Lubonty v U.S. Bank N.A.

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Lubonty v U.S. Bank N.A. 2015 NY Slip Op 31632(U) August 17, 2015 Supreme Court, Suffolk County Docket Number: 14-21853 Judge: Joseph Farneti Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] Sll<>K I H >KM OKOlcR I DEX o. 14-:2 1853 SUPREME COURT - ST/\TE OF NEW YORK I.J\.S. PART 37 - SlJffOLK COUNTY PRESENT: I Ion. JOSEPl I FARNETI Acting Justice Supreme Court MOTION DAT!:-, 2-5-15 /\OJ. DATE 4-30-15 Mot. Seq. II 00 I - MG; C/\SEDISP ---------------------------------------------------------------)( GREGG LUBONTY, Plaintiff, LESTER & ASSOCIATES. P.C. Attorney for Plaintiff 600 Old Country Road. Suite 229 Garden City, New York 11530 - against U.S. BJ\NK NATIONAL ASSOC1ATION, as Indenture Trustee for American Home Mortgage Investment Trust 2005-4A, HTNSHA W & CULBERTSON. LLP Attorney for DeCcndant 800 Third Avenue, I eth Floor New York, New York 10022 Defendant. ---------------------------------------------------------------)( Upon the following papers numbered l toll. read ori this motion to dismiss; Notice ot' Motion/ Order to Show Cause and supporting papers .L.:.11.; Notice of C1o~s Motio11 a11d rnppo1 ti11g pape1 s _, Answering/\ ffidavits and supporting papers 13 - 16; Replying Aflidavits and supporting papcrsll...: ...lJi; Othe1 _ , (a11d ttfte1 l1ea1 i11g eoun:scl i11 ~uppo1 t and oppo,c:d to the: ltt01'i-tm) i l is. ORDERED that this motion by defendant U.S. Bank National Association. as Indenture Trustee for Amcrican llome Mortgage Investment Tmst 2005-4A, and American Tlomc Mo11gagc Investment Trust 2005-4A ("US Bank''). for dismissal of plaintiffs' complaint, is considered under CPJ.R :>21 1 (a) (7) and is granted. On August 2, 2005, plaintiff Gregg Lubonty ("Lubonty") executed an adjustable rate note in !avor of J\mcrican Home Mortgage Acceptance, lnc. (Al-IMA) agreeing to pay the sum of $2,500.000.00. On even <late. plaintiff executed a mortgage in the principal sum or $2.500.000.00 on the subject premises located at 286 Montauk Ilighway, Southampton, New York ("premises"). The mortgage indicated J\.llMA to be the lender and Mortgage Electronic Registration Systems. Inc. (MERS) to be the nominee of AfIMI\ as well as the mortgagee of record for the purposes ol'n.:cording the mortgage. The mortgage was recorded on August 18. 2005 in the Suffolk County Clerk's Office. [* 2] Lubonty v US nank Indt:x No. 14-21853 Page 2 Thereafter. the subjt:ct mortgage loan was allegedly pooled and sewritizcd in the American I !ome Mortgage Invest Trust '.2005--lA on or about October 7, 2005. The rm.~mises was the subjec t or a mortgage foreclosure nction commenced on July 11. 2007 . in this Court . entitl ed American I!ol!le Mortga~e Acceptance, Inc. do A.mericon Home 1 'v/ortxug<' .'·)en•ic;ing \' (ireRg l.11ho11ty. et al. under Index umber 11749/2007 ("'first foreclosure action''). Tlowevcr. on June '.26. ::wen. Lubonty filed a voluntary Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court. Southern District ofTlorida under Docket Number 07-14945-AJC ("first bankruptcy action··). The first bankruptcy petition was voluntarily dismissed on November 24, 2009, approximately 2 years, 4 months and 29 days alh:r filing. Thercalkr, on January 14, 2010, AHMA moved for a default judgment and an Order of rcl'ercncc. By Order dated September 27, 20 10 (Costello, J .), the Court denied plain ti Ifs motion and dismissed AJ IMA 's complaint premised on the fact that it did not seek a default judgment against Lubonty vvithin one year of his default and failed to offer any explanation for the extensive delay (see CPLR 32 15 fc]). On May 9, 20 11. the mortgage was transferred by an assignment or mortgage from American Home Mortgage Servicing as attorney in fact fo r AHMA to U.S. Bank National Association, as Indenture Trustee for American IIome Mortgage Investment Trust 2005-4A. Thereafter, on June 9. 