Zucker v. HSBC Bank, National Association et al
Filing
40
MEMORANDUM AND OPINION re DE [31, 33, 34, 35, 38, 39]: The Court adheres to its original ruling that the LMMA constituted an acknowledgement of the debt and restarted the statute of limitations, thus warranting dismissal of plaintiffs cause for a declaration that the note and mortgage are unenforceable as time-barred. See attached Memorandum & Order. Ordered by Judge Denis R. Hurley on 10/4/2018. (Gapinski, Michele)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------X
HERBERT ROY ZUCKER
MEMORANDUM & ORDER
17-CV-2192 (DRH) (SIL)
Plaintiff,
-againstHSBC BANK, USA, PHH MORTGAGE
CORPORATION, and NASSAU COUNTY
RECORDER OF DEEDS,
Defendants.
-------------------------------------------------------X
APPEARANCES:
For Plaintiffs:
The Law Offices of Christopher Thompson
33 Davison Lane East
West Islip, New York 11795
By:
Christopher Thompson, Esq.
For Defendants HSBC Bank USA
Phillips Lytle LLP
340 Madison Avenue, 17th Floor
New York, New York 10173
By:
Preston L. Zarlock, Esq.
Richard Weingarten, Esq.
For Defendant PHH Mortgage Corporation:
Ballard Spahr LLP
919 Third Avenue
New York, New York 10002
By:
Adam P. Hartley, Esq.
HURLEY, Senior District Judge:
Plaintiff Herbert Roy Zucker (“Zucker” or “Plaintiff”) commenced this action against
HSBC Bank, USA, National Association (“HSBC”), PHH Mortgage Corporation (“PPH”)
Page 1 of 7
(collectively “Defendants”) and the Nassau County Recorder of Deeds asserting, inter alia, a
claim pursuant to Article 15 of the N.Y. Real Property Actions and Proceedings Law (“RPAPL”)
to cancel and strike a mortgage recorded on or about May 24, 2006 for property located at
Beechwood Manor Old Tappan Road, Glen Cove, N.Y. ( the “Property) asserting the underlying
debt is time-barred. By Order dated May 12, 2018, the Court granted Defendant’s motion to
dismiss on the ground that the Loan and Mortgage Modification Agreement dated August 19,
2013 (the “LMMA”) signed by Plaintiff constituted an acknowledgment of the debt and restarted
the statute of limitations.
Presently before the Court is Plaintiff’s motion for reconsideration. For the reasons set
forth below, the Court adheres to its original determination.
BACKGROUND
The background of this matter is set forth in the Court’s May 12, 2018 Order, familiarity
with which is presumed. Briefly stated, in 2006 Plaintiff executed an delivered a mortgage on the
Property in the amount of $2,300,000.00, which mortgage was assigned in 2009 to HSBC
Mortgage Corp. (“Mortgage Corp.”). The mortgage was then modified and as modified assigned
to HSBC. On October 6, 2009, just prior to that assignment, Mortgage Corp instituted a
foreclosure action in Supreme Court, Nassau County, accelerating the mortgage. In August 2013
the Nassau County court dismissed the foreclosure action and cancelled the notice of pendency.
Also in August 2013, Plaintiff received from HSBC a LLMA which he signed and returned. He
never received an executed copy back from HSBC and it was never recorded. Although Plaintiff
attempted to make the first three payments under the LMMA, they were never negotiated. When
he called to inquire about their status, he was told his loan was in default and there was no record
Page 2 of 7
of a modification agreement. According to the amended complaint, Plaintiff continued to receive
documentation from HSBC which claimed that the loan was due for the original default.
In its motion to dismiss, HSBC argued principally that the debt is not time barred because
(1) the loan was de-accelerated by the execution of the LMMA and/or HSBC’s voluntary
discontinuance of the foreclosure action; and/or (2) the LMMA revived the statute of limitations.
Plaintiff responded that defendants have not established that the loan was de-accelerated. First,
whether or not a voluntary discontinuance of a foreclosure action constitutes a de-acceleration of
the loan is a question of fact. Second, the LMMA was not recorded and Plaintiff never received a
copy of it back from HSBC. Third, HSBC’s actions after Plaintiff signed the LMMA were
inconsistent with de-acceleration.
