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Plaintiff,
MOTION DATE: 6129115
MOTION SEQ. NO.: 002,003
-against-
Complaint
Affirmation in Opposition.
Oral Argument on Motion...
the
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Plaintiff moves pursuant to C.P.L.R. $305(a), 1003, and 3025(b) for leave
to supplement the summons to add parties and for leave to serve and file an
arnended complaint adding a cause ofaction for foreclosure.
BACKGROUND
For the last ten years financial institutions, homeowners, and investors have
been presented with consistent but desperate problems. Starting before 2005, more
potential home buyers noted increases in home values coupled with lower interest
rates and easy borrowing criteria.
This environment called for the adoption of rules which were intended to be
equitable to all parties. The Court is now faced with one of the earliest
applications for the ultimate dismissal ofa foreclosure claim based on an assertion
that the statute of limitations has run. In every segment of the N.Y. and U.S. civil
law a statute of limitations exists to provide fairness for all parties. The question is
not whether a statute of limitations exists, but rather when it begins, and when
does it preclude the successful assertion of a claim. Statute of limitations have
been irnposed in various statutes including the N.Y. C.P.L.R., requiring that claims
be asserted in a timely f-ashion. A necessary fair and balanced determination
INSTANTMOTION
The instant matter was initially brought to set aside a foreclosure sale
pursuant to New York Real Properfy Law ("RPL") Section 329 and C.P.L.R.
Rule 5015. The Court refers to the parties' submissions for a complete recitation
ofthe facts underlying this action and the related foreclosure action entitled U,S
Bank National Association, as Trustee for the Structured Asset Investment Loan
Trust, 2005-10 v. Murillo el a/., Index No. 6056-08 (the "Foreclosure Action").
l{owever as an overview, on or about September 28,2005, Defendants
obtained a loan from BNS Mortgage Inc. ("BNC") in the original principal amount
of $482,000.00. The loan contained a promissory note (the "Note") and was
secured by a mortgage (the "Mortgage") on Defendant's residential real property
located at 934 Southern Drive, Franklin Square, New York (the "Property"). The
narned mortgagee was Mortgage Electronic Registrations Systems, Inc.
("MERS'), as nominee for BNC.
According to Plaintiff, the Trust acquired the loan pursuant to the Trust's
Pooling and Servicing Agreement dated as of November 1, 2005 (the "PSA').
Plaintiff claims that the original Note,, with allonge endorsing the Note in blank,
was physically delivered to the Plaintiff pursuant to the PSA, and that the transfer
of the Mortgage was memorialized in the "Assignment of the Mortgage" by
MERS, datcd April l, 2008 and recorded April 15, 2008 (the "Assignment").
Defendants def'aulted on their mortgage payments by failing to pay the
amounts due on November l, 2007 and thereafter. Plaintiff commenced the
Foreclosure Action on April 1, 2008, and obtained a Judgment ofForeclosure and
Sale on July 17,2009, which was entered on luly 21,2009 (the "Judgment").
Pursuant to the Judgment, the Property proceeded to a foreclosure sale. Plaintiff
was the highest bidder. A referee's deed to Plaintiff was executed on July 20, 2010
and recorded on July 28, 2010 (the "Referee's Deed").
Plaintiff asserted, however, that the foreclosure sale was never rescinded,
and that the Referee's Deed still appeared of record in the Nassau County Clerks
records. On or about October 2,2012, Plaintiff commenced an action for relief
pursuant to New York Real Property Law ("RPL") Section 329 and C.P'L.R.
Rule 5015 (the "October 2012 action"). The Complaint soughtjudgment (l)
setting aside the foreclosure sale held in the Foreclosure Action; (2) relieving
Plaintiff of its bid in the foreclosure sale; and (3) declaring the Referee's Deed null
and void, and expunging it frorn the record in Nassau County.
On February 4,2014, the Court issued a Short Form Order, granting
Plaintiff s motion for summary judgment, in part, as to the affirmative relief
sought in the Complaint and dismissing Defendants' First, Second, and Fifth
Counterclaims; and denying Plaintiff s motion for summary judgment, in part, as
to the remaining affirmative defenses and counterclaims.
DISCUSSION
Pursuant to C,P.L.R. $213, "an action upon a bond or note, the payment of
which is secured by a mortgage upon real property, or upon a bond or note and
mongage so secured, or upon a mortgage ofreal property, or any interest therein;"
must be commenced within six years. "The statute of limitations in a mortgage
foreclosure action begins to run from the due date for each unpaid installment, or
fiom the time thc mortgage is entitled to demand full payment, or from the date
the mortgage debt has been accelerated."
(2002\.
debt, which includes at least thirty days for the Defendant to cure the default.
brought current by January 23, 2008. Def-endants did not cure the default by
January 23,2008. Therefore, this was the date at which the mortgage debt was
accelerated, and thus the date at which the cause of action began to accrue.
"(1) both claims arose out of same conduct, transaction or occurrence, (2)
the new party is 'united in interest'with the original defendant, and by
reason ofthat relationship can be charged with such notice ofthe institution
of the action that he will not be prejudiced in maintaining his defense on the
merits and (3) the new party knew or should have known that, but for an
excusable mistake by plaintiff as to the identity of the proper parties, the
action would have been brought against him as well." Id.
In the instant action, the Court finds that these conditions are met. Both
claims here arise out of the Defendants' default on the mortgage. The Court of
Appeals determined that "if the interest of the parties in the subject-matter is such
that they stand or fall together and that judgment against one will similarly affect
the other, then they are 'otherwise united in interest. "' Prudential Ins. Co. of
America v. Stone, 270 N.Y. 154, 159 (1936). Here, the Defendants' heirs'
interests in the matter are such that they would stand together or fall together with
the other Defendants. Therefore, the Defendant and his heirs are presumptively
Plaintiff has demonstrated entitlement to the relief sought. Even though the
Court notes that Plaintiff has not included a Proposed Amended Complaint. Such a
defect is not fatal.
by the relation back doctrine. The cases hold strongly that the most important
consideration is timely notice of the substance of the intended amendment..9ee
generally Pendleton v. City of New York, 44 A.D.3d 733 (2007), Cooper v.
Sleepy's LLC, 126 A.D.3d 664 (2015). Here the Plaintiff provided the requisite
noiice to the Defendants.
This Court notes that were it not for the intervening20l2 action, the result
would have confined the timeline to the commencement in 2008 of the foreclosure
action and the running of the statute of limitations in2014, ultimately resulting in
the dismissal of the foreclosure.
Accordingly, it is
ORDERED that Plaintiff s Motion is granted, in accordance with the
foregoing decision.
ORDERED that in light of the Court's determination to continue this
action, Defendants' Cross-motion to discontinue the above-captioned action is
denied.
ORDERED that Defendants' Cross-motion to dismiss Counter-claims,
without prejudice is granted, with leave to renew these Counter-claims in their
Answer to the Amended Comolaint.
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