State of New York OPINION
Court of Appeals This opinion is uncorrected and subject to revision
before publication in the New York Reports.
No. 85
Gregg Lubonty,
Appellant,
v.
U.S. Bank National Association, &c.,
Respondent.
Peter K. Kamran, for appellant.
Schuyler B. Kraus, for respondent.
GARCIA, J.:
New York law tolls the statute of limitations where “the commencement of an action
has been stayed by a court or by statutory prohibition” (CPLR 204 [a]). Federal bankruptcy
law automatically stays the commencement or continuation of any judicial proceedings
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against a debtor upon the filing of a bankruptcy petition (see 11 USC § 362 [a]). We must
determine whether the bankruptcy stay qualifies as a “statutory prohibition” under CPLR
204 (a), and, if so, whether a party may later avail itself of the toll where, at the time the
stay was imposed, that party had a pending action asserting the same claim. For the reasons
set forth below, we answer yes to both questions, and affirm the order of the Appellate
Division.
I.
The relevant procedural history spans two foreclosure actions, two bankruptcy
petitions, and the instant action to cancel and discharge the mortgage. In 2005, plaintiff
Gregg Lubonty took out a $2.5 million mortgage on a property in Southampton, New York.
Less than two years later, he defaulted on his mortgage payments. On June 11, 2007,
defendant U.S. Bank National Association’s predecessor in interest, American Home
Mortgage Acceptance, Inc. (AHMA), accelerated plaintiff’s mortgage and commenced a
foreclosure action. For purposes of this appeal, we assume that at this point the six-year
statute of limitations on the foreclosure claim was triggered (see CPLR 213 [4]). Just two
weeks later, before his answer in the first foreclosure action was due, plaintiff filed a
bankruptcy petition in federal court invoking the automatic stay and barring continuation
of the first foreclosure action. On November 24, 2009, approximately 882 days after
initially filing, plaintiff voluntarily dismissed the first bankruptcy action and the stay was
lifted. On January 14, 2010, AHMA filed for default judgment in the first foreclosure
action. On September 27, 2010, the trial court granted plaintiff’s ex parte application to
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dismiss the action as abandoned.1
Subsequently, AHMA assigned plaintiff’s mortgage to defendant and in June 2011
defendant commenced a foreclosure action. On September 30, 2011, plaintiff moved to
dismiss the second foreclosure action for improper service. Before the return date on that
motion, however, plaintiff once again filed for bankruptcy, and an automatic bankruptcy
stay was again imposed, prohibiting continuation of the second foreclosure action for 769
days.
On November 26, 2013, the bankruptcy court ordered the property and three other
properties, with a combined market value of approximately $11 million, released to
plaintiff from the bankruptcy estate in return for two payments totaling $25,000. On April
8, 2014, the bankruptcy trustee notified the court in the second foreclosure action that the
stay was no longer in effect. The stay of the second foreclosure action was lifted.2
Plaintiff’s motion to dismiss for improper service was still pending and defendant filed its
opposition on June 2, 2014, the day after plaintiff made the final payment releasing the
1
In dismissing, the trial court in the first foreclosure action reasoned that “Plaintiff did not
seek a default judgment as against Defendant mortgagor . . . until January 14, 2010,
approximately thirty months after the action was commenced.” No mention is made of the
first bankruptcy action; the court only notes that AHMA “has failed to offer any
explanation for the extensive delay.” Excluding the time the action was stayed by the first
bankruptcy action, less than a month had elapsed from the time plaintiff’s answer was due
to when defendant filed for default judgment (see CPLR 3215 [c]).
2
Although the exact date on which the stay was lifted is uncertain (November 26, 2013,
April 8, 2014, or June 1, 2014), the choice among the dates does not change the result, and
therefore for purposes of this opinion the earliest date will be used to calculate the
limitations period (accord Lubonty v U.S. Bank N.A., 159 AD3d 962, 964 [2d Dept 2018]).
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property from his bankruptcy estate. Plaintiff replied on June 12, 2014. On October 21,
2014, the court dismissed the second foreclosure action for improper service of process.3
Two weeks later, plaintiff filed the instant action under Real Property Actions and
Proceedings Law (RPAPL) § 1501 (4) to discharge the mortgage, asserting that the statute
of limitations on defendant’s foreclosure claim had expired.4 Defendant moved to dismiss
the action arguing that the statute of limitations on its foreclosure claim had not, in fact,
expired because it was tolled while the bankruptcy stay was in effect.
