Real Property Law

In mortgagor's action to cancel and discharge a mortgage, mortgagor appealed from Supreme Court's grant of summary judgment to mortgagee dismissing the complaint and on mortgagee's counterclaim for foreclosure. The Appellate Division reversed and granted summary judgment to mortgagor, holding that mortgagee could not claim status as a mortgagee in possession to avoid expiration of the statute of limitations.

Mortgagor executed a note and mortgage in 2007 and subsequently defaulted. In January 2010, mortgagee brought a foreclosure action and elected to accelerate the mortgage. The foreclosure action was dismissed in 2012. Current mortgagee, a successor in interest, commenced a second foreclosure action in 2013, and that action was dismissed in 2015 for failure to prosecute. In February 2016, mortgagor brought this action to cancel and discharge the mortgage on the ground that the statute of limitations had expired. Mortgagee responded that mortgagor had abandoned the property and that mortgagee had been in possession and control since 2013. Mortgagee asserted that it had been a mortgagee in possession since 2013, and that the statute of limitations was tolled during that period. Supreme Court agreed and granted summary judgment to mortgagee.