Senate Bill S5473D

                                
 
BILL NUMBER: S5473

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the civil practice law and rules, the general obli-
gations law, the real property actions and proceedings law, and the real
property law, in relation to the rights of parties involved in foreclo-
sure actions

 
PURPOSE AND INTENT OF BILL:

The legislature finds that there is an ongoing problem with abuses of
the judicial foreclosure process; that the problem has been exacerbated
by court decisions which, contrary to the intent of the legislature,
have given mortgage lenders and loan servicers opportunities to avoid
strict compliance with remedial statutes and manipulate statutes of
limitation to their advantage; and that the purpose of the present
legislation is to clarify the meaning of existing statutes, and to
rectify these erroneous judicial interpretations thereof.

Accordingly, this bill amends certain statutes and rules to clarify the
              

existing law and overturn certain court decisions to ensure the laws of
this state apply equally to all litigants, including those currently
involved in mortgage foreclosure actions. The aim of the bill is to
thwart and eliminate abusive and unlawful litigation tactics that have
been adopted and pursued in mortgage foreclosure actions to manipulate
the law and judiciary to yield to expediency and the convenience of
mortgage banking and servicing institutions.  The bill also clarifies
the rights of parties involved in actions commenced against real proper-
ty owners, mortgagors and borrowers, including foreclosure actions.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill provides that this act shall be known as the
"Foreclosure Process Abuse Prevention Act."

Section 2 of the bill amends CPLR 203 by adding subdivision (h) to clar-
ify that once a cause of action has accrued, no party may unilaterally
"de-accrue" the cause or otherwise effectuate a unilateral extension of
the limitations period prescribed by law to interpose the claim, unless
expressly permitted by law.

Section 3 of the bill amends CPLR 205 (a) to provide that the six-month
extension afforded under that subdivision is unavailable where the judge
in the prior action specified the dismissal thereof was attributable to
any form of neglect, including those set forth under CPLR 3215 (c),
3216, 3404, 22 NYCRR 20227 or 202.48, or, in the alternative, put forth
on the record the conduct constituting forming the basis of dismissal.
The subdivision is further amended to clarify that an assignee of the
plaintiff is not entitled to the six-month extension, unless acting on
behalf or asserting the rights of the original plaintiff. Finally, the
subdivision clarifies that the extension provided thereunder may only be
used once, to file the new action and serve the defendant within six
months from the entry of an order of judgment dismissing the prior
action, regardless of whether an appeal is taken therefrom.

Section 4 of the bill amends CPLR 206 by adding a new subdivision (e)
that clarifies that a cause of action to foreclose upon all sums secured
by a uniform or model mortgage instrument securing real property, as
adopted by the Federal National Mortgage Association, Federal Home Loan
Mortgage Corporation or U.S. Department of Housing and Urban Develop-
ment, accrues at the first moment in time where the right to demand
immediate payment in full may be exercised-not when, if ever, the demand
is actually made.

Section 5 of the bill amends CPLR 306-b by clarifying that a motion for
an extension of time to serve the defendant with process shall be denied
as untimely if it is made after the entry of any order or judgment of
dismissal.

Section 6 of the bill amends CPLR 2001 by adding a new subdivision (b)
to clarify that mistakes, omissions, defects or irregularities arising
from pre-commencement requirements prescribed by RPAPL 1301, 1304, and
1306 may not disregarded by the court, nor may the failure of a lender,
an assignee or a mortgage loan servicer to strictly comply with the
remedial pleading and service requirements mandated under RPAPL 1301,
1302 and 1303.

Section 7 of the bill amends CPLR 3212 to reenact a subdivision (d) and
clarify that a successive motion for summary judgment is, in actuality,
a motion affecting a prior order and therefore shall be made and
reviewed in accordance with subdivisions (d), (e) or (f) of CPLR 2221 or
subdivision (a) of CPLR 5015.

Section 8 of the bill amends CPLR 3217 by adding a new subdivision (e)
and amending subdivision (d) to clarify that unless effectuated in
strict accordance with the applicable provisions of article 17 of the
general obligations law, the voluntary discontinuance of an action based
upon an instrument described under CPLR 213 (4)1, which includes an
action to foreclose upon a mortgage, by any means, shall not, in form or
effect: (1) act as a waiver, postponement, cancellation, resetting, or
tolling of accrual of the cause of action

(i.e., effectuate a "de-accrual" of the cause of action); (2) extend the
limitations period prescribed by law to interpose the claim; nor

(3) automatically revoke or nullify an election of remedies made in any
complaint.  Standardized residential mortgage instruments under CPLR 206
(e) are, by definition, instruments described under CPLR 213 (4).

Section 9 of the bill amends subdivisions (3) and (4)(a) of section
17-103 of the general obligations law to clarify that the statute
represents the exclusive means for parties to effectuate a waiver, post-
ponement, cancellation, resetting, tolling, revival or extension of the
time limited by statute for commencement of an action or proceeding
based on a cause of action for breach of contract, not involving a mort-
gage (e.g., an action based on a promissory note).

Section 10 of the bill amends subdivisions (4) and (5) of section 17-105
of the general obligations law to clarify that the statute represents
the exclusive means for parties to effectuate a waiver, postponement,
cancellation, resetting, tolling, revival or extension of the time
limited by statute for commencement of an action or proceeding based on
a cause of action to foreclose a mortgage, in part or whole.


Section 11 of the bill amends RPAPL 1304 (1), (1-a) and (2) to clarify
that the statute applies to borrowers and non-borrowing mortgagors
alike; expand the content required in the pre-foreclosure notices to
include updated website addresses for the NYS Office of the Attorney
General and information regarding free legal resources; and require the
NYS Department of Financial Services to update, archive and make public-
ly available certain important information concerning housing counseling
agency and bar association listings.

Section 12 of the bill amends RPL 282 to clarify that eligibility to
attorneys' fees and costs under the statute applies to mortgagors and
borrowers alike and to further clarify the intended broad scope and
meaning of a successful defense.

Section 13 of the bill contains the severability clause of the legis-
lation. Section 14 of the bill provides for the effective date and grace
periods.

 
JUSTIFICATION:

There is an urgent need to pass this bill to overrule the Court of
Appeals decision in Freedom Mtge. Corp. v Engel, NY3d , 2021 NY Slip Op
01090 (2021). As a direct result of this decision, hundreds of motions
to renew have been filed by mortgage lenders and servicer institutions
to open cases that were dismissed years ago for statute of limitations
on the ground there is a new change in the law that exempts plaintiff
banks from having the statute of limitation applied to it in foreclosure
actions. Without bill becoming law, the Courts, who had its budget cuts
and the mass of judges retiring, will be overburdened with these motions
to renew once the foreclosure moratorium ends on May 1, 2021. This bill
levels the fields for all homeowners, and ensure the statute of limita-
tion applies to all parties equally without exemption.

This bill seeks to further clarify and reaffirm the legislative intent
of a wide spectrum of laws that have been: (1) manipulated and abused by
mortgage lending and servicing institutions; as well as (2) misunder-
stood and/or misapplied by the courts.

 
CPLR 203(H):

CPLR 203 (h) is proposed to: (1) overrule Freedom Mtge. Corp. v Engel,
NY3d2021 NY Slip Op 01090 (2021), as violative of CPLR 201 and incon-
sistent with the legislative intent of CPLR 203; and (2) clarify that no
party may unilaterally waive, postpone, cancel, or reset the accrual
thereof, or otherwise effectuate a unilateral extension of the limita-
tions period prescribed by law to interpose the claim or, in other
words, self-effectuate "de-accrual" of his/her/its claim, unless
expressly permitted by law2 (see e.g., Sotheby's, Inc. v Mao, 173 AD3d
72, 76-81, n 9  
1ST DEPT 2019, Iv denied 34 NY3d 902 {2019).

Stated simply, the same way personal injury plaintiffs cannot unilater-
ally reset or otherwise extend the applicable statute of limitations to
interpose their claim by "un-injuring" and then "re-injuring" them-
selves, this new subdivision makes clear that once a cause of action has
accrued (e.g., once an injury has been sustained, economic or other-
wise), parties have no unilateral right or ability to declare themselves
"un-harmed" and then "re-harmed" which, by design or happenstance,
effectuates an unlawful extension of the time limited by law for inter-
position of the claim, unless expressly permitted by law, rule or stat-
ue.

In the context of actions commenced against real property owners, mort-
gagors and borrowers, including foreclosure actions, and contrary to
Engel, a lender's unilateral "de-acceleration" of a mortgage loan, even
if permitted under the express terms of the mortgage loan documents,
cannot effectuate "de-accrual" of the cause of action (i.e., breach of
contract or foreclosure) or otherwise unwind the applicable limitations
period, under the guise of having been accomplished by operation of law.

 
CPLR 205(A):

CPLR 205 (a) is hereby amended to clarify the intended meaning of
several words included within the subdivision by codifying the correct
decisional law interpreting the same, while expressly rejecting court
opinions inconsistent therewith.  First, as both providently determined
and correctly predicted by the Court of Appeals in Reliance Ins. Co. v
Polyvision Corp., 9 NY3d 52, 57-58 (2007), the six-month extension
afforded under CPLR 205 is available only to "the plaintiff' and is not
intended to be extended to a different party asserting different rights
because that "would open a new tributary in the law, presumably avail-
able to individuals as well as corporations, and breathe life into
otherwise stale claims" (id. at 58). " 
Mindful of the potential ramifi-
cations of a rule allowing" otherwise, the Court of Appeals correctly
directed that CPLR 205 (a) should be read "as it was written by the
Legislature . . . ." (id.).  2 The language "unless expressly permitted
by law," is not intended to be a "loophole" in the subdivision and
should not be viewed or treated as such. Rather, the language represents
the legislature's recognition of certain unique situations where the
law, in effect, may technically provide a party with the unilateral
ability to toll or extend the time prescribed by law to interpose a
claim. For example, if, after accrual of a cause of action, an individ-
ual claimant committed suicide, that individual, in effect, unilaterally
tolled or extended the time prescribed by law to interpose the claim
(e.g., CPLR 208, 210 
A).