Supreme Court dismissed, agreeing with defendant that “[u]nder [the provisions of
CPLR 204 (a) and 11 USC § 362 (a) (1)], the applicable statute of limitations is tolled for
the period of time during which a stay or prohibition is in effect.” The Appellate Division
unanimously affirmed, concluding that “plaintiff’s contention that CPLR 204 (a) does not
apply here because the earlier foreclosure actions had already been commenced when the
petitions in bankruptcy were filed is without merit” (Lubonty, 159 AD3d at 964). Applying
CPLR 204 (a), the Appellate Division determined that the statute of limitations for
defendant’s foreclosure claim was extended until December 2017 (id.). This Court granted
3
In dismissing the action, the trial court noted the “apparently inconsistent positions taken
by [plaintiff] in the Bankruptcy proceeding, claiming that the property was of
inconsequential value due to the pending foreclosure action and the position taken in the
instant case.” In fact, this representation by plaintiff to the trustee was used to justify the
bankruptcy estate’s sale to plaintiff of four properties valued at $11 million for a total price
of $25,000.
4
RPAPL § 1501 (4) provides that where the statute of limitations for commencement of a
foreclosure action on a mortgage has expired, a person with an interest in real property
subject to the mortgage may maintain an action “to secure the cancellation and discharge
of record of such encumbrance.”
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plaintiff leave to appeal.5
II.
Whether the automatic bankruptcy stay constitutes a “statutory prohibition” under
CPLR 204 (a) is an issue of first impression for this Court. The issue need not detain us
long. The bankruptcy stay provision expressly prohibits the “commencement or
continuation” of any covered action (11 USC § 362 [a] [1])—it is a blanket ban on filing
or continuing lawsuits against the debtor (see infra 9-10). It is true that an aggrieved party
may seek relief from the automatic stay by application to the bankruptcy court (see 11 USC
§ 362 [d]). But the need to seek judicial relief from the automatic stay means the creditor
is otherwise prohibited from proceeding, and there is no guarantee that the bankruptcy
court will favorably exercise its discretion (see id. § 362 [d] [1]). It is therefore clear that
section 362 (a) is a “statutory prohibition” within the plain meaning of CPLR 204 (a).
III.
The issue then becomes whether the toll provided in CPLR 204 (a) is available to a
claimant who, when the bankruptcy stay was imposed, had already commenced an action
against the debtor—later dismissed—on the claim now reasserted. In interpreting this
statute, our goal is to give force to the intent of the Legislature and we therefore begin with
the plain text—“the clearest indicator of legislative intent” (Majewski v Broadalbin-Perth
5
The parties notified this Court that defendant filed a third foreclosure action concerning
the subject property on December 14, 2017.
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Cent. Sch. Dist., 91 NY2d 577, 583 [1998]). In a manner consistent with the text, we may
look to the purpose of the enactment and the objectives of the Legislature (see Albino v
Kirby, 36 NY2d 526, 530-531 [1975]). We must also “interpret a statute so as to avoid an
unreasonable or absurd application of the law” (People v Garson, 6 NY3d 604, 614 [2006]
[internal quotation marks omitted], citing People v Santi, 3 NY3d 234, 244 [2004]).
Applying those principles here, plaintiff’s cramped reading of CPLR 204 (a), one that
produces inequitable and potentially absurd results, must be rejected.
A.
CPLR 204 (a) provides, “[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 result here depends on our reading of the term
“commencement.”
Plaintiff argues that it is impossible for defendant to have been prohibited from
“commencing” an action because a foreclosure action had been commenced prior to
plaintiff’s bankruptcy filing. Application of plaintiff’s rule would be as follows: Because
defendant filed the first foreclosure claim and defendant responded by filing a bankruptcy
petition, invoking the automatic stay, commencement of that first action was not “stayed”
under the statute and the toll is inapplicable. And when defendant filed a second
foreclosure action, and plaintiff again responded by again filing a bankruptcy petition that
invoked the automatic stay, “commencement” of that second action was not stayed, once
again making the toll inapplicable (see dissenting op at 4-5). As a result, the six-year statute
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of limitations would have expired on June 11, 2013—a time when the bankruptcy stay was
in effect prohibiting any action against plaintiff. Plaintiff’s brand of literalism quickly
loses sight of the forest for the trees, producing an outcome antagonistic to the purpose and
design of the tolling provision (see New York Trust Co. v Commr. of Internal Revenue, 68
F2d 19, 20 [2d Cir 1933] [Hand, J.]). That interpretation must be rejected.
