HSBC Bank USA, N.A., as Indenture Trustee for the Registered Noteholders of Renaissance Home Equity Loan Trust 2006-2 v. Nicola Nicholas, as Administrator of the Estate of Cecilia V. McDowell a/k/a Cecilia McDowell
Attorneys and Parties
Brief Summary
Mortgage foreclosure time-bar and acceleration issues under the Foreclosure Abuse Prevention Act (FAPA) [L 2022, ch 821; curtails abusive foreclosure litigation practices and prevents lenders from unilaterally resetting the statute of limitations; applies retroactively].
Applied FAPA retroactively to hold that voluntary discontinuance did not deaccelerate or reset the statute of limitations and that the 2011 stipulation was invalid under General Obligations Law § 17-105 because it was not personally signed by the borrower; dismissed the complaint as time-barred and denied plaintiff's summary judgment motion.
The dismissal under CPLR 3211(a)(5) and the determination that the 2011 stipulation did not toll the statute of limitations; the complaint was reinstated and the matter remanded for determination of plaintiff's summary judgment motion.
The 2011 stipulation was enforceable under CPLR 2104 [requires that stipulations in an action be in a writing subscribed by a party or the party’s attorney] and, under General Obligations Law § 17-105(5)(b) [preserves the effect and timing of an action based upon a stipulation made in an action or proceeding], was excluded from § 17-105(1)’s personal-signature requirement. CPLR 3217(e) [as amended by FAPA, voluntary discontinuance of a mortgage foreclosure action does not affect the limitations period unless expressly prescribed by statute] does not bar an express bilateral tolling agreement. Constitutional challenges to FAPA (Contract Clause, Due Process, Takings) were rejected consistent with Van Dyke and Article 13.
Background
Plaintiff accelerated the mortgage by commencing a foreclosure action on July 25, 2008. On May 4, 2011, the parties executed and filed a written stipulation discontinuing that action without prejudice and expressly tolling the statute of limitations from July 22, 2008 to June 1, 2013. Plaintiff filed the present foreclosure action on February 16, 2018. Plaintiff moved for summary judgment; defendant cross-moved to dismiss as time-barred under FAPA. The motion court applied FAPA retroactively, held that a voluntary discontinuance does not deaccelerate or reset accrual, and found the 2011 stipulation ineffective because it lacked the borrower’s personal signature.
Lower Court Decision
The Supreme Court, New York County, denied plaintiff’s motion for summary judgment and granted defendant’s CPLR 3211(a)(5) motion to dismiss as time-barred. The court applied FAPA retroactively, found that the 2011 stipulation did not comply with General Obligations Law § 17-105(1) because it was not signed by defendant personally, and concluded the limitations period was not tolled.
Appellate Division Reversal
The Appellate Division agreed that FAPA applies retroactively but held that the 2011 stipulation—executed by counsel and filed in the prior action—complied with CPLR 2104 and expressly tolled the statute of limitations to June 1, 2013. General Obligations Law § 17-105(5)(b) preserves stipulations made in an action from § 17-105(1)’s personal-signature requirement, and CPLR 3217(e) does not bar express bilateral tolling. The court rejected plaintiff’s constitutional challenges to FAPA (Contract Clause, Due Process, Takings). Because the present action commenced on February 16, 2018—within six years of June 1, 2013—it was timely. The court reversed, denied the cross-motion, reinstated the complaint, and remanded for a determination on summary judgment.
Legal Significance
Clarifies that, despite FAPA’s retroactive application and its limits on lenders’ unilateral acts, an attorney-signed stipulation made in a prior action that expressly tolls the statute of limitations remains enforceable under CPLR 2104 and General Obligations Law § 17-105(5)(b). Voluntary discontinuance alone does not toll or reset the period under CPLR 3217(e), but parties may still extend limitations through explicit, bilateral stipulations in an action. The decision reaffirms the constitutionality of FAPA’s retroactive provisions and provides guidance on drafting enforceable tolling stipulations in foreclosure cases.
Even under FAPA’s retroactive regime, a written, attorney-signed stipulation made in an action that expressly tolls the foreclosure limitations period is valid and can render a later foreclosure action timely; lenders cannot rely on unilateral acts, but clear bilateral stipulations remain effective.