Yet, in direct contravention of Reliance, the majority in Wells Fargo
Bank, N.A. v Eitani, 148 AD3d 193, 201-203 (2d Dept 2017), appeal
dismissed 29 NY3d 1023 (2017), held that Wells Fargo Bank, N.A.  (Wells
Fargo), the assignee of a mortgage loan originated by Argent Mortgage
Company, LLC (Argent), was entitled to the six-month extension afforded
to "the plaintiff' under CPLR 205 (a) because the mortgage loan was
assigned by Argent to Wells Fargo during the pendency of the prior
action, which was commenced by Argent. This holding is wrong and must
not be followed. In Eitani, Wells Fargo was not asserting the rights of
Argent in the new actioni.e., Wells Fargo did not claim to be acting on
behalf or for the benefit of Argent.  Rather, as correctly explained by
the dissent in Eitani, Wells Fargo was seeking to enforce its own rights
in and to the mortgage loan; the rights it acquired from Argent (Eitani,
148 AD3d at 206-209  
LEVENTHAL, J., DISSENTING).  Accordingly, CPLR 205
(a), as amended, now makes clear that unless acting on behalf or assert-
ing the rights of the original plaintiff, an assignee of that plaintiff
is not entitled to the benefit afforded under the statute. Therefore,
Eitani and its progeny should not be followed (e.g., U.S. Bank N.A. v
Gordon, 158 AD3d 832, 838-839  
2D DEPT 2018).


Similarly, CPLR 205 (a) is amended to specify the defendant. This amend-
ment clarifies that the plaintiff must both timely file and effectuate
service upon not just any defendant, but the defendant, within the six-
month extended period. For instance, in an action to foreclose upon a
mortgage where the City of New York holds a judgment or lien against the
mortgaged property and is, therefore, considered a necessary party to
the action, the statute, in its current form, does not expressly disal-
low the plaintiff from the benefit of the statute where the plaintiff
timely serves the nominal co-defendant City of New York, but fails to
timely serve the mortgagor or fee owner of the property. The minor
amendment provided herein closes the textual gap.

The subdivision is also amended to codify the Court of Appeals holding
in Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Land-
scape Architects, P.C. (Habiterra Assoc.), 5 NY3d 514, 520 (2005) and
further make clear that a dismissal for any form of neglect includes,
but is not limited to, dismissal made pursuant to CPLR 3215 (c), 3216,
3404, 22 NYCRR 202.27 and 202.48. Moreover, to address the issues
confronted by the court in Sokoloffv Schor, 176 AD3d 120, 128-133 (2d
Dept 2019) and Deutsche Bank Natl. Trust Co. v Baquero,AD3d, 2021

NY Slip Op 01246, *1-4 (2d Dept 2021) (split opinion), CPLR 205 (a) is
amended to provide further clarity, insofar as dismissals for any form
of neglect can be sufficient to prevent unauthorized use of the statute
where the judge in the prior action sets forth on the record either the
conduct constituting the neglect, which conduct shall demonstrate a
general pattern of delay in proceeding with the litigation, or, in the
alternative, simply specifies the law, rule or code forming the basis of
dismissal or neglect.

Finally, the amended language of CPLR 205 (a) expressly overrules the
endless cycle of re-filings triggered by the majority's unsustainable
holding in the matter of Bank of NY Mellon v Slavin, 156 AD3d 1073,
1073-1076 (3d Dept 2017), by further clarifying the legislature's intent
that:

(1) the six-month extension applies only where the applicable limita-
tions period prescribed by law for the underlying cause of action has
already expired (United States Fid. & Guar. Co. v E. W.  Smith Co., 46
NY2d 498, 505  
1979);

(2) the plaintiff shall receive no more than one six-month extension
under the statute (L 1992, ch 216, Governor's Bill Jacket at *12, Mem of
Assemblyman Lentol at *1  
"THE PARTY WOULD RECEIVE NO MORE EXTRA TIME
THAN THE SIX-MONTH PERIOD SET FORTH IN THIS SECTION . ."; see Shuhab
HDFC v Bates, 2008 NY Misc LEXIS 3725, *4-5, 239 NYLJ 118  
NY CIV CT,
NEW YORK COUNTY 2008  
THE PLAINTIFF MAY NOT BENEFIT FROM CPLR 205(A)'S
6-MONTH EXTENSION MORE THAN ONCE); and

(3) the prior action is deemed terminated upon entry of the order or
judgment of dismissal, regardless of whether an appeal is taken there-
from (see Slavin, 156 AD3d at 1076-1082  
AARONS, J., DISSENTING; Bank
of N.Y. Mellon v. Slavin: How the Third Department Has Created a Never-
Ending Foreclosure Case Using the "Savings Statute" CPLR 205, 48 NYSB
RPLJ 21, *21-28  
WINTER 2020).

 
CPLR 206(E):

This new subdivision expressly overrules Freedom Mtge. Corp. v Engel,
NY3d, 2021 NY Slip Op 01090 (2021), which effectively exempts mortgage
lenders and servicer institutions from having the statute of limitation
applied to it in all foreclosure actions. This news subdivision
expresses the legislature's intent that accrual of an action to fore-
close upon a uniform or model mortgage instrument adopted by Fannie Mae,
Freddie Mac, or HUD, shall not be measured from the "acceleration date,"
but rather from the time the right to demand immediate payment in full
of all sums so secured thereby may be exercised.

CPLR 206 (e) further clarifies that the statute of limitations to fore-
close a standard mortgage instrument shall be treated no different than
similar causes of action (see CPLR 203 
A; 206 
A; Hahn Auto. Warehouse,
Inc. v Am. Zurich Ins. Co., 18 NY3d 765, 770 (2012); quoting Aetna Life
& Cas. Co. v Nelson, 67 NY2d 169, 175 (1986).

The overwhelming majority of mortgage foreclosure actions filed in New
York are predicated upon suits seeking to foreclose upon the entirety of
all sums secured by a standard Fannie Mae, Freddie Mac, or HUD uniform
mortgage instrument. Regarding all facts required for the commencement
of a foreclosure action upon such a uniform mortgage instrument on the
basis of non-payment, the occurrence of which being necessary for a note
holder to be entitled to demand the entire loan balance secured by the
mortgage immediately due and payable in full, i.e., accelerate; they
include: (1) the borrower's payment default;

(2) the borrower being sent a notice of default and opportunity to cure;
and (3) the borrower's failure to cure the default on or before the
expiration date set forth in the notice (see e.g., Elizon Master Partic-
ipation Trust 1 v Clarke, 65 Misc 3d 1231(A), 2019 NY Slip Op 51935(U),
*2 (Sup Ct, Queens County 2019) ("(T)he Court finds that the limitations
period began to run on . . . the date the defendant was obligated to
cure her default by pursuant to the terms of the Acceleration Notice").

Since noteholders control if and when to send the requisite default
notice, the legislature's intent for consistency and predictability in
identifying and calculating limitations periods in actions involving
uniform instruments securing real property is achieved and realigned
with various judicial determinations from around the state which have
been strayed away from in the recent years (see e.g., CDR Creances S.A.
v Euro-American Lodging Corp., 43 AD3d 45, 51 (1st Dept 2007) ("(I)t is
well established that the six-year period begins to run when the lender
first has the right to foreclose on the mortgage . . . ."); Zinker v
Makler, 298 AD2d 516, 517 (2d Dept 2002) ("The statute of limitations in
a mortgage foreclosure action begins to run . . . from . . . the time
the mortgagee is entitled to demand full payment"); Saini v Cinelli
Enters., 289 AD2d 770, 771  
3D DEPT 2001  
"THE STATUTE OF LIMITATIONS
IN A MORTGAGE FORECLOSURE ACTION BEGINS TO RUN SIX YEARS FROM THE DUE
DATE FOR EACH UNPAID INSTALLMENT OR THE TIME THE MORTGAGEE IS ENTITLED
TO DEMAND FULL PAYMENT . . . ."; Wendover Fin.  Servs. v Ridgeway, 137
AD3d 1718, 1719  
4TH DEPT 2016; quoting Hahn, 8 NY3d at 770; accord ACE
Sec. Corp., Home Equity Loan Trust, Series 2006-SL2 v DB Structured
Prods., Inc., 25 NY3d 581, 593-594  
2015).

 
CPLR 306-B:

CPLR 306-b is hereby amended to clarify and reaffirm the legislature's
intent for the timing of a motion to extend the time to serve a defend-
ant under the statute. The amended language seeks to codify the dissent-
ing rationale in State of NY Mtge. Agency v Braun, 182 AD3d 63, 78-89
(2d Dept 2020 (cf. id. at 70-71  
MAJORITY NOTING THAT JUSTIFICATION OF
THE DISSENTING OPINION WOULD REQUIRE LEGISLATIVE ACTION TO CLARIFY THE
POSITED INTENT), and overrule US Bank N.A. v Saintus, 153 AD3d 1380,
1381-1382 (2d Dept 2017) and its progeny (e.g., Bayview Loan Servicing,
LLC v Tanvir H. Chaudhury, 188 AD3d 1128, 1128-1130  
2D DEPT 2020).

