supporting affidavits and payment records, which the defendant failed to contest effectively. Other arguments presented by the parties were deemed without merit or unnecessary to address.