DLJ MORTGAGE CAPITAL INC v. Mortgage Electronic Registration Systems, Inc. et al., Defendants. (2026)

Order, Supreme Court, New York County (Nancy M. Bannon, J.), entered September 27, 2024, which denied the motion of defendants Meyer Adler and 56 West 126 Holding, LLC (together, defendants) for leave to renew their opposition to plaintiff's motion for summary judgment and 56 West's cross-motion to dismiss the complaint based on the statute of limitations, unanimously reversed, on the law, without costs, the motion for leave to renew granted and, upon renewal, plaintiff's motion denied and 56 West's cross-motion granted.  The Clerk is directed to enter judgment accordingly.  Appeals from order, same court and Justice, entered August 12, 2024, which granted plaintiff's motion for summary judgment and denied 56 West's cross-motion to dismiss, unanimously dismissed, without costs, as academic.

On or about July 28, 2005, defendant Meyer Adler granted a nonparty a note and a mortgage securing 56 West 126th Street in Manhattan.  Adler later deeded the property to defendant 56 West 126 Holding, LLC. On September 8, 2009, nonparty GMAC Mortgage LLC brought a foreclosure action against Adler.  In GMAC's complaint, it stated that it was accelerating the loan.  GMAC then voluntarily discontinued the action on July 27, 2011, but never expressly stated that it was revoking the acceleration.

On September 12, 2016, Adler brought an action seeking a declaration canceling and discharging the note.  In November 2018, while the declaratory judgment action was pending, plaintiff, GMAC's successor-in-interest, commenced this foreclosure action upon the note and mortgage.  In May 2021, this Court affirmed the dismissal of the declaratory judgment action holding that the 2009 default notice did not accelerate the debt and that, even if it did, under Freedom Mtge. Corp. v. Engel, 37 N.Y.3d 1, 146 N.Y.S.3d 542, 169 N.E.3d 912 (2021), the voluntary discontinuance of the 2009 action revoked the acceleration (Adler v. DLJ Mtge. Capital, Inc., 194 A.D.3d 633, 144 N.Y.S.3d 564 [1st Dept. 2021]).

On October 29, 2021, plaintiff moved for summary judgment in this foreclosure action.  Defendant 56 West cross-moved to dismiss the complaint.  The motion was fully submitted in January 2022.

On December 30, 2022, New York enacted the Foreclosure Abuse Prevention Act (FAPA) (L 2022, ch 821), which, among other things, amended CPLR 3217 to add subdivision (e), which provided that the voluntary discontinuance of an action on a note or mortgage “shall not, in form or effect, waive, postpone, cancel, toll, extend, revive or reset” the statute of limitations (see L 2022, ch 821, § 8;  cf.  CPLR 213[4]).  FAPA section 10 provided that the act “shall take effect immediately” and would apply to all foreclosure actions “in which a final judgment of foreclosure and sale has not been enforced” (L 2022, ch 821, § 10).

By order entered August 12, 2024, the motion court granted plaintiff's motion for summary judgment based on the papers which were fully submitted by January 2022.  In September 2024, defendants filed their motion seeking leave to renew and, upon renewal, to dismiss the action based on FAPA.

The motion court should have granted defendants’ motion to renew based on CPLR 3217(e) (see e.g. Bank of N.Y. Mellon v. Bosboom, 238 A.D.3d 504, 504, 234 N.Y.S.3d 475 [1st Dept. 2025]).  FAPA applies to this action, as there has been no enforcement of a judgment of foreclosure and sale (see L 2022, ch 821, § 10).  Under FAPA, GMAC's 2011 discontinuance did not revoke its acceleration of the note (see CPLR 3217[e]).  Accordingly, since the note was accelerated in 2009, plaintiff had six years, i.e., until September 2015, to bring this action.

The court was correct to observe that the statute of limitations argument raised in the motion for leave to renew had not been articulated in defendants’ original motion papers.  However, plaintiff's summary judgment motion sought to dismiss defendants’ affirmative defenses, including those premised on the statute of limitations, and defendants opposed the motion, relying in part on the defenses raised in their answers.  The law changed after the original motion and cross-motion were fully submitted.  At that time defendants filed their motion to renew, using the precise procedural mechanism that the CPLR authorizes to undo a prior order based on a change in the law.  At that time, they briefed their statute of limitations defense fully.

Plaintiff argues that FAPA does not have retroactive effect.  The Court of Appeals rejected that argument conclusively in (Article 13 LLC v. Ponce De Leon Federal Bank, ––– N.Y.3d ––––, ––– N.Y.S.3d ––––, ––– N.E.3d ––––, 2025 N.Y. Slip Op. 06536 [2025];  see Genovese v. Nationstar Mtge. LLC, 223 A.D.3d 37, 45, 199 N.Y.S.3d 513 [1st Dept. 2023]).  Applying FAPA here would not violate the Contracts Clause of the United States Constitution, as plaintiff points to no contractual provision that allowed it to deaccelerate its loan or that FAPA otherwise impaired (Article 13 LLC, ––– N.Y.3d at –––– – ––––, ––– N.Y.S.3d ––––, –––– N.E.3d ––––, 2025 N.Y. Slip Op. 06536 at *4–5;  see Bank of N.Y. Mellon v. Del Rio, 233 A.D.3d 529, 532, 224 N.Y.S.3d 30 [1st Dept. 2024]).  Article 13 LLC also held that FAPA does not violate either the substantive or procedural due process protections provided by our state Constitution (id.).  Nor would retroactive application of FAPA violate the due process clause of the United States Constitution, as the 2011 stipulation of discontinuance was silent as to whether GMAC deaccelerated its loan (see id. at 531–532, 224 N.Y.S.3d 30).

Similarly, FAPA did not effect an unconstitutional taking.  Plaintiff claims that FAPA deprived it of its property interest in its mortgage.  We rejected that argument in Bank of New York v. Del Rio, 233 A.D.3d at 532, 224 N.Y.S.3d 30.  Plaintiff had no right to rely on the law in effect when the original lender entered into the loan agreements under which GMAC could deaccelerate its mortgage by voluntarily discontinuing the 2009 action (see Deutsche Bank Natl. Trust Co. v. Dagrin, 233 A.D.3d 1065, 1070–1071, 226 N.Y.S.3d 75 [2d Dept. 2024];  see also Bosboom, 238 A.D.3d at 505, 234 N.Y.S.3d 475).  Finally, FAPA is not an unconstitutional bill of attainder (see Dagrin at 1072, 226 N.Y.S.3d 75;  see also Wilmington Trust, N.A. v. Farkas, 232 A.D.3d 524, 525–526, 223 N.Y.S.3d 623 [1st Dept. 2024]).