SUPREME COURT OF THE STATE OF NEW YORK. Plaintiff. Defendant x

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1 '/I SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK Present: HON. LAWRENCE J. BRENNAN Acting Justice Supreme Court x CONTEMPORARY MORTGAGE BANKERS, INC., TRIAL PART: 44 NASSAU COUNTY GERAD GENTILE, INDEX NO.: against- Plaintiff Defendant x MOTION DATE: 12- SUBMIT DATE: 1- SEQ. NUMBER The following papers have been read on this motion: Notice of Motion, dated Memorandum of Law in Support, dated Memorandum of Law in Opposition, dated Affidavit in Opposition, dated Reply Affirmation, dated Motion by Contemporar Mortgage Bankers Inc. (Contemporary) for summar judgment against defendant Gerald Gentile pursuant to CPLR 3212 is granted. Plaintiff commenced this action against defendant Gerald Gentile on or about May , seeking to recover on a promissory note executed by defendant and his former wife Maria Gentile, on Januar 11, 1991 evidencing a loan of $ due and payable on Februar 1, The debt was secured by second mortgage in the same amount on defendant's then residence located at 189 Nichols Road, Nesconset, New York.

2 On or about February, 1993 the defendant defaulted on his first mortgage with NY Guardian Mortgage Corp. in the principal sum of $ When the first mortgagee commenced two foreclosure actions, Contemporary was named as a part defendant and served Notices of Appearance in each action. Ultimately, a mortgage foreclosure sale was held in September, 2001 at which time defendant' s home was sold for a total of$ No surplus monies remained from the sale for Contemporary and its second mortgage was extinguished. Having lost its mortgage at foreclosure, plaintiff now seeks to pursue its claim on the note signed by defendant. It is undisputed that payments on the note at issue ceased in August, 1994 when defendant was unable to continue to keep the loan curent because of a financial reversal. He has not made any payments since then. Defendant' s co-borrower, Mara Gentile, fied a Chapter 7 Banptcy Petition in 1993 at the end of which proceeding the debt was discharged as to her. It is undisputed that between March, 1995 and Februar 200 1, the defendant fied six petitions for protection under the United States Banptcy Code (Chapter 13) which tolled the applicable six-year statute of limitations for a total period of two years plus 137 days. While defendant seeks to avoid liability on the note on the grounds that plaintiff s suit commenced nine years and nine months after his default, is time-barred as well as barred by the doctrne of laches, plaintiff counters that a) the six-year statute of limitations (CPLR 213(4)) was tolled by the various bankptcy petitions filed by defendant, and b) the limitations period was extended pursuant to General Obligations Law Plaintiff contends that whether measured from August, 1998 (the date of defendant' s wrtten

3 acknowledgment to pay the debt owed to plaintiff, or March, 2001, the date on which the last Chapter 13 Plan was filed, this action, commenced within six years of either of these dates is timely. The statute of limitations governing plaintiffs action was tolled pursuant to CPLR 204(a) and 11 USC ~~ 362(a) and (c) during each ofthe six discrete time periods a statutory stay was imposed by plaintiff s filing of a petition under Chapter 13 ofthe Banptcy Code. Such a stay results from an intentional act, i.e., the fiing of a petition seeking protection of the banptcy laws and results in a toll for the entire period of the stay. Zuckerman v Street Corp., 167 Misc.2d 198, (N.Y. Sup. 1996). The United States Bankptcy Code provides for an automatic stay of certain prescribed actions against the debtor and the debtor s propert. 11 USC ~ 362(a). The automatic stay is one of the fudamental debtor protections provided by the bankptcy law. It is effective immediately upon filing without furher action. Once the automatic stay takes effect, any proceedings or post petition judicial actions described in ~ 362(a)(1) are void and without vitality. Only the banptcy cour has jursdiction to terminate, annul or modify the automatic stay. Carr McGrif 8 AD3d (2 Dept. 2004) (citations omitted). While plaintiff maintains that " (t)he last banptcy petition filed by the defendant purortedly providing in part, to satisfy plaintiff s debt was in Februar 2001, which would have extended the statute to that date, plaintiff fails to note that seven months was consumed from the initial default until the first bankptcy filing. However, as each banptcy case was dismissed, and the automatic stay lifted, the statute of limitations began to run again.