Outside the context of residential mortgage foreclosures, which has been
of special interest to the legislature over the last 15 years, the
legislature is unaware of another area of law where rampant improper and
defective service is condoned on such a routine basis.  It was never the
intent of the legislature to enable the courts to regularly deem bad
service "good cause" to grant an extension under CPLR 306-b, nor that
the "interest of justice" be routinely furthered by and through defec-
tive service. Rather, it was the judiciary that specifically requested
the legislature to repeal the former version of the statute and enact
CPLR 306-b to mirror Federal Rule of Civil Procedure 4(m)-authorizing a
court to extend the 120-day service mandate for good cause or in the
interest of justice, upon a plaintiff's timely cross-motion.

Nevertheless, at this point, the majority of extensions under the stat-
ute are granted to mortgage foreclosure plaintiffs having provided home-
owners, mortgagors and/or borrowers with improper or defective service-
usually many years after the fact (see e.g., Wachovia Bank, N A. v
Greenberg, 190 AD3d 1007  
2D DEPT 2021  
- 9 YEARS AFTER IMPROPER
SERVICE; U.S. Bank N.A. v Aoudou, AD3d , 2020 NY Slip Op 07619, *2  
2D
DEPT 2020  
- 5 YEARS AFTER IMPROPER SERVICE; Tanvir H. Chaudhury, 188
AD3d at 1128-1130  
- 9 YEARS AFTER IMPROPER SERVICE; U.S. Bank N.A. v
Viera, 187 AD3d 818, 818-820  
2D DEPT 2020  
-S 10 YEARS AFTER SERVICE
DEFECTIVE; accord HSBC Bank, USA v Gibatov, 183 AD3d 555, 555-557  
2D
DEPT 2020  
SAME).  The legislature's expressed desire to protect
homeownership is not reflected when the extension permitted under CPLR
306-b is utilized by plaintiffs and the courts as a mechanism to not
only routinely condone but, in effect, reward the plaintiffs for defec-
tive service of process upon a defendant-sometimes even 10 years after
fact. While there is undoubtedly a benefit for the courts to be
empowered to extend service deadlines under CPLR 306-b, at this point,
that benefit, left unfettered, has been far outweighed by habitual
improper service practices being relied upon by plaintiffs, and ulti-
mately rewarded under the statute.

Therefore, CPLR 306-b is hereby amended to clarify the legislature's
intent and strike a balance in the underlying equities.

 
CPLR 2001:

The amendments to CPLR 2001 are made to:

(1) clarify and reaffirm that the court has neither the discretionary
authority to disregard pre-commencement mistakes, omissions, or
defects-e.g., failures to strictly comply with the pre-foreclosure
conditions precedents mandated under RPAPL 1301, 1304, and 1306 (see
CPLR 103 
A,  
B; 105 
B; Aurora Loan Servs., LLC v Weisblum, 85 AD3d
95, 103, 107-108  
2D DEPT 2011; TD Bank, N.A. v Leroy, 121 AD3d 1256,
1258-1260  
3D DEPT 2014; CIT Bank, N.A. v Anderson, No.  16-CV-1712,
2019 US Dist LEXIS 137755, at *6-8  
EDNY AUG. 14, 2019; U.S. Bank N.A.
v Beymer, 161 AD3d 543, 544  
1ST DEPT 2018; Sec.  Natl. Servicing Corp.
v Liebowitz, 281 AD2d 615, 616  
2D DEPT 2001)), NOR POST-COMMENCEMENT
PLEADING OR SERVICE MISTAKES, DEFECTS, OR OMISSIONS INVOLVING THE
SUBSTANTIAL RIGHTS AFFORDED TO PROPERTY OWNERS, MORTGAGORS AND BORROWERS
UNDER RPAPL 1301, 1302 AND 1303; AND

(2) EXPRESSLY OVERRULE JUDICIAL INTERPRETATIONS INCONSISTENT WITH THE
INTENT OF THE LEGISLATURE. BANK OF AM., N.A. V COLAGRANDE, 171 AD3D
1124, 1124-1125 (2D DEPT 2019) AND BANK OF NY MELLON V DOUGHERTY, 63
MISC 3D 216, 224-225 (SUP CT, SUFFOLK COUNTY 2019) (FAILURE TO STRICTLY
COMPLY WITH RPAPL 1306 DISREGARDED); CITIMORTGAGE, INC. SBM ABN AMRO
MTGE. GROUP, INC. V BUNGER, 58 MISC 3D 333, 343 (SUP CT, SUFFOLK COUNTY
2017) (FAILURE TO STRICTLY COMPLY WITH RPAPL 1304 DISREGARDED); TRUSTCO
BANK V ALEXANDER, 23 MISC 3D 1129(A), 2009 NY SLIP OP 50996(U), *4 (SUP
CT, SARATOGA COUNTY 2009) (FAILURE TO STRICTLY COMPLY WITH RPAPL 1303
DISREGARDED); WELLS FARGO BANK, N.A.  V IRIZARRY, 142 AD3D 610, 611 (2D
DEPT 2016) AND ITS PROGENY (FAILURE TO STRICTLY COMPLY WITH RPAPL 1301
DISREGARDED).

 
CPLR 3212(D):

AMENDED TO CLARIFY AND AFFIRM THAT SUCCESSIVE MOTIONS FOR SUMMARY JUDG-
MENT SHOULD NOT BE GRANTED UNLESS MADE, AND ENTITLEMENT ESTABLISHED,
UNDER CPLR 2221 (D), (E), (F), OR 5015 (A). E.G., DEUTSCHE BANK NATL.
TRUST CO. V ELSHIEKH, 179 AD3D 1017, 1020-1021 (2D DEPT 2020). OUTSIDE
THE CONTEXT OF CPLR 2221 AND 5015, SUCCESSIVE MOTIONS FOR SUMMARY JUDG-
MENT, BY THEIR VERY NATURE, NEITHER PROMOTE THE INTEREST OF SUBSTANTIAL
JUSTICE NOR PRODUCE JUDICIAL EFFICIENCY.  CONTRA, E.G., MTGLQ INVS., LP
V COLLADO, 183 AD3D 414, 414-415 (1ST DEPT 2020).

CPLR 3217 (D), GENERAL OBLIGATIONS LAW 17-103 (3)., (4)(A) AND 17-105
(4) AND (5) COLLECTIVELY AMENDED TO EXPRESSLY OVERRULE FREEDOM MTGE.
CORP. V ENGEL, NY3D , 2021 NY SLIP OP 01090 (2021) BY:

(1) CODIFYING THE RELEVANT PROVISIONS OF JUDICIAL RULINGS SUCH AS FOWLER
V BOWERY SAY. BANK, 113 NY 450, 456 (1889), CONROW V LITTLE, 115 NY 387,
394 (1889), JOHN J. KASSNER & CO. V NEW YORK, 46 NY2D 544, 550-552
(1979), OST V MINDLIN, 170 AD 558, 559-560 (1ST DEPT 1915), AFFD 224 NY
668 (1918), SOTHEBY'S, INC. V MAO, 173 AD3D 72, 76-81 (1ST DEPT 2019);
U.S. BANK N.A. V MCCAFFERY, 186 AD3D 897, 899

(2D DEPT 2020), AND US BANK N.A. V SZOFFER, 58 MISC 3D 1220(A), 2017 NY
SLIP OP 51976(U), *2 (SUP CT, ROCKLAND COUNTY 2017);

(2) CLARIFYING THE LEGISLATURE'S INTENT THAT, WHERE APPLICABLE, THE
GENERAL OBLIGATIONS LAW BE THE EXCLUSIVE MEANS BY WHICH PARTIES ARE
ENABLED TO POSTPONE, CANCEL, RESET, TOLL, REVIVE OR OTHERWISE EFFECTUATE
AN EXTENSION OF THE TIME PRESCRIBED BY LAW FOR THE COMMENCEMENT OF AN
ACTION OR PROCEEDING UPON AN INSTRUMENT DESCRIBED UNDER CPLR 213 (4);
AND

(3) CLARIFYING THAT UNLESS EFFECTUATED IN STRICT ACCORDANCE WITH THE
RELEVANT SUBDIVISIONS OF GENERAL OBLIGATIONS LAW 17-103 OR 105, THE
DISCONTINUANCE OF AN ACTION UPON AN INSTRUMENT DESCRIBED UNDER CPLR 213
(4), BY ANY MEANS, SHALL NOT, IN FORM OR EFFECT:

A. ACT AS A WAIVER, POSTPONEMENT, CANCELLATION, RESETTING, OR TOLLING OF
ACCRUAL OF THE CAUSE OF ACTION;

B. EXTEND THE LIMITATIONS PERIOD PRESCRIBED BY LAW TO INTERPOSE THE
CLAIM; NOR

C. AUTOMATICALLY REVOKE OR NULLIFY AN ELECTION OF REMEDIES MADE IN ANY
COMPLAINT.  RPAPL 1304 AMENDED TO:

(1) CLARIFY THE LEGISLATURE'S INTENT FOR APPLICABILITY OF THE STATUTE TO
INCLUDE BORROWERS AND NON-BORROWING MORTGAGORS ALIKE (CONTRA CHARLES
SCHWAB BANK V WINITCH, 179 AD3D 1003, 1005-1006  
2D DEPT 2020);

(2) UPDATE THE PROPER WEBSITE ADDRESS LISTINGS PROVIDED IN THE NOTICE;

(3) INCLUDE INFORMATION REGARDING FREE LEGAL RESOURCES; AND

(4) REQUIRE THE NYS DEPARTMENT OF FINANCIAL SERVICES TO UPDATE, ARCHIVE
AND MAKE PUBLICLY AVAILABLE CERTAIN IMPORTANT INFORMATION CONCERNING
HOUSING COUNSELING AGENCY AND BAR ASSOCIATION LISTINGS.