Neither this Court nor the Legislature has restricted the term “commencement” to
the first time a party files a complaint asserting a cause of action; instead the term may also
include the commencement of subsequent actions asserting the same claim (cf. Carrick v
Cent. Gen. Hosp., 51 NY2d 242, 246 [1980] [“plaintiff commenced a second action by
serving defendants with a summons and complaint” (emphasis added)]; CPLR 205 [a]
[permitting a plaintiff, in certain circumstances, to “commence a new action” after
termination of a prior action]). Likewise, a toll operates to compensate a claimant for the
shortening of the statutory period in which it must commence—or recommence—an
action, irrespective of whether the stay has actually deprived the claimant of any
opportunity to do so (see Matter of Hickman, 75 NY2d 975, 977 [1990] [holding that the
limitations period was extended even though the stay ended ten months before the original
limitations period would have expired]).
Here, in ruling on plaintiff’s claim that the mortgage should be discharged, the court
must look to whether the “applicable statute of limitation for the commencement of an
action to foreclose” had expired (RPAPL § 1501 [4]). Because the two bankruptcy stays
prevented defendant from commencing a foreclosure action for at least 1651 days, that time
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is not part of the time within which such an action must be commenced. Put another way,
in determining whether the statute of limitations on a foreclosure action had expired when
plaintiff filed this RPAPL action, the duration of any bankruptcy stay must be excluded,
regardless of whether an earlier action on the same claim had been initiated or was pending
when the stay was imposed. 6
This interpretation of “commencement” promotes the purpose of CPLR 204 (a) and,
unlike plaintiff’s proposed rule, is reconcilable with both the bankruptcy stay’s effect, and
the policies underlying the enforcement of limitations periods.
B.
The New York tolling statute is an old one, reaching back into the days of equity (3
Report of the Commissioners Appointed to Revise the Statute Laws of This State, ch 4, at
16 [1828] [“Whenever the commencement of any suit shall be stayed by an injunction of
any court of equity, the time during which such injunction shall be in force, shall not be
deemed any portion of the time in this Chapter limited, for the commencement of such
suit”]), modified first to reflect the merger of law and equity with the enactment of the
Field Code in 1848 (Nathan Howard, Code of Procedure of the State of New York,
6
Commentators similarly use broad terms to describe the effects of the tolling provision
(see Patrick M. Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book
7B, CPLR C2201:6 at 10 [“If a federal statute, such as the (bankruptcy stay) bars an action
against the debtor, the statute of limitations period is tolled during the period of the stay”];
Weinstein-Korn-Miller, NY Civ Prac ¶ 204.00 [2d ed] [“In general, the period of the stay
or statutory prohibition is added to the period of limitation”]).
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Unabridged 440 [1867] [“When the commencement of an action shall be stayed by
injunction, the time of the continuance of the injunction shall not be part of the time limited
for the commencement of the action”]), and later to include statutes having the same effect
(id. [noting that the statute was amended to include the “statutory prohibition” language in
1849]). Having remained practically unchanged for almost two centuries, this rule has
strong roots in the equitable principle that plaintiffs should not be penalized for failing to
assert their rights when a court or statute prevents them from doing so (cf. Matter of
Feinberg, 18 NY2d 499, 507 [1966] [“The purpose of a Statute of Limitations is to penalize
claimants for sleeping on their rights”]).
We have concluded that the bankruptcy stay is a “statutory prohibition” within the
ambit of this equitable tolling provision, and we must therefore look to the effect of the
bankruptcy stay on the course of the litigation. The federal statutory restraint is indeed
broad in application. “Nothing is more basic to bankruptcy law than the automatic stay
and nothing is more important to fair case administration than enforcing stay violations”
(In re Lehman Bros. Holdings, Inc., 433 BR 101, 112 [Bankr SD NY 2010]). The effects
of that stay are wide-ranging and limit virtually all judicial action against the debtor and
any co-debtors: “The automatic stay is designed to provide blanket relief from creditor
action” (In re Newberry, 604 BR 37, 40 [Bankr ED Mich 2019]), and any exceptions from
the stay are narrowly written and “strictly construed” (In re Montgomery, 525 BR 682, 693
[Bankr WD Tenn 2015]). Courts have also held that the bankruptcy stay not only prevents
an action from being continued, but also from being discontinued and recommenced (see
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U.S. Bank N.A. v Joseph, 159 AD3d 968, 970-971 [2d Dept 2018]). Moreover, the
effective date of any stay is controlled by the debtor: the stay is automatic and “springs
into being upon the filing of the bankruptcy petition” and “operates without the necessity
for judicial intervention” (In re Soares, 107 F3d 969, 976 [1st Cir 2014] [internal quotation
marks and citation omitted]). In short, the stay brings any potential and ongoing litigation
to a standstill at a debtor’s behest.
