You are here: / / EVEN THOUGH THE DEBTOR TRANSFERRED THE PROPERTY TO THE NON-DEBTOR CODEFENDANT...
, ,

EVEN THOUGH THE DEBTOR TRANSFERRED THE PROPERTY TO THE NON-DEBTOR CODEFENDANT YEARS BEFORE FILING FOR BANKRUPTCY, THE BANKRUPTCY TOLLED THE FORECLOSURE STATUTE OF LIMITATIONS FOR THE ACTION AGAINST THE DEBTOR; THE TOLL DID NOT APPLY TO THE ACTION AGAINST THE NON-DEBTOR WHICH NEVER FILED FOR BANKRUPTCY (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Connolly, reversing (modifying) Supreme Court, determined the foreclosure statute of limitations was tolled by the bankruptcy stay for the action against the defendant who filed for bankruptcy, but not for the defendant to which the property was transferred (who did not file for bankruptcy):

This appeal requires us to examine whether the stay provided by section 362 of the 1978 Bankruptcy Code (11 USC § 362[a]) operates as a “statutory prohibition” under CPLR 204(a) to toll the statute of limitations to commence a mortgage foreclosure action against a defendant debtor who no longer owns the property that is the subject of the mortgage foreclosure action. We hold that the bankruptcy stay pursuant to subsection 362(a)(1) (see 11 USC § 362[a][1]) tolls the statute of limitations for commencing a mortgage foreclosure action against the defendant debtor, regardless of whether that defendant owns the property at the time of the bankruptcy filing.

This appeal also requires us to determine whether the bankruptcy stay pursuant to subsection 362(a) applies to a nondebtor codefendant to which the defendant debtor transferred the property years before filing for bankruptcy. On the record before this Court, the plaintiff failed to meet its burden of raising a question of fact as to whether the bankruptcy stay applied to the nondebtor codefendant. Bank of N.Y. Mellon v DeMatteis, 2023 NY Slip Op 05242, Second Dept 10-18-23

Practice Point: Filing for bankruptcy tolls the foreclosure statute of limitations, even if the property had been transferred before the filing.

 

You might also like
CPL 450.10 (1), WHICH PURPORTS TO PROHIBIT AN ‘EXCESSIVE SENTENCE’ APPEAL AFTER A GUILTY PLEA, IS UNCONSTITUTIONAL, DEFENDANT’S WAIVER OF APPEAL, HOWEVER, WAS VALID (SECOND DEPT).
County Not Necessary Party In Suit to Recover Taxes Wrongfully Paid to Town
PLAINTIFF BANK IN THIS FORECLOSURE ACTION DID NOT DEMONSTRATE STANDING WITH SUFFICIENT PROOF THAT THE NOTE WAS LOST (PURSUANT TO THE UCC) AND DID NOT PRESENT EVIDENCE SUFFICIENT TO WARRANT CORRECTION OF THE LEGAL DESCRIPTION OF THE PREMISES IN THE MORTGAGE BASED UPON MUTUAL MISTAKE (SECOND DEPT).
THE BANK IN THIS FORECLOSURE ACTION DID NOT PRESENT SUFFICIENT EVIDENCE OF DEFENDANTS’ DEFAULT (SECOND DEPT).
ALTHOUGH THE READY-FOR-TRIAL ANNOUNCEMENT WAS TIMELY, IT WAS ILLUSORY BECAUSE THE CERTIFICATE OF COMPLIANCE WITH DISCOVERY OBLIGATIONS HAD NOT BEEN FILED; INDICTMENT PROPERLY DISMISSED (SECOND DEPT).
AN ORDER REQUIRING COMPLIANCE WITH DISCOVERY DEMANDS WHICH WAS NOT SERVED ON THE DEFENDANT BY THE PLAINTIFF IS NOT ENFORCEABLE (SECOND DEPT).
FAILURE TO COMPLY WITH THE SERVICE-OF-PROCESS REQUIREMENTS IN CPLR 308 AND 311 ARE JURISDICTIONAL DEFECTS, NOT “TECHNICAL” DEFECTS WHICH CAN BE OVERLOOKED PURSUANT TO CPLR 2001 (SECOND DEPT).
PROFFERED COPY OF A GUARANTY PROPERLY EXCLUDED FROM EVIDENCE.

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

THE PROPOSED AMENDMENT TO THE NOTICE OF CLAIM DID NOT PRESENT A NEW THEORY OF... IN THIS MEDICAL MALPRACTICE ACTION, PLAINTIFF’S EXPERT’S AFFIDAVIT...