The New York Court of Appeals, the state’s highest court, recently held that (1) a notice of default sent before a foreclosure did not accelerate the mortgage debt for statute of limitation purposes; and (2) in most circumstances, a lender decelerates mortgage debt when it voluntarily dismisses a foreclosure complaint.
Posts tagged as “Statutes of Limitation”
The Court of Appeal of the State of California, Fifth District, recently held a trial court incorrectly applied the statute of limitations on an alleged quiet title claim, where the statute of limitations to foreclose a first deed of trust had already run, and the lien had been extinguished, prior to the filing of the alleged quiet title claim.
Joining similar rulings by the Eighth and Tenth Circuits, the U.S. Court of Appeals for the Fourth Circuit recently held that each violation of the FDCPA gives rise to a separate claim governed by its own statute of limitations period.
The Indiana Supreme Court recently held that there are important legal differences between closed-end installment contracts (such as ordinary mortgage loans) and open-end accounts (such as HELOCs) when considering statute of limitations, and there is no need to impose a rule of reasonableness when a lender sues for payment on a closed-end installment contract.
A number of states have tolled the statutes of limitations on legal actions in response to COVID-19. The Iowa Supreme Court announced a toll on statutes of limitations in a March 17 order regarding court procedures. According to a March 23 operations summary from the Iowa Judicial Branch: “The March 17th order is intended to toll the statute of limitations or similar deadline for commencing an action in district court by 48 days. Tolling means you add that amount of time to the statute of limitations. So, for example, if the statute would otherwise run on April 8, 2020, it…
The Supreme Court of Texas held that the contractual waiver of the statute of limitations on deficiency claims contained in a guaranty agreement was sufficiently “specific and for a reasonable time” as to be enforceable and not void as against public policy. Accordingly, the Texas Supreme Court affirmed the ruling of the appellate court, although it disagreed with portions of the appellate court’s reasoning. A copy of the opinion in Godoy v. Wells Fargo Bank, NA is available at: Link to Opinion. The lender extended a loan to the borrower, which loan was secured by property owned by the borrower. A guarantor…
• A bankruptcy court in Ohio recently applied the incorrect statute of limitations in a mortgage foreclosure action. • Ohio’s statute of limitations jurisprudence has evolved from an accepted legal proposition derived from one opinion to supposedly well-settled law stating the complete opposite in another opinion. • Federal courts interpreting Ohio law must apply the correct statute of limitations to mortgage foreclosure actions. In the bankruptcy case of In re Fisher, 584 B.R. 185, 199–200 (N.D. Ohio Bankr. 2018), the United States Bankruptcy Court for the Northern District of Ohio disallowed a lender’s proof of claim on a mortgage based on…
In a case involving a claim on a fire insurance policy relating to damaged real estate, the U.S. Court of Appeals for the Sixth Circuit recently held that the insurance policy’s two-year limitations provision did not apply to a claim brought under section 500.2006(4) of Michigan Complied Laws because it was not a claim “under the policy,” and instead Michigan’s “catch-all” six-year period of limitations applied. In addition, and contrary to two previous unpublished rulings, the Sixth Circuit determined that a private cause of action exists under section 500.2006(4) Accordingly, the Sixth Circuit determined that the insured’s claim was timely,…
The U.S. District Court for the Middle District of Florida recently confirmed that Florida’s statute of limitations did not bar a mortgagee from filing a new foreclosure action based on non-payment or other kinds of defaults within the past five years, even where the prior foreclosure action was dismissed without prejudice and acceleration of the mortgage occurred more than five years prior to the second foreclosure action. In so ruling, the Court dismissed an amended complaint for declaratory judgment seeking to invalidate a mortgage. A copy of the opinion is available at: Link to Opinion. A property owner sought a…
The District Court of Appeal of the State of Florida for the First District recently held that the statute of limitations does not bar a second mortgage foreclosure action based on a subsequent default, regardless of whether the first case was dismissed with or without prejudice. A copy of the opinion is available at: Link to Opinion. The borrowers defaulted on their mortgage in February of 2007. In April of 2007, the plaintiff mortgagee’s predecessor in interest accelerated the note based on the February, 2007 breach and sued to foreclose the mortgage. The case was dismissed without prejudice in October…
The New Jersey Appellate Division held in a surprising decision that a retail-branded credit card was time barred by its four year statute of limitations for the sale of goods. Trial Court Applied Six Year Statute A debt buyer filed a complaint in July 2012 to recover a defaulted store-branded credit card. The debtor counterclaimed under the Fair Debt Collection Practices Act arguing that the purchases she made with her card represented the sale of goods and since she defaulted in August of 2006, the debt buyer’s claim was time barred by New Jersey’s Uniform Commercial Code Article 2-725. The trial court…
Earlier this week the Seventh Circuit Court of Appeals issued its opinion in the consolidated appeals of McMahon v. LVNV Funding, LLC and Delgado v. Capital Management Services, L.P., concerning the collection of time barred debt without the threat of litigation. The result is not good for the credit and collections industry, principally because it further confuses application of the Fair Debt Collections Practices Act across the nation. Background In both cases the debt collectors offered to settle the debts, without mention of a lawsuit or any legal action. Both suits claimed that the letters were false, deceptive and misleading, in violation…