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Costa v. Deutsche Bank National Trust Co.

United States District Court, S.D. New York

March 30, 2017

VITO V. COSTA and MARION P. COSTA, Plaintiffs,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE FOR GSR MORTGAGE LOAN TRUST 2006-OAI, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OA1, and SPECIALIZED LOAN SERVICING LLC, Defendants. v.

          OPINION AND ORDER

          KATHERINE POLK FAILLA United States District Judge

         Stripped of its technical jargon, this case is about whether a nearly decade-old defaulted mortgage loan remains enforceable. Plaintiffs Vito and Marion Costa argue that the applicable six-year statute of limitations has expired and that they are therefore entitled to the cancellation and discharge of their mortgage loan. Defendants, the loan trustee and the servicer, maintain that the limitations period has not expired because it had not started prior to this action or, if it had, it was tolled or renewed; thus, foreclosure is warranted. Even if their foreclosure claim is time-barred, however, Defendants still seek to recoup their expenses in maintaining the property over the past decade. The parties filed cross-motions for summary judgment pursuant to Federal Rule of Civil Procedure 56 following the close of discovery. For the reasons that follow, Plaintiffs' motion is granted and Defendants' motion is denied.

         BACKGROUND[1]

A. Factual Background[2]

         1. The Costas' Mortgage Loan

         Plaintiffs own the property located at 60 Interlaken Avenue in New Rochelle, New York (the “Property”). (Pl. 56.1 ¶ 1). On May 9, 2006, Vito took out a mortgage loan with IndyMac Bank F.S.B. (“IndyMac”) as nominal lender in the amount of $544, 000 (the “Loan”). (Id. at ¶ 17). To accomplish this, Vito executed a note to IndyMac in that amount (the “Note”), and both Vito and Marion secured the Note by granting a corresponding mortgage on the Property (the “Mortgage, ” and collectively, the “Loan Instruments”) to Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee for IndyMac. (Id. at ¶¶ 12, 17, 30; Steiner Decl., Ex. E (Note); id., Ex. D (Mortgage)).[3] The adjustable-rate Note, which IndyMac endorsed in blank, has an initial yearly interest rate of 2.85% and an interest-rate cap of 9.95%. (Pl. 56.1 ¶¶ 18, 22).

         Defendant Deutsche Bank National Trust Company (“DB”) is a National Banking Association with its principal place of business in Los Angeles, California. (Pl. 56.1 ¶ 2). DB is the Trustee for GSR Mortgage Loan Trust 2006-OA1, Mortgage Pass-Through Certificates, Series 2006-0A1, which owns the Loan (the “Trust”); DB is being sued in its capacity as Trustee. (Id.; Def. 56.1 ¶ 10).[4] Defendant Specialized Loan Servicing LLC (“SLS”) is a Delaware limited liability company and the current servicer of the Loan. (Pl. 56.1 ¶ 5).

         On May 18, 2006, just over a week after the Loan closing, DB took physical possession of the Note and Mortgage, and maintained possession of these instruments at a location in Santa Ana, California, until January 7, 2016. (Pl. 56.1 ¶¶ 25-26; Def. 56.1 ¶¶ 5-6; Steiner Decl., Ex. A (Ward Dep.), at 46:8-47:6). On that date, SLS caused DB to transfer the instruments to Defendants' counsel in this matter, with whom the instruments remain. (Def. 56.1 ¶ 7; Haber Decl., ¶¶ 2-3).

         2. The Costas' Loan Default and the 2008 Foreclosure Action

         Vito began making monthly payments on the Loan starting in July 2006. (Costa Decl., ¶ 11). He made seventeen payments through November 2007, but was unable to make the December 2007 monthly payment or any thereafter. (Id. at ¶¶ 11, 13; Pl. 56.1 ¶ 43; Def. 56.1 ¶ 11).

         On or about February 4, 2008, IndyMac sent Vito a notice notifying him that the Loan was in default (the “Notice of Default” or the “Notice”). (Pl. 56.1 ¶ 44; Def. 56.1 ¶ 12; Steiner Decl., Ex. M (Notice of Default)). The Notice is examined in greater detail infra but, broadly speaking, it informed Vito of the amount owed on the Loan and the consequences of not curing the default by March 7, 2008. (Pl. 56.1 ¶ 45; Def. 56.1 ¶ 12; Steiner Decl., Ex. M (Notice of Default); Ward Decl. ¶ 15). Those consequences included a potential foreclosure action and sale of the Property. (Steiner Decl., Ex. M (Notice of Default)).

