The Bank of New York Mellon, formerly known as The Bank of New York v Adam P1otch, LLC
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Attorneys and Parties
Brief Summary
Mortgage foreclosure procedure and whether a borrower or property owner may use the Foreclosure Abuse Prevention Act (FAPA) after entry of a foreclosure judgment to seek relief based on a change in the law.
The lower court denied defendant's motion under CPLR 2221 [New York rule governing motions to renew or reargue, including motions based on a change in the law], finding the motion untimely.
The Appellate Division reversed the order denying the CPLR 2221 motion and remanded for consideration of the motion on the merits under the Foreclosure Abuse Prevention Act (FAPA).
After Article 13 LLC v Ponce De Leon Fed. Bank and 21st Mtge. Corp. v Lin, a party may seek retroactive application of FAPA by filing a motion to renew before the foreclosure sale occurs, even after judgment and after the time to appeal has expired. Defendant followed that procedure, so the motion was not untimely.
Background
Plaintiff commenced a mortgage foreclosure action on July 9, 2009. While that action was still pending, defendant Adam P1otch, LLC acquired the property at a condominium lien foreclosure sale on August 13, 2012, subject to the mortgage. Plaintiff then brought a second foreclosure action on the same mortgage on March 19, 2014. A judgment of foreclosure and sale was entered on October 29, 2020. Defendant later moved under CPLR 2221 [New York rule governing motions to renew or reargue, including motions based on a change in the law] to vacate that judgment based on the Foreclosure Abuse Prevention Act (FAPA).
Lower Court Decision
Supreme Court, New York County denied defendant's CPLR 2221 motion, concluding that the request to vacate the foreclosure judgment based on FAPA was untimely.
Appellate Division Reversal
The Appellate Division unanimously reversed, with costs, and remanded. It held that the motion should not have been rejected as untimely because, under recent precedent, the proper way to obtain retroactive application of FAPA after judgment and after expiration of the appeal period is to file a motion to renew before the foreclosure sale is conducted. The court also directed consideration on remand of the parties' arguments over whether retroactive application of FAPA would violate the Takings Clause and Due Process Clause.
Legal Significance
The decision confirms that, in the First Department, a post-judgment foreclosure litigant may still invoke FAPA through a CPLR 2221 motion to renew if the motion is made before the foreclosure sale occurs. It also highlights that constitutional objections to retroactive application of FAPA, including takings and due process arguments, remain open for determination on the merits.
A foreclosure defendant is not automatically barred from seeking relief under FAPA after a judgment of foreclosure and sale has been entered; if the foreclosure sale has not yet occurred, a CPLR 2221 motion to renew based on the change in law may still be timely.