Court Opinion

ID: 9871966
Source: CourtListenerOpinion
Date Created: 2023-09-26 20:49:25.419816+00
Date Added: 2024-06-11T07:46:17.411680
License: Public Domain

Leventhal, J.
(dissenting and voting to reverse the order appealed from, on the law, and grant the motion of the defendant David Cohan pursuant to CPLR 3211 [a] [5] to dismiss the complaint insofar as asserted against him as time-barred, with the following memorandum). The majority holds that CPLR 205 (a) applies in this case where one party seeks to recommence a foreclosure action originally commenced by a different party. Because I believe that CPLR 205 (a) does not apply here, I respectfully dissent.
Background
By note dated May 20, 2005, the borrower Doron Eitani, in return for a loan received, promised to pay a principal sum plus interest to the lender Argent Mortgage Company, LLC (hereinafter Argent). The note was secured by a mortgage on property Eitani owned in Brooklyn.
By letter dated September 2, 2005, the servicer of the loan, on behalf of the holder of the note, wrote to Eitani. In that letter, the servicer stated that the loan was in default because required payments had not been made. The servicer wrote that if the default was not cured on or before October 7, 2005, the mortgage payments would be accelerated with the full amount remaining accelerated and becoming due and payable in full.
In or about November 2005, Argent commenced an action to foreclose the mortgage. Although Argent obtained an order of *204reference dated June 6, 2008, the Supreme Court, by order dated August 1, 2013, dismissed the complaint as abandoned pursuant to CPLR 3215 (c) for failure to enter judgment within one year of the default. During the pendency of the action, Argent transferred the note and the mortgage to Wells Fargo Bank, N.A., as trustee, in trust for the registered holders of Park Place Securities, Inc., asset-backed pass-through certificates, series 2005-WCW1 (hereinafter Wells Fargo). Neither Argent nor Wells Fargo moved to substitute Wells Fargo for Argent as the plaintiff in that action. Also during the pendency of the action, Eitani conveyed the property to David Cohan.
On November 25, 2013, Wells Fargo commenced this action to foreclose the mortgage against, among other defendants, Cohan. Cohan moved pursuant to CPLR 3211 (a) (5) to dismiss, as time-barred, the complaint insofar as asserted against him. Cohan argued that the complaint insofar as asserted against him was time-barred because the six-year statute of limitations began to run once the mortgage debt was accelerated, and Argent accelerated the debt more than eight years prior to Wells Fargo’s filing of this action.
Wells Fargo opposed Cohan’s motion, arguing that this action was not time-barred since CPLR 205 (a) applied and it had commenced this action within six months of the dismissal of the prior action.
Cohan argued, in reply, that CPLR 205 (a) did not apply because the complaint in the prior action was dismissed for neglect to prosecute, and that CPLR 205 (a) also did not apply because Wells Fargo was not the plaintiff in the prior action.
By order dated July 30, 2014, the Supreme Court denied Cohan’s motion pursuant to CPLR 3211 (a) (5) to dismiss, as time-barred, the complaint insofar as asserted against him. The court determined, in part:
“Under the circumstances of this case the dismissal of the first action was not for a neglect to prosecute, pursuant to CPLR 3216 or otherwise, and, thus, CPLR 205 may be applied (see Marrero v Crystal Nails, 114 AD3d 101, 104 [2013]). Significantly, in the first action, plaintiff obtained a default judgment and Order of Reference on June 6, 2008 (Klein v St. Cyprian Props., Inc., 100 AD3d 711 [2012]; Home Sav. of Am., F.A. v Gkanios, 230 AD2d 770 [1996]) and a general pattern of delay in proceed*205ing with the litigation had not been demonstrated (CPLR 205 [a]).” (2014 NY Slip Op 33820(U) [2014]).
Cohan now appeals.
This Appeal
“On a motion to dismiss a complaint pursuant to CPLR 3211 (a) (5) on statute of limitations grounds, the moving defendant must establish, prima facie, that the time in which to commence the action has expired” (Baptiste v Harding-Marin, 88 AD3d 752, 753 [2011]; see Zaborowski v Local 74, Serv. Empls. Intl. Union, AFL-CIO, 91 AD3d 768, 768-769 [2012]). If the moving defendant establishes, prima facie, that the time in which to commence the action has expired, the burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations is tolled or is otherwise inapplicable (see Zaborowski v Local 74, Serv. Empls. Intl. Union, AFL-CIO, 91 AD3d at 769; Baptiste v Harding-Marin, 88 AD3d at 753).
