Supreme Court, Queens County, March 29, 2019 [*2]

Richard B. Zarco, New York City, for MD A. Islam, Also Known as MD Islam and another, defendant.

Frenkel, Lambert, Weiss, Weisman & Gordon, LLP, Bay Shore (Ruth O'Connor of counsel), for plaintiff.

It is ordered that the motion by defendant MD A. Islam to dismiss the complaint pursuant to CPLR 3211 (a) (5) is decided as follows:

This action for foreclosure was commenced on or about July 18, 2017, to recover on a debt secured by a mortgage on real property located at 33-25 72nd Street, Jackson Heights, NY 11372. Plaintiff's predecessor in interest Mortgage Electronic Registration Systems, Inc. (hereinafter MERS), had previously brought an action, under index No. 11713/2008, on the same mortgage and note in 2008, in which it had accelerated the debt. As plaintiff's predecessor in interest, MERS, as mortgagee of record, was designated by the original lender MortgageIT, Inc. only as nominee for purposes of recording the agreement. In the prior action, on or about June 2, 2009, Hon. James Golia ordered a judgment of foreclosure and sale and appointed Jodi Orlow, Esq., to serve as referee. On or about May 15, 2014, MERS, as plaintiff's predecessor in interest, discontinued the prior action requesting the court to vacate the judgment of foreclosure and sale and cancel the notice of pendency. In an order dated August 18, 2014, and filed with the Queens County Clerk on August 27, 2014, Hon. Valerie Brathwaite Nelson ordered that the action under index No. 11713/2008 be discontinued. Defendant MD A. Islam has now moved to dismiss the complaint pursuant to CPLR 3211 (a) (5), and plaintiff has opposed.

"On a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing,{**63 Misc 3d at 798} prima facie, that the time in which to sue has expired" (Wells Fargo Bank, N.A. v Burke, 155 AD3d 668, 669 [2d Dept 2017]). Once this showing has been made, the burden shifts to the plaintiff to "aver evidentiary facts establishing that the action was timely or to raise [a question] of fact as to whether the action was timely" (Lessoff v 26 Ct. St. Assoc., LLC, 58 AD3d 610, 611 [2d Dept 2009]). An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213 [4]). 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. (See Nationstar Mtge., LLC v Weisblum, 143 AD3d 866, 867 [2d Dept 2016].) However, "even 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." (EMC Mtge. Corp. v Patella, 279 AD2d 604, 605 [2d Dept 2001]; see Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d 985, 986 [2d Dept 2016].) "A lender may revoke its election to accelerate the mortgage, but it must do so by an affirmative act of revocation occurring during the six-year statute of limitations period subsequent to the initiation of the prior foreclosure action." (NMNT Realty Corp. v Knoxville 2012 Trust, 151 AD3d 1068, 1069-1070 [2d Dept 2017].)

Defendant MD A. Islam now moves to dismiss plaintiff's cause of action for foreclosure and sale of the subject property as being barred by the applicable statute of limitations, pursuant to CPLR 3211 (a) (5). He claims that MERS commenced its prior action on or about May 9, 2008, at which time MERS accelerated the debt and demanded payment in its entirety. As such, the six-year statute of limitations began to run not later than May 9, 2008, and the expiration date of the statute of limitations could occur not later than May 9, 2014. Therefore, any subsequent action to recover on the mortgage after May 9, 2014, would be barred by the statute of limitations pursuant to CPLR 213 (4). Since MERS moved to voluntarily discontinue its action, dated May 8, 2014, and entered by the Queens County Clerk on May 15, 2014, this was after the expiration of the statute of limitations. Consequently, MERS' attempt to revoke its right to elect acceleration occurred beyond the expiration of the six-year statute of limitations. Defendant MD A. Islam also argues that MERS' act of voluntarily discontinuing the prior action was not a sufficiently affirmative act to{**63 Misc 3d at 799} constitute a revocation of its acceleration of debt. As such, there was no tolling of the statute of limitations clock, and the current action was filed more than three years after the expiration of the six-year statute of limitations.

Plaintiff opposes the motion and states that the summons and complaint in the 2008 action was discontinued because it incorrectly recited that MERS is a party to the note and provides that MERS commenced the 2008 action as the owner and holder of the note and mortgage. Rather, the note was executed in favor of MortgageIT, Inc., and MERS had no standing to commence or maintain the 2008 foreclosure. Subsequent to discovering this error, plaintiff claims that, by notice of motion dated May 8, 2014, plaintiff in the 2008 action moved for an order discontinuing the 2008 action without prejudice, vacating the judgment and dismissing any counterclaims and cross claims due to title insurability issues. Thereafter, on July 18, 2017, plaintiff commenced the instant action and in its affirmation in opposition states that,

"insofar as Plaintiff is time-barred from collecting arrears aged more than six years prior to the commencement of the foreclosure, Plaintiff has waived the arrears from November 1, 2007 through July 1, 2011 and seeks to foreclose upon Defendant's default in making the August 1, 2011 payment and all subsequent mortgage payments."

