Raymond James Bank v Guzzetti

[*1] Raymond James Bank v Guzzetti 2023 NY Slip Op 50988(U) Decided on September 1, 2023 Supreme Court, Suffolk County Modelewski, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on September 1, 2023
Supreme Court, Suffolk County

Raymond James Bank, Plaintiff,

against

John Guzzetti A/K/A JOHN J. GUZZETTI A/K/A JOHN JOSEPH GUZZETTI; MARJORIE GUZZETTI; UNITED STATES OF AMERICA O/B/O INTERNAL REVENUE SERVICE; "JOHN DOE #1- #50" and "MARY ROE #1- #50", the last two names being fictitious, it being intended to name all other parties who may have some interest in or lien upon the premises described in the complaint, Defendants.



Index No. 203761/2022



MCMICHAEL TAYLOR GRAY, LLC

Attorneys for Plaintiff

7 Wells Street, Suite 205B

Saratoga Springs, NY 12866

ABRAMS FENSTERMAN, LLP Attorneys for Defendant John Guzzetti

3 Dakota Drive, Suite 300

Lake Success, New York 11042
Christopher Modelewski, J.

Upon the E-file document list numbered 29 to 36, 38 to 39, 41 to 42, 45, and 48 to 49, read and considered on the motion by defendant John Guzzetti for an order dismissing the complaint pursuant to CPLR 3211 (a)(1) and (5); it is

ORDERED that the motion by defendant John Guzzetti for an order dismissing the complaint pursuant to CPLR 3211 (a)(1) and (5) is denied, for the reasons set forth herein.

This is an action to foreclose a mortgage on real property located at 25 Hemingway Drive, Dix Hills, New York. A prior foreclosure action was commenced on April 16, 2015 under index number 603998/2015 ("the prior foreclosure action"). In the prior foreclosure action, a judgment of foreclosure and sale was issued on November 14, 2019. Defendant John Guzzetti ("defendant") appealed the judgment and the Appellate Division, Second Department issued a decision dated February 9, 2022, which found that the plaintiff failed to (1) establish its standing; (2) demonstrate that it provided notice of default in accordance with sections 15 and 22 of the subject mortgage; and (3) prove its strict compliance with section 1304 of the Real Property Actions and Proceedings Law ("RPAPL 1304"). As a result, the Second Department reversed the judgment of foreclosure and sale. The branches of plaintiff's motion for summary judgment, to strike the defendant's answer, and for an order of reference also were all denied. After the issuance of the Second Department decision, counsel for defendant moved by notice of motion dated March 14, 2022, for renewal of his motion for summary judgment dismissing the complaint (NYSCEF documents 112 to 117 under index number 603998/2015), based upon the Second Department decision in Bank of America, N.A. v Kessler, 202 AD3d 10, 160 NYS3d 277 (2d Dept 2021) ("Kessler"). Plaintiff cross-moved to discontinue the action stating that:

because the Second Department's recently issued decision in Bank of America, N.A. v Kessler, 202 AD3d 10 (2d Dept. 2021)[FN1], and its progeny, leave little doubt that the plaintiff's 90-day pre-foreclosure notices, sent pursuant to RPAPL §1304, will be found deficient, and as a result, this action should not continue. This issue is the subject of defendant John Guzzetti's pending motion for summary judgment, which the plaintiff does not substantively oppose.

(NYSCEF document number 119 under index number 603998/2015 [emphasis added]). An order in the prior foreclosure action was issued on April 25, 2022 (the "April 25, 2022 order"), which was determinative of the motion by defendant to dismiss the complaint and the cross-motion of plaintiff to discontinue the action. By the April 25, 2022 order, the prior action was "discontinued, without prejudice, without costs to either party, and with leave to refile under [*2]CPLR 205 (a)." The April 25, 2022 order was entered in the Suffolk County Clerk's Office on April 29, 2022 and was served with notice of entry on July 12, 2022 (NYSCEF document number 136 under index number 603998/2015). Plaintiff commenced this second foreclosure action by the filing of a summons and complaint on October 25, 2022.

