Windward Bora, LLC v. Wilmington Savings Fund Society, No. 19-3626 (2d Cir. 2020)
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The Second Circuit affirmed the district court's grant of summary judgment in favor of Wilmington Savings in an action seeking to quiet title and discharge a mortgage under New York law. Windward Bora argues that New York's six-year statute of limitations has expired as to any foreclosure action under the mortgage and Wilmington Savings argues that it is immune from this statute of limitations by virtue of its status as an assignee of the U.S. Department of Housing and Urban Development (HUD).
The court joined its sister circuits in concluding that assignees of the federal government are entitled to its immunity from state statutes of limitations. These courts generally reason, and this court found persuasive, that under traditional common law principles governing assignments, "the assignee of the United States stands in the shoes of the United States and is entitled to rely on the limitations periods prescribed by federal law." Moreover, this result is warranted "because it improves the marketability of instruments held by the United States, thereby giving the United States greater flexibility in monetizing its claims." The court also concluded that Wilmington Savings is entitled to such immunity here and rejected Windward Bora's contentions to the contrary. In this case, Wilmington Savings' status as a HUD assignee offers a sufficient basis for affirming the district court's conclusion that Wilmington Savings is immune from the state limitations period.
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