SHORT FORM ORDER

SUPREME COURT _ STATE OF NEW YORK

Present:
HON. F. DANA WINSLOW,
Justice
TRIAL/IAS PART 3
U.S. BANK NATIONAL ASSOCIATION, NASSAU COUNTY
AS TRUSTEE FOR THE STRUCTURED
ASSET INVESTMENT LOAN 2OO5-10.

Plaintiff,
MOTION DATE: 6129115
MOTION SEQ. NO.: 002,003

-against-

SOLEDAD MURILLO, LUIS DUQUE INDEX NO.:12492/12

NASSAU COUNTY CLERK, JOHN DOE
(Said name being fictitious, it being the
intention of Plaintiff to designate any and all
occupants of premises being foreclosed
herein, and any parties or corporations or
entities, if any, having or claiming an interest
or Iien upon the mortgaged premises.)
Defendants.

The following papers read on this motion (numbered 1-2):

Motion for Leave to Supplement the Summons and Amend

Complaint
Affirmation in Opposition.
Oral Argument on Motion...
the

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..........;.-.:..........3

Plaintiff moves pursuant to C.P.L.R. $305(a), 1003, and 3025(b) for leave
to supplement the summons to add parties and for leave to serve and file an
arnended complaint adding a cause ofaction for foreclosure.
BACKGROUND

For the last ten years financial institutions, homeowners, and investors have
been presented with consistent but desperate problems. Starting before 2005, more
potential home buyers noted increases in home values coupled with lower interest
rates and easy borrowing criteria.

Financial institutions recognized the profits that could be realized and

developed refined the CDO (Collateralized Debt Obligation) which expanded
CDS (Credit Default Swaps) with the consequence that the new and burgeoning
growth ofproduct nuances and profits drove the need for further investment
product with the comrnensurate demand for more.
The foregoing description is now a part of U.S. history even though the
factual, moral assessment and the specific roles played by the involved, including
the govemment, and the moral implications continue to be debated. Ben Bernanke
and Henry Paulson and ultimately the financial markets used terms in describing
the phenomenon such as the need to avoid "moral hazard", Troubled Asset Relief
Program ("TARP'), and "capital injection" to mention a few.
Subsequently, lending to homeowners increased dramatically and laws
were developed to address a financial market, in 2008 and 2009, on the brink of
collapse.

This environment called for the adoption of rules which were intended to be
equitable to all parties. The Court is now faced with one of the earliest
applications for the ultimate dismissal ofa foreclosure claim based on an assertion
that the statute of limitations has run. In every segment of the N.Y. and U.S. civil
law a statute of limitations exists to provide fairness for all parties. The question is
not whether a statute of limitations exists, but rather when it begins, and when
does it preclude the successful assertion of a claim. Statute of limitations have
been irnposed in various statutes including the N.Y. C.P.L.R., requiring that claims
be asserted in a timely f-ashion. A necessary fair and balanced determination

anticipates an acceptance of the proposition that a statute of limitations would

oreclude a successful claim if it were exceeded.

INSTANTMOTION

The instant matter was initially brought to set aside a foreclosure sale
pursuant to New York Real Properfy Law ("RPL") Section 329 and C.P.L.R.
Rule 5015. The Court refers to the parties' submissions for a complete recitation

ofthe facts underlying this action and the related foreclosure action entitled U,S
Bank National Association, as Trustee for the Structured Asset Investment Loan
Trust, 2005-10 v. Murillo el a/., Index No. 6056-08 (the "Foreclosure Action").
l{owever as an overview, on or about September 28,2005, Defendants
obtained a loan from BNS Mortgage Inc. ("BNC") in the original principal amount
of $482,000.00. The loan contained a promissory note (the "Note") and was
secured by a mortgage (the "Mortgage") on Defendant's residential real property
located at 934 Southern Drive, Franklin Square, New York (the "Property"). The
narned mortgagee was Mortgage Electronic Registrations Systems, Inc.
("MERS'), as nominee for BNC.
According to Plaintiff, the Trust acquired the loan pursuant to the Trust's
Pooling and Servicing Agreement dated as of November 1, 2005 (the "PSA').
Plaintiff claims that the original Note,, with allonge endorsing the Note in blank,
was physically delivered to the Plaintiff pursuant to the PSA, and that the transfer
of the Mortgage was memorialized in the "Assignment of the Mortgage" by
MERS, datcd April l, 2008 and recorded April 15, 2008 (the "Assignment").
Defendants def'aulted on their mortgage payments by failing to pay the
amounts due on November l, 2007 and thereafter. Plaintiff commenced the
Foreclosure Action on April 1, 2008, and obtained a Judgment ofForeclosure and
Sale on July 17,2009, which was entered on luly 21,2009 (the "Judgment").
Pursuant to the Judgment, the Property proceeded to a foreclosure sale. Plaintiff
was the highest bidder. A referee's deed to Plaintiff was executed on July 20, 2010
and recorded on July 28, 2010 (the "Referee's Deed").

