Opinion
24665/2003.
Decided September 30, 2005.
Plaintiffs Erold Williams and Sheron Gayle commenced this action, pursuant to RPAPL § 1501(4), seeking the cancellation and discharge of a secondary mortgage on the property located at 4232 White Plains Road, Bronx, NY In 1990, plaintiffs acquired such property for $600,000, along with the adjacent property located at 4230 White Plains Road, from defendant Arden Lopes and his partner Gladstone Marshall (who is not a party to this action). The buyers financed most of the purchase price with a bank loan and mortgage on each property, and the sellers agreed to hold a purchase money, secondary mortgage for each property for the remaining purchase price. Each secondary note and mortgage was for $75,000.00 and acted as a lien on the property.
In 1995, plaintiffs ceased making any payments on both secondary notes and mortgages. In 1996, defendant demanded accelerated payment of the balance due on both secondary notes and mortgages. In 2000, defendants tendered a satisfaction of the secondary note and mortgage for the property located at 4230 White Plains Road, in exchange, inter alia, for a payment of $90,000, stemming from the proceeds of the sale of the property. Plaintiffs now move for summary judgment, seeking a declaration that any action to foreclose the secondary note and mortgage on the second property located at 4232 White Plains Road is statutorily time-barred.
Discussion
It is well settled that the proponent of a motion for summary judgment must establish that "there is no defense to the cause of action or that the cause of action or defense has no merit," (C.P.L.R. § 3212[b]), sufficiently to warrant the court as a matter of law to direct judgment in his or her favor. Bush v. St. Clare's Hospital, 82 NY2d 738, 739 (1993); Winegrad v. New York University Medical Center, 64 NY2d 851, 853 (1985). This standard requires that the proponent of the motion "tender sufficient evidence to eliminate any material issues of fact from the case," id., "by evidentiary proof in admissible form." Zuckerman v. New York, 49 NY2d 557, 562 (1980). Thus, the motion must be supported "by affidavit [from a person having knowledge of the facts], by a copy of the pleadings and by other available proof, such as depositions." C.P.L.R. § 3212(b).
Where the proponent of the motion makes a prima facie showing of entitlement to summary judgment, the burden shifts to the party opposing the motion to demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action, or to tender an acceptable excuse for his or her failure to do so. Vermette v. Kenworth Truck Company, 68 NY2d 714, 717 (1986); Zuckerman v. New York, supra, 49 NY2d at 560, 562. Like the proponent of the motion, the party opposing the motion must set forth evidentiary proof in admissible form in support of his or her claim that material triable issues of fact exist. Id., at 562.
This Court finds that plaintiffs have met their burden of establishing that any action to foreclose on the secondary note and mortgage on the property located at 4232 White Plains Road is time-barred. CPLR § 213(a) provides that an action upon a mortgage of real property must be instituted within six years of the accrual of the claim. The six-year statute of limitations in a mortgage foreclosure action begins to run from the due date for each unpaid installment unless the debt has been accelerated; once the debt has been accelerated by a demand or commencement of an action, the entire sum becomes due and the statute of limitations begins to run on the entire mortgage. Loiacono v. Goldberg, 240 AD2d 476, 477 (2nd Dept. 1996); see also CPLR § 213 (4); Saini v. Cinelli Enters, 289 AD2d 770, 771 (3rd Dept. 2001).
Here, on April 15, 1996, defendant elected to accelerate the debt on the note and mortgage on the property located at 4232 White Plains Road. Accordingly, defendant's action for foreclosure on the secondary note and mortgage accrued on that date. More than six years have expired since then and no action for foreclosure has been interposed. Thus, any action for foreclosure on the property located at 4232 White Plains Road appears to be timed-barred. Cf. EMC Mortgage Corp. v. Patella, 279 AD2d 604 (2nd Dept. 2001).
Based upon the foregoing proof, plaintiffs met their burden of establishing that any action to foreclose upon the note and mortgage is timed barred, sufficient to warrant the Court as a matter of law to direct judgment in their favor cancelling such note and mortgage. Cf. Scheer v. Koubek, 70 NY2d 678, 679 (1987); Licari v. Elliott, 57 NY2d 230, 236 (1982); Garson v. Dowd, 143 AD2d 113 (2nd Dept. 1988); Palmer v. Amaker, 141 AD2d 622 (2nd Dept. 1988); Benitez v. Sexton, 139 AD2d 686 (2nd Dept. 1988). Thus, plaintiffs are entitled to judgment as a matter of law, unless defendant has demonstrated by admissible evidence the existence of a factual issue requiring a trial of the action.
Plaintiffs, however, are not entitled to summary judgment inasmuch as defendant has met his burden of producing sufficient evidence to raise questions of fact as to whether the Statute of Limitations was tolled or revived. There are two ways in which the statute may be tolled. The first is provided in section 17-101 of the General Obligations Law. This section provides that a signed written acknowledgment of an existing debt which contains nothing inconsistent with an intention of the debtor to pay the debt will toll the Statute of Limitations and start it running anew. Id. see also, Lew Morris Demolition Co. v. Board of Educ. of City of NY, 40 NY2d 516, 520-521 (1976); Siegel, New York Practice, § 50, p. 66 (Third Edition 2003).
