223 A.D.3d 37
N.Y. App. Div.2023Background
- In 2006, Joseph Genovese executed a reverse mortgage on his Bronx home, which became due upon his death in March 2008.
- Wells Fargo, the original lender, filed a foreclosure complaint in May 2009 against Genovese’s heirs before a fiduciary for the estate was appointed, accelerating the mortgage debt.
- The foreclosure action was ultimately dismissed in 2017 for lack of personal jurisdiction, as it was commenced before estate executors were appointed; the court did not rule on the validity of the acceleration.
- Wells Fargo assigned the mortgage to Nationstar Mortgage LLC in September 2017.
- In 2022, the co-executor of Genovese’s estate sought to discharge the mortgage under RPAPL 1501(4), claiming the six-year statute of limitations had run from the 2009 acceleration.
- The Supreme Court dismissed the complaint, concluding the prior action was a nullity and thus did not trigger the statute of limitations; plaintiff appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the allegedly void foreclosure action in 2009 validly accelerated the debt, starting the statute of limitations | The 2009 foreclosure complaint evidenced acceleration and triggered the six-year limitations period | The 2009 action was a nullity and could not accelerate the debt or start the clock | Defendant estopped under CPLR 213(4)(b); statute of limitations expired |
| Applicability and retroactivity of the Foreclosure Abuse Prevention Act (FAPA) to actions like this one | FAPA applies retroactively and estops Nationstar from asserting the limitations period did not expire | FAPA is not retroactive and does not apply to already-dismissed cases; application would be unconstitutional | FAPA clearly intended to apply retroactively due to legislative urgency and remedial nature |
| Whether the Supreme Court dismissal qualified for the FAPA exception (express judicial finding no valid acceleration) | No express finding about acceleration, so exception does not apply | Dismissal implied no valid acceleration | No express judicial determination; estoppel applies |
| Consideration of defendant’s constitutional objections to FAPA’s retroactivity | Not considered since AG was not notified | Raised issues re: due process and contract clauses | Not addressed due to procedural defect |
Key Cases Cited
- Bank of Am., N.A. v. Gulnick, 170 A.D.3d 1365 (NY App. Div. 3d Dept. 2019) (discussing reverse mortgage maturity and acceleration upon borrower death)
- Onewest Bank, FSB v. Smith, 135 A.D.3d 1063 (NY App. Div. 3d Dept. 2016) (triggering and effect of acceleration clause in mortgage foreclosure context)
- Laurenti v. Teatom, 210 A.D.2d 300 (NY App. Div. 2d Dept. 1994) (court lacks jurisdiction to foreclose against deceased defendant before estate representative appointed)
- Matter of Gleason v. Michael Vee, Ltd., 96 N.Y.2d 117 (NY Ct. App. 2001) (factors guiding retroactivity of newly amended statutes)
- Brothers v. Florence, 95 N.Y.2d 290 (NY Ct. App. 2000) (retroactivity of legislative amendments)
- Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577 (NY Ct. App. 1998) (presumption of prospectivity in statutory construction)