In response to the ongoing coronavirus pandemic, New York’s Governor Andrew Cuomo issued two executive orders since March 20, 2020, suspending the state’s statute of limitations for the commencement of new court cases until May 7, 2020. Executive Order 202.14; Executive Order 202.8.
Likewise, New York’s Office of Court Administration issued two memoranda suspending, among other things, the filing of new nonessential matter complaints until further notice, effective March 22, 2020. Administrative Order; Administrative Memorandum. Although foreclosures were not specifically addressed, they were left out of the defined “essential” matters.
The foregoing actions by the governor and the Office of Court Administration have more teeth than the industry letter issued by the New York Department of Financial Services on March 19, 2020. Industry Letter. Specifically, the New York Department of Financial Services issued an industry letter “urging” all regulated and exempt mortgage servicers to postpone foreclosures for ninety (90) days. For the reasons set forth below, loan servicers would do well to closely track the rapidly changing industry directives as they relate to the commencement of new foreclosure actions in the New York state courts.
In New York, “[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.” CPLR 204(a). CPLR 204. Accordingly, while foreclosure cases may be administratively delayed because they are not deemed “essential” and/or because the guidance from the Department of Financial Services is heeded by would-be foreclosing plaintiffs, the ability to suspend the statute of limitations pursuant to CPLR 204(a) is only available, absent an additional extension, until May 7, 2020.
Thus, if May 7, 2020, comes and goes without a new executive order further tolling the statute of limitations for the commencement of a new action, it will be essential for a statute of limitations analysis to be completed before voluntarily delaying the commencement of a New York foreclosure during the ongoing coronavirus pandemic. Guidance like the industry letter from the Department of Financial Services cannot act alone as a bar to the commencement of foreclosures and therefore will likely be unavailable as the basis to suspend the statute of limitations pursuant to CPLR 204(a).
A more thorough analysis of the New York statute of limitations to foreclose, and exceptions to same, is available here.