F ILED : QUEENS COUNTY CLERK 06 / 27 / 2017 0 9 : 4 4 AM MEMORANDUM SUPREME COURT: QUEENS COUNTY IA PART 30 HSBC BANK USA, N.A., Plaintiffs, - against - MOTION SEQ. NO. 1 MOTION CAL NO. 77 ABDUL SHAHID A/K/A ABDUL SHAHEED MOTION DATE: February 7, 2017 DBI/ASG COINVESTOR FUND.II, LLC, ET AL., Defendants. BY: Buggs, J. P' Ig,@, 4u0>> 20' COVg ops~>a<p~ OO " hfyy Plaintiff commenced this action to foreclose a mortgage recorded on April 6,. 2005 (the subject mortgage), given by defendant Abdul Shahid s/h/a Abdul Shahid a/k/a Abdul Shaheed to HSBC Mortgage Corp. (USA), on the real property known as 87-06 Dalny Road, Jamaica, New York to secure a note dated March 2, 2005 in the principal amount of $325,000.00, plus interest. The subject mortgage provides for repayment of the mortgage in monthly payments and also includes an optional acceleration clause. Plaintiffalleges that a default occurred under the terms of the mortgage and note in payment of the monthly mortgage installment due on September 1, 2008 and thereafter. It also alleges that it elects to accelerate the.entire unpaid mortgage debt. 1 of 7
F ILED : QUEENS COUNTY CLERK 06 / 27 / 2017 0 9 : 44 AM) NYSCEF DÒC. NO. 37 RECEIVED NYSCEF: 06/27/2017 Defendant Shahid served an answer with affirmative defenses, including ones based upon expiration of the statute of limitations and lack of capacity due to "the absence of a significantly cognizable stake in the outcome of the litigation," and interposing a counterclaim pursuant to article 15 of the Real Property Actions and Proceedings Law, to cancel and discharge of record the subject mortgage. Plaintiff served a reply, including affirmative defenses to the counterclaim of defendant Shahid. Defendant Shahid moves pursuant to CPLR 3212 for summary judgment dismissing the complaint insofar as asserted against him based upon the expiration of the applicable statute of limitations, lack of standing and capacity, and granting summary judgment in his favor on his counterclaim to cancel and discharge the subject mortgage. At the outset, the court notes that in opposition to the motion, plaintiff asserts that defendant Shahid seeks to vacate prior orders of the court and dismiss the complaint insofar as asserted against him on the basis of defective service of process. Contrary to such assertion, defendant Shahid makes no request to vacate any prior order, and does not move to dismiss the complaint insofar as asserted against him based upon improper or defective service of process, or lack of personal jurisdiction. Rather, the motion by defendant Shahid for summary judgment dismissing the complaint insofar as asserted against him, and in his favor on his counterclaim, is based upon his claims that the instant action is time-barred and plaintiff lacks capacity and standing. 2 2 of 7
(F I LED : QUEENS COUNTY CLERK 06 27 / 2017 0 9 : 4 4 AM It is well established that the proponent of a summary judgment motion "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact," (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986] ; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985]; Zuckerman v City of New York, 49 NY2d 557 [1980]). If the proponent succeeds, the burden shifts to the party opposing the motion, which then must show the existence of material issues of fact by producing evidentiary proof in admissible form, in support of its position (see Zuckerman, 49 NY2d 557). An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4] ). "The law is well settled that, 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 U.S. Bank Nat. Assn. v Barnett, _AD3d_, AD3d, 2017 WL 2453382, 2017 NY App Div LEXIS 4397 [2d Dept 2017]; Plaia v Safonte, 45 AD3d 747, 748; [2d Dept 2007 ] ; Koeppel v Carlandia Corp., 21 AD3d 884 [2d Dept 2005]). In support ofhis motion, defendant Shahid submits, among other things, a copy of the pleadings, the affirmation of his counsel, and a copy of the subject mortgage and underlying note and the complaint filed on December 30, 2008 in the foreclosure action, entitled HSBC Mortgage Corp. (USA) v Shahid, (Sup Ct, Queens County, Index No. 30842/2008) (the 2008 foreclosure action), in which the plaintiff therein elected to call 3 3 of 7
(FILED : QUEENS COUNTY CLERK 06 27 2017 O 9 : 4 4 W due the entire amount secured by the mortgage. Defendant Shahid also submits a copy of the order dated June 12, 2013, issued in the 2008 foreclosure action, dismissing that action, without prejudice, based upon the plaintiff's failure to comply with the terms of orders dated March 13, 2013 and May 8, 2013.1 Based upon these submissions, defendant Shahid has made a prima facie showing that the six-year statute of limitations expired prior to the commencement of this action on October 12, 2016 (see CPLR 213[4] ; Alvarez v Prospect Hosp., 68 N.Y.2d 320, 324). The burden shifts to plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable (see Barry v Cadman Towers, Inc., 136 AD3d 951, 952 [2d Dept 2016]). In opposition, plaintiff indicates that HSBC Mortgage Corp. (USA) is its predecessor in interest. Plaintiff makes no claim that the election by its predecessor to accelerate the balance of the mortgage debt, by means of the filing of the summons and complaint in the 2008 action, was thereafter revoked. Rather, plaintiff asserts HSBC Mortgage Corp. (USA) provided defendant Shahid with less than 90-days notice when serving an RPAPL 1304 notice upon Shahid in advance of bringing the 2008 action, and that by virtue of the short notice, HSBC Mortgage Corp. (USA) lacked "standing" to elect to accelerate the mortgage debt by means of the filing of the summons and complaint in the 2008 action. Plaintiff argues therefore that this action is timely commenced. 1 By notice of motion dated September 11, 2015, plaintiff moved within the confines of the 2008 foreclosure action to vacate the June 12, 2013 order, and to restore the case to the court's active calendar. By order dated February 19, 2016, that motion was denied. 4 4 of 7
