In DiDato v. WILMINGTON SAVINGS FUND SOCIETY, FSB, D/B/A CHRISTIANA TRUST, NOT INDIVIDUALLY BUT AS TRUSTEE FOR HILLDALE TRUST., a quiet title action commenced by the borrower in Dutchess Supreme Court, Adam Leitman Bailey, P.C. won a motion to dismiss in favor of the defendant note owner, using the rarely considered CPLR § 205(a) tolling statute, on the grounds that a defense was founded upon documentary evidence, the pleading failed to state a cause of action, and for lack of personal jurisdiction.
The history on the loan involves a prior note owner commencing a foreclosure in 2011, thereby accelerating the loan. That action was ultimately dismissed in 2016 due to the note owner’s lack of capacity to sue based on its failure to demonstrate that it was authorized to do business in New York. The note owner appealed and perfected the appeal, which is pending.
In the meantime, the borrower commenced this quiet title action, arguing that the loan was accelerated, the foreclosure was dismissed, and the note owner is now barred by the statute of limitations to foreclose.
ALBPC was retained by the note owner to defend the quiet title, however, by that time, the note owner was already in default in the quiet title action, and the borrower had already moved for a default judgment.
Immediately fact gathering and drafting affidavits for the note owner to execute surrounding the service of the complaint upon it and its reasonable excuse for failing to timely answer, ALBPC was able to timely cross-move in opposition seeking (i) leave to answer or appear, showing a reasonable excuse for the default and a meritorious defense to the action, and (ii) upon granting leave, then dismissing the action in its entirety.
ALBPC successfully argued that, pursuant to CPLR § 205(a), the note owner will have a six-month window after the appeal is decided to recommence foreclosure, if necessary, since the dismissed foreclosure was terminated in a manner other than voluntary discontinuance, failure to obtain personal jurisdiction, neglect to prosecute, or final judgment upon the merits—an argument that is rarely successfully crafted in the foreclosure field.
Further, ALBPC outlined for the Court that the current note owner, as assignee of the foreclosing plaintiff, is also entitled to the benefit conferred by CPLR § 205(a), despite the Borrower’s arguments to the contrary.
Persuaded by ALBPC’s arguments, in a decision and order dated November 29, 2018, the Honorable Maria G. Rosa, J.S.C. granted dismissal in favor of the note owner, taking language directly from ALBPC’s moving papers in expressly confirming that “even if the dismissal of [the foreclosure] action is upheld on appeal, [the note owner] may foreclose on the mortgage based upon the tolling provisions of CPLR 205(a).”
Jackie Halpern Weinstein, Esq. of the Title Litigation and Foreclosure Groups and Scott J. Pashman, Esq. of the Title Litigation Group at Adam Leitman Bailey, P.C. secured this victory for the Note Owner.