Mortgage Foreclosure Action Barred by Statute of Limitations Based On Prior Involuntary Dismissal Without Prejudice
The statute of limitations on a mortgage foreclosure action is governed by CPLR 213(4), which provides that the action must be commenced within six years.
Introduction. Without reinstatement or modification following the lender’s acceleration of the debt, there were no new payments due and, therefore, no new default. Accordingly, the second action-filed more than five years after the lender accelerated the debt in the first action-was barred by the statute of limitations.
In addition, the Court held that the plaintiff borrower failed to state a cause of action because res judicata did not apply to the dismissal of the foreclosure action, the debt was not barred by the statute of limitations, and any alleged expiration of the statute of limitations would not change the balance due on the mortgage loan.
Florida Foreclosure Statutes of Limitations.. (Learn about the statute of limitations in foreclosure actions.). the mortgage holder can generally bring a foreclosure action based on any of the default dates. The only requirement is that the foreclosure suit must be filed within five years.
If the involuntary dismissal without prejudice was based on such a finding by the court, this may raise some type of equitable estoppel for the homeowner to take the inconsistent position in the second foreclosure action that there actually had been an acceleration in the first action – without a prior acceleration, there was accrual of a cause of action and the statute of limitations never began to run.
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"The statute of limitations in a mortgage foreclosure action begins to run from the due date for each unpaid installment, or from the time the mortgagee is entitled to demand full payment, or from the date the mortgage debt has been accelerated (Plaia v Safonte, 45 AD3d 747, 748  [emphasis added]).
In September 2011, the lender voluntarily dismissed without prejudice, and, in 2013, the borrower filed his action to quiet title, alleging that the five-year statute of limitations barred enforcement of the note or mortgage. 31 The trial court rejected the borrower’s assertion, holding that the lender could file a second foreclosure action.
"[T]he statute of limitations on the balance under the note and mortgage would not continue to run after an involuntary dismissal, and thus the mortgagee would not be barred by the statute of limitations from filing a successive foreclosure action premised on a "separate and distinct" default.