Plaintiff’s use of the automatic stay, and his control over the timing of its application
and revocation, had the effect of halting the pending litigation and staying the
commencement of subsequent foreclosure actions for more than four years. In both
foreclosure actions, plaintiff filed for bankruptcy and obtained an automatic stay at critical
stages of the litigation: in the first case, pre-answer, and in the second before defendant
could respond to the motion to dismiss for lack of personal jurisdiction. In both cases,
plaintiff acted to lift the stay—either by dismissing the bankruptcy case or “purchasing”
the property from the bankruptcy estate—and shortly thereafter obtained dismissal of the
relevant foreclosure action. Defendant was clearly prevented from asserting its rights as a
direct result of the actions of the plaintiff.
In addition to the inequity and gamesmanship it would encourage, application of a
“pending action” rule urged by plaintiff would raise a host of practical issues. For example,
given the federal rules regarding stays of an action against codebtors, if one debtor declares
bankruptcy, a plaintiff cannot proceed independently against a codebtor even if the
codebtor has not filed for bankruptcy (see Deutsche Bank Natl. Trust Co. v DeGiorgio, 171
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AD3d 1267, 1268, n 2 [3d Dept 2019], citing 11 USC § 1301 [a]). Application of a
“pending action” rule could produce absurd results in such a situation: If a codebtor is not
named in the original suit, or the action against the codebtor is dismissed for some reason
prior to the application of the bankruptcy stay, the “pending action” rule would make suit
untimely against the bankrupt debtor but not against the codebtor. Application of the rule
adopted here would make both subject to the toll as both were subject to the stay.
In another scenario, under the “pending action” rule, an unasserted claim the
creditor “slept on,” arising out of the same transaction or series of transactions as the claim
interposed, would get the benefit of the toll, while the claim that was previously asserted
would not. Yet another absurd result. The rule adopted here would apply the toll equally
to claims arising from same transaction.
It is not surprising therefore that courts in the Second and Third Departments, as
well as a federal court applying New York law, under circumstances where a prior action
was pending when the bankruptcy stay began, have each interpreted CPLR 204 (a) as
excluding the time the stay was in effect from the statute of limitations (see DeGiorgio,
171 AD3d at 1268; Joseph, 159 AD3d at 968; In re Strawbridge, 2012 WL 701031, *9-10
[SD NY Mar. 6, 2012]).7 No court has adopted plaintiff’s interpretation.
7
The Third Department, in adopting the rule we apply here, found the Second
Department’s reasoning in this case persuasive (see DeGiorgio, 171 AD3d at 1268, citing
Lubonty, 159 AD3d at 963-964).
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C.
The dissent adopts as a refrain plaintiff’s argument that the “statutory scheme” of
the CPLR requires a different result. Specifically, plaintiff contends that CPLR 205 (a)
demonstrates the Legislature’s intent for the toll to apply only in cases where no action on
the claim was commenced before the bankruptcy stay became effective. CPLR 205 (a)
provides a six-month grace period to “commence a new action upon the same transaction
or occurrence or series of transactions or occurrences” where the previous action has been
dismissed for any “other manner than by a voluntary discontinuance, a failure to obtain
personal jurisdiction over the defendant, a dismissal of the complaint for neglect to
prosecute the action, or a final judgment upon the merits” (CPLR 205 [a] [emphasis
added]). Plaintiff asserts that the Legislature’s enactment of this savings provision shows
that it contemplated specific circumstances where plaintiffs should be allowed to extend
the statute of limitations for their claims, and that a failure to obtain personal jurisdiction
over the defendant was not one of them. This argument begs the question of whether CPLR
204 (a) applies to toll the statute of limitations under these circumstances. Because it does,
the Legislature’s contemplation of which grounds for dismissal earn the protections of the
grace period is irrelevant—the statute of limitations has not expired, and the grace period
in this case is unnecessary. There may well be other provisions within the CPLR that could
provide relief to other litigants in other circumstances. CPLR 204 (a), however, provides
defendant with relief in this case.
