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Deutsche Bank National Trust Company v. Michael Hochmeyer, F-7791-16 (N.J Super. Ch. Div. Jan. 18, 2017) decided on January 18, 2017, holds that N.J.S.A. 2A:50-56.1(a) permits a mortgagee to file an action within six years of the maturity date stated on the mortgage or note, and that acceleration of the loan will not alter the maturity date.

In this case, Defendant filed a motion to dismiss the underlying foreclosure action, arguing that the statute of limitations barred the action under subsection (a) of N.J.S.A. 2A:50-56.1. The Court began its extensive analysis by outlining the three triggering events which commence the running of the statute of limitations pursuant to N.J.S.A. 2A:50-56.1: (a) six years from the maturity date or the date of the last payment as stated on the note or mortgage; (b) thirty-six years from the date the mortgage was recorded or if not recorded, then thirty-six years from the date of execution, so long as the mortgage itself does not provide for a period of repayment in excess of thirty years; or (c) twenty years from the date on which the debtor defaulted, where said default has not been cured.

Here, the dispute was the parties’ interpretation of subsection (a). The note and mortgage specified June 1, 2036 as the maturity date. Under Plaintiff’s interpretation, subsection (a) would permit an action filed by June 1, 2042. The Defendant argued that the filing of a foreclosure complaint on August 23, 2007 accelerated the loan and altered the maturity date of the entire debt to August 23, 2007. Therefore, under Defendant’s interpretation, subsection (a) would permit an action filed by August 23, 2013, but the statute of limitations would bar all actions commenced after that date.

The Court found that the core issue was whether N.J.S.A. 2A:50-56.1(a) contemplates acceleration of the loan when determining the date the statute of limitations starts to run. Pursuant to N.J.S.A. 1:1-1, the Court interpreted subsection (a) by reading and construing the words and phrases of the statute in their context. Furthermore, the Court indicated that where the language of a statute is clear and unambiguous, the interpretive process is over and the Court need not look beyond the statutory terms. As such, here, the Court found that the plain language of subsection (a) of the statute only references “the date fixed for the making of the last payment or the maturity date set forth in the mortgage or the note” and that the statute makes no reference to acceleration or to the possibility that the maturity date can be shortened by a demand for full payment.

Based on the foregoing, the Court held that the six-year period specified in N.J.S.A. 2A:50-56.1(a) runs from the date set forth in the note and mortgage and Defendant’s motion to dismiss was denied, defeating the Defendant’s argument that acceleration altered the maturity date set forth on the mortgage or the note.

Written By Priya Patel