A STIPULATION TOLLING THE STATUTE OF LIMITATIONS IS ENFORCEABLE, DESPITE THE RETROACTIVE APPLICATION OF THE FORECLOSURE ABUSE PREVENTION ACT (FAPA) (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Michael, reversing Supreme Court, determined that, although the foreclosure action would have been untimely pursuant to the Foreclosure Abuse Protection Act (FAPA) because the plaintiff’s voluntary discontinuance no longer can stop the running of the statute of limitations, here the parties had entered a stipulation tolling the statute of limitations. Supreme Court erred by finding the stipulation unenforceable:

Plaintiff’s prior mortgage foreclosure action against defendant was commenced on July 25, 2008, which indisputably accelerated the entire loan. On May 4, 2011, the parties agreed to discontinue the foreclosure action without prejudice via written stipulation. They also agreed that “the statute of limitations for any claims of plaintiff or defendant against the other is hereby tolled from July 22, 2008 . . . until June 1, 2013.” The stipulation was executed by the parties’ respective counsel and filed with the court. Plaintiff subsequently commenced this foreclosure action on February 16, 2018 and moved for summary judgment. Defendant cross-moved to dismiss the complaint, arguing that plaintiff’s action was time-barred under FAPA. * * *

Simply put, despite FAPA’s retroactive application, the parties’ 2011 stipulation in which they expressly agreed to toll the limitations period to June 1, 2013 effectively tolled the limitations period to that date. Plaintiff’s commencement of this action on February 16, 2018, less than six years later, was thus timely. HSBC Bank USA, N.A. v Nicholas, 2026 NY Slip Op 01461, First Dept 3-27-26

Practice Point: A valid stipulation tolling the statute of limitations will be enforced even where, pursuant to FAPA, the revived foreclosure action would otherwise have been untimely.