         Vito failed to cure the defaulted Loan by the March 7, 2008 deadline. (Def. 56.1 ¶ 13). Consequently, on March 20, 2008, IndyMac commenced a foreclosure action against the Costas in New York State Supreme Court, Westchester County (the “Westchester Court”), entitled IndyMac Bank, F.S.B. v. Vito V. Costa, et al., Index No. 005909/2008 (the “2008 Foreclosure Action”). (Def. 56.1 ¶ 14; Pl. 56.1 ¶ 48). On April 15, 2008, the Costas filed an answer and counterclaims in that action; they also filed a third-party complaint against the mortgage broker and affiliated individuals, all of whom had originally facilitated the Loan. (Pl. 56.1 ¶ 52; Steiner Decl., Ex. P, Q). The gist of both pleadings was that the Costas had been duped into taking out the Loan: They thought they were receiving a fixed-rate loan at 2.85%, when in fact they were given an adjustable-rate loan with an initial rate of 2.85% and a capped rate of 9.95%. (Pl. 56.1 ¶ 53; Costa Decl. ¶¶ 5-6, 8-9, 11, 15). The third-party action was removed to federal court and eventually settled, but the 2008 Foreclosure Action remained active in the Westchester Court. (Pl. 56.1 ¶¶ 54-57).

         On July 11, 2008, the Office of Thrift Supervision closed IndyMac and appointed the Federal Deposit Insurance Corporation (the “FDIC”) as its receiver. (Pl. 56.1 ¶ 36). The FDIC organized IndyMac as a federal savings association, IndyMac Federal Savings Bank F.S.B. (“IndyMac Federal”), and became its conservator. (Id.). IndyMac Federal never substituted for IndyMac in the 2008 Foreclosure Action after the latter's failure. (Pl. 56.1 ¶ 58; Steiner Decl., Ex. V). And there was no case activity in the 2008 Foreclosure Action between April 15, 2008, the date on which the Costas filed their answer and counterclaim, and roughly four years later, on May 3, 2012, when IndyMac filed a Request for Judicial Intervention (the “RJI”). (Pl. 56.1 ¶¶ 59-60; Steiner Decl., Ex. V, O). Following the RJI, the 2008 Foreclosure Action was referred to the Westchester Court's “Foreclosure Settlement Part, ” and a May 7, 2012 “Foreclosure Conference Notice” was issued to Vito, notifying him that an initial settlement conference was scheduled for June 26, 2012. (Pl. 56.1 ¶ 61; Steiner Decl., Ex. W, X).

         3. The Parties' Unsuccessful Settlement Efforts and Dismissal of the 2008 Foreclosure Action for Failure to Prosecute

         In an effort to resolve the 2008 Foreclosure Action, the parties engaged in seven settlement conferences between June 26, 2012, and August 26, 2013. (Haber Decl., Ex. C; Steiner Decl., Ex. W). As part of this process, the court referee set forth a schedule for the submission and consideration of a loan-modification application. (Pl. 56.1 ¶ 70; Steiner Decl., Ex. AQ). Between October 2012 and June 2013, Vito submitted five applications to IndyMac under the Home Affordable Modification Program (“HAMP”), a federal program designed to assist financially struggling homeowners with their monthly loan payments. (Pl. 56.1 ¶¶ 68-79; Steiner Decl., Ex. Z (Oct. 2012); id., Ex. AB (Feb. 2013); id., Ex. AP (Apr. 2013); id., Ex. AE (May 2013); id., Ex. AG (June 2013)). Along with his February 2013 and April 2013 applications, Vito submitted identical hardship letters outlining the reasons for his request (the “Hardship Letters”). (Pl. 56.1 ¶ 80; Steiner Decl., Ex. AK). The contents of these HAMP applications, and IndyMac's responses, are detailed infra. Ultimately, however, IndyMac found none of Vito's HAMP applications to be complete and, therefore, never considered him for a loan modification. (Def. 56.1 Opp. ¶¶ 69-79).