A mortgage foreclosure action is subject to a six-year statute of limitations (see CPLR 213 [4]). Once a mortgage debt is accelerated, the entire amount becomes due and the statute of limitations begins to run on the entire debt (see Wells Fargo Bank, N.A. v Burke, 94 AD3d 980, 982 [2012]; EMC Mtge. Corp. v Patella, 279 AD2d 604, 605 [2001]).
Here, Cohan established, prima facie, that the time in which to commence the action had expired. Cohan showed that the statute of limitations began to run when Argent accelerated the debt, and that the acceleration occurred more than six years prior to when Wells Fargo commenced this action on November 25, 2013. Thus, the burden shifted to Wells Fargo to raise a question of fact in opposition.
In opposition, Wells Fargo argued that CPLR 205 (a) applied. On appeal, Cohan argues, as he argued in the Supreme Court, that CPLR 205 (a) does not apply because the complaint in the prior action was dismissed for neglect to prosecute, and, further, that CPLR 205 (a) does not apply because Wells Fargo was not the plaintiff in the prior action.
CPLR 205 (a) provides:
“(a) New action by plaintiff. If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute *206the action, or a final judgment upon the merits, the plaintiff, or, if the plaintiff dies, and the cause of action survives, his or her executor or administrator, may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period. Where a dismissal is one for neglect to prosecute the action made pursuant to rule thirty-two hundred sixteen of this chapter or otherwise, the judge shall set forth on the record the specific conduct constituting the neglect, which conduct shall demonstrate a general pattern of delay in proceeding with the litigation.”
Although I agree with the majority’s conclusion that the Supreme Court correctly determined that the order of dismissal was not based on a neglect to prosecute, I disagree with the majority’s conclusion that CPLR 205 (a) applies in this case where Wells Fargo seeks to recommence a foreclosure action originally commenced by Argent.
In Reliance Ins. Co. v PolyVision Corp. (9 NY3d 52 [2007]), the New York Court of Appeals, answering a certified question of the United States Court of Appeals for the Second Circuit, addressed whether CPLR 205 (a) allowed for commencement of a new action by an entity that was different from, but related to, the original corporate plaintiff (see id. at 57). The New York Court of Appeals stated:
“Turning first, as we must, to the text of the statute, we note that the benefit provided by the section is explicitly, and exclusively, bestowed on ‘the plaintiff’ who prosecuted the initial action. Only if ‘the plaintiff’ dies, and his or her cause of action survives, may the executor or administrator of a deceased plaintiff’s estate commence a new action based on the same occurrence. Outside of this representative context, we have not read ‘the plaintiff’ to include an individual or entity other than the original plaintiff. In George v Mt. Sinai Hosp. (47 NY2d 170 [1979]), we permitted a suit to proceed under section 205 (a) even though it had *207been improperly commenced in the decedent’s own name after her death and then properly recommenced in the administratrix’s name after the statute of limitations had expired. We observed, however, that ‘[u]sually, of course, the fact that one party commenced an action which is subsequently dismissed, will not serve to justify application of [CPLR 205 (a)] so as to support a later action by a different claimant’ (id. at 179). Similarly, in Streeter v Graham & Norton Co. (263 NY 39, 44 [1933]), we noted: ‘To grant the right conferred by [the statute] to a different party plaintiff, representing in part different interests, would require the placing of a construction upon the section plainly beyond its intent and purpose’ ” (id.).
