Section 213 - Actions to be commenced within six years: where not otherwise provided for; on contract; on sealed instrument; on bond or note, and mortgage upon real property; by state based on misappropriation of public property; based on mistake; by corporation against director, officer or stockholder; based on fraud

6 Analyses of this statute by attorneys

  1. New York Enacts Law Limiting Lenders in Foreclosure Actions

    Harris Beach PLLCKevin TompsettJanuary 13, 2023

    The Act amends the Real Property Actions and Proceedings Law (RPAPL § 1301), the General Obligations Law (NY Gen Oblig § 17-105), and the Civil Practice Law and Rules (NY CPLR §§ 203, 205, 213, and 3217) in relation to the rights of parties involved in foreclosure actions.Specifically, CPLR Section 3217 is amended to provide that a voluntary discontinuance of a mortgage foreclosure action does not reset the statute of limitations. Further, CPLR Section 203 is amended by adding a new subdivision “h,” which provides no party may unilaterally stop the running of the statute of limitations. These two amendments overrule the Court of Appeals decision in Freedom Mortgage Corp. v. Engel, 37 N.Y.3d 1 (2021), which held that, where the statute of limitations began to run upon the commencement of a foreclosure action, a voluntary discontinuance of that action constitutes a revocation of the election to accelerate, stopping the running of the statute of limitations.Subdivisions 4 and 5 of General Obligations Law Section 17-105 are amended to provide that an acknowledgment, waiver, promise or agreement, express or implied in fact or in law, shall not postpone, cancel, reset, toll, revi

  2. NY Court Of Appeals Issues A Landmark Decision On The Statute Of Limitations In Mortgage Foreclosure Actions

    McGlinchey StaffordMikelle BlissFebruary 19, 2021

    letter did not effectuate an unequivocal acceleration of the debt because it did not seek an immediate payment of the entire balance outstanding on the loan, but rather “referred to acceleration only as a future event, indicating the debt was not accelerated at the time the letter was written.” The Court further found that despite the language of the letter stating that the debt “will” be accelerated, the letter indicated that failure to cure the default “may” result in the commencement of a foreclosure action, which not only did not constitute an automatic acceleration, but that such an automatic acceleration upon the expiration of the cure period could be considered inconsistent with the terms of the loan contract.These decisions each present a significant change in the case law and have a profound effect upon the application of the statute of limitations to foreclose a mortgage in New York. Adopting this clear rule serves the objectives of “finality, certainty and predictability.” New York Civil Practice Law and Rules § 213(4) sets the statute of limitations for mortgage foreclosure actions as six years.[4] What is certain now is that where an acceleration of the loan occurred by virtue of the filing of a complaint in a foreclosure action, a voluntary discontinuance evinces a revocation of that acceleration absent a noteholder’s contemporaneous statement to the contrary. Navigating the wide range of possible applications of these decisions requires careful consideration by competent counsel to guide litigants to a successful resolution of their claims.[1] NMNT Realty Corp. v Knoxville 2012 Trust, 151 A.D.3d 1068, 1069 (2d Dept. 2017); Lavin v Elmakiss, 302 A.D.2d 638, 639; Federal Natl. Mtge. Assn. v Rosenberg, 180 A.D.3d 401, 402 (1st Dept. 2020).[2] Freedom Mortgage Corporation v. Engel, 163 A.D.3d 631, 633 (2d Dept. 2018); Ditech Financial, LLC v. Naidu, 175 A.D.3d 1387, 1389 (2d Dept. 2018); Wells Fargo Bank, N.A. v Liburd, 176 AD3d 464, 464-465 (1st Dept. 2019).[3] Albertina Realty Co. v Rosbro Realty

  3. The Foreclosure Abuse Prevention Act is Now Law

    Perkins CoieOfunne EdoziemJanuary 18, 2023

    tute once. In addition to this limitation, a lender may use the saving statute only if:The lender did not voluntarily discontinue the action.The action was not dismissed (involuntarily) because of neglect.The action was not dismissed for violation of court or part rules, failure to comply with scheduling orders, to appear at scheduled hearings, or to timely submit any order or judgment.The action was not dismissed upon a final judgment upon the merits.In the event a foreclosure action is dismissed for any of the foregoing reasons, N.Y. C.P.L.R. 205-a cannot be used to revive the case and extend the limitations period. Even if the foreclosure action qualifies as one that may be revived under N.Y. C.P.L.R. 205-a, successor lenders (typically entities that are assigned the note after a foreclosure action is commenced) will still not be able to use the saving statute unless the assignee pleads and proves it is acting on behalf of the plaintiff that filed the first action.Under the revised N.Y. C.P.L.R. 213, if, in a pending foreclosure action, the defendant raises a defense that the debt was previously accelerated, including by the filing of a prior action, then the lender cannot claim it did not accelerate the debt unless the court in the prior action expressly determined that the debt was not validly accelerated.FAPA applies not only to future-filed foreclosure actions but also to those currently pending if a final judgment of foreclosure and sale has not yet been enforced. Given its retroactivity, lenders in active foreclosure actions should anticipate challenges by borrowers who may seek to dismiss on grounds that the lender failed to comply with the newly enacted statutes. Pursuant to N.Y. C.P.L.R. 205-a, neglect includes but is not limited to a dismissal because (1) the plaintiff did not comply with a court order to disclose information during deposition or inspection or the plaintiff did not willfully disclose information that the court determined it should have disclosed (see N.