         Accordingly, on August 26, 2013, the Westchester Court issued a Notice to Resume Prosecution. (Pl. 56.1 ¶ 81). That notice told IndyMac that its prosecution of the 2008 Foreclosure Action “must be resumed”; that its note of issue “must be served” within 90 days of the receipt of the notice; and that its motion for summary judgment “must be made” within 120 days after the filing of the note of issue. (Steiner Decl., Ex. AL). The notice also cautioned that failure to comply with any of the aforementioned directives would require IndyMac to show a justifiable excuse for its failure at a January 29, 2014 conference. (Id.). The notice concluded with the following warning: “[IndyMac's] failure to appear and show justifiable excuse on said date shall result in the dismissal of the complaint, upon the court's own initiative, for want of prosecution of the above-referenced action pursuant to CPLR [§] 3216(a) and (e).” (Id.).

         IndyMac never filed a note of issue. (Pl. 56.1 ¶ 84). Nor did it take any other steps to prosecute the 2008 Foreclosure Action. (Id.). Accordingly, on January 31, 2014, the Westchester Court dismissed the 2008 Foreclosure Action for failure to prosecute. (Id.; Def. 56.1 ¶ 16; Steiner Decl., Ex. AM).[5]

         4. The Property's Carrying Costs

         After the Plaintiffs' December 2007 default, the Loan's servicers began making payments toward the Property's taxes, assessments, water rates, escrow, insurance premiums, and related charges (the “Carrying Costs”). (Def. 56.1 ¶ 17; Ward Aff., ¶ 19). When SLS began servicing the Loan in June 2014, it reimbursed the prior servicer for the entire balance of the escrow advances, $106, 116.59. (See Ward Aff., ¶ 20). From June 2014 through the present, SLS has continued to make advances for the Property's Carrying Costs. (See id. at ¶ 20, Ex. O). Moreover, the entirety of the escrow advances made by the prior servicers and SLS has been reimbursed by DB, totaling about $149, 042.93 as of the date of Defendants' Local Rule 56.1 Statement. (See Id. at ¶ 22; Haber Decl., ¶ 4, Ex. B).

         B. Procedural Background

         Plaintiffs filed this action in New York State Supreme Court, Westchester County, on February 23, 2015. (Dkt. #1). The matter was removed to this Court on April 6, 2015. (Id.). After about five months of discovery, the parties filed cross-motions for summary judgment. Plaintiffs filed their motion and supporting materials on March 21, 2016. (Dkt. #36-41). Defendants filed their motion, a combined brief supporting their motion and opposing Plaintiffs', and supporting materials on April 18-19, 2016. (Dkt. #42-48). Plaintiffs filed a combined brief opposing Defendants' motion and replying in support of their own motion on May 5, 2016. (Dkt. #51). Defendants filed a combined brief replying in support of their own motion and sur-replying in opposition to Plaintiffs' on May 23, 2016 (Dkt. #53), concluding the briefing on the instant motions.

         DISCUSSION

         A. Applicable Law

         1. Motions for Summary Judgment Under Rule 56

         Rule 56(a) instructs a court to “grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).[6] “When ruling on a summary judgment motion, the district court must construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant.” Pace v. Air & Liquid Sys. Corp., 171 F.Supp.3d 254, 262 (S.D.N.Y. 2016) (internal quotation marks omitted) (quoting Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003)). And where, as here, “‘parties file cross-motions for summary judgment, ... each party's motion must be examined on its own merits, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration.'” Fireman's Fund Ins. Co. v. Great Am. Ins. Co. of N.Y., 822 F.3d 620, 631 n.12 (2d Cir. 2016) (alterations omitted) (quoting Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001)).

         “A motion for summary judgment may properly be granted … only where there is no genuine issue of material fact to be tried, and the facts as to which there is no such issue warrant the entry of judgment for the moving party as a matter of law.” Rogoz v. City of Hartford, 796 F.3d 236, 245 (2d Cir. 2015) (quoting Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010)). In determining whether summary judgment is merited, “[t]he role of a court … is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party.” NEM Re Receivables, LLC v. Fortress Re, Inc., 173 F.Supp.3d 1, 5 (S.D.N.Y.) (internal quotation mark and citation omitted), reconsideration denied, 187 F.Supp.3d 390 (S.D.N.Y. 2016).

