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Adam Leitman Bailey, P.C. Defeats Motion for Summary Judgment in Quiet Title Action Seeking to Discharge a Mortgage for an Expired Statute of Limitations

In Aquino v. Ventures Trust, the plaintiff borrowers commenced a quiet title action seeking to cancel and discharge a mortgage for an expired statute of limitations. The plaintiffs’ entire action was centered on the allegation that their note and mortgage was accelerated by a prior foreclosure proceeding, triggering the applicable statute of limitations, which then allegedly expired on October 19, 2015, thereby entitling the plaintiffs to an order canceling and discharging the mortgage. Unfortunately for the current note owner, Ventures Trust, it did seem that its six years ran out.

Adam Leitman Bailey, P.C. was retained to defend the action to the extent possible. An initial analysis confirmed that the court would likely agree that the statute of limitations ran due to the commencement of the prior action.

In anticipation of having to oppose a summary judgment motion, Adam Leitman Bailey, P.C. preemptively contacted the prior owner of the note that commenced the prior foreclosure proceeding and relentlessly requested its entire servicing file for the loan. Persistence prevailed, the file was turned over, and Adam Leitman Bailey, P.C. revealed that the note was not physically delivered to the prior owner until after it commenced the foreclosure proceeding.

Adam Leitman Bailey, P.C. procured an affidavit from the prior owner confirming the date it received the note, so that a triable issue of fact could be set out to survive summary judgment. In opposition to the eventual summary judgment motion, Adam Leitman Bailey, P.C. argued that the prior action did not constitute a valid exercise of the option to accelerate the debt, as a matter of law, since the prior action was commenced before the note and mortgage were actually assigned to the plaintiff in that action, which action was, therefore, ineffective to constitute a valid exercise of any purported option to accelerate the debt, as that plaintiff did not have the authority to accelerate the debt or to sue to foreclose at that time.

As it turned out, without the affidavit from the prior owner, the court would have granted summary judgment and canceled and discharged the mortgage.

Jackie Halpern Weinstein, Esq., Courtney J. Lerias, Esq., and Danny Ramrattan, Esq. of the Foreclosure Group at Adam Leitman Bailey, P.C. secured this commendable result for the note owner.

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