20 11. U.S. Bank National Association as Indenture Trustee for American Home Mortgage Jnvcstmem Trust 2005-4A commenced a foreclosure action against I,ubonty under Index Number 18893-2011 ("second f'orcdosure action"). Subsequently, on October 19, 20 11, Lubonty filed a voluntary Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court, Eastern District of New York under Docket Number 8-1 1-77413 ("second bankruptcy action"). The premises was released from the bankruptcy estate by Order dated November 26, 2013 (Trust, J.), approximately 2 years, J month. and 8 days after filing. After the stay was lifted, by Order dated October 21, 2014, the Court (Whelan, .I.) dismissed the second foreclosure action after a traverse hearing. Lubonty commenced this action, pursuant to RP APL 150 I ( 4), for a judgment declaring the mortgage on premises, currently held by U.S. Bank. to be invalid and directing the Suffolk County Clerk 10 cancel and discharge the mortgage of record. RP APL 1501 (4) provides that where the period allowed by the appl icablc statute of limitations for the commencement of an action to foreclose a mortgage has expired, any person with an estate or interest in the property may maintain an action to secure the cancellation and discharge of record of such encumbrance, and to adjudge the estate or interest or tht: plaintiff in such real property to be free therefrom as barred by the statute of limitations. Plain ti IT asserts in his veri tied complaint "that the running of the statute oflimitations for the commencement of an action to forec.:losc the Mortgage or to bring any action on the Note for principal or for any interest thereon has not been tolled or abated and that the Note and Mortgage has become outlawed and barred by the statute or limitations." Defendant now moves to dismiss the action for failure to state a cause or action pursuant to CPLR 3211 (a) (7) on the basis that the statute of limitations was tolled by the filing of plaintiffs two bankruptcy petitions and that the statute of limitations has not expired. Plaintiff, through his attorney. opposes the application. [* 3] r.ubonty v us I3ank Index 1 o. 14-2185) Page J On a motion tt) tl ismiss pursuant to CJ>LR 32 1I (a) (7) for rciilurc to state.: u ca use of' a<.:tion. th~ court must accept the.: facts alleged in the complaint as true, accord the plaintiff the hcndit of every possihle favorable inference, and determine only whether the facts as alleged lit within any cogni1.ahk kgal theory (see Goshen v M utual L if Ins. Co. ofN. Y., 98 Y2d 314, 326. 756 NYS2d 858 l2002]: e leo11 v Martinez, 84 NY2d 83, 87, 614 YS2d 972 p 994J; Sp osato v Paboojitm . 110 /\DJd 979. 974 YS2d 251 l2d Dept 20131; Constructamax, Inc. v Dodge Chamberlin Luzine Weber, Assoc. Architects, LLP. l 09 /\D3d 574, 97 l NYS2d 48 l2d Dept 20 13]). Where. as here. eviclentiary material is submillcd and considen.:d on a motion pursuant to CPLR 3211 (a) (7),.the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one. and unless it has been shown that a material fact claimed by the plaintiff to be one is not a fact at all, and unless it can be said thnt no significant dispute exists regarding it, dismissal should not eventuate (see Guggenlieimer v Ginzburg. 43 NY2d 268. 275, 40 l NYS2d 182 l 1977]; Sposato v Pabooj ian , 110 /\D3d at 979; Co11str11ctam11x, Inc. v Dodge Chamberlin L11zi11e Weber, Assoc. Architects, LLP. 109 /\DJd at 574-575). Pursuant to CPLR 213 (4), a six-year statute or limitations applies to any a<.:tion based upon a bond or note, the payment or which is secured by a mortgage upon real property. "The statute or limitations in a mortgage rorcclosure action begins to run from the due date for each unpaid instal lment, or from the time the mortgagee is entitled to demand full payment, or from the date the mortgage debt has been accelerated" (111 re Strawbridge, 2012 WL 70103 1 [SDNY 2012 j, citing MesserPlaia v Safonte, 45 AD3d 747, 748, 847 NYS2d 101 [2d Dept 2007]; Z ink er v M akler, 298 AD2d 516, 517. 748 NYS2<l 780 f2d Dept 20021; Notarnicola v L afayette Farms, 288 AD2d 198, 199, 733 NYS2d 91 l2d Dept 200l]; EMCMtge. Corp. v Patella, 279/\02d604,605,720NYS2d 16 1 [2dDept200lj; loiaco110 v Goldberg, 240 AD2d 476, 477, 658 NYS2d 138 (2d Dept 1997)). Once a mortgage debt is accelerated by the commencement of a foreclosure action. the borrower's right to make monthly installments ceases, all sums become immediately due and payable, and the six-year statute or limitations begins to run on the entire mortgage debt (see Federal N ational Mortgage Assn v Meb.(ffte, 208 A02d 892. 894, 618 NYS2d 88 [2<l Dept 1994); Clay ton Natl. v Guidi, 307 AD2d 982. 