         A party moving for summary judgment “bears the initial burden of demonstrating ‘the absence of a genuine issue of material fact.'” ICC Chem. Corp. v. Nordic Tankers Trading A/S, 186 F.Supp.3d 296, 301 (S.D.N.Y. 2016) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). “[A] fact is material if it ‘might affect the outcome of the suit under the governing law.'” Royal Crown Day Care LLC v. Dep't of Health & Mental Hygiene of City of N.Y., 746 F.3d 538, 544 (2d Cir. 2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). And “[a] dispute is genuine ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Fireman's Fund Ins. Co., 822 F.3d at 631 n.12 (quoting Anderson, 477 U.S. at 248).

         If the movant satisfies its initial burden, then “the adverse party must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 250 (internal quotation marks and citation omitted). To make this showing, a summary-judgment “opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, that opponent must adduce “evidence on which the jury could reasonably find for” him. Anderson, 477 U.S. at 252.

         2.Article 15 of the Real Property Actions and Proceedings Law

         In New York, the equitable action to quiet title has been largely replaced by proceedings under Article 15 of the Real Property Actions and Proceedings Law (the “RPAPL”). See Barberan v. Nationpoint, 706 F.Supp.2d 408, 416-17 (S.D.N.Y. 2010) (citing 2-24 Warren's Weed New York Real Property § 24.01); see also W. 14th St. Commercial Corp. v. 5 W. 14th Owners Corp., 815 F.2d 188, 196 (2d Cir. 1987) (“New York has codified the common law action to quiet title and statutorily redefined the necessary elements for a well-pleaded remaining cloud on title complaint.”). Article 15 does not, however, “limit any other remedy in law or equity, ” N.Y. R.P.A.P.L. § 1551; thus, a plaintiff “may choose to seek an equitable common law action to quiet title despite the existence of the RPAPL statute, or [he] may bring both claims.” Barberan, 706 F.Supp.2d at 417. But “[w]hether a quiet title action is commenced in equity or under RPAPL Article 15, the result is almost the same - although RPAPL Article 15 is a statutory action, ‘it has been described as a hybrid one in which the relief awarded is in large measure equitable in nature.'” Id. (quoting Dowd v. Ahr, 563 N.Y.S.2d 917, 919 (3d Dep't 1990), rev'd on other grounds, 78 N.Y.2d 469 (1991)).

         As relevant here, RPAPL Article 15 provides:

Where the period allowed by the applicable statute of limitation for the commencement of an action to foreclose a mortgage, or to enforce a vendor's lien, has expired, any person having an estate or interest in the real property subject to such encumbrance may maintain an action against any other person or persons, known or unknown … to secure the cancellation and discharge of record of such encumbrance, and to adjudge the estate or interest of the plaintiff in such real property to be free therefrom. … In any action brought under this section it shall be immaterial whether the debt upon which the mortgage or lien was based has, or has not, been paid; and also whether the mortgage in question was, or was not, given to secure a part of the purchase price.

N.Y. R.P.A.P.L. § 1501(4). A successful Article 15 claim must set forth facts showing: (i) the nature of the plaintiff's interest in the real property and the source of this interest; (ii) that the defendant claims an interest in the property adverse to that of the plaintiff, and the particular nature of the interest; (iii) whether any defendant is known or unknown, or incompetent; and (iv) whether all interested parties are named. See Id. § 1515; Guccione v. Estate of Guccione, 923 N.Y.S.2d 591, 593 (2d Dep't 2011); see also Knox v. Countrywide Bank, 4 F.Supp.3d 499, 513 (E.D.N.Y. 2014) (recognizing the “absence of a requirement that a plaintiff asserting a statutory quiet title claim plead ‘invalidity'” of the defendant's mortgage interest).

         A judgment issued pursuant to RPAPL Article 15 must “declare the validity of any claim ... established by any party, ” and may direct that an instrument purporting to create an interest deemed invalid be cancelled or reformed. Barberan, 706 F.Supp.2d at 417 (citing § 1521(1)); see also TEG N.Y. LLC v. Ardenwood Estates, Inc., No. 03 Civ. 1721 (DGT), 2004 WL 626802, at *4 (E.D.N.Y. Mar. 30, 2004) (noting that in an RPAPL Article 15 action to compel the determination of a claim to real property, a court may determine the ownership interests in the property or reform a deed (citing § 1521(1))). The judgment must “also declare that any party whose claim to an estate or interest in the property has been judged invalid, and every person claiming under him ... be forever barred from asserting such claim.” Barberan, 706 F.Supp.2d at 417 (internal quotation marks omitted) (quoting § 1521(1)); see also O'Brien v. Town of Huntington, 884 N.Y.S.2d 446, 451 (2d Dep't 2009).