In or about October 2010, Defendants moved to vacate the Judgment on the

ground that Plaintiff failed to obtain personal jurisdiction over the Def'endants.
After a traverse hearing to determine service ofprocess, the motion was granted.
By Order of the Court dated December 15, 2011, the Judgment was vacated and
the Foreclosure Action was dismissed. On April 9,2012, a stipulation was
recorded cancelling the Notice ofPendency in the Foreclosure Action.

Plaintiff asserted, however, that the foreclosure sale was never rescinded,
and that the Referee's Deed still appeared of record in the Nassau County Clerks
records. On or about October 2,2012, Plaintiff commenced an action for relief
pursuant to New York Real Property Law ("RPL") Section 329 and C.P'L.R.
Rule 5015 (the "October 2012 action"). The Complaint soughtjudgment (l)
setting aside the foreclosure sale held in the Foreclosure Action; (2) relieving
Plaintiff of its bid in the foreclosure sale; and (3) declaring the Referee's Deed null
and void, and expunging it frorn the record in Nassau County.
On February 4,2014, the Court issued a Short Form Order, granting
Plaintiff s motion for summary judgment, in part, as to the affirmative relief
sought in the Complaint and dismissing Defendants' First, Second, and Fifth
Counterclaims; and denying Plaintiff s motion for summary judgment, in part, as
to the remaining affirmative defenses and counterclaims.

On September 9,2014, Defendant Luis Duque ("Mr. Duque") died

intestate. Plaintiff now moves for leave to amend the complaint to allege a cause
of action to foreclosc on the subject mortgage. Plaintiff also seeks to supplement
the summons to name Mr. Duque's heirs as defendants.
The Court notes that the Plaintiffhas produced the original note and
certified copy of the mortgage. The finding is one that is made with the approval
of the Defendant. However, the date at which the note was initially possessed and
more importantly part of the Plaintiff s records has not been established.

DISCUSSION
Pursuant to C,P.L.R. $213, "an action upon a bond or note, the payment of
which is secured by a mortgage upon real property, or upon a bond or note and
mongage so secured, or upon a mortgage ofreal property, or any interest therein;"
must be commenced within six years. "The statute of limitations in a mortgage
foreclosure action begins to run from the due date for each unpaid installment, or
fiom the time thc mortgage is entitled to demand full payment, or from the date
the mortgage debt has been accelerated."
(2002\.

Zinkler v. Makler, 298 A.D.Zd 516,517

Under Section 22 of the Mortgage, the "Lender" (Plaintiff) may require

"Lnmediate Payment in Full" where the "Borrower" (Defendants) fails "to keep
any promise or agreement made in the Security Instrument". Section 22 also
establishes the notice required in order for the

Plaintiffto accelerate the mortgage

debt, which includes at least thirty days for the Defendant to cure the default.

Plaintiff sent a letter dated December 24,2007 to Defendants notiSing

Defendants that their loan was in default. The letter indicated that it would become
necessary to acceleratc the Mortgage Note unless payments on the loan could be

brought current by January 23, 2008. Def-endants did not cure the default by
January 23,2008. Therefore, this was the date at which the mortgage debt was
accelerated, and thus the date at which the cause of action began to accrue.

