District Judge in NY Knocks down Attempt to Avoid Statute of Limitations

Somewhere along the line, people are going to start asking why “the banks” wait so long and they will come up with the answer: that “the banks” make more money by waiting.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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see Costa v. Deutsche Bank 2017 03 29

Ten years have expired since the alleged “default” occurred. Without any other action the maintenance of the property has been paid by somebody through the conduit of an alleged servicer probably using investor funds without investors knowing anything about it. Now suddenly someone, actually ANYONE, wants a judgment of foreclosure. They want a judgment for “unjust enrichment” as if that wasn’t rubbing salt in the wound of their incredibly wrongful foreclosure in the first instance.
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In Florida there was a time that the statute of limitations would have barred the subsequent action for foreclosure or even unjust enrichment. With the Bartram decision and the decision of the Supreme Court of Florida to deny rehearing, it is law that pretender lenders and pretender servicers and pretender trustees can keep coming back to court until they win. BUT in New York, things are very different.
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The question is whether the statute of limitations applies. It does and it has run according to NY Law. I would add the unanswered questions of laches and statute of repose. Note that the case was already dismissed once for lack of prosecution. In this opinion by Federal District Judge Katherine Polk Failla, reason prevails. Homeowners Motion for Summary Judgment is granted and case closed.
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There is another piece that could cut multiple ways without the Judge realizing what door she was opening. Whereas “trial payments” actually form a new contract entitling the homeowner to the benefits of what as promised in a misleading way. We have previously outlined the elements of modification fraud. But in this case the Judge takes an alternate view that the “trial Payments” were a much more limited contract — namely making three payments in exchange for mere consideration of modification. This has been robustly repudiated in other courts and should have been left out of the opinion. The Judge was using it to declare that those payments did not renew the statute of limitations:
  • Just a few months ago in United States Bank National Association v. Martinez, the Kings County Supreme Court addressed whether a borrower’s payments during the HAMP Trial Period renewed the statute of limitations under § 17-101. See 2016 WL 7973961, at *16-17 (Table) (Sup. Ct. Kings Cty. 2016). Relying on Petito and Sichol, among other New York precedents, the court held that “[the borrower’s] execution of the 2009 HAMP Trial was not an acknowledgment of the debt sufficient to toll and renew the Statute of Limitations [under] § 17-101.” Id. at *17. The court reasoned:
    The 2009 HAMP Trial does not qualify as an acknowledgment of an existing debt, pursuant to GOL § 17-101, because the 2009 HAMP Trial does not contain [the borrower’s] express acknowledgment of his indebtedness under the … Mortgage and Note [n]or [the borrower’] express promise to pay any of the outstanding debt. Instead, [the borrower] made a conditional promise to make three payments … during the three-month 2009 HAMP Trial period during which [the lender] promised to review [the borrower’s] documented income to determine whether [he] qualified for a final HAMP modification.
    Id.; see id. at *16 (“[A] HAMP modification trial is not an agreement for the binding obligations of the parties going forward because it is merely a trial arrangement.” (internal quotation marks omitted) (quoting Meyers, 966 N.Y.S.2d at 116)).
Appeal is possible but probably unlikely. The prospect of a negative opinion from an appellate court is far more dangerous than the opinion of one judge, even if they are a Federal Judge.
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There are presumptions, assumptions and other issues with this opinion. It is not the end of this fight but it lays out convincingly why there should be further action on the particular debt that was the subject of the action. The homeowner’s essentially end up with the mostly mythological “free house.”
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The Court finds that the unique facts of this case are governed by the
Third Department’s reasoning and holding in Clark: Defendants took a calculated risk in continuing to pay the Carrying Costs in order to maintain the Property following Plaintiffs’ December 2007 default.
The Third Department — relying on the principle that “the mere fact that the plaintiff’s activities bestowed a benefit on the defendant is insufficient” and that, instead, the plaintiff’s “services [must be] performed for the defendant resulting in [the latter’s] unjust enrichment” — upheld the summary-judgment dismissal of the lenders’ unjust-enrichment claim. Clark, 751 N.Y.S.2d at 623 (emphasis in original) (internal citations omitted). The court recognized that there was “no question” that the lenders’ tax payment “worked to [the borrower’s] benefit by relieving him of that burden.” Id. at 624. Nevertheless, the court found that it was equally clear that plaintiffs operated under no mistake of fact or law but, rather, their sole motivation in making the payment was to protect their own interests.