4 Plaintiff does not take into account the fact that durng each of the interim periods between each discrete bankptcy filing, the statute of limitations was ruing. According to the cour' s calculations, when the final banptcy filing was dismissed on June 8, 2001, only eight months remained on the statute of limitations. Since the instant action was not commenced until May , it is untimely. The inquiry does not end there, however. The fact that Contemporary was named as a defendant in the senior mortgagee s foreclosure actions does not make the instant action on the note timely. In re Garcia, 167 B. R. 34 (B. Y. 1994), on which plaintiff relies, stands only for the proposition that the lien of a junior mortgagee, who is made a par to a foreclosure action brought by a senior mortgagee although cut off and extinguished as to land, continues as a lien upon the surlus fuds arsing from the foreclosure. Pursuant to General Obligations Law ~ however, a written acknowledgment of a debt and promise to pay starts the statute of limitations ruing anew. Fleet Nat. Bank Laquidara, Inc., 290 AD2d (3rd Dept. 2002), leave to appeal dismissed 98 NY2d 671. To constitute an acknowledgment of a debt, a wrting must recognize an existing debt and contain nothing inconsistent with an intention on the par of the debtor to pay it. Knoll Datek Securities Corp., 2AD3d (2 Dept. 2003). In determining the effectiveness of an acknowledgment, the critical determination is whether the acknowledgment impars an intention to pay. Knoll Datek Securities Corp., supra at p Under the circumstances extant, the dispositive issue is, therefore, whether defendant's obligation to repay the debt due and owing plaintiff was revived by his written acknowledgment of the debt in the form of a letter dated August 20, 1998 in which defendant states:

5 As you are probably aware of, I have a second mortgage with Contemporar Mortgage Baners, of which approximately $ is also in arrears. I have worked out an agreement with James Leibman, the vice-president of Contemporary, to remain curent on my second mortgage payment to him, and extending the past due balance to the end of the mortgage period. While defendant attests in his affidavit in opposition to plaintiff s motion for summary judgment that he did "not recall writing this letter, defendant does not deny that in Januar, 2000, he attached the very same letter as an exhibit to the affidavit he submitted to the Supreme Cour: Suffolk County, under index no. 2900/94, in opposition to the first mortgagee s Motion for a Judgment of Foreclosure and Sale. Clearly, the letter at issue recognizes defendant's debt to plaintiff and contains nothing inconsistent with an intention on the part of Mr. Gentile to pay it. Banco Do Brasil S.A. State of Antigua and Barbuda, 268 AD2d 75, 77 (1 st Dept. 2000). In the view of this cour, defendant' s letter of August 20, 1998 constitutes a wrtten acknowledgment or promise within the meaning of General Obligations Law ~ sufficient to revive plaintiffs otherwise time-barred claim. The language employed by defendant conveys and is consistent with an intention to pay an existing debt. Atlantic Nat. Trust LLC Silver 9 AD3d 321 (Ist Dept. 2004). Under the circumstances extant, where defendant himself relied upon the letter in a prior litigation, the fact that he neglected to sign the letter, quite possibly by design, is unavailing. Defendant' s tyewritten, rather than

6 handwrtten, name below the body of the letter is sufficient to constitute the signatue required by General Obligations Law ~ See generally, Parma Tile Estate of Short, 87 NY2d (1996); Leising Multiple R. Development, 249 AD2d 920 (4th Dept. 1998). Inasmuch as none of the Chapter 13 Plans filed by defendant are before this cour, it is impossible to determine whether anyone of them served to extend the statute oflimitations under General Obligations Law ~ as plaintiff argues. Both the laches defense made by a defendant who filed six petitions in banptcy, which succeeded in delaying the sale of the propert, and who was apparently in frequent contact with plaintiff s representative over the years in an attempt to work out an amicable resolution to the problem, and the claimed violation of the Fair Debt Collection Practices Act are unavailing given the facts at bar. Accordingly, plaintiff s motion for summar judgment against defendant on the complaint is granted. Submit order on notice. This shall constitute the Decision and Order of this Cour. ENTERED ENTER MAR' DATED: February" 2005

7 TO: Jeff Morgenstern, Bsq. Attorney for the Plaintiff One Old Countr Road, Ste. 320 Carle Place, NY Samuel B. Rieff, Bsq. Attorney for the Defendant 100 Garden City Plaza Garden City, NY 11530