Plaintiff moved on May 6, 201 5 pursuant to C.P.L.R. $305(a), 1003, and

3025(b) for leave to supplement the summons to add parties and for leave to serve
and f'rle an amended complaint adding a cause ofaction for foreclosure, such
motion was fully submitted on June 29,2015. The Court must consider such an
amendment, which is freely granted, in the context of C.P.L.R $203(f), the
relation back doctrine. Such proposition is widely accepted and was acknowledged
and approved on the record by both parties on June23,2015.
The relation back doctrine "allows a claim asserted against a defendant in

filing to relate back to claims previously asserted against a

codefendant for Statute of Limitations purposes where the two defendants are
'united in interest'." Buran v. Coupal, 87 N.Y.2d 173, 177 (1995). Three
an amended

conditions must be met. in order for claims to relate back:

"(1) both claims arose out of same conduct, transaction or occurrence, (2)
the new party is 'united in interest'with the original defendant, and by
reason ofthat relationship can be charged with such notice ofthe institution
of the action that he will not be prejudiced in maintaining his defense on the
merits and (3) the new party knew or should have known that, but for an
excusable mistake by plaintiff as to the identity of the proper parties, the
action would have been brought against him as well." Id.
In the instant action, the Court finds that these conditions are met. Both
claims here arise out of the Defendants' default on the mortgage. The Court of

Appeals determined that "if the interest of the parties in the subject-matter is such
that they stand or fall together and that judgment against one will similarly affect
the other, then they are 'otherwise united in interest. "' Prudential Ins. Co. of
America v. Stone, 270 N.Y. 154, 159 (1936). Here, the Defendants' heirs'
interests in the matter are such that they would stand together or fall together with
the other Defendants. Therefore, the Defendant and his heirs are presumptively

"united in interest" as between themselves. As to the last condition, Defendant's

heirs should have known that in the event ofDefendant's death, the foreclosure
action would have been brought against those with an interest in the property.
In English v. Ski Windham Operating Corp.,263 A.D.2d443 (1999),Ihe
Court affirmed the Suprerne Court, Suffolk County's grant of Plaintiffs cross
motion for leave to arnend the complaint where "the allegations in the original
complaint gave notice of the transactions and occutrences to be proved pursuant to
the amended cornplaint." ld. at 444.In 2006, the Second Department reversed the
Supreme Court, Queens County's denial of the Plaintiff s motion for leave to
amend the complaint and add a new cause ofaction, noting that "because the
proposed amendment relates back to the allegations contained in the original
complaint, it was not time-barred." 39 College Point Corp. v. Transpac Capital
Corp.,27 A.D.3d 454,455 (2006).
I'lere, the Court finds that allegations contained in the October 2012
Cornplaint directly referred to the 2008 Action seeking to foreclose on the
property, and the October 2012 action references the Plaintiff s intention to
foreclose. Accordingly, the Court finds that Defendants had notice of the
transactions and occurrences giving rise to the proposed cause of action for
fbreclosure. Thetefore Plaintiff s motion for leave to serve and file the proposed
amended Complaint is granted.

Plaintiff has demonstrated entitlement to the relief sought. Even though the
Court notes that Plaintiff has not included a Proposed Amended Complaint. Such a
defect is not fatal.

The Court's concem is whether or not approximately sixteen months

betvveen the October 2014 determination which removed Defendants'
impediments to proceed with the foreclosure and the May 6,2015, Notice of
Motion to Amend submitted June 29, 2015, exceeds a period of time contemplated

by the relation back doctrine. The cases hold strongly that the most important
consideration is timely notice of the substance of the intended amendment..9ee
generally Pendleton v. City of New York, 44 A.D.3d 733 (2007), Cooper v.

Sleepy's LLC, 126 A.D.3d 664 (2015). Here the Plaintiff provided the requisite
noiice to the Defendants.
This Court notes that were it not for the intervening20l2 action, the result
would have confined the timeline to the commencement in 2008 of the foreclosure
action and the running of the statute of limitations in2014, ultimately resulting in
the dismissal of the foreclosure.

In light of the Court's determination to continue this action, Defendants'

Cross-motion to discontinue the above-captioned action is denied. Defendants'
Cross-motion to dismiss Counter-claims, without prejudice is granted, with leave
to renew these Counter-claims in their Answer to any Amended Complaint.
Plaintiff must file and serve an Amended Comolaint consistent with this
decision.

Accordingly, it is
ORDERED that Plaintiff s Motion is granted, in accordance with the
foregoing decision.
ORDERED that in light of the Court's determination to continue this
action, Defendants' Cross-motion to discontinue the above-captioned action is
denied.
ORDERED that Defendants' Cross-motion to dismiss Counter-claims,
without prejudice is granted, with leave to renew these Counter-claims in their
Answer to the Amended Comolaint.

This constitutes the Order of the Court. Submit Order on ten

notice after entry.

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