Majestic Holdings (USA) LLC v Wilmington Sav. Fund Socy., FSB

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Majestic Holdings (USA) LLC v Wilmington Sav. Fund Socy., FSB 2022 NY Slip Op 32828(U) August 23, 2022 Supreme Court, New York County Docket Number: Index No. 152365/2021 Judge: Mary V. Rosado Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 152365/2021 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 08/23/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 33 I ---------------------Xi 11 MAJESTIC HOLDINGS (USA) LLC, INDEX NO. Plaintiff, MOTION DATE 152365/2021 04/01/2021 - V - 001 MOTION SEQ. NO. WILMINGTON SAVINGS FUND SOCIETY, FSB, AS TRUSTEE OF STANWICH MORTGAGE LOAN TRUST A, DECISION+ ORDER ON ·MOTION Defendant. ---------------------X:i HON. MARY V. ROSADO: The following e-filed documents, listed by NYSCEF document n'Lmber (Motion 001) 15, 16, 17, 18, 19, 20,21,22,23,24,25,26,27,28, 29, 30,31,32, 35 . DISMISS were read on this motion to/for II Oral argument took place on June 16, 2022 with D~niel H. Richland appearing on behalf of Plaintiff Majestic Holdings (USA) LLC ("Plaintiff') and Zachary Gold appearing on behalf of 'I Defendant Wilmington Savings Fund Society, FSB, as Trustee of Stanwich Mortgage Loan Trust A ("Wilmington"). Upon oral argument and the foregoing documents, it is ordered and decided 11 as follows. I. Factual and Procedural Background Plaintiff acquired Condominium Unit 825 (the "Unit") located at 55 Wall Street, New '! York, New York on October 25, 2006 (NYSCEF Doc. 1 at,r 4 ). Also on October 25, 2006, Plaintiff executed a note secured by a thirty-year mortgage od! the Unit worth $690,000.000 ("the Mortgage") from lender GreenPoint Mortgage Funding, Inc. ("Greenpoint) (id at ,r 5). The i Mortgage allowed for the loan to be paid immediately in' full for any amount owed if Plaintiff defaulted in making required payments (id. at ,r 6). Plaintiff allegedly stopped making payments 11 In January of 2009 (id. at ,r 7). 152365/2021 MAJESTIC HOLDINGS (USA) LLC vs. WILMINGTON SAVINGS FUND Motion No. 001 i,, [* 1] 1 of 5 Page 1 of 5 INDEX NO. 152365/2021 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 08/23/2022 In July of 2009, Greenpoint ass-igned the mortgage to BAC Home Loans Servicing, LP ("BAC") (id. at ,r 8). On August 14, 2009, BAC commenced a foreclosure action against Plaintiff (the "2009 foreclosure action") (id. at ,r 9). In its Complaint, BAC elected for $690,000 to be immediately due on the Mortgage (id. at ,r 10). On Septembtr 20, 2010, BAC commenced another foreclosure action against Plaintiff (the "2010 foreclosure action") (id.). In the 2010 foreclosure action, BAC again elected to accelerate the loan by declaring the entire unpaid balance of principal immediately due (id.). On May 5, 2011, the 2009 foreclosure action was discontinued (id. at ,r 11). lj On August 6, 2012, BAC assigned the Mortgage to Capital One (id. at ,r 12). On September 10, 2013, BAC discontinued the 2010 foreclosure action (id. at II qiortgage to Defendant Wilmington on January 1, 2019 (id. at ,r ,r 13). Capital One assigned the 16). Plaintiff has allegedly not made any payments on the Mortgage since January 2009 (id. at ,r 15). Plaintiff filed a Complaint i against Wilmington on March 8,2021 seeking discharge of the Mortgage (id. at ,r17). Wilmington filed a pre-answer motion to dismiss pursuant to CPLR §§ 321 l(a)(l), (a)(7), I . and (b) (NYSCEF Doc. 15). Wilmington argues that PlJintiff' s Complaint must be dismissed because the statute of limitations has not run. The basis of Wilmington's argument is that the II statute of limitations is reset when a lender voluntarily disdontinues a foreclosure action in which it accelerated the amount due; therefore, Plaintiff cannot seek di~charge of its mortgage (NYSCEF II I Doc. 16). Plaintiff opposed Defendant's motion to dismiss (NYSCEF Doc. 27). Plaintiff argued that where a note does not expressly allow a lender to decelerate an accelerated loan, the statute of i! ,I limitations is not reset by a lender voluntarily discontinuing a foreclosure action (id.) Defendant filed a reply arguing that pursuant to Court of Appeals precedent, where the right to accelerate is !I discretionary, a voluntary withdrawal of a foreclosure action revokes the election to accelerate as a matter of law (NYSCEF Doc. 32). As this action was ,,pending, a parallel foreclosure action ii ii 152365/2021 MAJESTIC HOLDINGS (USA) LLC vs. WILMINGTON SAVIN(;S FUND Motion No. 001 [* 2] 2 of 5 Page 2 of 5 INDEX NO. 152365/2021 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 08/23/2022 initiated by Wilmington's assignee, Oceanside NYUC LLC ("Oceanside" or "Wilmington's assignee") was filed under index number 850251/2021 (the "2021 Foreclosure Action") (NYSCEF Doc. 35). In that action, Hon. Francis Kahn, III, J.S.C. granted default judgment to Wilmington's assignee against Plaintiff, determining the mortgage was valid and compelling foreclosure (id.) II. Discussion A motion to dismiss based on documentary evidence pursuant to CPLR § 3211(a)(l) is appropriately granted only when the documentary evidence utterly refutes the plaintiffs factual allegations, conclusively