3 Responses

  1. Greetings, My name is Deborah from Brooklyn, NY. I have been advocating for homeowners in foreclosure now for almost 2 yrs, yet I’ve been studying foreclosure and financial fraud now since 2008. As not to take up too much time in this reply, a lot of the info that I have assembled over the yrs have been through this site. I HUMBLY THANK YOU. As a result, I have a method to “finally shut the banks & the Feds down by truly Cracking the Real Code with ease” & would like to privately share it with you. I have been to a “plethora” of NY attorneys, my local Borough President, who then sent me to the Brooklyn, DA’s office, which referred me directly to Eric Schneiderman’s the NY Attorney General, & I haven’t heard from them since early February of this year. I even went to a town hall meeting with Senator Hakieem Jeffries which turned out to be another dead end, yet my claims were UNDISPUTED!!! In fact, I was told by a close agent to the Congressman, , , flat out, , , “Even if my claims are valid do you think all these people deserve a house for free, , , If I (meaning agent) have to pay, so do they.” It was suggested that I leave the counterfeit notes I had in my possession as proof with him, with no guarantees anything investigation would take place. The securities fraud being perpetrated among us by the Feds since 1933 needs to stop & think I found factual proof that the Feds & the Bank is guilty of crimes against the US. I feel as though since Congress has failed to hold the big banks accountable, then the attorneys which act in their Individual capacities to commence these wrongful foreclosures against innocent homeowners should hold the bag. Maybe it would deter other attorneys from engaging in such reckless outrageous conduct. This site is the 1st online site I have reached out to. I dont have to even question, who’s side you guys are on. Hopefully this simple method I use to can help as many people who have the will to shut’em down & I look forward to speaking with you or a representative soon. Oh, , , I am not a lie-aw-yer either. 🙂

  2. Hi G.,

    I am not Neil, and I am not a lawyer, so this is not legal advice. But having fought my own NY foreclosure case pro se since 2009, I have studied the statute of limitations extensively.

    Statute of limitations won’t help you until/unless you get the current action dismissed in your favor – then it can be an extremely powerful defense, if done right.

    If your case is still active, I’d look at trying to get a dismissal based on any one of the exceptions to CPLR 205(a), which is the “saving statute” that can give the plaintiff an additional six months to refile a dismissed case, even if the SOL has passed. These exceptions include voluntary dismissal (by plaintiff), failure to obtain personal jurisdiction (you weren’t properly served), neglect to prosecute, or final dismissal on the merits.

    If you win dismissal on one of the above exceptions, and they bring a new action within six months, then you can use the SOL defense. (If you get this case dismissed under ANY circumstances and they wait more than six months to refile, this also applies.) You’ll need to mount a strong and solid defense pursuant to CPLR 213(4), as it was likely time-barred by the SOL. This can be tricky too, though, because it’s not always clear whether the loan was properly accelerated in 2008.

    If you don’t get a dismissal on one of the exceptions, and they do refile within six months, you can’t use the SOL defense unless you win the second case on one of those exceptions mentioned above.

    Be careful not to argue lack of standing in your current case, because if you win on that, you might lose your SOL acceleration and defense (see EMC v. Suarez). Courts in NY often say that if the plaintiff lacked standing to bring the action, they also lacked standing to accelerate the loan in the first place, and there goes your SOL trigger date.

    Take a look at some of attorney Ivan Young’s SOL cases. You can find some of his pleadings on the e-courts system.

  3. Dear Mr. Garfield,

    I have one question based on the following,

    A foreclosure case initiated on 07/2008 in NY was dismissed without prejudice for extrinsic fraud (FAILURE TO NAME A NECESSARY DEFENDANT) on 09/2014. Plaintiff appeals on 10/2014 and Court of Appeals, on 03/16 affirmed the vacate of judgement but not the dismissal. arguing that Defendant was made Original Defendant by Lower Court`s sua sponte when it permitted Defendant`s motion to dismiss in 09/2014.

    How to apply the statute of limitations, if any, in this case?

    Please advise,

    Regards,

    G.

    ________________________________

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