 
RPL 282:

TYPICALLY, WHERE A MORTGAGE FORECLOSURE IS DISMISSED WITHOUT PREJUDICE,
THE MORTGAGEE RECOMMENCES SUIT AND THE ATTORNEYS' FEES AND COSTS FROM
THE DISMISSED SUIT ARE ADDED TO THOSE ACCRUED WITHIN THE SUBSEQUENT
SUIT. YET, UNDER THIS EXACT SCENARIO, THE CURRENT JURISPRUDENCE OF OUR
STATE PROHIBITS MORTGAGORS FROM RECOUPING THEIR ATTORNEYS' FEES AND
COSTS FROM THE DISMISSED SUIT, WHICH IS INCONSISTENT WITH "LEVELING THE
PLAYING FIELD"-ONE OF THE EXPRESS PURPOSES FOR ENACTING THE STATUTE (SEE
L 2010, CH 550, GOVERNOR'S BILL JACKET AT *15).

ACCORDINGLY, RPL 282 IS AMENDED TO:

(1) CLARIFY THE LEGISLATURE'S INTENT FOR APPLICABILITY OF THE STATUTE TO
INCLUDE MORTGAGORS AND BORROWERS ALIKE; AND

(2) CLARIFY THE INTENT OF THE STATUTE WITH RESPECT TO THE DEFINITION OF
A SUCCESSFUL DEFENSE AND OVERRULE JUDICIAL INTERPRETATIONS TO THE
CONTRARY (E.G., BAC HOME LOANS SERVICING, LP V HASSETT, 2013 NY SLIP OP
30235 
U, *2-5  
SUP CT, SUFFOLK COUNTY 2013; DKR MTGE. ASSET TRUST I V
RIVERA, 130 AD3D 774, 776  
2D DEPT 2015).

 
PRIOR LEGISLATIVE HISTORY:

NEW BILL.

 
FISCAL IMPLICATIONS:

NONE TO THE STATE.

 
EFFECTIVE DATE:
THIS ACT SHALL TAKE EFFECT IMMEDIATELY, EXCEPT AS PROVIDED IN SECTION 14
OF THE BILL.

                                 
BILL NUMBER: S5473A

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the civil practice law and rules, the general obli-
gations law, the real property actions and proceedings law, and the real
property law, in relation to the rights of parties involved in foreclo-
sure actions

 
PURPOSE AND INTENT OF BILL:

The legislature finds that there is an ongoing problem with abuses of
the judicial foreclosure process; that the problem has been exacerbated
by court decisions which, contrary to the intent of the legislature,
have given mortgage lenders and loan servicers opportunities to avoid
strict compliance with remedial statutes and manipulate statutes of
limitation to their advantage; and that the purpose of the present
legislation is to clarify the meaning of existing statutes, and to
rectify these erroneous judicial interpretations thereof.

Accordingly, this bill amends certain statutes and rules to clarify the
existing law and overturn certain court decisions to ensure the laws of
              

this state apply equally to all litigants, including those currently
involved in mortgage foreclosure actions. The aim of the bill is to
thwart and eliminate abusive and unlawful litigation tactics that have
been adopted and pursued in mortgage foreclosure actions to manipulate
the law and judiciary to yield to expediency and the convenience of
mortgage banking and servicing institutions.  The bill also clarifies
the rights of parties involved in actions commenced against real proper-
ty owners, mortgagors and borrowers, including foreclosure actions. The
bill also adds new provisions, sections, and subdivisions intended to
curb abuses frequently and particularly abound in the context of actions
upon real property related instruments.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill provides that this act shall be known as the
"Foreclosure Process Abuse Prevention Act."

Section 2 of the bill amends CPLR 203 by adding subdivision (h) to clar-
ify that once a cause of action based upon an instrument described under
CPLR 213 (4){1} has accrued, no party may unilaterally "de-accrue" the
cause or otherwise effectuate a unilateral extension of the limitations
period prescribed by law to interpose the claim, unless expressly
permitted by law.

Section 3 of the bill adds a new section CPLR 205-a, which mirrors CPLR
205, but is limited to actions based upon instruments described under
CPLR 213 (4) and provides that the six-month extension afforded under
CPLR 205-a (a) is unavailable where the judge in the prior action speci-
fied the dismissal thereof was attributable to any form of neglect,
including, but not limited to, those set forth under CPLR 3215 (c),
3216, 3404, 22 NYCRR 202.27 or 202.48, or, in the alternative, put forth
on the record the conduct constituting forming the basis of dismissal.
The new section further clarifies that an assignee of the plaintiff is
not entitled to the six-month extension, unless acting on behalf or
asserting the rights of the original plaintiff. Finally, the new section
clarifies that the extension provided thereunder may only be used once,
to file the new action and serve the original defendant within six
months from the termination of the prior action.

Section 4 of the bill amends CPLR 206 by adding a new subdivision (e)
that clarifies that a cause of action to foreclose upon all sums secured
by a uniform or model mortgage instrument securing real property, as
adopted by the Federal National Mortgage Association (Fannie Mae),
Federal Home Loan Mortgage Corporation (Freddie Mac), or U.S. Department
of Housing and Urban Development (HUD), accrues at the first moment in
time where the right to demand immediate payment in full may be exer-
cised-not when, if ever, the demand is actually made.

Section 5 of the bill amends CPLR 306-b by clarifying that in an action
based on an instrument described under CPLR 213 (4), a motion for an
extension of time to serve the defendant with process shall be denied as
untimely if it is made after the entry of any order or judgment of
dismissal.

Section 6 of the bill amends CPLR 2001 by adding a new subdivision (b)
to clarify that mistakes, omissions, defects or irregularities arising
from pre-commencement requirements prescribed by RPAPL 1301, 1304, and
1306 may not disregarded by the court, nor may the failure of a lender,
an assignee or a mortgage loan servicer to strictly comply with the
remedial pleading and service requirements mandated under RPAPL 1301,
1302 and 1303.

Section 7 of the bill amends CPLR 3212 by adding a new subdivision (d)
to clarify that a successive motion for summary judgment is, in actuali-
ty, a motion affecting a prior order and therefore shall be made and
reviewed in accordance with subdivisions (d), (e) or (f) of CPLR 2221 or
subdivision (a) of CPLR 5015.

Section 8 of the bill amends CPLR 3217 by amending subdivision (d) and
adding a new subdivision (e) to clarify that unless effectuated in
strict accordance with the applicable provisions of article 17 of the
general obligations law, the voluntary discontinuance of an action based
upon an instrument described under CPLR 213 (4), by any means, shall
not, in form or effect: (1) act as a waiver, postponement, cancellation,
resetting, or tolling of accrual of the cause of action (i.e., effectu-
ate a "de-accrual" of the cause of action); (2) extend the limitations
period prescribed by law to interpose the claim; nor (3) automatically
revoke or nullify an election of remedies made in any complaint.

Section 9 of the bill amends subdivisions (3) and (4)(a) of section
17-103 of the general obligations law to clarify that the statute
represents, the exclusive means for parties to effectuate a waiver,
postponement, cancellation, resetting, tolling, revival or extension of
the time limited by statute for commencement of an action or proceeding
based on a cause of action for breach of contract, not involving a mort-
gage (e.g., an action based on a promissory note).

Section 10 of the bill amends subdivisions (4) and (5) of section 17-105
of the general obligations law to clarify that the statute represents
the exclusive means for parties to effectuate a waiver, postponement,
cancellation, resetting, tolling, revival or extension of the time
limited by statute for commencement of an action or proceeding based on
a cause of action to foreclose a mortgage, in part or whole.

Section 11 of the bill amends RPAPL 1304 (1), (1-a) and (2) to clarify
that the statute applies to borrowers and non-borrowing mortgagors
alike; expand the content required in the pre-foreclosure notices to
include updated website addresses for the NYS Office of the Attorney
General and information regarding free legal resources; and require the
NYS Department of Financial Services to update, archive and make public-
ly available certain important information concerning housing counseling
agency and bar association listings.

Section 12 of the bill amends RPL 282 to clarify that eligibility to
attorneys' fees and costs under the statute applies to mortgagors and
borrowers alike and to further clarify the intended broad scope and
meaning of a successful defense.

Section 13 of the bill contains the severability clause of the legis-
lation.

Section 14 of the bill provides for the effective date and grace peri-
ods.

 
JUSTIFICATION:

There is an urgent need to pass this bill to overrule the Court of
Appeals decision in Freedom Mtge. Corp. v Engel,NY3d, 2021 NY Slip Op
01090 (2021). As a direct result of this decision, a flurry of motions
have been filed by mortgage lenders and servicing institutions to reopen
time-barred cases that were dismissed years ago on the ground there is a
new change in the law that essentially exempts foreclosing plaintiffs
from having the statute of limitation applied to it in foreclosure
actions. Without this bill becoming law, the Courts, which had signif-
icant budget cuts and forced retirement of dozens of senior judges, will
be overburdened with these motions once the foreclosure moratorium ends
on May 1, 2021. This bill levels the fields for all homeowners, and
ensures the statute of limitation applies to all parties equally without
exemption.

This bill seeks to further clarify and reaffirm the legislative intent
of a wide spectrum of laws that have been: (1) manipulated and abused by
mortgage lending and servicing institutions; as well as (2) misunder-
stood and/or misapplied by the courts.

