232 A.D.3d 524
N.Y. App. Div.2024Background
- Wilmington Trust, as successor to Citibank, brought a foreclosure action in 2022 involving a mortgage originally accelerated in 2008.
- The original lender, Citibank, commenced foreclosure in 2008, expressly accelerating the mortgage debt.
- Citibank voluntarily discontinued the 2008 foreclosure action in 2013; Wilmington later sought to foreclose on the same mortgage in 2022.
- Plaintiff claimed the statute of limitations was extended or tolled by discontinuance, an alleged de-acceleration letter, and by Farkas's bankruptcy filings.
- Defendant argued, and the trial court held, that the claim was time-barred under New York’s six-year statute of limitations for mortgage foreclosures, as clarified by the Foreclosure Abuse Prevention Act (FAPA).
- The Appellate Division affirmed dismissal of the action as untimely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of Limitations for Foreclosure | Action was timely due to discontinuance, intent, or FAPA non-application | Six years expired; FAPA applies; no valid tolling or revival | Time-barred; FAPA properly applied; discontinuance/de-acceleration ineffective |
| Effect of Voluntary Discontinuance | Discontinuance in 2013 reset/extended limitations | Discontinuance does not affect limitations per FAPA | Discontinuance does not reset limitations period |
| Effect of Alleged Debt Reaffirmation | Bankruptcy “Statement of Intention” reaffirmed debt | No express promise; statement only intent | No tolling; no express reaffirmation by defendant |
| Retroactive Application of FAPA | FAPA should not apply retroactively to this action | FAPA is remedial, applies to pending suits | FAPA’s retroactive application is constitutional and appropriate |
Key Cases Cited
- Batavia Townhouses, Ltd. v. Council of Churches Hous. Dev. Fund Co., Inc., 38 NY3d 467 (mere statement of future intent to pay is not an express promise reviving limitations period)
- Federal Natl. Mtge. Assn. v. Rosenberg, 180 AD3d 401 (once limitations period expires, revocation of acceleration is ineffective)
- Freedom Mtge. Corp. v. Engel, 37 NY3d 1 (FAPA enacted to overrule Engel regarding resetting of limitations period by discontinuance)
- US Bank N.A. v. Fox, 216 AD3d 445 (FAPA applies to pending foreclosure suits)
- Matter of Regina Metro. Co., LLC v. NY State Div. of Hous. & Community Renewal, 35 NY3d 332 (retroactive remedial legislation must serve legitimate legislative purpose)