Plaintiff also argues that the bankruptcy statute itself provides the primary
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mechanism by which a defendant may refile a claim—namely, the 30-day grace period
provided in 11 USC § 108 (c). This argument is also unavailing: if another statute tolls
the action longer than 30 days section 108 (c) applies the longer toll, rather than the 30-day
grace period (see Pettibone Corp. v Easley, 935 F2d 120, 121 [7th Cir. 1991] [“Federal
Law assured the plaintiffs 30 days in which to pick up the baton; if states want to give
plaintiffs additional time, that is their business”]; see also HSBC Bank USA, N.A. v Crum,
907 F3d 199, 206 [5th Cir 2018]; Siegel, NY Prac § 51 [6th ed]).
IV.
Applying the above rule to the instant action, defendant’s claims were not time-
barred when Supreme Court granted defendant’s motion to dismiss.8 The statute of
limitations for a foreclosure claim is six years (CPLR 213 [4]). Here, the limitations period
began to run on June 11, 2007, upon AHMA’s acceleration of plaintiff’s mortgage. The
property was subject to bankruptcy stays for at least 1651 days, during which defendant
was statutorily prohibited from commencing any action concerning the property. Adding
the duration of the stay to the six-year statute of limitations period, defendant had until on
or about December 18, 2017 to commence the foreclosure action. Dismissal of plaintiff’s
action to discharge the mortgage was thus proper. Accordingly, the order of the Appellate
8
The accusation that the Court, in interpreting and applying the CPLR 204 (a) tolling
provision, is somehow “ignoring” or “disregarding” the law is unwarranted (dissenting op
at 5-6; see CPLR 201 [an action must be commenced within the time specified in CPLR
article 2 and “no court shall extend the time limited by law for the commencement of an
action”]). “[A]lthough [the statute of limitations] is subject to a variety of tolls and
extensions . . . [it] is not subject to a discretionary judicial extension” (Siegel, NY Prac
§ 33 at 51 [6th ed] [emphasis added]).
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Division should be affirmed, with costs.
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Lubonty v U.S. Bank National Association
No. 85
STEIN, J. (dissenting):
The express language of CPLR 204 (a) is unambiguous: “[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”
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(emphasis added). Consequently, where a stay is instituted after an action is commenced—
that is, where “the commencement of [the] action [is not] stayed”—section 204 (a) is
inapplicable. In my view, the majority reads the word “commencement” out of section 204
(a), thereby impermissibly extending the statute of limitations by judicial fiat. Therefore,
I respectfully dissent.
A brief restatement of the complicated procedural posture of this case—which
includes two foreclosure actions, two bankruptcy proceedings, and the present action to
cancel and discharge the mortgage—is necessary. In 2005, plaintiff executed a note with
nonparty American Home Mortgage Acceptance, Inc. (AHMA), secured with a mortgage
on residential real property (the subject property). In 2007, AHMA commenced the first
foreclosure action, alleging that plaintiff had defaulted on the mortgage and requesting
payment in full. Approximately two weeks later, plaintiff commenced a bankruptcy
proceeding, automatically staying continuation of the first foreclosure action (see 11 USC
§ 362). This stay was lifted in November 2009, after plaintiff’s bankruptcy petition was
dismissed. The first foreclosure action was subsequently dismissed as abandoned in
September 2010.1
In June 2011, after being assigned the mortgage, defendant U.S. Bank National
Association (U.S. Bank) commenced a second foreclosure action, based upon the same
default alleged in the first foreclosure action. Plaintiff moved to dismiss the complaint
1
Whether AHMA could have avoided dismissal by arguing that the bankruptcy stay
prevented it from prosecuting the action, and whether the first foreclosure action was
properly dismissed as abandoned, are not questions before the Court on this appeal.
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based upon improper service and, shortly thereafter, commenced a second bankruptcy
proceeding, which stayed the second foreclosure action before U.S. Bank had an
opportunity to respond to plaintiff’s motion to dismiss. The subject property was thereafter
released from the bankruptcy estate, and the stay was lifted. In October 2014, Supreme
Court granted plaintiff’s motion to dismiss the second foreclosure action, concluding, on
the evidence presented, that U.S. Bank had failed to properly serve plaintiff under CPLR
308 (2).