  4. How to State “Account Stated”

    Wilson Sonsini Goodrich & RosatiEli RichlinSeptember 14, 2021

    . Purolite C Corp., No. 08 Civ. 7600 (PGG), 2011 U.S. Dist. LEXIS 24458, at *6 (S.D.N.Y. Mar. 10, 2011) (citations omitted).[12] Bowne of N.Y., Inc. v. Int’l 800 Telecom Corp., 178 A.D.2d 138, 139 (1st Dep’t. 1991) (fact issue as to whether an “objection [wa]s made within a reasonable time after receipt of the account”); see also Auburn Custom Millwork, Inc. v. Schmidt & Schmidt, Inc., 50 N.Y.S.3d 635, 640 (4th Dep’t 2017) (“[W]hile the mere silence and failure to object to an account stated cannot be construed as an agreement to the correctness of the account, the factual situation attending the particular transactions may be such that, in the absence of an objection made within a reasonable time, an implied account stated may be found.” (citation omitted)).[13] Cal. Civ. Proc. Code §337(b).[14] Elie Int’l, Inc. v Macy's W. Inc., 965 N.Y.S.2d 52, 53 (1st Dep’t 2013) (“The statute of limitations for a cause of action for an account stated is also six years.” (citation omitted) (citing N.Y. C.P.L.R. §213(2)).

  5. Claw Back of Parent PLUS Loan Proceeds to Pay College Tuition Hits a Roadblock

    Shipman & Goodwin LLPEric GoldsteinJanuary 3, 2018

    date indicates that bankruptcy trustees will not be able to maintain these claims because the loan proceeds are never in the parents’ custody or control, and federal law places strict restrictions on the use of such proceeds. There are still a number of Parent PLUS loan cases presently winding their way through the courts. The disposition of these cases in the coming months should provide additional guidance on whether trustees have a viable claim to recover the proceeds of such loans from colleges and universities. _______________[1] 11 U.S.C. § 548(a)(1)(B). Transfers also may be subject to avoidance if debtor “intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor’s ability to pay as such debts matured . . . .” Id.[2] 11 U.S.C. § 544(b)(1). Most states that have adopted the Uniform Fraudulent Transfer Act have a four year statute of limitations. However, some states have longer statute of limitations for fraudulent transfer claims. E.g., NY CPLR § 213(8) (six year statute of limitation under NY law). Notably though, Connecticut has recently amended its Uniform Fraudulent Transfer Act to expressly bar “constructive” fraudulent transfer claims against higher education institutions for undergraduate tuition payments by a parent or guardian. See Conn. Gen. Stat. § 52-552i(f).[3]See,e.g., Boscarino v. Board of Trustees of Connecticut State University System (In re Knight), Adv. Pro. No. 15-02064, 2017 WL 4410455 at *3-7 (Bankr. D. Conn. Sept. 29, 2017); Roach v. Skidmore Coll. (Matter of Dunston), 566 B.R. 624, 636-37 (Bankr. S.D. Ga. 2017); Gold v. Marquette Univ. (In re Leonard), 454 B.R. 444, 457 (Bankr. E.D. Mich. 2011); Banner v. Lindsay (In re Lindsay), No. 08–9091, 2010 WL 1780065, at *9 (Bankr. S.D.N.Y. May 4, 2010).[4]Eisenberg v. Penn State Univ. (In re Lewis), 574 B.R. 536, 541 (Bankr. E.D. Pa. 2017) (“parent’s payment of a child’s undergraduate college expenses is reasonable and necessary expense for maintenance of the family a

  6. Claw Back of Parent PLUS Loan Proceeds to Pay College Tuition Hits a Roadblock

    Shipman & Goodwin LLPEric GoldsteinDecember 22, 2017

    cates that bankruptcy trustees will not be able to maintain these claims because the loan proceeds are never in the parents’ custody or control, and federal law places strict restrictions on the use of such proceeds. There are still a number of Parent PLUS loan cases presently winding their way through the courts. The disposition of these cases in the coming months should provide additional guidance on whether trustees have a viable claim to recover the proceeds of such loans from colleges and universities. _______________ [1] 11 U.S.C. § 548(a)(1)(B). Transfers also may be subject to avoidance if debtor “intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor’s ability to pay as such debts matured . . . .” Id. [2] 11 U.S.C. § 544(b)(1). Most states that have adopted the Uniform Fraudulent Transfer Act have a four year statute of limitations. However, some states have longer statute of limitations for fraudulent transfer claims. E.g., NY CPLR § 213(8) (six year statute of limitation under NY law). Notably though, Connecticut has recently amended its Uniform Fraudulent Transfer Act to expressly bar “constructive” fraudulent transfer claims against higher education institutions for undergraduate tuition payments by a parent or guardian. See Conn. Gen. Stat. § 52-552i(f). [3] See,e.g., Boscarino v. Board of Trustees of Connecticut State University System (In re Knight), Adv. Pro. No. 15-02064, 2017 WL 4410455 at *3-7 (Bankr. D. Conn. Sept. 29, 2017); Roach v. Skidmore Coll. (Matter of Dunston), 566 B.R. 624, 636-37 (Bankr. S.D. Ga. 2017); Gold v. Marquette Univ. (In re Leonard), 454 B.R. 444, 457 (Bankr. E.D. Mich. 2011); Banner v. Lindsay (In re Lindsay), No. 08–9091, 2010 WL 1780065, at *9 (Bankr. S.D.N.Y. May 4, 2010). [4] Eisenberg v. Penn State Univ. (In re Lewis), 574 B.R. 536, 541 (Bankr. E.D. Pa. 2017) (“parent's payment of a child's undergraduate college expenses is reasonable and necessary expense for maintenance of th