In its May 12, 2018 Order, the Court rejected, at the motion to dismiss stage, the
arguments that a revocation of the acceleration of the debt was effectuated by either the dismissal
of the foreclosure action or the LMMA. However, a review of the LMMA revealed that it
restarted the statute of limitations on the mortgage debt. Under its express terms, Plaintiff
recognized the existing mortgage debt and promised to pay it. The promise to pay was in writing
and signed by Plaintiff, and conditioned only the dismissal of the foreclosure action and
cancellation of the lis pendens, which conditions were met. It is this holding that is the subject of
the current motion.
DISCUSSION
Originally brought pursuant to Rule 60 of the Federal Rules of Civil Procedure
(“FRCP”), Plaintiff now relies upon Rule 54(b).
Under Federal Rule of Civil Procedure 54(b), as well as its inherent power a court may
“reconsider a prior decision at any time before entry of final judgment.” Smith v. Town of
Page 3 of 7
Hempstead Dept. of Sanitation Sanitary Dist. No. 2, 982 F. Supp. 2d 225, 230 (E.D.N.Y. 2013)
(internal quotation marks omitted). Federal Rule of Federal Rule of Civil Procedure 54(b)
provides, in relevant part, that “any order or other decision . . . that adjudicates fewer than all the
claims or the rights and liabilities of fewer than all the parties does not end the action as to any of
the claims or parties and may be revised at any time before the entry of a judgment adjudicating
all the claims and all the parties' rights and responsibilities.” Fed. R. Civ. P. 54(b). In this
District, motions for reconsideration are governed by Local Civil Rule 6.3. That rule requires
that motions for reconsideration or reargument “of a court order determining a motion shall be
served within fourteen (14) days after the entry of the Court’s determination of the original
motion . . . .” However, a court retains discretion to consider a motion for reconsideration
notwithstanding movant’s failure to comply with the Local Rules’ time requirement. See Smith,
982 F. Supp. 2d at 230.
The standard for a motion for reconsideration “is strict, and reconsideration will generally
be denied unless the moving party can point to controlling decisions or [factual] data that the
court overlooked – matters, in other words, that might reasonably be expected to alter the
conclusion reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995)
(finding district court properly exercised its discretion to reconsider earlier ruling in light of the
introduction of additional relevant case law and substantial legislative history); see also Arum v.
Miller, 304 F. Supp. 2d 344, 347 (E.D.N.Y. 2003) (“To grant such a motion the Court must find
that it overlooked matters or controlling decisions which, if considered by the Court, would have
mandated a different result.”) (citation and internal quotation marks omitted). “The major
grounds justifying reconsideration are ‘an intervening change of controlling law, the availability
of new evidence, or the need to correct a clear error or prevent manifest injustice.’” Virgin Atl.
Page 4 of 7
Airways, Ltd. v. National Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992) (quoting 18 C.
Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 4478 at 790). Thus, a “‘party
may not advance new facts, issues, or arguments not previously presented to the Court.’”
National Union Fire Ins. Co. v. Stroh Cos., 265 F.3d 97, 115 (2d Cir. 2001) (quoting Polsby v.
St. Martin’s Press, 2000 WL 98057, at *1 (S.D.N.Y. Jan. 18, 2000)). A party may, however,
introduce relevant authority that was not before the district court when it initially ruled on the
matter. See Vaughn v. Consumer Home Mortgage Co., 2007 WL 140956 at *6 (E.D.N.Y. Jan.
22, 2007). In the alternative, reconsideration is appropriate if a court “misinterpreted or
misapplied” relevant case law in its original decision.
Assuming arguendo that the Court should exercise its discretion to waive the time limit
for reconsideration, Plaintiff’s arguments for reconsideration are without merit as discussed
below.
