Applying the Statute of Limitations for Foreclosure Cases

Deutsche Bank Trust Company Americas v. Weiner, 456 N.J. Super. 546 (App. Div. 2018).  Judge Fisher issued this short decision in this case today.  The body of the opinion consumes just four pages of text, with the final word, “Affirmed,” on a fifth page.  The opinion occupies less space than it would have before the Appellate Division changed the font and appearance of its opinions at the start of this current Term.  Still, its brevity is admirable.

In 2009, the Legislature codified prior caselaw in enacting N.J.S.A. 2A:50-56.1.  That statute provided that a residential foreclosure “shall not be commenced following the earliest of” three milestone dates: (a) “the date fixed for the making of the last payment or the maturity date set forth in the mortgage or in the note”; (b) 36 years from the date the mortgage was recorded or, if not recorded, from the date of execution; and (c) twenty years from the date of a default that “has not been cured.”

Defendants borrowed money from plaintiff’s assignor in 2005.  They signed a promissory note for monthly payments, the last of which was to be in 2035.  Both defendants also executed a mortgage, which was recorded in 2005.

Beginning in August 2009, however, and continuing thereafter, defendants failed to make their scheduled payments.  “After four discontinued suits,” plaintiff commenced this case in September 2016, over seven years after defendants’ uncured default.

The parties cross-moved for summary judgment.  The Chancery Division granted plaintiff’s motion and denied that of defendants, as well as defendants’ motion for reconsideration.  The Appellate Division affirmed, rejecting two of defendants’ arguments as not worthy of discussion under the “that’s ridiculous” rule, and discussing only their contention that the statute of limitations barred plaintiff’s suit.

Defendants argued that the six-year limitation of section (a) began to run upon defendants’ default, which triggered acceleration of all payments due thereafter.  Judge Fisher did not agree.  “Subsection (c) specifically provides a time frame to be considered upon an uncured default.  To interpret subsection (a) as triggering the same event encompassed by subsection (c) would wreak havoc with the clearly delineated provisions of N.J.S.A. 2A:50-56.1.”

Moreover, defendants’ position ignored the statute’s plain language.  Subsection (a) states that the six-year time limit runs from the final payment date or the maturity date “set forth in the mortgage or in the note.”  That date was in 2035.  “There is no ambiguity,” Judge Fisher said, “that conclusion is what the plain language of the statute compels.”

The panel concluded that because none of the possible statute of limitation dates (2041, under subsections (a) and (b) (six years after the 2035 maturity date and 36 years after the 2005 mortgage recording date, respectively), or 2029, twenty years from defendants’ uncured default, under subsection (c)) had yet occurred, plaintiff’s lawsuit was timely.  Accordingly, the Chancery Division’s decision was affirmed.