Enforcement Attorneys
Recent Developments
April 23, 2025
Another Win in the Appellate Division – This Time in an Unusual Real Estate Case
In this case, our client came to us with an unusual $1.1 million promissory note: it does not contain a fixed maturity (payment) date. It was issued to her in connection with the conveyance of real estate in Soho on Spring Street. She was taken advantage of by an unscrupulous soon-to-be ex-spouse in connection with a dirty real estate deal he made and pushed through during their divorce case.
In a nutshell, she trusted him and allowed the sale to go through without her own counsel. We sued on the Note alleging that the ambiguous condition to payment in the Note had occurred (90 days after the owner had a “long-term tenant” for the commercial space in the building). The defendant argued, without any proof, that a “long term tenant,” a term it inserted in the Note without providing a definition, was intended to mean ten years or more. We asked the court to interpret the term in our favor based on these circumstances, but a lower court judge shockingly tossed our case, finding that our client had no enforceable contract. The defendant had not even argued that.
We immediately appealed and on February 18, 2025, obtained a unanimous reversal from the Appellate Division, First Department, reinstating the case. The case was remitted for further proceedings below. The decision can be read here. We are optimistic that we will prevail and recover the full amount owed on the Note.
The Life and Death of New York Judgments
New York judgments are generally valid for twenty years; after that, they are conclusively presumed to have been paid, even if they were not. CPLR 211(b).
There are, however, a few nuances. First, the time will be extended (basically renewed) if the debtor within the twenty years “acknowledges an indebtedness” or “makes a payment.” The acknowledgement must be signed and in writing. Money or property recovered through judgment enforcement is considered a payment. None of the tolls and extensions available for other statutes of limitation are applicable to the twenty year period for valid judgments, however.
There is one other important thing. Judgment liens on real estate are valid only for ten years. They are subject to renewal for ten additional years, which should be done by filing an action on the judgment pursuant to CPLR 5203. The action for a renewal judgment may be filed during the year prior to the expiration of the original judgment lien, a provision which assumes that the renewal judgment will be issued within a year, avoiding a dangerous lien gap. Depending on the county, this may be an overly optimistic timeline. A good idea would be to file the renewal judgment action as a motion for summary judgment in lieu of complaint, under CPLR 3213.