Banco do Brasil S. A. v. State of Antigua & Barbuda
2000 N.Y. App. Div. LEXIS 4361, 268 A.D.2d 75, 707 N.Y.S.2d 151 (2000)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under New York General Obligations Law § 17-101, a written acknowledgment of a debt, sent after the statute of limitations has run, can revive the time-barred claim if the writing recognizes an existing debt and contains nothing inconsistent with an intention to pay it.
Facts:
- On November 12, 1981, Banco do Brasil loaned $3,000,000 to the State of Antigua and Barbuda.
- The Ministry of Finance of the State of Antigua and Barbuda guaranteed the loan.
- The State of Antigua and Barbuda failed to pay the amount due, with the final payment having been due on January 21, 1985.
- On October 5, 1989, the Ministry sent a letter confirming the obligation but requesting a six-month delay to devise a repayment plan due to damages from Hurricane Hugo.
- On February 24, 1997, the Ministry sent a second letter to Banco do Brasil confirming the current balances due under the loan, detailing the original loan amount, accrued interest, past-due interest, and the total due of $11,400,810.96.
- Despite demands for payment after the 1997 letter, the State of Antigua and Barbuda failed to pay the amount owed.
Procedural Posture:
- Banco do Brasil (plaintiff) commenced an action against the State of Antigua and Barbuda and its Ministry of Finance (defendants) in the Supreme Court, New York County, a state trial court.
- The suit alleged breach of the loan agreement, promissory notes, and guarantee agreement.
- Defendants filed a motion to dismiss the complaint, arguing the claims were barred by the applicable six-year statute of limitations.
- The trial court denied the defendants' motion to dismiss, ruling that the 1997 letter revived the statute of limitations.
- The defendants (appellants) appealed the trial court's order to the Supreme Court, Appellate Division, First Department, an intermediate appellate court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a letter sent after the statute of limitations has run, which confirms the specific amount of an outstanding debt including principal and accrued interest, constitute a sufficient acknowledgment to revive the time-barred claim under New York General Obligations Law § 17-101?
Opinions:
Majority - Lerner, J.
Yes. A letter that confirms the specific balances of a time-barred debt constitutes a sufficient acknowledgment under General Obligations Law § 17-101 to revive the claim. The court reasoned that the statute requires a writing that recognizes an existing debt and contains nothing inconsistent with an intention to pay. The 1997 letter, by explicitly referring to the original loan and confirming the current and increasing balances of principal and interest, was a plain admission of indebtedness. Citing Morris Demolition Co. v Board of Educ., the court held that such a recital, even if not an express new promise, clearly conveys an intention to pay, which is all the statute requires. The court rejected the defendants' argument that discovery was needed to determine their own intent, as their intention was evident from the letter itself.
Analysis:
This decision clarifies the threshold for what constitutes an 'acknowledgment' sufficient to revive a time-barred debt under GOL § 17-101. It establishes that an explicit new promise to pay is not required; a detailed, written confirmation of the specific amount owed is enough to imply the debtor's intention to pay. The ruling lowers the burden for creditors seeking to enforce old debts and puts debtors on notice that communications confirming the specifics of an outstanding balance can have significant legal consequences, effectively resetting the statute of limitations.