         3. Mortgage-Foreclosure Actions

         Under New York law, “three elements must be established in order to sustain a foreclosure claim: [i] the proof of the existence of an obligation secured by a mortgage; [ii] a default on that obligation by the debtor; and [iii] notice to the debtor of that default.” United States v. Paugh, 332 F.Supp.2d 679, 680 (S.D.N.Y. 2004); see also R.B. Ventures, Ltd. v. Shane, 112 F.3d 54, 59 n.2 (2d Cir. 1997); United States v. Freidus, 769 F.Supp. 1266, 1277 (S.D.N.Y. 1991). “[C]ourts in this Circuit have found that summary judgment in a mortgage foreclosure action is appropriate where the Note and the Mortgage are produced to the Court along with proof that the [m]ortgagor has failed to make payments due under the Note.” Gustavia Home, LLC v. Rutty, No. 16 Civ. 2823 (BMC), 2017 WL 354206, at *2 (E.D.N.Y. Jan. 24, 2017) (internal quotation marks and citation omitted). “Once the [mortgagee] has made an affirmative showing of the [mortgagor's] default, the [mortgagor] must make ‘an affirmative showing' that a defense to the action exists.” Id.; see also Paugh, 332 F.Supp.2d at 680 (same).

         B. Plaintiffs' Summary-Judgment Motion Is Granted in Its Entirety and Defendants' Summary-Judgment Motion Is Denied in Its Entirety

         Plaintiffs move for summary judgment in favor of their RPAPL Article 15 action seeking the cancellation and discharge of record of the Mortgage, a declaration adjudging the Property to be free from an encumbrance relating to the Mortgage, and a declaration discharging Plaintiffs' obligations under the Note (see FAC ¶¶ 1, 22-29, 35-39; Pl. Br. 1, 28); and against Defendants' counterclaims and affirmative defenses (Pl. Br. 19-27). Defendants move for summary judgment in favor of their foreclosure and unjust-enrichment counterclaims and against Plaintiffs' claims and affirmative defenses. (See Ans. ¶¶ 18-26; Def. Br. 17-39).[7]

         These motions turn principally on a single inquiry: whether the statute of limitations to foreclose the Mortgage and enforce the Note has expired. See N.Y. R.P.A.P.L. § 1501(4). If it has expired, then the ancillary question is whether Defendants have established a claim of unjust enrichment. Plaintiffs have the better of the arguments on both fronts and, accordingly, their motion is granted in its entirety and Defendants' denied in its entirety.

         1. Plaintiffs' Motion Is Granted and Defendants' Motion Is Denied on the Mortgage Loan-Related Claims and Counterclaims

         a. The Statute of Limitations on Defendants' Foreclosure Action Accrued on March 8, 2008

         The statute of limitations inquiry begins with a deceptively simple question: When did the statute of limitations accrue? The short answer is: upon expiration of the period to cure the defaulted Loan.

         i. Applicable Law

         It is undisputed that the New York statute of limitations governs the inquiry. (Pl. Br. 11-15; Def. Br. 8).[8] The New York Court of Appeals has observed that the state's “statutes of limitation serve the same objectives of finality, certainty and predictability that New York's contract law endorses. Statutes of limitation not only save litigants from defending stale claims, but also express a societal interest or public policy of giving repose to human affairs.” ACE Sec. Corp. v. DB Structured Prod., Inc., 25 N.Y.3d 581, 593 (2015) (internal quotation marks and alterations omitted) (quoting John J. Kassner & Co. v. City of N.Y., 46 N.Y.2d 544, 550 (1979)).