In that action, Reliance Insurance Company (hereinafter RIC), which was the party seeking to apply CPLR 205 (a), was the parent corporation of Reliance Insurance Company of New York (hereinafter RNY), which was the plaintiff in the original action. RIC argued that, as the parent corporation of RNY, it was not an entirely different party than RNY, that the New York Court of Appeals never before had precluded a substitution of corporate plaintiffs, and that CPLR 205 (a) must be read generously to advance its remedial purpose (see id.). For reasons of policy and precedent, the New York Court of Appeals rejected RIC’s conclusion (see id.). The Court explained:
“Pivotal here is that, unlike the scenario in George, RIC is seeking to enforce its own, separate rights, rather than the rights of the plaintiff in the original action. We agree with the conclusion of the District Court that ‘[t]he common thread running through cases applying CPLR 205 in cases where the error in the dismissed action lies only in the “identity” of the plaintiff, is the fact that it is the same person or entity whose rights are sought to be vindicated in both actions’ (390 F Supp 2d 269, 273 [ED NY 2005] [,] [affd 292 Fed Appx 106 (2008)]). As that court aptly stated, ‘the plaintiff in the new lawsuit may appear in a different capacity, such as a duly appointed administrator, but the identity of the individual on whose behalf redress is sought, [must] remain[ ] the same’ (id.). That is the situation the Legislature addressed in CPLR 205 (a), but that is not the case here. RIC is not RNY in a different capacity.
*208“To allow RIC to proceed also would open a new tributary in the law, presumably available to individuals as well as corporations, and breathe life into otherwise stale claims — some, like this one, going back nearly 20 years” (id. at 57-58).
In the case at bar, the identity of the entity on whose behalf redress is sought has not remained the same. Wells Fargo is not Argent in a different capacity. Following the holding in Reliance, then, CPLR 205 (a) does not apply here.
In an effort to distinguish Reliance from this case, the majority concludes that Argent and Wells Fargo, though different entities, each sued to enforce the same right in that each sought to foreclose on the subject property based on the alleged default on the note and mortgage. However, while Wells Fargo seeks the same relief that Argent sought, namely, to foreclose on the mortgage, Wells Fargo seeks not to vindicate Argent’s rights but to vindicate Wells Fargo’s rights.
The majority notes that, even absent a formal substitution, an assignee of a mortgage can continue an action in the name of the original mortgagee (see Brighton BK, LLC v Kurbatsky, 131 AD3d 1000, 1001 [2015]; Lincoln Sav. Bank, FSB v Wynn, 7 AD3d 760 [2004]; Central Fed. Sav. v 405 W. 45th St., 242 AD2d 512 [1997]). Certainly, CPLR 1018 provides that “[u]pon any transfer of interest, the action may be continued by or against the original parties unless the court directs the person to whom the interest is transferred to be substituted or joined in the action.” Here, however, the foreclosure action Argent commenced was dismissed. Wells Fargo is not continuing Argent’s action in Argent’s name, and Wells Fargo was not substituted for Argent in that action. Rather, Wells Fargo commenced this action after the time in which to commence an action had expired, and seeks to apply CPLR 205 (a) to toll the statute of limitations.
This Court is constrained to interpret CPLR 205 (a) in accordance with how it was written by the Legislature and how it has been interpreted by the Court of Appeals. The majority’s interpretation of CPLR 205 (a) permits that statute to support later actions by different claimants. For instance, the majority’s rationale would appear to allow an insurer to apply CPLR 205 (a) to toll the statute of limitations where the insurer seeks subrogation; after all, the insurer and its insured both seek to recover based on the same act of wrongdoing against the insured, just as Argent and Wells Fargo both seek to foreclose *209based on the same default. However, “ ‘[t]o grant the right conferred by [the statute] to a different party plaintiff, representing in part different interests, would require the placing of a construction upon the section plainly beyond its intent and purpose’ ” (Reliance Ins. Co. v PolyVision Corp., 9 NY3d at 57, quoting Streeter v Graham & Norton Co., 263 NY at 44).
Since I believe that CPLR 205 (a) does not apply here, I conclude that Wells Fargo failed to raise a question of fact as to whether the statute of limitations was tolled or otherwise was inapplicable. Accordingly, in my view the Supreme Court should have granted Cohan’s motion pursuant to CPLR 3211 (a) (5) to dismiss, as time-barred, the complaint insofar as asserted against him.
Eng, P.J., and Chambers, J., concur with Maltese, J.; Lev-enthal and Duffy, JJ., dissent in a separate opinion by Lev-ENTHAL, J.
Ordered that the order is affirmed, with costs.