In support its motion, Plaintiff cites the case of McQueen v. Bank of New York, 57
Misc.3d 481, 484-85, 56 N.Y.S.3d 811 (Sup. Ct., Kings County). According to Plaintiff, the
court in McQueen “considered a similar fact-pattern and found that a homeowners [sic] request
for a modification which is rejected by a lender is akin to an offer of settlement which does not
necessarily acknowledge liability, but may be offered for many reasons.” That court, according
to Plaintiff, “found the essential difference between unconditional acknowledgement that would
suffice to revive an expired statute of limitations . . . and something which is offered in
contemplation of settlement of litigation is whether the parties require negotiation to resolve the
debt.” (DE 31 at 2.)
Page 5 of 7
McQueen provides no basis for reconsideration. Firstly, McQueen was decided eleven
months before this Court issued its decision. Moreover, this Court considered and rejected
similar authority in its May 12, 2018 Order as the following excerpt therefrom demonstrates:
The cases Plaintiff relies on are inapposite. For example, in Costa v.
Deutsche Bank Nat’l Trust Co., 247 F. Supp. 3d 229 (S.D.N.Y. 2017) the question
was whether the mortgagor’s submission of applications for loan modification
was an acknowledgement of the debt. That court held that the applications did not
unconditionally acknowledge an intent to pay but was merely an implied offer of
settlement. In Callahan v. Credit Suisse (USA), Inc., the court recognized that
“[u]nder § 17–101, the statute of limitations could be tolled or restarted if [the
defendants] unconditionally acknowledged an intent to pay amounts due,” but
held that the defendants' proposed separation agreement there did not
“unconditionally acknowledge” such intent because it was “clearly conditioned on
[the plaintiff's] acceptance.” 2011 WL 4001001, at *7 (S.D.N.Y. Aug. 18, 2011);
see also Sitkiewicz v. Cty. of Sullivan, 256 A.D.2d 884, 681 N.Y.S.2d 677, 678–
79 (3d Dep't 1998) (holding that an “offer letter was not an unconditional promise
to pay a sum certain” in satisfaction of § 17–101 because it did not acknowledge
the debt but “merely made an offer of settlement which [the] plaintiff never
accepted”).
Here, in contrast, there is a document signed by Plaintiff acknowledging
the amount of the debt and promising to pay it conditioned only on dismissal of
the foreclosure action and lis pendens, which condition was met. Absent from the
LMMA is a requirement that it be signed by the lender and a copy returned to
Plaintiff.
May 12, 2018 Order at 16.
Unlike in McQueen, here was not a mere application for a modification. A review of the
LMMA reveals that all terms were set forth therein. HSBC’s sending of the LMMA to Plaintiff
constituted an offer which Plaintiff accepted when he signed the LMMA. No further negotiation
was needed to resolve the debt and the LMMA meets the requirements of N.Y. Gen’l
Obligations Law § 17-101 to restart the statute of limitations.
Plaintiff also proffers a letter dated May 23, 2018 as “new evidence” which he asserts
establishes that “HSBC never accepted Plaintiff’s offer to modify the loan. The letter does not
constitute “new” evidence. Plaintiff alleged in the amended complaint that HSBC acted
Page 6 of 7
inconsistently with revocation of the acceleration of the debt and at best the referenced letter
supports that assertion. However, the Court did not dismiss Plaintiff’s claim on the basis that the
LMMA constituted a revocation of the acceleration. See May 12, 2018 at 15 (“Plaintiff alleges
conduct by HSBC subsequent to the LMMA that is inconsistent with revocation. Accordingly
dismissal of the RPAPL claim on the basis that acceleration was revoked is not appropriate at
this juncture.”) Rather, the LMMA sent by HSBC to Plaintiff was complete in its terms and
constituted an offer which Plaintiff accepted by signing and returning and in the course of which
he acknowledged the debt, restarting the statute of limitations.
CONCLUSION
The Court adheres to its original ruling that the LMMA constituted an acknowledgement
of the debt and restarted the statute of limitations, thus warranting dismissal of plaintiff’s cause
for a declaration that the note and mortgage are unenforceable as time-barred.
SO ORDERED.
Dated: Central Islip, New York
October 4, 2018
s/ Denis R. Hurley
Denis R. Hurley
United States District Judge
Page 7 of 7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?