Defendant now moves to dismiss the complaint pursuant to CPLR 3211 (a)(1) and (5) on the grounds that the action is time-barred, citing to the new CPLR 203 (h) that was enacted as part of the Foreclosure Abuse Prevention Action ("FAPA"). Defendant argues that the April 25, 2022 order was a unilateral discontinuance of the prior foreclosure action that operated to effect a unilateral extension of the limitations period, which act defendant alleges is prohibited under CPLR 203 (h). Defendant argues that therefore plaintiff cannot invoke CPLR 205 (a) to extend the six year statute of limitations period to commence this foreclosure action, which defendant alleges expired on April 16, 2021, that date being six years from the date of the commencement of the prior foreclosure action. Defendant further argues that if this action is not dismissed, then plaintiff cannot recover the unpaid installments which accrued more than six years prior to the commencement of this foreclosure action or prior to October 25, 2016. Plaintiff opposes the motion and makes several arguments including that the April 25, 2022 order in the prior foreclosure action specifically granted plaintiff the right to refile under CPLR 205 (a). Plaintiff also asserts that it never attempted to unilaterally "de-accrue" or reset the accrual of its foreclosure action and no such arguments or statements were made by the plaintiff in the prior foreclosure action. Indeed, plaintiff acknowledges now as it did in its reply papers in the prior foreclosure action, that plaintiff was "outside the six-year limitations period to file a foreclosure action...and therefore was unable to de-accelerate the loan." Plaintiff further argues that the prior foreclosure action was not voluntarily discontinued, as defendant sought dismissal of the prior foreclosure action by way of a summary judgment motion specifically citing the now overruled Second Department decision in Kessler. Plaintiff further argues that while FAPA creates a new CPLR 205-a, it left unchanged the exception to re-filing relating to voluntary discontinuances found in CPLR 205 (a) and therefore FAPA does not apply. Plaintiff argues that under either CPLR 205 (a) or CPLR 205-a the recommencement of this foreclosure action is permitted within six months of the April 25, 2022 dismissal of the prior foreclosure action. Plaintiff further asserts that it has not alleged in the complaint the amount it is seeking to collect and in any event, the amount due is not determined at this stage of the foreclosure action. Defendant replies and both parties filed supplemental affirmations regarding recent case law concerning FAPA.

On a motion to dismiss a complaint based on documentary evidence pursuant to CPLR 3211 (a) (1), such a motion will only be granted where the documentary evidence that forms the basis of the defense is such that it resolves all of the factual allegations as a matter of law, and conclusively disposes of the plaintiff's claims (see Turkat v Lalezarian Developers, Inc., 52 AD3d 595, 596, 860 NYS2d 153 [2d Dept 2008]). The court may grant a motion to dismiss pursuant to CPLR 3211 (a) (1) "only where the documentary evidence utterly refutes plaintiff's allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 746 NYS2d 858 [2002]; Sobel v Ansanelli, 98 AD3d 1020, 951 NYS2d 533 [2d Dept 2012]; Harris v Barbera, 96 AD3d 904, 947 NYS2d 548 [2d Dept 2012]). In order to qualify as "documentary evidence" the printed materials "must be unambiguous and of undisputed authenticity" (Fontanetta v John Doe 1, 73 AD3d 78, 86, 898 NYS2d 569 [2d [*3]Dept 2010]). For example, judicial records, mortgages, deeds, and contracts have been found to qualify as documentary evidence (see S & J Service Ctr., Inc. v Commerce Commercial Group, Inc., 178 AD3d 977, 112 NYS3d 584 [2d Dept 2019]).

It is well settled that "to dismiss a cause of action pursuant to CPLR 3211 (a)(5) on the ground that it is barred by the applicable statute of limitations, a defendant bears the initial burden of demonstrating, prima facie, that the time within which to commence the action has expired" (U.S. Bank N.A. v Corcuera, 217 AD3d 896, 897, 191 NYS3d 717 [2d Dept 2023]; see also Sperry Assoc. Fed. Credit Union v John, 218 AD3d 707, 193 NYS3d 209 [2d Dept 2023]; U.S. Bank N.A. v Kropp-Somoza, 191 AD3d 918, 919, 143 NYS3d 52 [2d Dept 2021]). Once the defendant satisfies this burden, "the burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff actually commenced the action within the applicable limitations period" (id. at 919-20).

Generally, an action to foreclose a mortgage may be brought to recover unpaid amounts due within the six-year period immediately preceding the action (see CPLR § 213[4]; U.S. Bank N.A. v Corcuera, supra; Everhome Mtge. Co. v Aber, 195 AD3d 682, 151 NYS3d 55 [2d Dept 2021] aff'd 39 NY3d 949, 178 NYS3d 8 [2022]). With respect to a mortgage payable in installments, separate causes of action accrue for each installment that is not paid, and the statute of limitations begins to run, on the date each installment becomes due (Everhome Mtge. Co. v Aber, supra; see also Bank of NY Mellon v Craig, 169AD3d 627, 93 NYS3d 425 [2d Dept 2019]). Once a mortgage debt is accelerated, however, the borrowers' right and obligation to make monthly installments ceases, all future sums become immediately due and payable, and the six-year statute of limitations begins to run on the entire mortgage debt (U.S. Bank N.A. v Davids, 197 AD3d 1203, 1204, 151 AD3d 621 [2d Dept 2021]; Wilmington Sav. Fund Socy. v 117 Pulaski, 197 AD3d 686, 687, 153 NYS3d 126 [2d Dept 2021]; EMC Mtge. Corp. v Patella, 279 AD2d 604, 605, 720 NYS2d 161 [2d Dept 2001]).

