REVOCATION OF ACCELERATION & STATUTE OF LIMITATIONS – BUYER
August 29, 2022
By Diane Drain Attorney & Retired Law Professor
Miller Designs v. US Bank et al. CA-CV 16-0723, 244 Ariz. 265, (AZ Court of Appeals, Div. One, 2/13/18)
Holding: : (1) A purchaser of real property acquired at an execution sale under Arizona Revised Statutes (“A.R.S.“) section 12-1622 has standing to assert a statute of limitations defense under A.R.S. § 33-816 and no additional contractual privity is necessary; (2) a creditor may unilaterally revoke its acceleration of debt; (3) unilateral revocation of the debt’s acceleration requires an affirmative act by the creditor, which must communicate to the debtor that the debt’s acceleration has been cancelled; (4) a notice of cancellation of the trustee’s sale may be an affirmative act by the creditor sufficient to communicate to the debtor, and to any third party investigating title to the property, that the creditor cancelled the debt’s acceleration if it contains a statement revoking the acceleration; and (5) recording the notice of cancellation of trustee’s sale with language revoking the acceleration constitutes sufficient notice that the creditor has revoked the debt’s acceleration.
Because Bank inserted the Acceleration Revocation Clause into the Notice of Cancellation, it sufficiently communicated to the Borrower, and to any third party investigating title to the property, that Bank was also revoking the debt’s acceleration. Acceleration of note starts the clock for six year statute of limitations to complete trustee’s sale. Affirmative act by lender de-accelerating a prior acceleration of a note restarts the statute of limitations. An acceleration revocation clause in the recorded notice of cancellation of trustee’s sale held sufficient affirmative act. Because the acceleration’s revocation reset the statute of limitations the court found that the statute of limitations regarding future obligations has not run.
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