U.S. Bank N.A. v Sokolski
Annotate this CaseDecided on January 4, 2021
Supreme Court, Westchester County
U.S. Bank National Association, Not in its Individual Capacity but Solely as Trustee For the RMAC Trust, Series 2016-CTT, Plaintiff(s),
against
Vladimir Sokolski; Elena Sokolski; Denton Invest & Trade Corp.; Lycar Advisory Services, Llc; Discover Bank; "John Doe No.1" Through "John Doe #10" inclusive the names of the ten last name, Defendants being fictitious, real names unknown to the Plaintiff, the parties intended being persons or corporations having an interest in, or tenants or persons in possession of, portions of the mortgage premises described in the Complaint, Defendant(s).
64602/2017
Gregg L Verrilli
Knuckles, Komosinski & Manfro, LLP
Attorney for Plaintiff
565 Taxter Road, Suite 590
Elmsford, NY 10523
Erin K Flynn
Clair Gjertsen & Weathers PLLC
Attorney for Defendants Vladimir Sokolski and Elena Sokolski
4 New King St.
White Plains, NY 10604
Mary H. Smith, J.
Plaintiff moves (Motion #3) for an order, granting summary judgment, entering a default judgment against all non-appearing defendants, extending time to serve defendant Denton Invest & Trade Corp. nunc pro tunc, issuing an order of reference, and amending the caption. Defendants Vladimir Sokolski and Elena Sokolski (defendants) move (Motion #4) for an order, granting summary judgment in their favor on their counterclaim pursuant to RPAPL Article 15, declaring the subject note and mortgage invalid, time-barred, and unenforceable, directing the Westchester County Clerk to mark the land records to show the discharge thereof, and [*2]dismissing the instant action.
The following papers were read:
Notice of Motion (#3), Affirmation, Affidavit, and Exhibits (18) 1-21
Proposed Order and Memo of Law 22-23
Affirmation in Opposition 24
Affirmation in Reply and Exhibit 25-26
Notice of Motion (#4), Affirmation, Affidavits (2), Exs (9), Proposed Order 27-40
Affirmation in Opposition, Affidavit, Exs (13), and Memo of Law 41-56
Affirmation in Reply and Exhibits (3) 57-60
Supplemental Affirmation and Exhibit 61-62
Supplemental Affirmation 63
By way of background, plaintiff commenced this action to foreclose a mortgage on real property known as 91 Old Lake Street, White Plains, New York (Premises). Plaintiff now moves for, among other things, summary judgment and defendants move for summary judgment on their counterclaim. The Court addresses the motions in reverse.
In support of their motion, defendants assert that plaintiff's predecessor-in-interest accelerated the subject loan by commencing a foreclosure action on March 12, 2008 (2008 Action). Defendants also assert that the 2008 Action was dismissed on June 10, 2015 as abandoned. Defendants further assert that, by the time the 2008 Action was dismissed, the applicable statute of limitations had expired and that there is nothing in the dismissal order, which would constitute a revocation of the prior acceleration. Accordingly, defendants contend, the instant action, commenced on September 21, 2017, is time-barred by the application statute of limitations.
In opposition, plaintiff asserts that, on December 8, 2006, Washington Mutual Bank, FA (WAMU) assigned the subject note and mortgage to EMC Mortgage Corporation (EMC), as evidenced by an assignment of mortgage. Thus, plaintiff contends, when WAMU commenced the 2008 Action, it lacked the authority to accelerate the subject loan, as it was no longer the holder of the note or mortgage.
In reply, defendants assert that the issue of the assignment from WAMU to EMC was before the Court and that plaintiff moved, as part of the motion for summary judgment, to amend the caption to reflect the proper plaintiff, that is, EMC. As such, defendants contend, the issue of WAMU's standing in the 2008 Action has been decided.
A mortgagee may accelerate a mortgage debt in several ways. A mortgagee can accelerate a mortgage debt by commencing an action to foreclose upon a note and mortgage and seeking in the complaint payment of the full balance due (see Milone v US Bank N.A., 164 AD3d 145, 152 [2d Dept 2018], lv to appeal dismissed, 34 NY3d 1009 [2019]). However, the commencement of such an action "is ineffective to constitute a valid exercise of the option to accelerate a [mortgage] debt where the plaintiff does not have the authority to accelerate the debt or to sue to foreclose at that time" (J & JT Holding Corp. v Deutsche Bank Natl. Tr. Co., 173 AD3d 704, 707 [2d Dept 2019], internal quotation marks omitted). A mortgagee may also accelerate the mortgage debt by transmitting an acceleration notice to the mortgagor, which clearly and unequivocally notifies the mortgagor of the acceleration (see Milone, 164 AD3d at 152).
Here, plaintiff has proffered an assignment of mortgage, dated December 8, 2006, which demonstrates, prima facie, that WAMU lacked the standing to commence the 2008 Action and [*3]thereby lacked the authority to accelerate the subject loan. Defendants have presented nothing to contradict this fact. Thus, the commencement of the 2008 Action did not, by itself, constitute a valid acceleration of the subject mortgage debt (see Wells Fargo Bank, N.A. v Burke, 94 AD3d 980, 983 [2d Dept 2012]).
However, on or about December 5, 2008, WAMU moved in the 2008 Action for, among other things, summary judgment and to substitute EMC as the proper plaintiff. Contained within said motion papers was a copy of the complaint, which provided, among other things, that:
"Defendant(s) VLADIMIR SOKOLSKI so named, has/have failed to comply with the conditions of the mortgage and note by failing to pay principal and interest and/or taxes, assessments, water rates, insurance premiums, escrow and/or other charges that came due and payable on the 1st day of November, 2007 as more fully set forth below. Accordingly, Plaintiff elects to call due the entire amount secured by the mortgage."Also contained within said motion paper was an affidavit of service, indicating that the motion papers were served on defendants at the Premises.
The parties were directed to file supplemental papers addressing whether the mortgage debt, although not accelerated by the commencement of the 2008 Action, was otherwise accelerated by some action during the 2008 Action.
In the supplemental papers, plaintiff argues, among other things, that because defendants only argued that the commencement of the action accelerated the mortgage, further consideration of things other than the commencement are unwarranted. Plaintiff also argues that the prior action was a nullity and therefore anything in connection with that matter is ineffectual. In defendants' supplemental papers they argue, among other things, that when they were served with the summary judgment motion in the prior action, the party with the authority to accelerate the mortgage, that being EMC, served them with the summons and complaint which indicated acceleration, as well as an affidavit of the Assistant Vice President of EMC, Carolyn Brown, who stated that the loan was accelerated. Neither party provided any documentation to show that the acceleration was revoked at any time.
Because a mortgagee may also accelerate the mortgage debt by transmitting an acceleration notice to the mortgagor and does not have to necessarily commence a foreclosure action to accelerate the mortgage, the fact that the acceleration was done during a prior foreclosure action does not change the fact that the mortgage was accelerated clearly and unequivocally (see Milone, 164 AD3d at 152). Here, the defendants were served with two different documents from the party that had the authority to do so, that both stated the mortgage was accelerated.
As such, the Court finds that the instant action is time-barred by the applicable statute of limitations. Accordingly, Motion #4 is granted, and Motion #3 is denied.
Dated: January 4, 2021
White Plains, New York
HON. MARY H. SMITH
Justice of the Supreme Court
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