The alternate method for tolling the Statute of Limitations or starting it anew, as developed by the common law, is based on a partial payment of the debt before or after the statute has expired. Educ. Res. Inst., Inc. v. Piazza, 17 AD3d 513 (2nd Dept. 2005. However, in order to toll the statute or start it running anew, it must be shown that the payment was of a portion of an admitted debt under circumstances amounting to a clearly demonstrated intention to pay the balance. Educ. Res. Inst., Inc. v. Piazza, supra, 17 AD3d 513; Bernstein v. Kaplan, 67 AD2d 897 (2nd Dept. 1979); see also, Crow v. Gleason, 141 NY 489, 493 (1894). The circumstances of a partial payment may be proven by extrinsic evidence, including the books and records of the debtor, admissions of the debtor, as well as testimony of the debtor or persons having direct knowledge of the circumstances of the payment. Educ. Res. Inst., Inc. v. Piazza, 17 AD3d 513 (2nd Dept. 2005); Bernstein v. Kaplan, 67 AD2d 897 (2nd Dept. 1979).
Applying the above principles to the case at bar, this Court finds that defendant has produced sufficient evidence to raise genuine issues of fact as to whether the Statute of Limitations has been tolled or revived. First, the Court finds genuine issues of fact as to whether the Statute of Limitations has been tolled or revived by a signed written acknowledgment of an existing debt. There are two pertinent written communications on the note and mortgage. One was written by plaintiff's current attorney on August 2, 2002. The letter states, in pertinent part, as follows:
My clients, Erold Williams and Sheron Gayle, expect to be in a position, very shortly, to satisfy your mortgage. They would like to do so, at the very worse, under the same terms and conditions in which they satisfied the mortgage at 4232 White Plains Road, Bronx, New York. It would therefore be appreciated if you have your attorney contact me so we could make arrangements in advance for payment.
Another similar letter addressed to the mortgagees was written some years earlier by another attorney then representing plaintiffs-mortgagors. That letter, written on September 18, 1997, states as follows:
I am writing you this letter in hopes that we can discuss a satisfaction of your mortgage prior to your bringing any legal action. This makes sense especially considering my clients have a signed contract to sell the above captioned premises. Surely, your mortgage will have to be satisfied in order for us to transfer the property. Towards that end kindly contact my office or have your attorney contact my office as soon as possible so that we can discuss an amicable resolution of this matter without the need for costly and time consuming litigation.
Each of these letters, independently, can be categorized, in this Court's view, as a written acknowledgment of an existing debt. Moreover, each letter contains clear and consistent language evidencing an intention on the part of the debtor to pay it. For instance, in the August 2, 2002, letter current counsel communicates to defendant-mortgagee that his "clients, Erold Williams and Sheron Gayle, expect to be in a position, very shortly, to satisfy your mortgage." Similarly, in the September 8, 1997 — letter, former counsel for plaintiffs communicates to defendant-mortgagee that "your mortgage will have to be satisfied in order for us to transfer the property." Thus, each letter appears to satisfy the requirements of General Obligations Law § 17-101, for the extension of the Statute of Limitations. Cf. Albin v. Dallacqua, 254 AD2d 444 (2nd Dept. 1998). The aforementioned letters, in and of themselves, are, therefore, sufficient to deny summary judgment to plaintiffs.
Defendant, however, also raises issues of fact as to whether a partial payment has been made under circumstances amounting to a clearly demonstrated intention to pay the balance. As alluded to before, in 2000, plaintiffs approached defendant-mortgagee to inform him that they had a buyer to the property located at 4232 White Plains Road. According to defendant-mortgagor, he, along with his partner, agreed to execute a satisfaction of the mortgage and to discharge the lien on the property, in exchange for a promise that plaintiffs mortgagors would turn over $90,000 of the proceeds of the sale of the property in full satisfaction of the debt owed on the note and mortgage for the property located at 4230 White Plains Road, and in partial payment of the debt owed on the note and mortgage for the property located at 4232 White Plains Road. Concomitantly, plaintiff-mortgagors allegedly agreed to pay the balance owed ($62,738.88, plus interest) when the property located at 4232 White Plains Road was to be sold in the immediate future.
Plaintiffs, however, claim that there was never any agreement regarding the property at 4232 White Plains Road and that the $90,000 payment was made solely in consideration for the discharge of the lien on the property located at 4230 White Plains Road. Plaintiffs, however, fail to establish how much was owed on each note and mortgage prior to the agreement. Under the circumstances, plaintiffs have failed to exclude the possibility that, as defendant claims, part of the $90,000 payment constituted partial payment of the note and mortgage for the property located at 4232 White Plains Road. View in a light most favorable to defendant-mortgagor, the evidence supports an inference that part of the $90,000 payment constituted partial payment of the note and mortgage for the property located at 4232 White Plains Road. Thus, the circumstances of the purported $90,000 payment are sufficient to raise a question of fact to present to the jury on the issue of a partial payment tolling the Statute of Limitations and to defeat the motion for summary judgment. Cf. Saljanin v. Vuksanaj, 284 AD2d 525 (2nd Dept. 2001) (an action commenced in July 1997 to recover on a promissory note that matured in Dec. 1990 was not barred as untimely because the defendant's partial payment on the note in Apr. 1992 restarted the running of the six-year limitations period); see also Bernstein v. Kaplan, 67 AD2d 897 (2nd Dept. 1979).
Conclusion
In short, although plaintiffs have established that defendant has taken no action more than six years since demanding accelerated payment of the balance due on the secondary mortgage, plaintiffs' cannot be granted summary judgment as defendant has raised sufficient evidence to establish that the Statute of Limitations period was extended pursuant to General Obligations Law § 17-50(1). Similarly, defendant has submitted sufficient proof to establish that the Statute of Limitations period was extended by a partial payment of an admitted debt. Therefore, plaintiffs' request for summary judgment to cancel the mortgage in question is denied.
This constitutes the Decision and Order of the Court.