The Appellate Division Second Department has issued an important decision in New York pertaining to statute of limitations on foreclosure actions in New York. It explicitly rejected MacPherson and its progeny in Bank of New York Mellon, etc., appellant, v. Alice J. Dieudonne, respondent, et al., defendants., No. 2017-08956, 2019 WL 1141973, at *1 (N.Y. App. Div. Mar. 13, 2019).
The plaintiff argued that the statute of limitations did not begin to run until the borrower’s rights under the reinstatement provision in the subject mortgage were extinguished. The Court found that the reinstatement provision in paragraph 19 of the mortgage does not include any language indicating that it serves as a condition precedent to the plaintiff’s right to accelerate the outstanding debt. Accordingly, the statute of limitations started to run when the plaintiff exercised its option to accelerate.
This case takes away one of the argument that was available to extend the statute of limitation.
On the positive side, the case further outlines the parties burden of proof regarding statute of limitations. Defendant must prove that the mortgage was properly accelerated and that all the pre-conditions were met. Thus, arguments are still available with regard to notice of default, defining the loan acceleration, and actively deaccelerating the loan.
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