Adam Leitman Bailey, P.C. Defeats Statute of Limitations Argument in Foreclosure Action and Quiet Title Action

Adam Leitman Bailey, P.C. Defeats Statute of Limitations Argument in Foreclosure Action and Quiet Title Action

Adam Leitman Bailey

Adam Leitman Bailey

January 17, 2023 02:36 PM

Adam Leitman Bailey, P.C. was retained by a Lender in connection with a foreclosure action and a quiet title action. The Lender’s predecessor in interest commenced a prior foreclosure action in 2009 that was ultimately dismissed without prejudice by the First Department Appellate Division on November 21, 2019.

In response to the dismissal of the foreclosure action, the Borrower commenced a quiet title action on May 28, 2020 seeking to discharge the mortgage as time-barred by the statute of limitations. Adam Leitman Bailey, P.C. entered into a stipulation with the Borrower to extend the Lender’s time to respond to the Complaint to September 30, 2020.

Adam Leitman Bailey, P.C. then commenced a new foreclosure action on August 31, 2020, which the Borrower moved to dismiss as time-barred, and Adam Leitman Bailey, P.C. moved to dismiss the quiet title action.

The arguments in both dismissal motions were identical. The Borrower argued that the statute of limitations ran because the Lender accelerated the loan on November 18, 2009 when the first foreclosure action was commenced, and the instant foreclosure action was commenced over 6 years later on August 31, 2020.

In response, Adam Leitman Bailey, P.C. argued that although the statute of limitations did start on November 18, 2009 when the first action was commenced, the action fell under the CPLR 205(a) savings statute, which provides a six-month grace period during which an action, which was originally timely commenced, but was then “terminated” in any manner other than voluntary discontinuance, failure to obtain personal jurisdiction, neglect to prosecute, or final judgment upon the merits, may timely be re-filed and served.

Initially, the Lender’s time to recommence this action would have been May 21, 2020—six months after the November 21, 2019 dismissal. However, due to the Covid-19 Pandemic, the Governor issued Executive Orders which suspended “any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding, as prescribed by the procedural laws of the state”, and Adam Leitman Bailey, P.C. successfully argued that the Executive Orders tolled the statute of limitations from March 20, 2020 to at least July 6, 2020. Based upon the toll, the new deadline for the Lender to recommence the foreclosure action and serve the Borrower became September 6, 2020. Adam Leitman Bailey, P.C. argued that the Lender timely recommenced pursuant to CPLR 205(a) by commencing the action on August 31, 2020, and personally serving Borrower on September 1, 2020.

The Borrower argued that CPLR 205(a) was not available to the Lender, as it was merely a successor in interest to the Plaintiff in the first foreclosure action, and not the same plaintiff. In response, Adam Leitman Bailey, P.C. argued that, pursuant to CPLR 1018, the Lender steps into the shoes of its predecessor in interest, and that, regardless, the Lender was assigned the loan prior to the dismissal of the first foreclosure action.

The Court fully adopted Adam Leitman Bailey, P.C. ’s arguments dismissing the Borrower’s quiet title action and denying the Borrower’s motion to dismiss the foreclosure action, in holding that the Lender’s second commenced foreclosure action was timely under the savings statute.

Jackie Halpern Weinstein, Courtney Lerias, and Danny Ramrattan, of the Foreclosure Litigation Group at Adam Leitman Bailey, P.C. secured this result for its client

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