Plaintiff subsequently commenced this action against U.S. Bank pursuant to RPAPL
1501 (4), seeking to cancel and discharge the mortgage on the subject property because the
six-year statute of limitations applicable to commencement of a foreclosure action had
expired (see CPLR 213 [4]). U.S. Bank moved to dismiss the complaint pursuant to CPLR
3211 (a) (7), asserting, as relevant here, that the two bankruptcy stays tolled the statute of
limitations pursuant to CPLR 204 (a) such that it was still possible to timely commence a
third foreclosure action. Plaintiff opposed the motion to dismiss, arguing that CPLR 204
(a) was inapplicable because each bankruptcy stay became effective after each mortgage
foreclosure action was commenced, and each stay was terminated before each foreclosure
action was dismissed; therefore, plaintiff contended that, pursuant to the express language
of CPLR 204 (a), the statute of limitations was not tolled insofar as “the commencement
of an action” was never stayed. Plaintiff advances the same arguments on this appeal.
Because this case presents a question of statutory interpretation regarding CPLR
204 (a), we must “attempt to effectuate the intent of the [l]egislature, and where the
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statutory language is clear and unambiguous,” we must interpret the statute “so as to give
effect to the plain meaning of the words used” (Patrolmen’s Benevolent Assn. of City of
N.Y. v City of New York, 41 NY2d 205, 208 [1976] [internal citations omitted]; see
Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998]). It is also
well established that “‘resort must be had to the natural significance of the words employed,
and if they have a definite meaning, which involves no absurdity or contradiction . . . courts
have no right to add or take away from that meaning’” (Majewski, 91 NY2d at 583, quoting
Tompkins v Hunter, 149 NY 117, 122-123 [1896]).
CPLR 204 (a) is entitled, in pertinent part, “[s]tay of commencement of action” and,
as previously noted, provides 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” (CPLR 204 [a] [emphasis added]).
Although the majority correctly states that the outcome of this case is dependent upon our
reading of the term “commencement,” the majority neglects the critical point that
“commencement” is defined in CPLR 304. In that regard, the legislature has provided that
“[a]n action is commenced by filing a summons and complaint or summons with notice in
accordance with [CPLR 2102]” (CPLR 304 [a]). In light of that definition, CPLR 204 (a)
could not be clearer: a toll of the statute of limitations is available only where a would-be
plaintiff is precluded from duly filing the applicable papers—thereby commencing an
action—as the result of a stay or statutory prohibition.
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Here, it is undisputed that the first foreclosure action was commenced under CPLR
304 (a) before any bankruptcy stay took effect, and the second foreclosure action was
commenced in the time period between the first and second bankruptcy stays, i.e. when no
stay was in effect. Accordingly, because the bankruptcy stays did not prevent the
commencement of a foreclosure action regarding the subject property, the toll codified in
CPLR 204 (a) does not apply.
Nevertheless, the majority holds that “the duration of any bankruptcy stay must be
excluded, regardless of whether an earlier action on the same claim has been initiated or
was pending when the stay was imposed” (majority op at 8). Stated differently, according
to the majority, whenever a stay is interposed, the statute of limitations is extended for the
length of that stay, even if the action was already commenced and is subsequently
terminated. However, if the legislature intended to enact such a rule, it easily could have
made CPLR 204 (a) applicable whenever a stay prevents a party from “commencing or
continuing a civil action”—the phrase used in the Federal Bankruptcy Code (11 USC § 108
[c]; see 11 USC § 362 [a] [1]). Instead, the legislature chose to enact a statute that links
application of the toll to “commencement,” a term defined by the CPLR. Therefore, the
rule adopted by the majority today disregards two fundamental principles of law. First, it
renders the phrase “the commencement of” superfluous, in contravention of our rules of
statutory interpretation (see Majewski, 91 NY2d at 587; Jensen v General Elec. Co., 82
NY2d 77, 86 [1993]). Second, the majority’s rule extends the statute of limitations without
regard to the plain language of the tolling provision, thereby ignoring the legislature’s
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express direction that “[n]o court shall extend the time limited by law for the
commencement of an action” (see CPLR 201).
The majority reaches its result by relying on amorphous notions of equity, positing
that application of the express statutory language would produce absurd results and
encourage gamesmanship. To be sure, “courts should construe [statutes] to avoid
objectionable, unreasonable[,] or absurd consequences” (Long v State of New York, 7
NY3d 269, 273 [2006]; see New York State Bankers Assn. v Albright, 38 NY2d 430, 437
[1975]). However, the majority struggles to identify any such consequences that result
from applying the unambiguous text of CPLR 204. First, the majority states that an absurd
result would occur where an action is commenced against one codebtor before imposition
of a bankruptcy stay and against a second codebtor after the same stay is lifted. The
majority asserts that, in this scenario, the literal effect of the plain language of CPLR 204
(a) is that the causes of action against each codebtor would become untimely at different
times (see majority op at 10-11). Of course, it might be the case that the relation-back
doctrine would apply in this scenario, avoiding the consequence the majority presumes (see
CPLR 203 [c]; Buran v Coupal, 87 NY2d 173, 178 [1995]). In any event, even if the
majority were correct, it is wholly unclear why we should rewrite CPLR 204 (a) to avoid
such an outcome. That the application of the statute of limitations may vary between
different parties or claims is a reality of complex civil litigation.
