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Real Property Law
Mortgagee’s Claim Time-Barred
Lakeview Loan Servicing, LLC v. Rafuna2024 WL 4830379
AppDiv, Second Dept.
(memorandum opinion)
In an action to foreclose mortgages, subsequent purchaser of the mortgaged property appealed from Supreme Court’s denial of his motion to dismiss. The Appellate Division reversed and dismissed the complaint, holding that mortgagee’s claim was time-barred.
Mortgagor executed a note and mortgage in the amount of $421,245 in 2009. The mortgage was promptly recorded. In 2011, mortgagor executed a gap mortgage in the amount of $4,116.12, and a consolidation, extension, and modification agreement (CEMA) creating a single lien on the property. The gap mortgage and the CEMA were recorded on Nov. 16, 2011. The following month, MERS, as nominee for the mortgage lender, issued and recorded a satisfaction of mortgage. Five years later, subsequent purchaser acquired title to the property and recorded the deed. In 2022, mortgagee commenced a foreclosure action against subsequent purchaser and others, contending that the satisfaction of mortgage was erroneously recorded and that subsequent purchaser had defaulted in making payments that became due on April 1, 2020 and thereafter. Subsequent purchaser moved to dismiss because the cause of action to vacate the satisfaction was time-barred, Supreme Court denied the motion, holding that the 10-year statute of limitations for quiet title actions was applicable.
In reversing, the Appellate Division held that because the gravamen of the complaint was to correct a mistake in recording the satisfaction, the six-year statute of limitations, not the 10-year statute, was applicable. The court also held that the statute runs from the time the mistake is made, not the time when it was discovered. As a result the cause of action to vacate the satisfaction was time-barred, requiring dismissal of the foreclosure action.
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