Partners for Payment Relief DE IV, LLC v Aucapina
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Attorneys and Parties
Brief Summary
Mortgage foreclosure statute-of-limitations enforcement and whether a lender may rely on the six-month savings provision after an earlier foreclosure action was dismissed as abandoned.
The Supreme Court, Suffolk County, denied the defendants' motion for summary judgment seeking dismissal of the foreclosure complaint as untimely and judgment on their counterclaim under RPAPL 1501(4) [action to cancel and discharge of record a mortgage when it is no longer enforceable].
The Appellate Division reversed the order and granted summary judgment to the defendants, dismissing the complaint insofar as asserted against them and directing relief on their RPAPL 1501(4) counterclaim.
The prior foreclosure action accelerated the mortgage debt in December 2009, triggering the six-year limitations period under CPLR 213(4) [six-year statute of limitations for mortgage foreclosure actions]. This action, filed in July 2022, was untimely. The plaintiff could not use CPLR 205(a) [six-month savings provision allowing recommencement in limited circumstances] because the earlier action had been dismissed as abandoned under CPLR 3215(c) [dismissal of abandoned claims where a plaintiff fails to timely seek default-related relief], and the Foreclosure Abuse Prevention Act (FAPA) barred that savings-statute argument.
Background
Wells Fargo Bank, the plaintiff's predecessor, commenced a foreclosure action in December 2009 against the defendants concerning East Hampton property and accelerated the full mortgage debt by calling the entire amount due. In April 2021, the Appellate Division dismissed that prior foreclosure action insofar as asserted against these defendants as abandoned under CPLR 3215(c). In July 2022, Partners for Payment Relief DE IV, LLC filed this new action to foreclose the same mortgage. The defendants answered, asserted a statute-of-limitations defense, and counterclaimed under RPAPL 1501(4) to cancel and discharge the mortgage of record.
Lower Court Decision
The Supreme Court denied the defendants' motion for summary judgment. It refused to dismiss the complaint as time-barred and also denied relief on the defendants' counterclaim to cancel and discharge the mortgage.
Appellate Division Reversal
The Appellate Division held that the defendants made a prima facie showing that the debt was accelerated in December 2009 when the prior foreclosure action was filed, so the limitations period began then. Because the present action was not commenced until July 2022, more than six years later, it was untimely under CPLR 213(4). The plaintiff's reliance on CPLR 205(a) failed because, under the Foreclosure Abuse Prevention Act (FAPA), a prior action dismissed as abandoned under CPLR 3215(c) does not qualify for the benefit of CPLR 205(a) or 205-a. The court also rejected the plaintiff's challenges to FAPA's retroactive application and constitutionality, citing Van Dyke v U.S. Bank, Natl. Assn. and Article 13 LLC v Ponce De Leon Fed. Bank.
Legal Significance
This decision reinforces that commencement of a foreclosure action can accelerate the mortgage debt and start the six-year limitations clock for the entire debt. It also confirms that, after FAPA, lenders cannot revive an otherwise time-barred foreclosure action through CPLR 205(a) when the prior case was dismissed as abandoned under CPLR 3215(c). The ruling further recognizes the validity and retroactive application of FAPA in this context.
If a lender accelerated a mortgage through an earlier foreclosure action and that earlier case was later dismissed as abandoned, a later foreclosure action filed more than six years after the acceleration is time-barred, and the borrower may obtain cancellation and discharge of the mortgage under RPAPL 1501(4).