Mercury Capital Corp. v. Shepherds Beach, Inc.

281 A.D.2d 604, 723 N.Y.S.2d 48, 2001 N.Y. App. Div. LEXIS 3052

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: March 26, 2001
• Status: Published

Opinion

—In an action to foreclose a mortgage, the defendant Shepherds Beach, Inc., appeals from an order of the Supreme Court, Suffolk County (Floyd, J.), dated March 16, 2000, which denied its motion to dismiss the complaint insofar as asserted against it as barred by the Statute of Limitations.

Ordered that the order is reversed, on the law, with costs, the motion is granted, the complaint is dismissed insofar as asserted against the appellant, and the action against the remaining defendants is severed.

The default on the note and mortgage at issue occurred on January 1, 1992. On January 27, 1994, the defendant Eileen C. Oliver filed a petition for protection under the United States Bankruptcy Code, which imposed an automatic stay of any mortgage foreclosure actions (see, 11 USC § 362 [a]). On May 31, 1995, the Bankruptcy Court issued an order confirming a plan under Chapter 11 of the Bankruptcy Code. This action to foreclose the mortgage was not commenced until August 19, 1999.

The automatic stay was lifted when the Bankruptcy Court issued the order confirming the Chapter 11 plan (see, 11 USC § 362 [c]; § 1141 [b]; In re Turning Point Lounge, 111 Bankr 44; In re Fortner Oilfield Servs., 49 Bankr 9). Thus, the six-year Statute of Limitations of CPLR 213 (4) was tolled pursuant to CPLR 204 (a) only from January 27, 1994, to May 31, 1995. Since this foreclosure action was not commenced until August 19, 1999, it was not timely. O’Brien, J. P., Friedmann, Gold-stein and Smith, JJ., concur.