Court Denies Motion to Dismiss on Statute of Limitations Grounds

On June 30, 2023, Justice Margaret Chan of the New York County Commercial Division issued a decision in Murphy v. PHG Funding LLC, 2023 N.Y. Misc. LEXIS 3327, denying the defendants’ motion to dismiss on statute of limitations grounds. Specifically, the Court rejected the defendants’ argument that the three-year statute of limitations found in the recently enacted Consumer Credit Fairness Act (“CCFA”) applied, holding that because the action was brought before the passing of the CCFA and there was no showing that the New York legislature intended the CCFA to apply retroactively, the standard six-year statute of limitations for a breach of contract action applied. The Court explained:

At the outset, the amended statute of limitations promulgated by the CCFA did not go into effect until April 7, 2022 (NYSCEF #'s 51, 52). Plaintiff, conversely, commenced this lawsuit on October 26, 2021, i.e., prior to the Governor signing the CCFA into law on November 8, 2021, and well before the April 7, 2022, effective date. To be sure, the CCFA did shorten the statute of limitations from six years to three years for actions arising out of consumer credit transactions filed on or after April 7, 2022. Yet Defendants make no showing (prima facie or otherwise) supporting a conclusion that the New York Legislature intended this new three-year statute of limitations to also apply retroactively to lawsuits already commenced before April 7, 2022 (cf Bank of Am. v David., 78 Misc3d 1214[A], at *2, 185 N.Y.S.3d 645, 2023 NY Slip Op 50222[U] [Ithaca City Ct, Mar. 6, 2023] [observing that the charge-off statement provision of the CCFA "is not retroactive"]; see generally 30 E. 33rd St. Realty LLC v PPF Off Two Park Ave. Owner, LLC, 105 AD3d 515, 515-16, 963 N.Y.S.2d 106 [1st Dept. 2013] ["It 'has long been a primary rule of statutory construction that a new statute is to be applied prospectively, and will not be given retroactive construction unless an intention to make it so can be deduced from its wording'"]).

The Court further noted that, even if the CCFA did apply retroactively, its three-year statute of limitations would not apply because the transaction at issue did not constitute a consumer credit transaction.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning the proper statute of limitations for your claims.