Plaintiff claims that the purported acceleration by the 2008 action was a nullity since MERS had no standing to commence this action. This being due to MERS having never been assigned the note and mortgage nor having possession of the note at the time of the [*3]commencement of the 2008 action. Plaintiff claims that since the acceleration of the note was a nullity, the statute of limitations did not begin to run and the current action is not time-barred. Plaintiff also claims since the 2008 action resulted in a voluntary discontinuance pursuant to MERS' motion, that was granted in an order of the court, entered on August 27, 2014, the 2008 acceleration was rescinded. This affirmative act of rescission was within six years of the instant action, thus rendering the instant action timely filed.

Here, the defendant established that the six-year statute of limitations began to run on the entire debt on May 9, 2008, the date that MERS accelerated the mortgage debt by commencing the prior action. (See Freedom Mtge. Corp. v Engel, 163 AD3d{**63 Misc 3d at 800}631, 632-633 [2d Dept 2018].) Since the plaintiff did not commence this action until July 18, 2017, more than six years later, the defendant sustained his initial burden of demonstrating, prima facie, that this action was untimely. (U.S. Bank N.A. v Martin, 144 AD3d 891, 892 [2d Dept 2016].) The burden then shifted to the plaintiff to present admissible evidence establishing that the action was timely or to raise a question of fact as to whether the action was timely. (Id. at 892.)

The plaintiff failed to meet its burden. Contrary to its contention, the plaintiff failed to raise a question of fact as to whether it affirmatively revoked its election to accelerate the mortgage within the six-year limitations period. Its filing of the motion and the court's order discontinuing the action did not, by themselves, constitute an affirmative act to revoke MERS' election to accelerate, since the motion and order were silent on the issue of the election to accelerate, and did not otherwise indicate that the plaintiff would accept installment payments from the defendant MD A. Islam. (See Bank of N.Y. Mellon v Craig, 169 AD3d 627 [2d Dept 2019]; see also Deutsche Bank Trust Co. Ams. v Smith, 170 AD3d 660 [2d Dept 2019].)

Furthermore, the plaintiff's argument that the acceleration of the note was a nullity is without merit. First, the court order of discontinuance of the action does not state standing was a basis or consideration in reaching the decision. Second, the motion by MERS did not mention it was based upon any epiphany regarding standing. Rather, it sought vacatur of the judgment of foreclosure and sale and discontinuance of the action "due to title insurability issues." Therefore, plaintiff's claims to the contrary are belied by MERS' motion.

Third, a facially adequate cause of action to foreclose a mortgage requires allegations regarding the existence of the mortgage, the unpaid note, and the defendant's default thereunder, which, if subsequently proved, will establish a prima facie case for relief. (US Bank N.A. v Nelson, 169 AD3d 110 [2d Dept 2019].) In order to place in issue any of these essential elements of the cause of action, a defendant need only deny them in the answer. However, as a general matter, a plaintiff need not establish its standing (i.e., that it held and/or owned the note at the time the action was commenced) as an essential element of the cause of action. (Id.) Rather, it is only where the plaintiff's standing is placed in issue by the defendant that the plaintiff must shoulder the additional burden of establishing its standing to commence the action, a burden satisfied by evidence{**63 Misc 3d at 801} that it was the holder or assignee of the underlying note at the time the action was commenced. (Id.) Consequently, where, as here, standing is not an essential element of the cause of action, under CPLR 3018 (b) a defendant must affirmatively plead lack of standing as an affirmative defense in the answer in order to properly raise the issue [*4]in its responsive pleading. (Id.) This was not done in the 2008 action by defendant MD A. Islam, nor any other defendant. Since CPLR 3211 (e) provides that such a defense is waived if not raised either by motion or in the responsive pleading, any objection to MERS' standing was deemed waived. Clearly, if defendants waived such objections, plaintiff in the instant matter cannot raise an objection to MERS' standing and seek to use lack of standing to its advantage. Moreover, in the 2008 action, there was the 2009 order that granted MERS' motion for a judgment of foreclosure and sale, thereby finding MERS made out a sufficient cause of action and, in essence, making a finding of standing based upon there being no objection. To adopt plaintiff's argument regarding standing would twist the well established rules into a means to avoid statute of limitations bars to actions. This court has not been given any basis to do so.

Based on the above, defendant MD A. Islam's motion to dismiss the complaint, as against him, pursuant to CPLR 3211 (a) (5), is granted.