Judges

Attorneys and Parties

Brief Summary

Background

In 2001, Antonette Cabello and Rodolfo A. Cabello executed a note secured by a mortgage on Long Beach property. Between 2002 and 2005, they took additional loans secured by additional mortgages, and the obligations were consolidated through Consolidation, Extension, and Modification Agreements into one lien. In February 2008, a satisfaction of the consolidated mortgage was allegedly recorded in error. In March 2019, Citibank, as assignee, sued to expunge the satisfaction, foreclose the consolidated mortgage, or alternatively foreclose an equitable lien. Earlier proceedings resulted in dismissal of the first and second causes of action and later denial of relief on the equitable lien theory based on alleged defects in the preforeclosure notices under RPAPL 1304(2) [preforeclosure 90-day notice requirement] and then-controlling Appellate Division precedent in Kessler.

Lower Court Decision

After the Court of Appeals reversed the Appellate Division in Bank of Am., N.A. v Kessler, the plaintiff moved for leave to renew. The Supreme Court granted renewal, vacated its prior October 12, 2022 determination insofar as it had denied the plaintiff relief and granted the defendants summary judgment, then granted the plaintiff summary judgment on the alternative cause of action to foreclose an equitable lien, declared that the plaintiff had an equitable lien against the property, struck the defendants' amended answer and counterclaim, restored the matter to the active calendar, and referred the matter to a referee to compute the amount due.

Appellate Division Reversal

The Appellate Division held that the plaintiff's renewal motion was timely because it was made before entry of final judgment. However, it ruled that the equitable lien claim was time-barred under CPLR 213(4) [six-year statute of limitations]. The court further held that this limitations issue could be reached for the first time on appeal because it was a pure question of law appearing on the face of the record and could not have been avoided if raised earlier. Relying on prior precedent governing equitable mortgage and equitable subrogation claims, the court concluded that the claim accrued when the note and mortgage were made or recorded, and here no later than March 2008 when the allegedly erroneous satisfaction was recorded. Because the plaintiff did not assert the equitable lien claim until March 2019, the claim was untimely. The court therefore reversed the December 12, 2023 orders insofar as appealed from, denied renewal, and reinstated the October 12, 2022 order to the extent it had denied the plaintiff's motion and granted the defendants' cross-motion.

Legal Significance

This decision confirms that in New York, a cause of action to establish or foreclose an equitable lien under an equitable mortgage or equitable subrogation theory is governed by a six-year limitations period under CPLR 213(4) [six-year statute of limitations]. The limitations clock begins when the relevant note and mortgage were made or recorded, and at the latest here when the allegedly erroneous satisfaction was recorded. The case also shows that a favorable change in law on a separate issue, such as RPAPL 1304(2) [preforeclosure 90-day notice requirement], will not save a claim that is independently untimely.