Here, there is no dispute between the parties that the mortgage debt was accelerated upon the commencement of the prior foreclosure action on April 16, 2015. The issue before the Court is whether or not the April 25, 2022 order constituted a voluntary discontinuance of the prior foreclosure action and thus, whether or not plaintiff can invoke the savings provisions of CPLR 205 (a) or CPLR 205-a. Defendant relies upon CPLR 203 (h), as applicable to foreclosure actions, and which provides, in pertinent part, that "no party may in form or effect, unilaterally waive, postpone, cancel, toll, revive or rest the accrual thereof, or otherwise purport to effect a unilateral extension of the limitations period prescribed by law" (CPLR 203 [h]). Defendant argues that the prior action was voluntarily discontinued by plaintiff and that this unilateral act is prohibited by CPLR 203 (h). Plaintiff argues that because the prior foreclosure action was not voluntarily discontinued, it can rely upon the savings provisions of CPLR 205 (a) and CPLR 205-a. Plaintiff asserts that the term "voluntary" required a unilateral act by plaintiff to discontinue the prior foreclosure action and that because it was defendant who sought dismissal of the complaint in that action through his summary judgment motion, that the resultant April 25, 2022 order cannot be viewed as a voluntary discontinuance. Furthermore, plaintiff asserts the April 25, 2022 order expressly afforded plaintiff the opportunity to recommence its foreclosure action under CPLR 205 (a).

As the Second Department has recently ruled,

under both CPLR 205 (a) and CPLR 205-a, where an action is timely commenced and is terminated for any reason other than those specified in the statutes [i.e., a voluntary discontinuance], the plaintiff may commence a new action upon the same transaction or occurrence within six months following the termination, provided that the new action would have been timely commenced within the applicable limitations period prescribed by law at the time of the commencement of the prior action and that service upon the original defendant is completed within such six month period. For the purposes of CPLR 205-a, as for the purposes of CPLR 205 (a), "termination" of the prior action occurs when appeals as of right are exhausted.

(U.S. Bank N.A. v Coleman, 215 AD3d 780, 185 NYS3d 701 [2d Dept 2023]; see also MTGLQ Invs., LP v Zaveri, 210 AD3d 1387, 177 NYS3d 816 [2d Dept 2022]).

The Court agrees with plaintiff and finds that the April 25, 2022 order was not a voluntary discontinuance (cf. Islam v 495 McDonald Avenue, LLC, 216 AD3d 751, 188 NYS3d 632 [2d Dept 2023]) nor was the April 25, 2022 order the result of a unilateral act by plaintiff in an attempt to effect a unilateral extension of the limitations period under CPLR 203 (h).[FN2] The April 25, 2022 order was a disposition of defendant's renewal motion seeking dismissal of the complaint based upon the Second Department decision in Kessler. It also was the result of plaintiff's cross-motion for the same relief, inasmuch as plaintiff conceded its failure to comply with the RPAPL 1304 requirements mandated by Kessler and specifically did not oppose the relief requested by defendant. Indeed, as plaintiff concedes, defendant's motion for summary judgment dismissing the complaint would have been granted regardless of whether plaintiff had filed a cross-motion.

The April 25, 2022 order was entered in the Suffolk County Clerk's Office on April 29, 2022 and was served with notice of entry on July 12, 2022. The time to appeal the April 25, 2022 order expired on August 11, 2022, thirty days after service of the notice of entry (CPLR 5513; cf. U.S. Bank N.A. v Corcuera, 217 AD3d 896, 191 NYS3d 717 [2d Dept 2023][termination of prior action occurred when appeal as of right expired, which was thirty days after service of the entered order with notice of entry]). This action was commenced on October 25, 2022, within six months of August 11, 2022 and the affidavit of service filed herein indicates service of process was effectuated upon defendant on November 14, 2022, which also is within six months of August 11, 2022. Accordingly, the Court finds that this action was timely commenced. In the event plaintiff prevails in this action, its recovery may be limited to those unpaid installments that accrued within the six-year period immediately preceding its commencement of this action (see Bank of NY Mellon v Mor, 201 AD3d 691, 162 NYS3d 64 [2d Dept 2022]; Deutsche Bank Natl. Trust Co. v Limtcher 193 AD3d 686, 141 NYS3d 686 [2d Dept 2021]; U.S. Bank N.A. v Singer, 192 AD3d 1182, 145 NYS3d 537 [2d Dept 2021]; U.S. Bank N.A. v Atia, 178 AD3d 747, 114 NYS3d 389 [2d Dept 2019]; EMC Mtge. v Suarez, 49 AD3d 592, 852 NYS2d 791 [2d Dept 2008]). However, a determination of this issue is premature at this stage of the litigation. The Court has considered the remaining arguments of [*4]defendant and finds that they lack merit.

Accordingly, the motion by defendant to dismiss the complaint pursuant to CPLR 3211(a)(1) and (5) is denied.

The foregoing constitutes the decision and Order of the Court.

Dated: September 1, 2023

HON. CHRISTOPHER MODELEWSKI, J.S.C. Footnotes

Footnote 1:Kessler has since been reversed by the Court of Appeals (see Bank of America, N.A. v Kessler, 39 NY3d 317, 326, 186 NYS3d 85 [2023]).

Footnote 2:The Court need not rule on whether FAPA should be applied retroactively, inasmuch as plaintiff was not barred from recommencing this action under any of the CPLR provisions cited by the parties.