Windward Bora LLC v. Lungen

Background

Windward Bora LLC brought a mortgage-foreclosure action against Joshua Lungen and Sterling National Bank, formerly known as Provident Bank. Windward Bora moved for summary judgment, which asks the court to rule in a party’s favor when there is no genuine dispute about a fact important to the case.

Magistrate Judge Judith C. McCarthy issued a report and recommendation concluding that Windward Bora had established its initial case and that Lungen had not raised a genuine issue of material fact. Lungen filed objections. Sterling never appeared or participated in the action, and the Clerk entered a certificate of default against Sterling.

Lungen’s Objection

Lungen argued that the foreclosure action was barred by New York Civil Practice Law and Rules section 213(4), which provides a six-year statute of limitations for an action on a mortgage of real property. He contended that the mortgage debt had been accelerated on September 6, 2013, causing the six-year period to begin then. Because Windward Bora filed this action on June 7, 2022, Lungen argued that the action was untimely.

The court explained that when a mortgage payable in installments is accelerated, the entire debt becomes due and the limitations period begins to run on the entire debt. Acceleration can occur when the mortgage holder files a foreclosure action seeking the full balance or when the borrower receives an acceleration notice.

The parties did not dispute that Sterling, Windward Bora’s assignor, filed an earlier foreclosure action on July 27, 2016. Lungen relied on allegations in that action’s complaint. The court determined that one paragraph referred to interest accruing from September 6, 2013, not to acceleration of the mortgage balance on that date. Another paragraph stated that Sterling had declared the entire balance due but did not connect that declaration to September 6, 2013. Lungen offered no evidence that Sterling sent an acceleration notice before July 27, 2016.

Ruling

The court agreed that Lungen had not raised a triable issue—a fact dispute requiring a trial—about acceleration before July 27, 2016. Because Windward Bora filed this action less than six years after that date, and because the earlier foreclosure action sought payment of the full amount borrowed, the court held that this action was timely.

Judge Vincent L. Briccetti overruled Lungen’s objection, adopted Magistrate Judge McCarthy’s report and recommendation in its entirety as the court’s opinion, and granted Windward Bora’s motion for summary judgment. The court directed Windward Bora to submit a proposed judgment concerning Lungen and to advise how it wished to proceed against Sterling. The Clerk was instructed to terminate the pending motion.