Summary
The Appellate Division, Second Department, affirmed an order denying the plaintiff mortgagee's motion for summary judgment, to strike affirmative defenses and counterclaims, and for an order of reference. The court held that the mortgage foreclosure action was time-barred because acceleration occurred when a prior foreclosure action was commenced in 2007, and the voluntary discontinuance did not reset the limitations period under the Foreclosure Abuse Prevention Act. The court also held that the plaintiff failed to establish that res judicata applied because it was not a party to, or in privity with a party to, the prior quiet-title action.
Topics
Practice areas
Questions Presented
- Whether the plaintiff's 2017 foreclosure action was timely under the six-year statute of limitations after the mortgage debt was accelerated in the 2007 foreclosure action and that action was later voluntarily discontinued.
- Whether the Foreclosure Abuse Prevention Act's limitation on reviving or resetting the statute of limitations through voluntary discontinuance was retroactively applicable and constitutional.
- Whether the Supreme Court was precluded by the law-of-the-case doctrine from reconsidering the res judicata issue previously decided in the action.
- Whether the plaintiff established that res judicata barred the defendant's affirmative defenses and counterclaims based on a prior quiet-title action.
Holdings
- The 2017 foreclosure action was time-barred because the six-year statute of limitations began to run when the plaintiff's predecessor accelerated the mortgage debt in the 2007 foreclosure action, and the later voluntary discontinuance did not revive or reset the limitations period.
- The law-of-the-case doctrine precluded the Supreme Court from reconsidering the res judicata issue because that issue had previously been considered and decided in an earlier order in the same proceeding.
- The plaintiff failed to establish prima facie that res judicata barred the defendant's affirmative defenses and counterclaims because the plaintiff was not a party to the prior quiet-title action and did not establish privity with a party to that action.
Key quotations
“"[E]ven if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the statute of limitations begins to run on the entire debt"” ([*2])
“"Res judicata, or claim preclusion, bars successive litigation based upon the same transaction or series of connected transactions . . . if: (i) there is a judgment on the merits rendered by a court of competent jurisdiction, and (ii) the party against whom the doctrine is invoked was a party to the previous action, or in privity with a party who was"” ([*2])
“"The doctrine of the law of the case seeks to prevent relitigation of issues of law that have already been determined at an earlier stage of the proceeding"” ([*2])
Factual background
In 2006, Antonia Bertin executed a $496,000 note secured by a mortgage on Brooklyn real property. The plaintiff's predecessor commenced a foreclosure action in July 2007 and accelerated the debt by demanding the entire mortgage balance, but voluntarily discontinued that action in 2013. The plaintiff commenced this foreclosure action in November 2017 after the owner of the property, Fest Stallings, had died, substituting Rhonda Stallings individually and as administrator of Fest Stallings's estate.
Procedural history
The plaintiff's predecessor commenced a foreclosure action in 2007 and accelerated the mortgage debt by electing to call the entire amount due. That action was voluntarily discontinued in 2013. The plaintiff commenced the present foreclosure action in November 2017 and later moved for summary judgment and related relief. The Supreme Court, Kings County, denied the motion, and the Appellate Division affirmed insofar as appealed from.