US Bank National Association v. Livoti
Attorneys and Parties
Brief Summary
Residential mortgage foreclosure statute of limitations and the retroactive application of the Foreclosure Abuse Prevention Act (FAPA) to bar unilateral de-acceleration/reset of accrual.
The trial court granted plaintiff's summary judgment, struck defendant's answer and affirmative defenses, issued an order of reference, and later confirmed the referee's report and entered a judgment of foreclosure and sale.
The Appellate Division reversed the denial of renewal, vacated the prior summary judgment/order of reference and the judgment of foreclosure and sale, and granted defendant's limitations defense dismissing the complaint.
FAPA applies to pending foreclosure actions where the judgment has not been enforced and prohibits unilateral de-acceleration from resetting the statute of limitations (CPLR 203[h] [now provides that once a foreclosure claim accrues, no party may unilaterally revive or reset accrual or extend the limitations period]). The 2009 foreclosure action accelerated the debt, triggering the six-year limitations period under CPLR 213(4) [six-year statute of limitations for mortgage foreclosure]. The plaintiff's 2015 de-acceleration letter could not reset accrual under FAPA, rendering the 2016 action untimely. Constitutional challenges to FAPA were rejected.
Background
Defendant executed a $1,000,000 note and mortgage in 2007. In 2009, CitiMortgage (plaintiff's predecessor) commenced a foreclosure, thereby accelerating the debt. In 2015, the trial court dismissed that prior action as abandoned under CPLR 3215(c) [requires dismissal when plaintiff fails to take proceedings for entry of judgment within one year after default]. CitiMortgage then sent a 2015 letter purporting to rescind acceleration. Plaintiff commenced this new foreclosure in 2016. In 2019, the trial court granted plaintiff summary judgment, struck defenses, and issued an order of reference; that order was affirmed on appeal. The court later confirmed the referee's report and entered a judgment of foreclosure and sale in December 2022. FAPA (L 2022, ch 821) took effect December 30, 2022, and plaintiff scheduled an auction for April 25, 2023. Defendant moved in March 2023 to renew based on FAPA; the trial court denied renewal in September 2023, prompting this appeal.
Lower Court Decision
By order dated October 8, 2019, the Supreme Court granted plaintiff's motion for summary judgment, struck defendant's answer and affirmative defenses, and issued an order of reference, while denying defendant's cross-motion to dismiss as time-barred. In December 2022, the court confirmed the referee's report and entered a judgment of foreclosure and sale. In September 2023, the court denied defendant's motion to renew based on FAPA.
Appellate Division Reversal
The Appellate Division held that a motion to renew was proper because it was based on a change in law—FAPA (CPLR 2221[e][2] [permits renewal based on new facts or a change in the law that would change the prior determination]). The court ruled FAPA applies to all actions where a final judgment of foreclosure and sale has not been enforced, including where a sale is scheduled but not yet held. It rejected plaintiff's constitutional challenges, held the 2009 acceleration started the six-year limitations period under CPLR 213(4), and concluded the 2015 de-acceleration letter could not reset accrual under CPLR 203(h). Because the 2016 action was commenced more than six years after acceleration, it was time-barred. The court granted renewal, vacated the October 8, 2019 and December 20, 2022 orders and the judgment of foreclosure and sale, denied plaintiff's motions, and granted defendant's cross-motion dismissing the complaint as time-barred.
Legal Significance
The decision confirms FAPA's retroactive application to pending foreclosure matters where the judgment has not been enforced and forecloses reliance on unilateral de-acceleration letters or voluntary discontinuances to reset the limitations clock. It underscores that acceleration by filing a foreclosure action triggers the six-year period and that CPLR 203(h) prevents unilateral revival after accrual. It also joins precedent rejecting Takings, Due Process, and Contract Clause challenges to FAPA in this context.
Once a mortgage is accelerated by commencing foreclosure, the six-year limitations period under CPLR 213(4) runs on the entire debt, and under FAPA/CPLR 203(h) a lender cannot unilaterally reset that clock; FAPA applies to cases with unexecuted judgments, making renewal under CPLR 2221(e)(2) an effective vehicle to vacate prior orders and dismiss time-barred actions.