CPLR 204(a) states that “[w]here the commencement of an action has been stayed by a court or by statutory prohibition, the duration of the stay is not a part of the time within which the action must be commenced.” The question in this case is whether CPLR 204(a) tolls the statute of limitations on a claim whose prosecution was stayed by a federal bankruptcy stay, even if the stayed action was filed before the bankruptcy stay went into place.
In this case, plaintiff allegedly owns a property in Southampton that is the subject of a $2.5 million mortgage executed in 2005 in favor of American Home Mortgage Acceptance Inc. (AHMA). The mortgage was subsequently securitized, with AMHA appointed to act as servicer of the securitization trust and defendant U.S. Bank N.A. appointed to act as trustee. AMHA first tried to foreclose in 2007 through an action filed in Supreme Court, Suffolk County, but that action was stayed when plaintiff filed for bankruptcy shortly after the foreclosure action was commenced. Respondent later commenced a second foreclosure action, but that action too was stayed by a second bankruptcy filing by plaintiff.
In 2014, plaintiff commenced an action to declare the mortgage unenforceable because the statute of limitations for had expired; defendant moved to dismiss the action, contending that under CPLR 204(a), the time to enforce the mortgage was tolled while the prior foreclosure actions were stayed. Supreme Court, Suffolk County agreed with defendant and dismissed the action, and the Second Department affirmed.
The Court of Appeals granted leave to appeal.
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