THE BANK DID NOT PRESENT EVIDENCE IN ADMISSIBLE FORM TO SUPPORT ITS CLAIM THAT DEFENDANT ACKNOWLEDGED THE MORTGAGE DEBT, STARTING THE STATUTE OF LIMITATIONS ANEW; DEFENDANT’S MOTION TO DISMISS THE FORECLOSURE ACTION AS UNTIMELY SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the foreclosure action was commenced after the statute of limitations had run. The bank claimed the defendant acknowledged the debt in a loan modification agreement, starting the statute of limitations anew. But the bank did not present evidence of the agreement in admissible form:

The plaintiff argues that the defendant entered into a loan modification agreement, which constituted an acknowledgment of the mortgage debt under General Obligations Law § 17-101 sufficient to reset the statute of limitations to commence a future foreclosure action on the mortgage. “General Obligations Law § 17-101 effectively revives a time-barred claim when the debtor has signed a writing which validly acknowledges the debt” … . “To constitute a valid acknowledgment, a ‘writing must be signed and recognize an existing debt and must contain nothing inconsistent with an intention on the part of the debtor to pay it'” … . “In order to demonstrate that the statute of limitations has been renewed by a partial payment, it must be shown that the payment was accompanied by circumstances amounting to an absolute and unqualified acknowledgment by the debtor of more being due, from which a promise may be inferred to pay the remainder” … . Bayview Loan Servicing, LLC v Paniagua, 2022 NY Slip Op 04708, Second Dept 7-27-22

Practice Point: Plaintiff bank did not demonstrate defendant acknowledged the mortgage debt in a loan modification agreement (thereby re-starting the statute of limitation for a foreclosure action). The evidence of the debt-acknowledgment presented by the bank did not meet the requirements of General Obligations Law 17-101. Therefore the statute of limitations was not revived. Defendant’s motion to dismiss the foreclosure complaint as untimely should have been granted.