763 NYS2d 493 l 2d Dept 20031). CPLR 204 (a) provides as follows: (a) Stay. Where the commencement of an action has been stayed hy a court or by statutory prohibition, the duration of the stay is not part of the time within which the action must be commenced. rurthermore, it has been held that under CPLR 204, the filing of a petition in bankruptcy results in a toll ing for the entire period of the stay specifically imposed by the Bankruptcy Code (see Mercu1:1' Capital Corp. v Slieplzerds Beach, I nc., 281 /\D2d 604, 605, 723 NYS2d 48 Pd Dept 200 11 [holding that the statute of limitations on mmigage note was tolled under CPLR 204 during rederal bankrup1cy proceeding!; see also Z uckerman v 2346 W. 22st. Corp., 167 Misc 2d 198, 203, 645 'YS2d 967. 971 fSup Ct, New York County 1996]). [* 4] Luhonty v US Bank ln<.k x o. 14-21853 Page 4 * In addition, Lhc tiling of a pcLiLion in bankruplcy invokes LhL: provisions or 11 llSC 362. This automaLic stay. spcci lically Section 362 (a) ( 1), operates as an injunction against the commencement or the continuation or speci lied actions against the both debtor and the debtor's estate (see Mid/antic Nat. Bank'' New Jersey Dept. of E1111ironme11tal Protection. 474 US 494. 503, I 06 SC 755 f ! 986J). The automatic stay becomes el'lectivc at the moment of the filing of the petition and applies to all entities. even to proceedings pending in state and federal courts (see Maritime Elec. Co. v United Jersey Bm1k. 959 F2d I 194. 22 Bank.r Ct Dec 1309 [3rd Cir 19911). Except for several enumerated situations not relevant to this action, the automatic stay operates as a prohibition against the continuation of certain actions such as those to collect a debt or to forec lose a mortgage. Section 362 of the Bankruptcy Act provides in pertinent part: Automatic stay. (a) Except as provided in subsection (b) of this section. a petition filed under section 30 I, 302, or 303 of this title ... operates as a stay, applicable to all entities. of (1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title (see 1l USC § 362 fa l f I] [emphasis added]). /\. review of the submissions before the Court demonstrates that Lubonty Ii led two petitions for relief pursuant to Chapters 11and7 of the Bankruptcy Code (11lJSC§1301, et. seq.). The first bankrnptcy action was filed under Docket Number 07-14945-/\.JC on June 26, 2007, and was dism issed on November 24, 2009. The second bankruptcy action was filed under Docket Number 8-11-77413 on October 19, 2011. The premises was released from the bankruptcy estate by Order dated November 26. 2013 (Trust, J.). Where, as here, there has been a bankruptcy filing, the provisions of C'PLR 204 (a) and 11 lJSC § 362 Ia l l I J are effective and invoked as a matter of law. Under these sections, the applicable statute of limatations is tolled for the period of time during wh ich a stay or prohibition is in effect (see Zuckerman v 234-6 W. 22 Street Corp., 167 Misc 2d 198). Thus, Lubonty' s Chapter 11 filing effectively tollc<.l the statute or limitations for a period or two years, four months, and twenty nine days {from June 26, 2007 through November 24. 2009). I,ikcwise. I ,ubonty's Chapter 7 filing tolled th1.: statute of limitations fo r a period or two years. one month. and eight days). ln total. Lubonty's bankruptcy filings tolled the statute of limitations for a period or approximately four years, five months and fourteen days. Here, the filing of the summons and complaint and lis pcndcns in 2007 accelerated the note and mortgage (see Clayton Natl. v Guidi, 307 AD2d 982). Thus, the statute of limitations began to run upon nccderation of the mortgage debt (see EMC Mtge. Corp. v Patella, 279 AD2d 604, 605, 720 NYS 2d [* 5] Lubonty v US 13ank Index o. 14-11853 Page 5 161 l'.:!<l Dept 10011). As the lirst action was commenced on Ju ly 11, '.W07. under normal circumsL anc.:cs. l JS Bank· s right to commence a forec losure action in this matter would have expi red on July 11 . 20 11. I lowcvcr. due to plaintiff's two bankruptcy lilings, CPLR 204 (a) and 11 USC§ 362 (a) ( 1) effectively tolled the statute of limitation for a period of four years. five months and fourteen days. thereby extending the limitation period to December 25, 2017. Accordingly. the motion to dismiss the complaint for failure to state a cause or action is granted and the complaint is dismissed in its entirety. Dated: August 17. 2015 X FINAL DISPOSITION NON-FINAL DISPOSITION

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