Summary
This Appellate Division, Third Department opinion addresses a mortgage foreclosure action brought by U.S. Bank against the administrator of a decedent's estate. The court held that while the plaintiff established standing as the holder of the note at the time the action commenced, the lawsuit was barred by the six-year statute of limitations because the initial 2007 foreclosure action accelerated the debt, and the subsequent 2012 voluntary discontinuance did not reset the limitations period under the newly enacted Foreclosure Abuse Prevention Act. Consequently, the court reversed the lower court's grant of summary judgment for the bank, reinstated the defendant's counterclaims for discharge of the mortgage and sanctions, and remanded the matter for further proceedings.
Topics
Practice areas
Questions Presented
- Whether plaintiff has standing to sue as holder or assignee of the note
- Whether the Foreclosure Abuse Prevention Act (FAPA) applies retroactively to bar the action
- Whether the six‑year statute of limitations bars the 2019 foreclosure action
- Whether defendant’s counterclaims should be reinstated
Holdings
- Plaintiff established standing as a matter of law by tendering proof that it was the holder or assignee of the underlying note at the time the action was commenced.
- FAPA applies retroactively to actions pending at the time of its enactment and therefore does not save the 2019 action from the statute‑of‑limitations bar.
- The six‑year limitations period began to run in 2007 when the first foreclosure action accelerated the debt, and therefore the action filed in 2019 is time‑barred.
- The first counterclaim for sanctions is reinstated for further consideration; the second counterclaim seeking discharge of the mortgage is affirmed as time‑barred; the third counterclaim is denied.
Key quotations
“The six‑year statute of limitations applicable to a foreclosure action begins to run when a mortgage debt has been accelerated by the commencement of an action seeking the entire sum due.”
Factual background
Elizabeth Craft executed a $108,000 note secured by a mortgage in 2003. After her death in 2007 the estate defaulted, leading Bank of America (plaintiff's predecessor) to commence a foreclosure in 2007, which was discontinued by stipulation in 2012. Plaintiff later filed a new foreclosure action in 2019; the defendant raised standing and a time‑bar defense, and both parties cross‑moved for summary judgment.
Procedural history
Supreme Court, Albany County entered an order on March 11, 2024 granting plaintiff summary judgment and dismissing defendant's counterclaims. The appeal is taken to the Appellate Division, Third Department.
Remand instructions
Matter remitted to the Supreme Court for further proceedings consistent with this decision; first and second counterclaims reinstated; plaintiff's cross‑motion for summary judgment reversed; defendant's motion for summary judgment granted to the extent of dismissing the complaint and discharging the mortgage.