 
CPLR 203 (H):

CPLR 203 (h) is proposed to: (1) overrule Freedom Mtge. Corp. v
Engel,NY3d, 2021 NY Slip Op 01090 (2021), as violative of CPLR 201 and
inconsistent with the legislative intent of CPLR 203; and (2) clarify
that no party may unilaterally waive, postpone, cancel, or reset the
accrual thereof, or otherwise effectuate a unilateral extension of the
limitations period prescribed by law to interpose the claim or, in other
words, self-effectuate "de-accrual" of his/her/its claim, unless
expressly permitted by law {2} (see e.g., Sotheby's, Inc. v Mao, 173
AD3d 72, 76-81, n 9 (1st Dept 2019), lv denied 34 NY3d 902 (2019)).

Stated simply, the same way personal injury plaintiffs cannot unilater-
ally reset or otherwise extend the applicable statute of limitations to
interpose their claim by "un-injuring" and then "re-injuring" them-
selves, this new subdivision makes clear that once a cause of action has
accrued (e.g., once an injury has been sustained, economic or other-
wise), parties have no unilateral right or ability to declare themselves
"un-harmed" and then "re-harmed" which, by design or happenstance,
effectuates an unlawful extension of the time limited by law for inter-
position of the claim, unless expressly permitted by law, rule or stat-
ue.

In the context of actions commenced against real property owners, mort-
gagors and borrowers, including foreclosure actions, and contrary to
Engel, a lender's unilateral "de-acceleration" of a mortgage loan, even
if permitted under the express terms of the mortgage loan documents,
cannot effectuate "de-accrual" of the cause of action (i.e., breach of
contract or foreclosure) or otherwise unwind the applicable limitations
period, under the guise of having been accomplished by operation of law.

 
CPLR 205-A:

CPLR 205-a, applicable to actions based on real property related instru-
ments described under CPLR 213 (4), is added to clarify the intended
meaning of several words included within CPLR 205 (a) by codifying the
correct decisional law interpreting the same, while expressly rejecting
court opinions inconsistent therewith.

First, as both providently determined and correctly predicted by the
Court of Appeals in Reliance Ins. Co. v Polyvision Corp., 9 NY3d 52,
57-58 (2007), the six-month extension afforded under CPLR 205 is avail-
able only to "the plaintiff' and is not intended to be extended to a
different party asserting different rights because that "would open a
new tributary in the law, presumably available to individuals as well as
corporations, and breathe life into otherwise stale claims" (id. at 58).
" 
Mindful of the potential ramifications of a rule allowing" otherwise,
the Court of Appeals correctly directed that CPLR 205 (a) should be read
"as it was written by the Legislature . . . ." (id.).

Yet, in direct contravention of Reliance, the majority in Wells Fargo
Bank, N.A. v Eitani, 148 AD3d 193, 201-203 (2d Dept 2017), appeal
dismissed 29 NY3d 1023 (2017), held that Wells Fargo Bank, N.A.  (Wells
Fargo), the assignee of a mortgage loan originated by Argent Mortgage
Company, LLC (Argent), was entitled to the six-month extension afforded
to "the plaintiff' under

CPLR 205 (a) because the mortgage loan was assigned by Argent to Wells
Fargo during the pendency of the prior action, which was commenced by
Argent. This holding is wrong and must not be followed. In Eitani, Wells
Fargo was not asserting the rights of Argent in the new actioni.e.,
Wells Fargo did not claim to be acting on behalf or for the benefit of
Argent. Rather, as correctly explained by the dissent in Eitani, Wells
Fargo was seeking to enforce its own rights in and to the mortgage loan;
the rights it acquired from Argent (Eitani, 148 AD3d at 206-209 (Leven-
thal, J., dissenting)).

Accordingly, CPLR 205-a (a) (1) explicitly provides that unless acting
on behalf or asserting the rights of the original plaintiff, an assignee
of that plaintiff is not entitled to the extension afforded under the
statute. Therefore, Eitani and its progeny should not be followed (e.g.,
U.S. Bank N.A. v Gordon, 158 AD3d 832, 838-839 (2d Dept 2018)).

Similarly, CPLR 205-a (a) specifies the original defendant. This spec-
ification clarifies that the plaintiff must both timely file and effec-
tuate service upon not just any defendant, but the original defendant,
within the six-month extended period (e.g., Rayo v New York, 882 F Supp
37, 39 (NDNY 1995) ("In examining the language of Section 205(a), it is
plain that the six month extension applies only if the original court
had personal jurisdiction over the same defendant as in the second
case"); accord Raji v SG Americas Sec., LLC, 189 AD3d 514, 515 (1st Dept
2020) ("CPLR 205(a) cannot apply to render plaintiffs claims against
defendant SG Americas Securities, Inc. (SG Inc.) timely, however, since
SG Inc. was not a party to the federal action"); see also Cazsador by
Cazsador v Greene Cent. Sch., 243 AD2d 867, 868-869 (3d Dept 1997);
Caplan v Winslett, 218 AD2d 148, 153-154 (1st Dept 1996)). This is
consistent with the intention of CPLR 205 (a) that the intended defend-
ant have had actual prior notice of the action within the applicable
statute of limitations period (Matter of Goldstein v NY State Urban Dev.
Corp., 13 NY3d 511, 521 (2009)).

CPLR 205-a (a) also aims to codify the Court of Appeals holding in
Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape
Architects, P.C. (Habiterra Assoc.), 5 NY3d 514, 520 (2005) and further
make clear that a dismissal for any form of neglect includes, but is not
limited to, {3} dismissals made pursuant to CPLR 3215 (c), 3216, 3404,
22 NYCRR 202.27 and 202.48. Moreover, to address the issues confronted
by the court in Sokoloff v Schor, 176 AD3d 120, 128-133 (2d Dept 2019)
and Deutsche Bank Natl. Trust Co. v Baquero,AD3d, 2021 NY Slip Op 01246,
*1-4 (2d Dept 2021) (split opinion), CPLR 205-a (a) provides further
clarity, insofar as dismissals for any form of neglect can be sufficient
to prevent unauthorized use of the statute where the judge in the prior
action sets forth on the record either the conduct constituting the
neglect, which conduct shall demonstrate a general pattern of delay in
proceeding with the litigation, or, in the alternative, simply specifies
the law, rule or code forming the basis of dismissal or neglect.

Finally, CPLR 205-a (a) further clarifies the legislature's intent that:

(1) the six-month extension applies only where the applicable limita-
tions period prescribed by law for the underlying cause of action has
already expired (United States Fid. & Guar. Co. v E. W.  Smith Co., 46
NY2d 498, 505 (1979)); and

(2) the plaintiff shall receive no more than one six-month extension
under the statute (L 1992, ch 216, Governor's Bill Jacket at *12, Mem of
Assemblyman Lentol at *1 ("the party would receive no more extra time
than the six-month period set forth in this section . . . ."); see
Shuhab HDFC v Bates, 2008 NY Misc LEXIS 3725, *4-5, 239 NYLJ 118 (NY Civ
Ct, New York County 2008) (the plaintiff may not benefit from CPLR
205(a)'s 6-month extension more than once)).

 
CPLR 206 (E):

This new subdivision expressly overrules Freedom Mtge. Corp. v
Engel,NY3d, 2021 NY Slip Op 01090 (2021), which effectively exempts
mortgage lenders and servicer institutions from having the statute of
limitation applied to it in all foreclosure actions. This new subdivi-
sion expresses the legislature's intent that accrual of an action to
foreclose upon a uniform or model mortgage instrument adopted by Fannie
Mae, Freddie Mac, or HUD, shall not be measured from the "acceleration
date," but rather from the time the right to demand immediate payment in
full of all sums so secured thereby may be exercised.
CPLR 206 (e) further clarifies that the statute of limitations to fore-
close a standard mortgage instrument shall be treated no different than
similar causes of action (see CPLR 203(a); 206(a); Hahn Auto. Warehouse,
Inc. v Am. Zurich Ins. Co., 18 NY3d 765, 770 (2012); quoting Aetna Life
& Cas. Co. v Nelson, 67 NY2d 169, 175 (1986)).

The overwhelming majority of mortgage foreclosure actions filed in New
York are predicated upon suits seeking to foreclose upon the entirety of
all sums secured by a standard Fannie Mae, Freddie Mac, or HUD uniform
mortgage instrument. Regarding all facts required for the commencement
of a foreclosure action upon such a uniform mortgage instrument on the
basis of non-payment, the occurrence of which being necessary for a note
holder to be entitled to demand the entire loan balance secured by the
mortgage immediately due and payable in full, i.e., accelerate; they
include: (1) the borrower's payment default; (2) the borrower being sent
a notice of default and opportunity to cure; and (3) the borrower's
failure to cure the default on or before the expiration date set forth
in the notice (see e.g., Elizon Master Participation Trust I v Clarke,
65 Misc 3d 1231(A), 2019 NY Slip Op 51935(U), *2 (Sup Ct, Queens County
2019) ("(T)he Court finds that the limitations period began to run on .
. . the date the defendant was obligated to cure her default by pursuant
to the terms of the Acceleration Notice")).

