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Security National Partners Limited Partnership v. Mahler

A-0813-99T1, 2000 WL 1898958 (N.J. Super. App. Div. 2000) (Unpublished)

MORTGAGES; FORECLOSURE; STATUTE OF LIMITATION—There is a twenty year statute of limitations governing institution of a mortgage foreclosure and it is not dependant on non-payment, laches or other equitable concept.

A couple executed a note and mortgage on their residence. They defaulted on the loan and the bank commenced foreclosure. The mortgage was then transferred several times to different mortgage holders. At one point, a mortgage holder filed a unilateral discontinuance of the foreclosure proceeding. A subsequent mortgage holder then filed a subsequent foreclosure action and moved for summary judgment which the lower court granted. The couple appealed, arguing that the previous mortgage holder’s unilateral discontinuance barred the subsequent mortgage holder from instituting the foreclosure proceeding. It also argued that the statute of limitations to foreclose on a mortgage is six years and therefore the subsequent foreclosure action was barred by the statute of limitations. The Appellate Division acknowledged that a unilateral discontinuance was unauthorized under New Jersey Court Rules, but rejected the homeowner’s argument that because the stipulation of dismissal was improperly filed it should be treated as being “with prejudice,” barring any subsequent or new complaint. With respect to the statute of limitations argument, the Appellate Division began by explaining that a foreclosure proceeding is different and distinct from a suit on the underlying note. It acknowledged that a suit on the note is governed by a six year statute of limitations whereas there had been no definitive rule relating to a statute of limitations on the foreclosure proceeding. Relying on principles from prior case law, the Appellate Division held that: “1) there is a twenty year limitation period governing institution of a mortgage foreclosure suit; 2) the twenty year limitation is a true statute of limitations and does not depend on presumptions of non-payment, laches, or other equitable concepts; and 3) one urging the applicability of the twenty year limitation in a particular case need not show any evidence of adverse possession other than the lack of any payments during the twenty years in question.”

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