The majority further posits, more generally, that enforcing the statute as written
would reward parties that delay commencement of an action, because a party that
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commences an action closer in time to the expiration of the statute of limitations is more
likely to benefit from a CPLR 204 (a) toll if a stay goes into effect, whereas a party that
commences an action before any stays are imposed, will receive no toll. The majority
overlooks that a party who commences an action within the statute of limitations has not
engaged in dilatory conduct. In other words, enforcing the statute as written does not
encourage delay beyond the limitations period that the legislature has deemed appropriate.
Thus, the majority’s attempt to grasp for scenarios under which the express language of
the statute could create a questionable outcome is unpersuasive.
Furthermore, the statutory scheme belies the majority’s conclusion that CPLR 204
(a), as written, creates undesirable results. To ascertain whether the express language of
CPLR 204 (a) creates absurd results, we must examine how that toll operates within the
larger statutory scheme of the CPLR as a whole (see e.g. Matter of Mestecky v City of New
York, 30 NY3d 239, 243 [2017]; Matter of Wallach v Town of Dryden, 23 NY3d 728, 744
[2014]). Generally, under the CPLR, the limitations period runs from the date a claim
accrues until it is interposed by filing—that is, until the action is commenced (see CPLR
203 [a], [c]). In other words, once an action is commenced, it either is or is not time-barred
by the applicable statute of limitations.2 However, U.S. Bank seeks to invoke a toll despite
2
The majority suggests that “[n]either this Court nor the Legislature has restricted the term
‘commencement’ to the first time a party files a complaint asserting a cause of action”
(majority op at 7). But the CPLR directs that the limitation periods be calculated from
accrual until commencement (CPLR 203 [c]) and, once a party commences an action, there
generally would be no occasion to recommence the same action while the first action is
pending. Indeed, if a party were to recommence the same action, the court could dismiss
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its timely interposition—i.e., commencement—of the second foreclosure action because
that action was dismissed after the expiration of the applicable limitations period as a result
of U.S. Bank’s failure to properly serve the summons and complaint on plaintiff.
Conveniently, the CPLR contains a provision addressing this precise predicament—
namely, where an action is timely commenced, but subsequently terminated after the
statute of limitations period expires. Specifically, CPLR 205 (a) provides, in relevant part:
“If an action is timely commenced and is terminated in any
other manner than by a voluntary discontinuance, a failure to
obtain personal jurisdiction over the defendant, a dismissal of
the complaint for neglect to prosecute the action, or a final
judgment upon the merits, the plaintiff . . . may commence a
new action upon the same transaction or occurrence or series
of transactions or occurrences within six months after the
termination.”
Therefore, without assistance from the judiciary, the legislature has provided a remedy for
the situation faced by U.S. Bank where an action is terminated after the limitations period
has expired. Read in the context of the broader statutory scheme—specifically, CPLR 203
and 205 (a)—it was perfectly reasonable that the legislature chose to limit the application
of CPLR 204 (a) to situations arising before commencement.3
that action (see CPLR 3211 [a] [4]). Moreover, under RPAPL 1301 (3), U.S. Bank could
not have commenced a third foreclosure action while the second foreclosure action was
pending “without leave of the court.”
3
I agree with the majority that, if CPLR 204 (a) applied, then U.S. Bank would have had
no need to resort to CPLR 205 (a) because it would have had more than six months
remaining on the statute of limitations to recommence a third foreclosure action after
termination of the second foreclosure action. However, this misses the point of looking to
CPLR 205 (a) in this case. As noted, before proclaiming that the unambiguous language
of a statute creates absurd results, it is prudent to see how that statute fits within the broader
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Here, of course, the second foreclosure action was dismissed for U.S. Bank’s failure
to effectuate proper service, a personal jurisdiction defect expressly excluded from the
benefit of CPLR 205 (a) (see CPLR 205 [a]; Keane v Kamin, 94 NY2d 263, 265 [1999];
Dobkin v Chapman, 21 NY2d 490, 500-501 [1968]). That a party in U.S. Bank’s position
is without a remedy under CPLR 205 (a) is the legislature’s intended consequence of CPLR
article 2; to that end, the legislature amended CPLR 205 (a) in 1992 to add the personal
jurisdiction exception (see L 1992, ch 216).4 If U.S. Bank’s action had been dismissed
outside the statute of limitations for any reason other than the four exceptions to CPLR 205
(a), it would have had six months to recommence the action. In other words, that U.S. bank
was unable to timely commence a third foreclosure action did not result from an absurd
reading of CPLR 204 (a). Rather, it was the legislature’s intended result.
