1027 Belmont Ave. LLC v Federal Natl. Mtge. Assn.

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1027 Belmont Ave. LLC v Federal Natl. Mtge. Assn. 2022 NY Slip Op 32957(U) August 30, 2022 Supreme Court, Kings County Docket Number: Index No. 515228/15 Judge: Lawrence Knipel 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. 515228/2015 FILED: KINGS COUNTY CLERK 09/02/2022 01:08 PM NYSCEF DOC. NO. 102 RECEIVED NYSCEF: 09/02/2022 At an· IAS Term~ FRP 3 of the.Supreme Court -of the State of New York,. held· in and for the County of Kings, at the Courthouse, at"360 Adams Street; Brooklyn, New. York, on the 3Q 1h day of August; 202:i · PRESEN T: HON. LAWRENCE K.NlPEL; Justice. ·------ --------. -· ·_ ------------. ------- .- .---- ... -----------X 1027 BELMONT AVENUE Ll;C, Plaintiff, DEClSlON, ORDER,, AND JUQGM~NT lridex No. 515228/tS j::EDERAL NATIONAL MORTGAGE Ass6CIAT[O N, Mot.Seq. Nos. 4-5 Defendant. ·--· ----· ---- ------------- ------- .---·_ -··-·. ------- -----------. X The foilowing-·e-filed papers. i'ead herein: N.YSCEFD oc No.: Notice ofMotioh/C ross .Motion, Affinnations, and ExhibHs Annexed._ _ _ _ _ _ _ _ __ Affitination in Opposition -a:nd Exhibits Anne_xed __ Reply Affirm~tion _ _ _ _ _ _ _ _ _ __ Letters tothe Court' - ------ ----- 70.;73~ 75~92 94·96 9:7-98. too In this action purstiant to RPAPL 1501 (4) to cancel ai14 discharge a mortgage, defendant Federal National Mortgage Associatkm ("defenda nt") moves, and plaintiff 1021 Belmont A venue LLC ("plaintiff"} cross-moves~ in each instc1nce, for smnrnary judgment (Seq. Nos. 4 and 5, respectfvely). In the related (and since-discontinued) foreclosure action commenced- on December 2, 2009·· (Onewe:st Bank, FS1J v. McKay; index. No. 30557/09 [Sup Ct, Kings County]) (the ••foredosui'e action't defendant 's assignor, Onewest ·Bank_, FSB ("Oriewest"), sought to foreclose its. mortgage on the real property then owned by [* 1] 1 of 4 FILED: KINGS COUNTY CLERK 09/02/2022 01:08 PM NYSCEF DOC. NO. 102 INDEX NO. 515228/2015 RECEIVED NYSCEF: 09/02/2022 plaintif f's transferor, Michae lMcKa y ("McKa.y"). On Februa ry 13, 2014, and while the foreclosure action was pending ; McKay transferred the underly ing propert y to plaintif fin consideration of $1,000. Ort May 28, 2015, Onewe st voluntarily discontinued the foreclosure action and cancele d the.notice of pendency. Onewe st's subsequ ent (i.e,, postdiscontinuance} litigation in the fore9losure action was preclud ed by order, dated February 16, 2017 (Knipel, 1.), affd I 72 AD3d 887 (2d Dept, May 8, 2019), on the grounds that its prior volunta ry discontinuance of the foreclosure action had rendere d moot all subsequent proceed ings therein. 1 Meanwhile, the Court, by·order, dated Februa ry 16,201 8 (KnipeI, J.), stayed all proceed ings herein pendin gthe outcom e of Onewe st's appeal of the aforementioned Februar y 16 th order in the foreclosure action. After the instant motion and cross motion were filed but before they fully submitt ed on August 9, 2022, the Court of Appeal s issued a landma rk decisio n in Freedom Mtge. Corp. v Engel, 37 NYJ<l 1 (2021), rearg denied 37 NY3d 926 (2021) (''Enge t'). There, the Comi of Appeal s, in (among othetm lings) reversing the Second Judicia l Departm ent's holding to the contrary (163 AD3d 6Jl [2018]), held that a volunta ry discont inuance of a foreclosure action was sufficient to de-ac:celerate a mortga ge loan {id. at JI). As the Court ofAppe als explained in Engel: "A voluntary discont inuance withdraws the complaint and, when the compla int is the only expression of a demand for in1mediate paymen t of the entire debt, this is the functio nal equivalent of a stateme nt by the lender that the acceler ation is being revoked. Accordingly, we conclud e that where accelerati011 occurred by virtue of the filing of compla int in a foreclosure action, the noteho lder's voluntary discontinuance of that action constitutes a t Onewest's post-discohtiima:nce litigation in the foreclosure action was prompted commencement of the instant action on December 16, 2015. 