Miss Jones LLC v. Stiles

Background

Miss Jones LLC sued Keith Stiles, Moy Rlty, LLC, and Van Hasselt Auto Service to foreclose on a mortgage. Stiles had executed a note and mortgage with National City Bank in 2007. The note and mortgage were later assigned to DBI/ASG Mortgage Holdings LLC and then to Miss Jones. The opinion states that Stiles stopped making payments in 2008 and that Miss Jones later sought to foreclose.

Stiles asserted that the foreclosure action was barred by New York’s six-year statute of limitations. The mortgage allowed the lender to accelerate the debt after default, meaning the entire balance could become immediately due. Three letters dated in 2009 stated that the account had been accelerated and demanded full payment. Stiles said he received the letters, while Miss Jones disputed whether they had been mailed and received, particularly because they were sent to an address Stiles had left.

Evidence ruling

The court held that the three acceleration letters were admissible under the business-records exception to the hearsay rule. Pamela Glass, PNC Bank’s records custodian, provided a declaration stating that the letters were true copies of records kept by PNC and its predecessor, were made near their stated dates, and were kept as part of regularly conducted business. The court concluded that Glass did not need personal knowledge of the letters’ creation or employment by National City Bank in 2009 to establish the records’ admissibility.

The court did not consider the Glass declaration as proof that the letters were actually sent by National City Bank or PNC, because the declaration did not establish that fact through personal knowledge. The court nevertheless considered the letters in deciding the summary-judgment motions.

Summary-judgment motions

The court concluded that Miss Jones had established the basic elements of a foreclosure claim by producing the note, mortgage, assignments, and evidence of default. Stiles therefore had to make an affirmative showing supporting his statute-of-limitations defense.

Under New York law, acceleration of the entire mortgage debt can start the limitations period for the full debt. The court found that the letters’ language was clear and unequivocal. If the letters had been transmitted to and received by Stiles in 2009, the limitations period for the entire debt would have begun then.

The court found conflicting evidence about mailing and receipt. Stiles consistently stated that he received the letters, although he no longer had the originals. Miss Jones relied on a different letter that had been returned as undeliverable and argued that Stiles therefore likely had not received the acceleration letters. Stiles responded that he had other ways of receiving mail sent to the property. The court held that this evidence created a material factual dispute that could not be resolved on summary judgment without improperly deciding witness credibility.

The court therefore denied Miss Jones’s motion for summary judgment on its foreclosure claim and denied Stiles’s cross-motion for summary judgment on his statute-of-limitations defense. It also denied Stiles’s cross-motion for summary judgment on his counterclaim seeking to expunge the mortgage, because that request depended on a determination that the foreclosure action was untimely, which the court could not make while the factual dispute remained.

Default judgment and appointment requests

Miss Jones sought default judgment against Moy Rlty, LLC and Van Hasselt Auto Service, which had not answered or otherwise responded to the complaint. The court denied that motion without prejudice to renewal after compliance with the applicable rules. Miss Jones had not obtained a Clerk’s Certificate of Default and had not sought default judgment through the required order-to-show-cause procedure.

Because the foreclosure summary-judgment motion and default-judgment motion were denied, the court also denied Miss Jones’s request to appoint a referee or special master to calculate the amount due. The court described that request as premature.

Disposition

The court denied Miss Jones’s motions for summary judgment, default judgment, and appointment of a referee or special master. It likewise denied Keith Stiles’s cross-motion for summary judgment on his affirmative defense and counterclaim. Judge Nelson S. Román directed the parties to appear for a pretrial conference. The opinion stated that Stiles’s motion to modify the receiver order and Miss Jones’s cross-motion for contempt would be decided later.

Classification basis

This order is classified as mixed because it reached the merits of the foreclosure and statute-of-limitations dispute through summary judgment while disposing of the default-judgment request on procedural grounds.