Since noteholders control if and when to send the requisite default
notice, the legislature's intent for consistency and predictability in
identifying and calculating limitations periods in actions involving
uniform instruments securing real property is achieved and realigned
with various judicial determinations from around the state which have
been strayed away from in the recent years (see e.g., CDR Creances S.A.
v Euro-American Lodging Corp., 43 AD3d 45, 51 (1st Dept 2007) (Tit is
well established that the six-year period begins to run when the lender
first has the right to foreclose on the mortgage . .
 Zinker v Makler, 298 AD2d 516, 517 (2d Dept 2002) ("The statute of
limitations in a mortgage foreclosure action begins to run the mortgagee
is entitled to demand full payment"); Saini v Cinelli Enters., 289 AD2d
770, 771 (3d Dept 2001) ("The Statute of Limitations in a mortgage fore-
closure action begins to run six years from the due date for each unpaid
installment or the time the mortgagee is entitled to demand full payment
. . . ."); Wendover Fin.  Servs. v Ridgeway, 137 AD3d 1718, 1719 (4th
Dept 2016); quoting Hahn, 8 NY3d at 770; accord ACE Sec. Corp., Home
Equity Loan Trust, Series 2006-SL2 v DB Structured Prods., Inc., 25 NY3d
581, 593-594 (2015)).  Thus, a foreclosure action must be commenced, and
in the case of an amended complaint, the foreclosure claim must be
interposed (see Rols Capital Co. v Beeten, 264 AD2d 724, 725 (2d Dept
1999); Gateway State Bank v Puma, 229 AD2d 373, 374 (2d Dept 1996)),
within six years of the date on which the plaintiff had the right to
demand payment in full. For the purposes of the interposition of a claim
against an additional defendant (see CPLR 203(c), (f)), the additional
defendant must be united in interest with the original defendant at the
time of the commencement of the action and through the interposition of
the claim against the additional defendant (see Jones v Bill, 10 NY3d
550, 554 (2008); Nevling v Chrysler Corp., 206 AD2d 221, 224-226 (2d
Dept 1994)).

 
CPLR 306-B:

In the context of actions upon instruments related to real property,
CPLR 306-b is hereby amended to clarify and reaffirm the legislature's
intent for the timing of a motion to extend the time to serve a defend-
ant under the statute. The amended language seeks to codify the dissent-
ing rationale in State of NY Mtge. Agency v Braun, 182 AD3d 63, 78-89
(2d Dept 2020 (cf. id. at 70-71 (majority noting that justification of
the dissenting opinion would require legislative action to clarify the
posited intent)), and overrule US Bank N.A. v Saintus, 153 AD3d 1380,
1381-1382 (2d Dept 2017) and its progeny (e.g., Bayview Loan Servicing,
LLC v Tanvir H Chaudhury, 188 AD3d 1128, 1128-1130 (2d Dept 2020)).

Outside the context of residential mortgage foreclosures, which has been
of special interest to the legislature over the last 15 years, the
legislature is unaware of another area of law where rampant improper and
defective service is condoned on such a routine basis.  It was never the
intent of the legislature to enable the courts to regularly deem bad
service "good cause" to grant an extension under CPLR 306-b, nor that
the "interest of justice" be routinely furthered by and through defec-
tive service. Rather, it was the judiciary that specifically requested
the legislature to repeal the former version of the statute and enact
CPLR 306-b to mirror Federal Rule of Civil Procedure 4(m)-authorizing a
court to extend the 120-day service mandate for good cause or in the
interest of justice, upon a plaintiff's timely cross-motion.

Nevertheless, at this point, the majority of extensions under the stat-
ute are granted to mortgage foreclosure plaintiffs having provided home-
owners, mortgagors and/or borrowers with improper or defective service-
usually many years after the fact (see e.g., Wachovia Bank, N. A. v
Greenberg, 190 AD3d 1007 (2d Dept 2021) (- 9 years after improper
service); U.S. Bank N.A. v Aoudou,AD3d, 2020 NY Slip Op 07619, *2 (2d
Dept 2020) (- 5 years after improper service); Tanvir H Chaudhury, 188
AD3d at 1128-1130 (- 9 years after improper service); U.S. Bank N.A. v
Viera, 187 AD3d 818, 818-820 (2d Dept 2020) (- 10 years after service
defective); accord HSBC Bank, USA v Gibatov, 183 AD3d 555, 555-557 (2d
Dept 2020) (same)).

The legislature's expressed desire to protect homeownership is not
reflected when the extension permitted under CPLR 306-b is utilized by
plaintiffs and the courts as a mechanism to not only routinely condone
but, in effect, reward the plaintiffs for defective service of process
upon a defendant-sometimes even 10 years after fact. While there is
undoubtedly a benefit for the courts to be empowered to extend service
deadlines under CPLR 306-b, at this point, that benefit, left unfet-
tered, has been far outweighed by habitual improper service practices
being relied upon by plaintiffs, and ultimately rewarded under the stat-
ute.

Therefore, CPLR 306-b is hereby amended to clarify the legislature's
intent and strike a balance in the underlying equities.

 
CPLR 2001:

The amendments to CPLR 2001 are made to:

(1) clarify and reaffirm that the court has neither the discretionary
authority to disregard pre-commencement mistakes, omissions, or
defects-e.g., failures to strictly comply with the pre-foreclosure
conditions precedents mandated under RPAPL 1301, 1304, and 1306 (see
CPLR 103(a), (b); 105(b); Aurora Loan Servs., LLC v Weisblum, 85 AD3d
95, 103, 107-108 (2d Dept 2011); TD Bank, N.A. v Leroy, 121 AD3d 1256,
1258-1260 (3d Dept 2014); CIT Bank, N.A. v Anderson, No.  16-CV-1712,
2019 US Dist LEXIS 137755, at *6-8 (EDNY Aug. 14, 2019); U.S. Bank N.A.
v Beymer, 161 AD3d 543, 544 (1st Dept 2018); Sec.  Natl. Servicing Corp.
v Liebowitz, 281 AD2d 615, 616 (2d Dept 2001)), nor post-commencement
pleading or service mistakes, defects, or omissions involving the
substantial rights afforded to property owners, mortgagors and borrowers
under RPAPL 1301, 1302 and 1303; and

(2) expressly overrule judicial interpretations inconsistent with the
intent of the legislature. Bank of Am., N.A. v Colagrande, 171 AD3d
1124, 1124-1125 (2d Dept 2019) and Bank of NY Mellon v Dougherty, 63
Misc 3d 216, 224-225 (Sup Ct, Suffolk County 2019) (failure to strictly
comply with RPAPL 1306 disregarded); Citimortgage, Inc. Sbm ABN Arnro
Mtge. Group, Inc. v Bunger, 58 Misc 3d 333, 343 (Sup Ct, Suffolk County
2017) (failure to strictly comply with RPAPL 1304 disregarded); Trustco
Bank v Alexander, 23 Misc 3d 1129(A), 2009 NY Slip Op 50996(U), *4 (Sup
Ct, Saratoga County 2009) (failure to strictly comply with RPAPL 1303
disregarded); Wells Fargo Bank, N.A.  v Irizarry, 142 AD3d 610, 611 (2d
Dept 2016) and its progeny (failure to strictly comply with RPAPL 1301
disregarded).

 
CPLR 3212 (D):

Amended to clarify and affirm that successive motions for summary judg-
ment should not be granted unless made, and entitlement established,
under CPLR 2221 (d), (e), (f), or 5015 (a). E.g., Deutsche Bank Natl.
Trust Co. v Elshiekh, 179 AD3d 1017, 1020-1021 (2d Dept 2020). Outside
the context of CPLR 2221 and 5015, successive motions for summary judg-
ment, by their very nature, neither promote the interest of substantial
justice nor produce judicial efficiency.  Contra, e.g., MTGLQ Invs., LP
v Collado, 183 AD3d 414, 414-415 (1st Dept 2020).

 
CPLR 3217 (D), GENERAL OBLIGATIONS LAW 17-103 (3), (4)(A) AND 17-105
(4) AND (5):

Collectively amended to expressly overrule Freedom Mtge. Corp. v
Engel,NY3d, 2021 NY Slip Op 01090 (2021) by:

(1) codifying the relevant provisions of judicial rulings such as Fowler
v Bowery Say. Bank, 113 NY 450, 456 (1889), Conrow v Little, 115 NY 387,
394 (1889), John J. Kassner & Co. v New York, 46 NY2d 544, 550-552
(1979), Ost v Mindlin, 170 AD 558, 559-560 (1st Dept 1915), affd 224 NY
668 (1918), Sotheby's, Inc. v Mao, 173 AD3d 72, 76-81 (1st Dept 2019);
U.S. Bank N.A. v McCaffery, 186 AD3d 897, 899 (2d Dept 2020), and US
Bank N.A. v Szoffer, 58 Misc 3d 1220(A), 2017 NY Slip Op 51976(U), *2
(Sup Ct, Rockland County 2017);

(2) clarifying the legislature's intent that, where applicable, the
general obligations law be the exclusive means by which parties are
enabled to postpone, cancel, reset, toll, revive or otherwise effectuate
an extension of the time prescribed by law for the commencement of an
action or proceeding upon an instrument described under CPLR 213 (4);
and

(3) clarifying that unless effectuated in strict accordance with the
relevant subdivisions of general obligations law 17-103 or 105, the
discontinuance of an action upon an instrument described under CPLR 213
(4), by any means, shall not, in form or effect:
  a. act as a waiver, postponement, cancellation, resetting, or tolling
of accrual of the cause of action;
  b. extend the limitations period prescribed by law to interpose the
claim; nor
  c. automatically revoke or nullify an election of remedies made in any
complaint.

 
RPAPL 1304:

Amended to:
(1) clarify the legislature's intent for applicability of the statute to
include borrowers and non-borrowing mortgagors alike (contra Charles
Schwab Bank v Winitch, 179 AD3d 1003, 1005-1006 (2d Dept 20201);

(2) update the proper website address listings provided in the notice;

(3) include information regarding free legal resources; and

(4) require the NYS Department of Financial Services to update, archive
and make publicly available certain important information concerning
housing counseling agency listings.

 
RPL 282:

Typically, where a mortgage foreclosure is dismissed without prejudice,
the mortgagee recommences suit and the attorneys' fees and costs from
the dismissed suit are added to those accrued within the subsequent
suit. Yet, under this exact scenario, the current jurisprudence of our
state prohibits mortgagors from recouping their attorneys' fees and
costs from the dismissed suit, which is inconsistent with "leveling the
playing field"-one of the express purposes for enacting the statute (see
L 2010, ch 550, Governor's Bill Jacket at *15).