2 [* 2] 2 of 4 by the FILED: KINGS COUNTY CLERK 09/02/2022 01:08 PM NYSCEF DOC. NO. 102 INDEX NO. 515228/2015 RECEIVED NYSCEF: 09/02/2022 an affirmative act ofrev ocatio n oftha tacce letati onas a matte r oflaw , abse11t an express, conte mpora neous statem ent to the contrary by the noteh older.;' (id. at 3:2). Engel's bright-line nile that the discontinuance of a ±oreclosure action autom aticall y revokes a prior acceleration effect ed by the comp laint in forecl osure displa ced Secon d Judicial Depar tment 's earlie r holdin gs that "requ ire[d] courts to scruti nize the course of the pattie s' post-d iscon tinuan ce conduct and corres ponde nce to determ ine wheth er a noteh older meant to revoke the acceleration when it discon tinued the action '' (Engel, 37 NY3d at 30) (einph asis added). Here, accord ing full weigh t to Engel's holdin g and its encyc loped ic caselaw analysis, the Court holds that defen dant's mortg age had been (and remai ned) valid a11d de.,accelernted by virtue of its assign or'spr ior discon tinuan ce of the foreclosure action in May 2015, or approxfrriately seven month s before plaint iff comm enced this action in Dece1 nber2 015. Defen dant's "post- discon tinuan ce condu ct" (i.e., the positi on it had taken in the course uf its subsequent appeal of the foreclosure action) did not, under the crystalclear holdin g of Engel, revok e its earlier deacc elerat ion by way of its voluntary discontinuance of the foreclosure, action. The inesca pable conclu sion flowin g from Engel (and as reinforced by its ample proge ny} is that defen dant's mortg age was not (and could not have been) time- barred when plaint iff comm enced the instan t action (seeB oresh esky v US. Bank Triwt, _ AD3 d_, 2022 NY Slip Op 04892 [2d Dept, Aug. 10, 2022]; see also Deutsche Bank Natl. Trust Co. v Fresca, _ 3 [* 3] 3 of 4 AD3d _ , 2022 NY Slip Op 04948 INDEX NO. 515228/2015 FILED: KINGS COUNTY CLERK 09/02/2022 01:08 PM NYSCEF DOC. NO. 102 RECEIVED NYSCEF: 09/02/2022 [2d Dept, Aug. 17, 2022] ; US. Bank Natl. Assn. v Clair,_ AD3d _ , 2022 NY Slip Op 04927 [2d Dept, Aug. 10, 2022]). 2 Accordingly, it is ORDERED that defendant's motion in Seq. No. 4 is granted, and the complaint is dismissed in its entirety without costs and disbursements; and it is further ORDERED that plaintiffs cross motion in Seq. No. 5 is denied; and it is further ORDERED that defendant's counsel is directed to electronically serve a copy of this decision, order, and judgment with notice of entry on plaintiffs counsel and to electronically file an affidavit of service thereof with the Kings County Clerk. This constitutes the decision, order, and judgment of the Court. ENTER FORTHWITH, HON. LAWRENCE KNf PEL ADMINISTRATIVE JUDGE 2 Although subsequent legislation (S-5473D) seeking, among other things, to overrule Engel passed both the New York Senate and Assembly, it was returned to the Assembly on May 3, 2022, and, as of the date of this decision and order, was not delivered to the Governor for consideration (see https ://www.nysenate.gov/1 egi slati on/bi 11 s/2021 Is54 73# :~:text=The%20aim%20o f0/42 0the%20b i11, mortgage%20banking%20and%20servicing%20institutions) (last accessed Aug. 29, 2022). 4 [* 4] 4 of 4

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