Recently, several New York Courts have rendered decisions addressing whether Statute of Limitations concerns affect whether a party can maintain an action, or whether a dismissal was merited.
- In 352 Legion Funding Assoc. v. 348 Riverdale, 2018 WL 3748331 (2d Dep’t, August 8, 2018), the Second Department issued a decision holding that a court cannot sua sponte raise the issue of statute of limitations. In this matter, Plaintiff commenced a foreclosure action more than six years after the original maturity date of a loan, but not the maturity date as extended by letter to the borrower. The trial court sua sponte dismissed Plaintiff’s foreclosure action, holding that it was outside the six year statute of limitations. The Appellate Division reversed, reiterating that: “[t]he statute of limitations is an affirmative defense which is waived by a party unless it is raised either in a responsive pleading, or by motion prior to the submission of a responsive pleading (see CPLR 3211[e]; Deutsche Bank Trust Co. Ams. v. Cox, 110 AD3d 760, 762; Aurora Loan Servs. LLC v. Dimura, 104 AD3d 796, 797; Horst v. Brown, 72 AD3d 434, 436). “A court may not take ‘judicial notice,’ sua sponte, of the applicability of a statute of limitations if that defense has not been raised.” This decision is consistent with New York Court rules, which explicitly list statute of limitations as a waivable defense.
- In U.S. Bank Nat’l Assoc. v. Lieto, 2018 WL 3647250 (Sup. Ct, Westchester Cty, August 6, 2018), a Westchester Court found that a three month Repayment Agreement was sufficient to restart the statute of limitations. In this action, Defendant moved for summary judgment, arguing that this 2016 foreclosure was time barred by a prior, 2009 foreclosure. Defendant entered and made payments on a Repayment Agreement in 2012. The repayment agreement was signed by the Defendant and provided “[t]here presently remains an outstanding indebtedness to the ‘Lender’ pursuant to the [note and mortgage that were the subject of the 2009 Foreclosure Action].” It also provided that it supplemented and amended the mortgage. However, as noted by the Defendant, the Repayment Agreement also outlined that “it is expressly understood and agreed that the default is not cured or waived by acceptance of any monies hereunder.” The Court noted that “the statute of limitations may begin anew where there is a written acknowledgement of the debt, containing nothing inconsistent with an intention on the part of the debtor to pay.” The Court found the action was timely and held that “[t]he trial modification plan contains an acknowledgement of the debt and contains nothing inconsistent with an intention on the part of the debtor to pay it.”
Ben is a commercial litigation partner at PIB Law where he focuses his practice on the representation of financial institutions in connection with financial services-related litigation matters. He has particular experience ...