Accordingly, RPL 282 is amended to:

(1) clarify the legislature's intent for applicability of the statute to
include mortgagors and borrowers alike; and

(2) clarify the intent of the statute with respect to the definition of
a successful defense and overrule judicial interpretations to the
contrary (e.g., Bac Home Loans Servicing, LP v Hassett, 2013 NY Slip Op
30235(U), *2-5 (Sup Ct, Suffolk County 2013); DKR Mtge. Asset Trust 1 v
Rivera, 130 AD3d 774, 776 (2d Dept 2015)).

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
This act shall take effect immediately, except as provided in section 14
of the bill.

                                
 
BILL NUMBER: S5473B

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the civil practice law and rules, the general obli-
gations law, and the real property actions and proceedings law, in
relation to the rights of parties involved in foreclosure actions

 
PURPOSE AND INTENT OF BILL:

The legislature finds that there is an ongoing problem with abuses of
the judicial foreclosure process; that the problem has been exacerbated
by court decisions which, contrary to the intent of the legislature,
have given mortgage lenders and loan servicers opportunities to avoid
strict compliance with remedial statutes and manipulate statutes of
limitation to their advantage; and that the purpose of the present
legislation is to clarify the meaning of existing statutes, and to
rectify these erroneous judicial interpretations thereof.

Accordingly, this bill amends certain statutes and rules to clarify the
existing law and overturn certain court decisions to ensure the laws of
              

this state apply equally to all litigants, including those currently
involved in mortgage foreclosure actions. The aim of the bill is to
thwart and eliminate abusive and unlawful litigation tactics that have
been adopted and pursued in mortgage foreclosure actions to manipulate
the law and judiciary to yield to expediency and the convenience of
mortgage banking and servicing institutions.  The bill also clarifies
the rights of parties involved in actions commenced against real proper-
ty owners, mortgagors and borrowers, including foreclosure actions. The
bill also adds new provisions, sections, and subdivisions intended to
curb abuses frequently and particularly abound in the context of actions
upon real property related instruments.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill provides that this act shall be known as the
"Foreclosure Process Abuse Prevention Act."

Section 2 of the bill amends CPLR 203 by adding subdivision (h) to clar-
ify that once a cause of action based upon an instrument described under
CPLR 213 (4){1} has accrued, no party may unilaterally "de-accrue" the
cause or otherwise effectuate a unilateral extension of the limitations
period prescribed by law to interpose the claim, unless expressly
permitted by law.

Section 3 of the bill adds a new section CPLR 205-a, which mirrors CPLR
205, but is limited to actions based upon instruments described under
CPLR 213 (4) and provides that the six-month extension afforded under
CPLR 205-a (a) is unavailable where the judge in the prior action speci-
fied the dismissal thereof was attributable to any form of neglect,
including, but not limited to, those set forth under CPLR 3215 (c),
3216, 3404, 22 NYCRR 202.27 or 202.48, or, in the alternative, put forth
on the record the conduct constituting forming the basis of dismissal.
The new section further clarifies that an assignee of the plaintiff is
not entitled to the six-month extension, unless acting on behalf or
asserting the rights of the original plaintiff. Finally, the new section
clarifies that the extension provided thereunder may only be used once,

to file the new action and serve the original defendant within six
months from the termination of the prior action.

Section 4 of the bill amends CPLR 206 by adding a new subdivision (e)
that clarifies that a cause of action to foreclose upon all sums secured
by a uniform or model mortgage instrument securing real property, as
adopted by the Federal National Mortgage Association (Fannie Mae),
Federal Home Loan Mortgage Corporation (Freddie Mac), or U.S. Department
of Housing and Urban Development (HUD), accrues at the first moment in
time where the right to demand immediate payment in full may be exer-
cised-not when, if ever, the demand is actually made.

Section 5 of the bill amends CPLR 306-b by clarifying that in an action
based on an instrument described under CPLR 213 (4), a motion for an
extension of time to serve the defendant with process shall be denied as
untimely if it is made after the entry of any order or judgment of
dismissal.

Section 6 of the bill amends CPLR 2001 by adding a new subdivision (b)
to clarify that mistakes, omissions, defects or irregularities arising
from pre-commencement requirements prescribed by RPAPL 1301, 1304, and
1306 may not disregarded by the court, nor may the failure of a lender,
an assignee or a mortgage loan servicer to strictly comply with the
remedial pleading and service requirements mandated under RPAPL 1301,
1302 and 1303.

Section 7 of the bill amends CPLR 3212 by adding a new subdivision (d)
to clarify that a successive motion for summary judgment is, in actuali-
ty, a motion affecting a prior order and therefore shall be made and
reviewed in accordance with subdivisions (d), (e) or (f) of CPLR 2221 or
subdivision (a) of CPLR 5015.

Section 8 of the bill amends CPLR 3217 by amending subdivision (d) and
adding a new subdivision (e) to clarify that unless effectuated in
strict accordance with the applicable provisions of article 17 of the
general obligations law, the voluntary discontinuance of an action based
upon an instrument described under CPLR 213 (4), by any means, shall
not, in form or effect: (1) act as a waiver, postponement, cancellation,
resetting, or tolling of accrual of the cause of action (i.e., effectu-
ate a "de-accrual" of the cause of action); (2) extend the limitations
period prescribed by law to interpose the claim; nor (3) automatically
revoke or nullify an election of remedies made in any complaint.

Section 9 of the bill amends subdivisions (3) and (4)(a) of section
17-103 of the general obligations law to clarify that the statute
represents, the exclusive means for parties to effectuate a waiver,
postponement, cancellation, resetting, tolling, revival or extension of
the time limited by statute for commencement of an action or proceeding
based on a cause of action for breach of contract, not involving a mort-
gage (e.g., an action based on a promissory note).

Section 10 of the bill amends subdivisions (4) and (5) of section 17-105
of the general obligations law to clarify that the statute represents
the exclusive means for parties to effectuate a waiver, postponement,
cancellation, resetting, tolling, revival or extension of the time
limited by statute for commencement of an action or proceeding based on
a cause of action to foreclose a mortgage, in part or whole.

Section 11 of the bill amends RPAPL 1304 (1), (1-a) and (2) to clarify
that the statute applies to borrowers and non-borrowing mortgagors
alike; expand the content required in the pre-foreclosure notices to
include updated website addresses for the NYS Office of the Attorney
General and information regarding free legal resources; and require the
NYS Department of Financial Services to update, archive and make public-
ly available certain important information concerning housing counseling
agency and bar association listings.

Section 12 of the bill amends RPL 282 to clarify that eligibility to
attorneys' fees and costs under the statute applies to mortgagors and
borrowers alike and to further clarify the intended broad scope and
meaning of a successful defense.

Section 13 of the bill contains the severability clause of the legis-
lation.

Section 14 of the bill provides for the effective date and grace peri-
ods.

 
JUSTIFICATION:

There is an urgent need to pass this bill to overrule the Court of
Appeals decision in Freedom Mtge. Corp. v Engel,NY3d, 2021 NY Slip Op
01090 (2021). As a direct result of this decision, a flurry of motions
have been filed by mortgage lenders and servicing institutions to reopen
time-barred cases that were dismissed years ago on the ground there is a
new change in the law that essentially exempts foreclosing plaintiffs
from having the statute of limitation applied to it in foreclosure
actions. Without this bill becoming law, the Courts, which had signif-
icant budget cuts and forced retirement of dozens of senior judges, will
be overburdened with these motions once the foreclosure moratorium ends
on May 1, 2021. This bill levels the fields for all homeowners, and
ensures the statute of limitation applies to all parties equally without
exemption.

This bill seeks to further clarify and reaffirm the legislative intent
of a wide spectrum of laws that have been: (1) manipulated and abused by
mortgage lending and servicing institutions; as well as (2) misunder-
stood and/or misapplied by the courts.

 
CPLR 203 (H):

CPLR 203 (h) is proposed to: (1) overrule Freedom Mtge. Corp. v
Engel,NY3d, 2021 NY Slip Op 01090 (2021), as violative of CPLR 201 and
inconsistent with the legislative intent of CPLR 203; and (2) clarify
that no party may unilaterally waive, postpone, cancel, or reset the
accrual thereof, or otherwise effectuate a unilateral extension of the
limitations period prescribed by law to interpose the claim or, in other
words, self-effectuate "de-accrual" of his/her/its claim, unless
expressly permitted by law {2} (see e.g., Sotheby's, Inc. v Mao, 173
AD3d 72, 76-81, n 9 1st Dept 2019, lv denied 34 NY3d 902 2019).

Stated simply, the same way personal injury plaintiffs cannot unilater-
ally reset or otherwise extend the applicable statute of limitations to
interpose their claim by "un-injuring" and then "re-injuring" them-
selves, this new subdivision makes clear that once a cause of action has
accrued (e.g., once an injury has been sustained, economic or other-
wise), parties have no unilateral right or ability to declare themselves
"un-harmed" and then "re-harmed" which, by design or happenstance,
effectuates an unlawful extension of the time limited by law for inter-
position of the claim, unless expressly permitted by law, rule or stat-
ue.

In the context of actions commenced against real property owners, mort-
gagors and borrowers, including foreclosure actions, and contrary to
Engel, a lender's unilateral "de-acceleration" of a mortgage loan, even
if permitted under the express terms of the mortgage loan documents,
cannot effectuate "de-accrual" of the cause of action (i.e., breach of
contract or foreclosure) or otherwise unwind the applicable limitations
period, under the guise of having been accomplished by operation of law.