establishing a defense as a matter 'of law (Goshen v Mutual Life Ins. Co. of New York, 98 NY2d 314 [2002]). The documentary1 evidence must be unambiguous, of i undisputed authenticity, and its contents must be essentiall~ undeniable (VXI Lux Holdco S.A.R.L. j !' v SIC Holdings, LLC, 171 AD3d 189, 193 [1st Dept 2019]). A court may not dismiss a complaint I based on documentary evidence unless the factual allegations are definitively contradicted by the evidence (Leon v Martinez, 84 NY2d 83, 88 [1994]). On a motion to dismiss based on failure to state a cause of action pursuant to CPLR § 321 l(a)(7) the Court must accept as true the facts as alleged in the Complaint and afford a plaintiff the benefit of every possible favorable inference (Sassi v Mobile Life Support Services, Inc., 37 NY3d 236, 239 [2021]; Chapman, Spira & Carson, LLC v Helix BioPharma Corp., 115 AD3d 526, 527 [1st Dept 2014]). The Court's inquiry in determining a motion to dismiss pursuant to CPLR § 321l(a)(7) is whether the alleged facts fit within any cognizable legal theory (Leon v I Martinez, 84 NY2d 83, 87-88 [1994]). • ., j Wilmington meets its burden pursuant to both C11:R § 321 l(a)(S) and (7). The default judgment e11-tered in the 2021 Foreclosure Action is presumed val.id and unless reversed or annulled i in a proper proceeding, it is not open to attack by parties oriprivies in any collateral action or other 152365/2021 MAJESTIC HOLDINGS (USA) LLC vs. WILMINGTON SAVINGS FUND Motion No. 001 [* 3] 3 of 5 Page 3 of 5 INDEX NO. 152365/2021 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 08/23/2022 proceeding (Silvar v Commissioner of Labor of State, 175 AD3d 95, 101 [1st Dept 2019]). Therefore, Plaintiffs Complaint is barred by res judicata. Moreover, even if Plaintiffs Complaint was not barred by res judicata, its Complaint still would not survive Wilmington's motion to dismiss. A lender revokes an election to accelerate mortgage debt made in a complaint when it voluntarily discontinues the foreclosure action where it elected to accelerate, even if de-acceleration is not m~ntioned in a stipulation of voluntary . ' discontinuance (Freedom Mortgage Corporation v Engel, 37 NY3d 1, 31-32 [2021 ]). Therefore, withdrawal of a complaint where a lender elected to accelefate decelerates the loan as a matter of law (id.). Where a loan has not been accelerated, default on the obligation to make a timely payment will trigger the six-year statute of limitations for an action to recover that payment, but a default alone does not trigger the statute of limitations to commence a foreclosure action (id. at 21-22; see also Adler v DLJ Mortgage Capital, Inc., 194 AD3d 633, 634 (1st Dept 2021]; CPLR §§ 203(a); 213(4)). Although a lender may be equitably estopped from revoking its election to accelerate, this will only occur if a borrower alleges she materially changed her position in detrimental reliance on the loan acceleration (Freedom at 36). ,,,, Plaintiff has not alleged it materially changed its position in detrimental reliance on any ii alleged loan acceleration, so equitable estoppel does hot apply. Moreover, the clear and • 1' ! incontrovertible evidence shows that both foreclosure ac#ons which accelerated the Mortgage were both voluntarily discontinued; therefore, the Mortgage was decelerated each time by operation oflaw (Freedom at 31-32). There is no allegation that the Mortgage was ever accelerated besides in the 2009 and 2010 foreclosure actions. Because the Mortgage remained decelerated, the statute of limitations for a foreclosure action has not run. Plaintiffs Complaint, which seeks discharge of the mortgage based on a statute of limitations argument, is therefore contradicted by 152365/2021 MAJESTIC HOLDINGS (USA) LLC vs. WILMINGTON SAVINGS FUND · Motion No. 001 [* 4] 4 of 5 Page4 of 5 INDEX NO. 152365/2021 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 08/23/2022 the documentary evidence and barred as ~ matter of law. Wilmington's motion to dismiss is granted. Accordingly, it is hereby ORDERED that Wilmington's motion to dismiss Plaintiffs Complaint is granted and it is further; ORDERED that counsel for Wilmington Associates serve a copy of this order along with notice of entry on all parties within ten (10) days of this order; and it is further II ORDERED that, within 30 days from entry of this order, counsel for Wilmington shall serve a copy of this order with notice of entry upon the Clerk of this Court; and it is further ORDERED that service upon the Clerk of this Court shall be made in accordance with the procedures set forth in The Protocol on Courthouse · and County Clerk Procedures for Electronically Filed Cases (accessible at the "E-Filing" pade on the court's website at the address ;• www.nycourts.gov/supctmanh). This constitutes the decision and order of the Court. 8/23/2022 DATE CHECK ONE: HON. MARY V. ROSADO, J.S.C. x CASE DISPOSEb x GRANTED DENIED GRANTED IN PART APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 152365/2021 MAJESTIC HOLDINGS (USA) LLC Motion No. 001 [* 5] • NON-FINAL DISPOSITION vs. WILMINGTON SAVINGS FUND 5 of 5 • • OTHER REFERENCE Page 5of 5

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