Bank of New York Mellon v Conforti
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Attorneys and Parties
Brief Summary
Mortgage foreclosure and statute of limitations, specifically whether a lender's prior foreclosure action accelerated the debt and whether a later voluntary discontinuance reset the limitations period after the Foreclosure Abuse Prevention Act (FAPA).
The Supreme Court denied 35 Pleasure, LLC's motion for leave to renew under CPLR 2221(e)(2) [renewal motion based on new facts or a change in law], refused to revisit its earlier denial of summary judgment dismissing the complaint and granting relief on the counterclaim under RPAPL 1501(4) [permits a person with an estate or interest in mortgaged real property to seek cancellation and discharge of the mortgage if the foreclosure limitations period has expired], and granted the plaintiff's request to confirm the referee's report and enter a judgment of foreclosure and sale.
The Appellate Division reversed the order and judgment of foreclosure and sale, granted renewal, vacated the prior denial of 35 Pleasure, LLC's cross-motion, granted summary judgment dismissing the complaint insofar as asserted against 35 Pleasure, LLC, granted its RPAPL 1501(4) counterclaim to cancel and discharge the mortgage, and denied the plaintiff's cross-motion to confirm the referee's report and for a judgment of foreclosure and sale.
FAPA changed the law by providing through CPLR 3217(e) [voluntary discontinuance of a foreclosure action does not waive, postpone, cancel, toll, extend, revive, or reset the limitations period] and CPLR 203(h) [after accrual of a mortgage foreclosure claim, no party may unilaterally revive or reset accrual or extend the statute of limitations] that a lender cannot de-accelerate a mortgage debt merely by voluntarily discontinuing a prior foreclosure action. Because the plaintiff accelerated the debt in the 2011 foreclosure action, the six-year period under CPLR 213(4) [six-year statute of limitations for mortgage foreclosure actions] expired in December 2017, making this May 2018 action untimely. The court also rejected the plaintiff's arguments against FAPA's retroactive application and constitutionality.
Background
The plaintiff commenced a prior foreclosure action in December 2011 and, by doing so, accelerated the mortgage debt. That action was voluntarily discontinued in 2014. In May 2018, the plaintiff brought this foreclosure action against, among others, 35 Pleasure, LLC. 35 Pleasure, LLC argued that the 2018 action was time-barred and counterclaimed under RPAPL 1501(4) to cancel and discharge the mortgage. The Supreme Court initially rejected that position in 2019. After enactment of FAPA in 2022, 35 Pleasure, LLC moved to renew on the ground that the new statute changed the limitations analysis.
Lower Court Decision
The Supreme Court, Suffolk County, denied renewal, adhered to its earlier ruling denying 35 Pleasure, LLC's summary judgment cross-motion and RPAPL 1501(4) counterclaim, granted the plaintiff's cross-motion to confirm the referee's report and for a judgment of foreclosure and sale, and entered an order and judgment directing sale of the property.
Appellate Division Reversal
The Appellate Division held that renewal should have been granted because FAPA constituted a change in law that altered the prior determination. The court concluded that the 2011 foreclosure action accelerated the debt, that the voluntary discontinuance did not undo that acceleration under FAPA, and that the limitations period therefore expired in December 2017. Since the present action was not commenced until May 2018, it was untimely. The appellate court dismissed the complaint insofar as asserted against 35 Pleasure, LLC, granted its counterclaim to cancel and discharge the mortgage, and denied foreclosure relief to the plaintiff.
Legal Significance
This decision reinforces that FAPA applies to pending mortgage cases and can support renewal of prior rulings. It confirms that a lender's voluntary discontinuance of an earlier foreclosure action no longer de-accelerates the debt or resets the statute of limitations. It also underscores that New York appellate courts continue to reject challenges to FAPA's retroactivity and constitutionality.
When a lender accelerated a mortgage debt by filing a foreclosure action, a later voluntary discontinuance does not reset the clock under FAPA, so a new foreclosure action filed more than six years later is time-barred and the mortgage may be canceled under RPAPL 1501(4).