The majority disregards the legislative scheme of the CPLR in one additional
respect that is noteworthy. CPLR 306-b requires that service be completed within 120 days
legislative scheme. The majority reads CPLR 204 (a) in a vacuum, despite its obvious
relation to other provisions of CPLR articles 2 and 3.
4
Before 1992, the personal jurisdiction exception to CPLR 205 (a) existed in case law only
(see Markoff v South Nassau Community Hosp., 61 NY2d 283, 286 [1984]). In Markoff,
this Court held that CPLR 205 (a)—which applies, by its plain terms, only where an action
is “timely commenced,” was not triggered in the absence of proper service because, under
the then-existing statutory regime, an action was commenced by service, not filing.
Notably, the Markoff Court recognized that “commence[ment]” could not be read out of
CPLR 205 (a)—a statute related to limitation periods. When the legislature revised the
CPLR to adopt commencement by filing, it expressly codified the Markoff rule in CPLR
205 (a), even though the Court’s rationale no longer applied under the new statutory
scheme. This history reinforces that the inapplicability of CPLR 205 (a) to the facts of this
case was intentional.
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of the commencement of an action, but provides that, “[i]f service is not made upon a
defendant within [that] time” the court may, “upon good cause shown or in the interest of
justice, extend the time for service.” Rather than move to extend its time to complete
proper service under this provision, U.S. Bank unsuccessfully chose to litigate the propriety
of its original service.5 Additionally, U.S. Bank could have moved for relief from the stay
in the bankruptcy proceeding in order to effectuate proper service (see 11 USC 362 [d] [4];
[f]).6 Given U.S. Bank’s failure to even attempt to utilize these existing statutory remedies,
I disagree with the majority’s conclusion that interpreting the statute as written and as
advanced by plaintiff would be inherently unreasonable. We should not lose sight, as the
majority has, of the relevant statutory scheme when interpreting the express language of
the statute.
Finally, although the majority proclaims that lower courts have unanimously read
CPLR 204 (a) to disregard the term “commencement,” it is notable that, of the three cases
cited in support of this proposition, one relies upon the Appellate Division order being
reviewed on this appeal (see Deutsche Bank Natl. Trust Co. v DeGiorgio, 171 AD3d 1267,
5
Here, only 132 days had passed between the commencement of the second foreclosure
action and the institution of the bankruptcy stay. When the bankruptcy stay was lifted,
U.S. Bank likely had a strong argument that the court should afford it additional time to
correct its defective service considering that stay.
6
Alternatively, U.S. Bank could have moved to reopen the bankruptcy proceeding (see 11
USC § 350 [b]) or attempted to take advantage of the 30-day window provided by 11 USC
§ 108 (c) (2) for recommencing an action where the applicable limitations period has
expired.
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1268 [3d Dept 2019]) and none include any meaningful analysis of the statutory language
or scheme, or of the legislative intent underlying CPLR 204 (a).
In sum, the express language of CPLR 204 (a) evinces the legislature’s unmistakable
intent to provide a statute of limitations toll only “where [the] commencement of an action
has been stayed.” I would hold that “commencement” should be read as defined in the
CPLR, itself. Contrary to the majority’s view, there is nothing inherently absurd about
applying the words chosen by the legislature under the facts of this case, in light of U.S.
Bank’s failure to avail itself of other statutory devices that likely would have prevented a
dismissal of the second foreclosure action based upon improper service. Nor, considering
the broader statutory scheme, can it be said that the plain language of CPLR 204 (a)
encourages gamesmanship or creates absurd results. Therefore, I would reverse the order
of the Appellate Division.
* * * * * * * * * * * * * * * * *
Order affirmed, with costs. Opinion by Judge Garcia. Chief Judge DiFiore and Judges
Wilson and Feinman concur. Judge Stein dissents in an opinion in which Judges Rivera
and Fahey concur.
Decided November 25, 2019
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