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Revive a Time-Barred Claim in a Mortgage Foreclosure Action Using § 17-105(1) of New York’s General Obligation Law

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  • Posted on: Nov 19 2021

By Jonathan H. Freiberger

In this Blog’s article entitled: “Revive a Time-Barred Claim Using § 17-101 of New York’s General Obligations Law,” we discussed the general purpose of statutes of limitations, noting that:

“The Statute of Limitations was enacted to afford protection to defendants against defending stale claims after a reasonable period of time had elapsed during which a person of ordinary diligence would bring an action. The statutes embody an important policy of giving repose to human affairs.” Flanagan [v. Mount Eden General Hospital], 24 N.Y.2d [427] at 429 [1969] (citation omitted).

It has been stated that “the primary purpose of Statutes of Limitation is to relieve defendants of the necessity of investigating and preparing a defense where the action is commenced against them after the expiration of the statutory period because the law presumes that by that time evidence has been lost, memories have faded and witnesses have disappeared.”  Connell v. Hayden, 83 A.D.2d 30 (2nd Dep’t 1981). 

The Blog went on to specifically discuss how § 17-101 of the GOL can operate to revive “stale” claims where, under certain circumstances, the underlying debt is acknowledged in writing.  Thus, in order for a writing to satisfy the requirements of GOL § 17-101, it “must be signed and recognize an existing debt and must contain nothing inconsistent with an intention on the part of the debtor to pay it.”  Yadegar v. Deutsche Bank Nat. Trust Co., 164 A.D.3d 945 (2nd Dep’t 2018).

This Blog frequently addresses legal issues related to mortgage foreclosures.  Section 17-105(1) of the GOL, permits the waiver of limitation periods in mortgage foreclosure actions, specifically.  Thus, § 17-105(1) provides:

A waiver of the expiration of the time limited for commencement of an action to foreclose a mortgage of real property or a mortgage of a lease of real property, or a waiver of the time that has expired, or a promise not to plead the expiration of the time limited, or not to plead the time that has expired, or a promise to pay the mortgage debt, if made after the accrual of a right of action to foreclose the mortgage and made, either with or without consideration, by the express terms of a writing signed by the party to be charged is effective, subject to any conditions expressed in the writing, to make the time limited for commencement of the action run from the date of the waiver or promise.  If the waiver or promise specifies a shorter period of limitation than that otherwise applicable, the time limited shall be the period specified.

Batavia Townhouses, Ltd. V. Council of Churches Housing Dev. Fund Co., Inc., 189 A.D.3d 20, (4th Dep’t 2020), is an action by mortgagor seeking a declaration that a mortgage was unenforceable pursuant to RPAPL § 1501(4).  [Eds. Note: this Blog has treated RPAPL § 1501(4) [here] and [here].]  Defendants/mortgagees defended the action by seeking to revive the expired statute of limitations.  The Court, which determined that GOL § 17-105(1) was the applicable provision under which to decide the matter after a thorough analysis of the import, applicability and history of the provision, found that the statute of limitations was not revived because “the financial statements submitted by defendant [as writings acknowledging the debt] do not meet the requirements of subdivision (1) of section 17-105 because those documents merely list the mortgage as a liability and do not constitute an express promise to pay the mortgage debt.”  Batavia, 189 A.D.3d at 28 (citations omitted).

Similarly, the Court in U.S. Bank Nat. Ass’n v. Caruana, 188 A.D.3d 511 (1st Dep’t 2020), affirmed the dismissal of a mortgage foreclosure complaint as time-barred.  There, borrower filed for bankruptcy and, in his petition, checked a box in a statement of intention indicating that “the condominium would be retained and kept current”.  The Court found this insufficient to satisfy the requirements of, inter alia, GOL § 17-105(1) because the checking of the box “merely listed the mortgage debt at issue, neither expressly acknowledging the debt nor promising to pay it.”  Caruana, 188 A.D.3d at 511 (citations omitted).

The Second Department, in National Loan Investors, L.P. v. Piscitello, 21 A.D.3d 537, 538 (2nd Dep’t 2005), agreed with supreme court that borrower’s “defense to foreclosure was without merit.” Relying on GOL § 17-105(1), the Court found that “[e]ven if the commencement of this action was barred by the statute of limitations, the [borrower’s] bankruptcy filing, in which he acknowledged the mortgage debt and promised to repay it within six months, sufficed to extend the statute of limitations.”  Piscitello, 21 A.D.3d at 358 (citations omitted).

On November 17, 2021, the Appellate Division, Second Department, decided Federal National Mortgage Ass’n. V. Walter, a mortgage foreclosure action that was deemed time-barred after the unsuccessful attempt by lender’s assignee to invoke the savings provision of GOL § 17-105(1).  By way of brief background, in 2006, the borrower in Walter secured a $400,000.00 loan with a mortgage on real property.  Borrower defaulted in 2009 and lender commenced a foreclosure action later that year.  A judgment of foreclosure and sale was issued in December of 2009, but was vacated a year later due to improper service of process on borrower.  In March of 2014, a year after the mortgage was assigned to plaintiff by lender, borrower transferred the subject property to 1 Eleanor Corp. pursuant to a deed which provided that “1 Eleanor Corp. would assume and pay the mortgage debt on the subject property.”  The deed was executed by borrower only, and was “not executed by [borrower] on behalf of 1 Eleanor Corp.”

In September of 2016, lender’s assignee commenced a new foreclosure action against borrower and 1 Eleanor Corp.  Lender’s assignee moved for summary judgment and borrower and 1 Eleanor Corp. cross-moved for summary judgment dismissing the complaint as time-barred.  The Second Department affirmed the dismissal of complaint and rejected the argument of lender’s assignee that “the statute of limitations was extended pursuant to General Obligations Law § 17-105 by the deed transferring the subject property from [borrower] to 1 Eleanor Corp.  The Court, stated:

According to General Obligations Law § 17-105(1), “a promise to pay the mortgage debt, if made after the accrual of a right of action to foreclose the mortgage and made, either with or without consideration, by the express terms of a writing signed by the party to be charged is effective, subject to any conditions expressed in the writing, to make the time limited for commencement of the action run from the date of the waiver or promise.” But a writing, in order to constitute an acknowledgment of a debt, must recognize an existing debt and contain nothing inconsistent with an intention on the part of the debtor to pay it. Here, although there is a deed between [borrower] and 1 Eleanor Corp. that states an obligation by 1 Eleanor Corp. to pay the mortgage debt, since it was not executed by 1 Eleanor Corp., the deed does not satisfy General Obligations Law § 17-105 and does not serve to extend the statute of limitations. Therefore, the statute of limitations began to run when the 2009 action was commenced, and this action, commenced in September 2016, is time-barred by the six-year statute of limitations for mortgage foreclosure actions.  (Citations, internal quotation marks and internal brackets omitted.)


Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.

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