(FILED : QUEENS COUNTY CLERK 06 27 / 2017 O 9 : 4 4 W NYSCEF DOC. NO, 37 RECEIVED NYSCEF: 06/27/2017 An entity purporting to accelerate a mortgagor's mortgage debt in a prior action must have been the holder of the option to accelerate by virtue of its being the holder or assignee of the underlying note and mortgage at the time of commencement (see Wells Fargo Bank, N.A. v Burke, 94 AD3d 980 [2d Dept 2012]; EMC Mortgage Corp. v Suarez, 49 AD3d 592 [2d Dept 2008]). However, the mere failure by a plaintiff in a foreclosure action to comply with the notice requirements pursuant to RPAPL 1304 does not, ipso facto, mean or establish the plaintiff was without authority to accelerate the mortgage debt.2 Plaintiff, furthermore, makes no showing that HSBC Mortgage Corp. (USA) was not the holder or assignee of the subject note and mortgage at the time the 2008 action was brought. HSBC Mortgage Corp. (USA) specifically alleged in its complaint in the 2008 action that "[a]t the time of commencement, [it] was the holder of the'... mortgage and underlying debt instrument" (paragraph no. 7 in the 2008 complaint). Plaintiff has offered no evidence to rebut such allegation. Plaintiff also has failed to raise a question of fact as to whether the statute of limitations was tolled, extended or otherwise inapplicable. 2 In those instances where a mortgage loan is a home loan for the borrower's principal residence (see RPAPL 1304[5][b]), the mortgage creditor contemplating a mortgage foreclosure action is required, pursuant to RPAPL 1304, to serve the borrower with notice of his or her default in a specified form by registered or certified mail and first class mail at least 90 days prior to the commencement of the action (see RPAPL 1304 [2]). However, the failure to comply with RPAPL 1304 is not jurisdictional (see Pritchard v Curtis, 10 I AD3d 1502, 1505 [3d Dept 2012]). Rather, it is a defense which may be raised at any time (see U.S. Bank N.A. v Carey, 137 AD3d 894 [2d Dept 2016]; Citimortgage, Inc. v Espinal, 134 AD3d 876 [2d Dept 2015); Aurora Loan Servs., LLC v Weishlum, 85 AD3d 95, 105 [2d Dept 2011] ; First Natl. Bank of Chicago v Silver, 73 AD3d 162 [2d Dept 2010]). 5 5 of 7
[F ILED : QUEENS COUNTY CLERK 06 / 27 / 2017 0 9 : 4 4 AM) Under such circumstances, defendant Shahid is entitled to summary judgment dismissing the complaint insofar as asserted against him based upon the expiration of the statute of limitations. Because defendant Shahid is entitled to summary judgment dismissing the complaint insofar as asserted against him based upon the expiration of the statute of limitations, the court need not consider the merits of the branch of the motion by defendant Shahid for summary judgment dismissing the complaint based upon lack of standing and capacity. That branch of the motion by defendant Shahid for summary judgment dismissing the complaint insofar as asserted against him based upon the expiration of the statute of limitations is granted. With respect to that branch of the motion by defendant Shahid for summary judgment in his favor on his counterclaim, RPAPL 1501(4) provides that "[w]here the period allowed by the applicable statute of limitation for the commencement of an action to foreclose a mortgage... has expired," any person with an estate or interest in the property may maintain an action "to secure the cancellation and discharge of record of such encumbrance, and to adjudge the estate or interest of the plaintiff in such real property to be free therefrom" (RPAPL 150I[4]). Here, defendant Shahid has made a prima facie showing more than six years have elapsed since he defaulted on the mortgage, that the 2008 foreclosure action commenced by HSBC Mortgage Corp., plaintiff's predecessor, was 6
F ILED : QUEENS COUNTY CLERK 06 / 27 / 2017 0 9 : 4 4 W dismissed by this court pursuant to the June 12, 2013 order, and that the commencement of this foreclosure action is time-barred by the applicable six-year statute of limitations. As a consequence, defendant Shahid has established his entitlement to judgment as a matter of law declaring that the subject mortgage is invalid (see CPLR 213[4] ; see JBR Const. Corp, v Staples, 71 AD3d 952 [2d Dept 2010]; Corrado v Petrone, 139 AD2d 483 [2d Dept 1988]). In opposition, plaintiff has failed to raise a triable issue of fact as to whether the statute of limitations was tolled, revived, etc. (see Alvarez v Prospect Hosp., 68 NY2d 32O ; JBR Const. Corp. v. Staples, 71 AD3d 952). Accordingly, that branch of the motion by defendant Shahid for summary judgment in his favor on his counterclaim is granted to the extent of declaring that the subject mortgage is invalid and directing the County Clerk to cancel it. Settle judgment. Dated: June 21, 2017 Hon eé A. Buggs, JSC c Oy "~ee c<ee Cog + 7y 7 7 of 7