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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: October 16, 2020

Partial Payments Renewed Statute of Limitations

On October 7, 2020, the Second Department issued a decision in HSBC Bank USA, N.A. v. Macaulay, 2020 NY Slip Op. 05493, holding that partial payments renewed the statute of limitations, explaining:

We agree with the Supreme Court’s determination that the 14 partial payments on the mortgage that Sobo made over the course of approximately 17 months renewed the statute of limitations. Where, as here, it is undisputed that the action was commenced after the six-year statute of limitations had already expired, the plaintiff has the burden of establishing that the statute of limitations is tolled, or that an exception to the statute of limitations applies. In order to demonstrate that the statute of limitations has been renewed by a partial payment, it must be shown that the payment was accompanied by circumstances amounting to an absolute and unqualified acknowledgment by the debtor of more being due, from which a promise may be inferred to pay the remainder.
. . .
Here, the Supreme Court’s determination that the partial payments amounted to an absolute and unqualified acknowledgment of more being due, from which a promise may be inferred to pay the remainder, and that Sobo made the payments pursuant to an agreement between himself and Macaulay that Sobo would be the one to take care of the property financially, rested largely on the court’s assessment of the documentary evidence before it and the credibility of the witnesses. Contrary to Silver Street’s contentions, the court’s findings and determinations were warranted by the facts. Accordingly, we affirm the judgment of foreclosure and sale.

(Internal quotations and citations omitted).

It is not unusual for the statute of limitations to be an issue in complex commercial litigation. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding whether claims are barred by the statute of limitations.

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