In a case of appellate first impression in New York, the
Appellate Division, Second Department held that a mortgage is
accelerated upon a lender's election to do so, notwithstanding
an optional reinstatement clause in a mortgage. In the
Dieudonne matter,1 the Second Department rejected
the "MacPherson Argument," first pronounced by the
Supreme Court, Suffolk County2 and affirmed the dismissal of
the lender's foreclosure complaint as time-barred. The
MacPherson Argument reasons that a mortgage with an optional
reinstatement clause is not accelerated until judgment enters, as
the borrower has an continuous right to reinstate until that
point.
The Dieudonne decision will have significant impact on
whether certain residential foreclosure actions are deemed timely
commenced. In New York, the statute of limitations to foreclose a
mortgage is six years. See CPLR 213(4). The commencement of a
foreclosure action is the most common way that lenders take an
affirmative act to
