HSBC Bank USA, N.A. v Barrett
Attorneys and Parties
Brief Summary
Residential mortgage foreclosure—statute of limitations, acceleration, and the effect of the Foreclosure Abuse Prevention Act (FAPA).
The Supreme Court, Suffolk County, granted the lender summary judgment and an order of reference, and denied the borrower’s cross-motion to dismiss.
The Appellate Division reversed, denying the lender’s motion and granting the borrower’s cross-motion dismissing the complaint as time-barred.
The mortgage debt was accelerated by the lender’s 2011 foreclosure action, starting the six-year limitations period under CPLR 213(4) [six-year statute of limitations for mortgage foreclosure actions]. The 2017 action was commenced more than six years later and is time-barred. Under the Foreclosure Abuse Prevention Act (FAPA), CPLR 3217(e) [voluntary discontinuance of a foreclosure action does not de-accelerate the debt or revive/reset the statute of limitations], the 2013 voluntary discontinuance did not reset the limitations period. The lender’s assertions that the 2011 complaint was unverified or that counsel lacked authority to accelerate were rejected, as were its retroactivity and constitutional challenges to FAPA.
Background
HSBC sued in January 2011 to foreclose a consolidated mortgage on Suffolk County property, thereby electing to call the entire debt due. The bank voluntarily discontinued that action by stipulation dated June 26, 2013. In September 2017, HSBC commenced a new foreclosure action. Rita Barrett answered, asserting defenses including failure to comply with conditions precedent and the statute of limitations. HSBC moved for summary judgment and an order of reference; Barrett cross-moved for summary judgment dismissing the complaint as time-barred.
Lower Court Decision
By order dated January 16, 2024, the Supreme Court, Suffolk County, granted HSBC’s motion for summary judgment and an order of reference and denied Barrett’s cross-motion to dismiss.
Appellate Division Reversal
The Appellate Division held that the 2011 action accelerated the mortgage, triggering the six-year limitations period under CPLR 213(4). The 2017 action was commenced more than six years later and is therefore untimely. FAPA (CPLR 3217[e]) prevents a voluntary discontinuance from de-accelerating or resetting the limitations period. The court rejected HSBC’s arguments that the 2011 complaint was an invalid acceleration due to lack of verification or counsel authority, and it rejected HSBC’s retroactivity and constitutional challenges to FAPA. The court denied HSBC’s motion and granted Barrett’s cross-motion dismissing the complaint as to her.
Legal Significance
Reaffirms that acceleration by filing a foreclosure complaint starts the six-year limitations period and that, under the Foreclosure Abuse Prevention Act (FAPA), discontinuance cannot be used to reset or revive the statute of limitations. It underscores that unverified pleadings and counsel authority arguments do not negate an acceleration alleged in a prior foreclosure complaint, and confirms Second Department acceptance of FAPA’s retroactive application and constitutionality.
In New York mortgage foreclosures, once a prior action accelerates the debt, the lender has six years to sue; after FAPA, voluntarily discontinuing the earlier action does not undo acceleration or restart the clock.