         The statute of limitations for a mortgage-foreclosure action is six years under New York law. See N.Y. C.P.L.R. § 213 (“[A]n 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 mortgage so secured, or upon a mortgage of real property, or any interest therein” shall “be commenced within six years.”). Typically, the statute “begins to run from the due date for each unpaid installment.” Plaia v. Safonte, 847 N.Y.S.2d 101, 102 (2d Dep't 2007). “[E]ven if a mortgage is payable in installments, ” however, “once a mortgage debt is accelerated, the entire amount is due and the [s]tatute of [l]imitations begins to run on the entire debt.” EMC Mortg. Corp. v. Patella, 720 N.Y.S.2d 161, 162 (2d Dep't 2001) (internal citations omitted); id. (“[O]nce a mortgage debt is accelerated, ‘the borrowers' right and obligation to make monthly installments cease[s] and all sums [become] immediately due and payable', and the six-year [s]tatute of [l]imitations begins to run on the entire mortgage debt.” (quoting Federal Natl. Mortg. Ass'n v. Mebane, 618 N.Y.S.2d 88, 90 (2d Dep't 1994))).

         The Loan Instruments here offer the lender the option to accelerate the Loan if the borrower defaults. The Mortgage provides that in the event of a default the “Lender may require that [the Borrower] pay immediately the entire amount then remaining unpaid under the Note … [and the] Lender may do [so] without making any further demand for payment.” (Steiner Decl., Ex. D (Mortgage § 22), at 16). Likewise, the Note indicates that “the Note Holder may require [the borrower] to pay immediately the full amount of principal that has not been paid.” (Id., Ex. E (Note § 7(C)), at 4; see also Def. Br. 11-12 (“[U]nder the terms of the … Loan, acceleration of the debt does not occur automatically upon default, but rather remains at the option of the holder.”)).

         Where, as here, the Mortgage and Note make loan acceleration an option, “some affirmative action must be taken evidencing the holder's election to take advantage of the accelerating provision, and until such action has been taken the provision has no operation.” Wells Fargo Bank, N.A. v. Burke, 943 N.Y.S.2d 540, 542 (2d Dep't 2012). This affirmative act of acceleration may be in the form of a demand or through the commencement of a foreclosure action. See Lavin v. Elmakiss, 754 N.Y.S.2d 741, 743 (3d Dep't 2003) (“[O]nce the debt has been accelerated by a demand or commencement of an action, the entire sum becomes due and the statute of limitations begins to run on the entire mortgage.”); see also United States v. Alessi, 599 F.2d 513, 515 n.4 (2d Cir. 1979) (“Such acceleration must consist of either notice of election to the [m]ortgagor or of some unequivocal overt act (such as initiating a foreclosure suit) manifesting an election in such a way as to entitle the mortgagor, if he desires, to discharge the principal of the mortgage.”).

         Plaintiffs contend that either of two acts accelerated the Loan: the Notice of Default or, alternatively, the 2008 Foreclosure Action. Defendants maintain that neither effected an acceleration of the Loan and that, indeed, the Loan was not accelerated until “the filing of the counterclaim in this matter.” (Def. Br. 17).

         ii. IndyMac's Notice of Default Accelerated the Loan

          “As with other contractual options, ” an acceleration-option holder “may be required to exercise [the] option … in accordance with the terms of the note and mortgage.” Burke, 943 N.Y.S.2d at 542; id. (“[T]he borrower must be provided with notice of the holder's decision to exercise the option to accelerate the maturity of a loan[.]”). The Loan Instruments here establish such terms. The Mortgage provides that the lender can accelerate the Loan “only if” (i) the Loan is in default, (ii) a conforming default notice is issued that provides at least a 30-day period to cure the default, and (iii) the borrower does not correct the default “by the date stated in th[e] notice.” (Steiner Decl., Ex. D (Mortgage § 22), at 16). Similarly, the Note provides for “a written notice telling [the borrower] that if [he or she does] not pay the overdue amount by a certain date” that is “at least 30 days after” the notice is sent, the holder may accelerate the Loan. (Steiner Decl., Ex. E (Note § 7(C)), at 4).

         In addition to complying with the loan instruments, a notice or demand to exercise the acceleration option “must be ‘clear and unequivocal.'” McIntosh v. Fed. Nat'l Mortg. Ass'n, No. 15 Civ. 8073 (VB), 2016 WL 4083434, at *5 (S.D.N.Y. July 25, 2016) (quoting Burke, 943 N.Y.S.2d at ...


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