 
CPLR 205-A:

CPLR 205-a, applicable to actions based on real property related instru-
ments described under CPLR 213 (4), is added to clarify the intended
meaning of several words included within CPLR 205 (a) by codifying the
correct decisional law interpreting the same, while expressly rejecting
court opinions inconsistent therewith.

First, as both providently determined and correctly predicted by the
Court of Appeals in Reliance Ins. Co. v Polyvision Corp., 9 NY3d 52,
57-58 (2007), the six-month extension afforded under CPLR 205 is avail-
able only to "the plaintiff' and is not intended to be extended to a
different party asserting different rights because that "would open a
new tributary in the law, presumably available tb individuals as well as
corporations, and breathe life into otherwise stale claims" (id. at 58).

Mindful of the potential ramifications of a rule allowing" otherwise,
the Court of Appeals correctly directed that CPLR 205 (a) should be read
"as it was written by the Legislature . . . ." (id.).

Yet, in direct contravention of Reliance, the majority in Wells Fargo
Bank, N.A. v Eitani, 148 AD3d 193, 201-203 (2d Dept 2017), appeal
dismissed 29 NY3d 1023 (2017), held that Wells Fargo Bank, N.A.  (Wells
Fargo), the assignee of a mortgage loan originated by Argent Mortgage
Company, LLC (Argent), was entitled to the six-month extension afforded
to "the plaintiff' under

CPLR 205 (a) because the mortgage loan was assigned by Argent to Wells
Fargo during the pendency of the prior action, which was commenced by
Argent. This holding is wrong and must not be followed. In Eitani, Wells
Fargo was not asserting the rights of Argent in the new actioni.e.,
Wells Fargo did not claim to be acting on behalf or for the benefit of
Argent. Rather, as correctly explained by the dissent in Eitani, Wells
Fargo was seeking to enforce its own rights in and to the mortgage loan;
the rights it acquired from Argent (Eitani, 148 AD3d at 206-209 Leven-
thal, J., dissenting).

Accordingly, CPLR 205-a (a) (1) explicitly provides that unless acting
on behalf or asserting the rights of the original plaintiff, an assignee
of that plaintiff is not entitled to the extension afforded under the
statute. Therefore, Eitani and its progeny should not be followed (e.g.,
U.S. Bank N.A. v Gordon, 158 AD3d 832, 838-839 2d Dept 2018).


Similarly, CPLR 205-a (a) specifies the original defendant. This spec-
ification clarifies that the plaintiff must both timely file and effec-
tuate service upon not just any defendant, .but the original defendant,
within the six-month extended period (e.g., Rayo v New York, 882 F Supp
37, 39 NDNY 1995 "In examining the language of Section 205(a), it is
plain that the six month extension applies only if the original court
had personal jurisdiction over the same defendant as in the second
case"; accord Raji v SG Americas Sec., LLC, 189 AD3d 514, 515 1st Dept
2020 "CPLR 205(a) cannot apply to render plaintiffs claims against
defendant SG Americas Securities, Inc. (SG Inc.) timely, however, since
SG Inc. was not a party to the federal action"; see also Cazsador by
Cazsador v Greene Cent. Sch., 243 AD2d 867, 868-869 3d Dept 1997; Caplan
v Winslett, 218 AD2d 148, 153-154 1st Dept 1996). This is consistent
with the intention of CPLR 205 (a) that the intended defendant have had
actual prior notice of the action within the applicable statute of limi-
tations period (Matter of Goldstein v NY State Urban Dev. Corp., 13 NY3d
511, 521 2009).

CPLR 205-a (a) also aims to codify the Court of Appeals holding in
Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape
Architects, P.C. (Habiterra Assoc.), 5 NY3d 514, 520 (2005) and further
make clear that a dismissal for any form of neglect includes, but is not
limited to, (3) dismissals made pursuant to CPLR 3215 (c), 3216, 3404,
22 NYCRR 202.27 and 202.48. Moreover, to address the issues confronted
by the court in Sokoloff v Schor, 176 AD3d 120, 128-133 (2d Dept 2019)
and Deutsche Bank Natl. Trust Co. v Baquero,AD3d, 2021 NY Slip Op 01246,
*1-4 (2d Dept 2021). (split opinion), CPLR 205-a (a) provides further
clarity, insofar as dismissals for any form of neglect can be sufficient
to prevent unauthorized use of the statute where the judge in the prior
action sets forth on the record either the conduct constituting the
neglect, which conduct shall demonstrate'a general pattern of delay in
proceeding with the litigation, or, in the alternative, simply specifies
the law, rule or code forming the basis of dismissal or neglect.

Finally, CPLR 205-a (a) further clarifies the legislature's intent that:

(1) the six-month extension applies only where the applicable limita-
tions period prescribed by law for the underlying cause of action has
already expired (United States Fid. & Guar. Co. v E. W.  Smith Co., 46
NY2d 498, 505 1979); and

(2) the plaintiff shall receive no more than one six-month extension
under the statute (L 1992, ch 216, Governor's Bill Jacket at *12, Mem of
Assemblyman Lentol at *1 "the party would receive no more extra time
than the six-month period set forth in this section . . . ."; see Shuhab
HDFC v Bates, 2008 NY Misc LEXIS 3725, *4-5, 239 NYLJ 118 NY Civ Ct, New
York County 2008 the plaintiff may not benefit from CPLR 205(a)'s
6-month extension more than once).

 
CPLR 206 (E):

This new subdivision expressly overrules Freedom Mtge. Corp. v
Engel,NY3d, 2021 NY Slip Op 01090 (2021), which effectively exempts
mortgage lenders and servicer institutions from having the statute of
limitation applied to it in all foreclosure actions. This new subdivi-
sion expresses the legislature's intent that accrual of an action to
foreclose upon a uniform or model mortgage instrument adopted by Fannie
Mae, Freddie Mac, or HUD, shall not be measured from the "acceleration
date," but rather from the time the right to demand immediate payment in
full of all sums so secured thereby may be exercised.  CPLR 206 (e)
further clarifies that the statute of limitations to foreclose a stand-
ard mortgage instrument shall be treated no different than similar caus-
es of action (see CPLR 203 a; 206 a; Hahn Auto. Warehouse, Inc. v Am.
Zurich Ins. Co., 18 NY3d 765, 770 2012; quoting Aetna Life & Cas. Co. v
Nelson, 67 NY2d 169, 175 1986).

The overwhelming majority of mortgage foreclosure actions filed in New
York are predicated upon suits seeking to foreclose upon the entirety of
all sums secured by a standard Fannie Mae, Freddie Mac, or HUD uniform
mortgage instrument. Regarding all facts required for the commencement
of a foreclosure action upon such a uniform mortgage instrument on the
basis of non-payment, the occurrence of which being necessary for a note
holder to be entitled to demand the entire loan balance secured by the
mortgage immediately due and payable in full, i.e., accelerate; they
include: (1) the borrower's payment default;

(2) the borrower being sent a notice of default and opportunity to cure;
and (3) the borrower's failure to cure the default on or before the
expiration date set forth in the notice (see e.g., Elizon Master Partic-
ipation Trust I v Clarke, 65 Misc 3d 1231 A, 2019 NY Slip Op 51935 U, *2
Sup Ct, Queens County 2019 IV The Court finds that the limitations peri-
od began to run on .  pursuant to the terms of the Acceleration
Notice").  Since noteholders control if and when to send the requisite
default notice, the legislature's intent for consistency and predict-
ability in identifying and calculating limitations periods in actions
involving uniform instruments securing real property is achieved and
realigned with various judicial determinations from around the state
which have been strayed away from in the recent years (see e.g.,òCDR
Creances S.A v Euro-American Lodging Corp., 43 AD3d 45, 51 1st Dept 2007
Tit is well established that the six-year period begins to run when the
lender first has the right to foreclose on the mortgage Zinker v Makler,
298 AD2d 516, 517 2d Dept 2002 "The statute of limitations in a mortgage
foreclosure action begins to run the mortgagee is entitled to demand
full payment"; Saini v Cinelli Enters., 289 AD2d 770, 771 3d Dept 2001
"The Statute of Limitations in a mortgage fore- closure action begins to
run six years from the due date for each unpaid installment or the time
the mortgagee is entitled to demand full payment
 Wendover Fin. Servs. v Ridgeway, 137 AD3d 1718, 1719 4th Dept 2016;
quoting Hahn, 8 NY3d at 770; accord ACE Sec. Corp., Home Equity Loan
Trust, Series 2006-SL2 v DB Structured Prods., Inc., 25 NY3d 581,
593-594 2015). Thus, a foreclosure action must be commenced, and in the
case of an amended complaint, the foreclosure claim must be interposed
(see Rols Capital Co. v Beeten, 264 AD2d 724, 725 2d Dept 1999; Gateway
State Bank v Puma, 229 AD2d 373, 374 2d Dept 1996), within six years of
the date on which the plaintiff had the right to demand payment in full.
For the purposes of the interposition of a claim against an additional
defendant (see CPLR 203 -a-- f), the additional defendant must be united
in interest with the original defendant at the time of the commencement
of the action and through the interposition of the claim against the
additional defendant (see Jones v Bill, 10 NY3d 550, 554 2008; Nevling v
Chry sler Corp., 206 AD2d 221, 224-226 2d Dept 1994).

 
CPLR 306-B:

In the context of actions upon instruments related to real property,
CPLR 306-b is hereby amended to clarify and reaffirm the legislature's
intent for the timing of a motion to extend the time to serve a defend-
ant under the statute. The amended language seeks to codify the dissent-
ing rationale in State of NY Mtge. Agency v Braun, 182 AD3d 63, 78-89
(2d Dept 2020 (cf. id. at 70-71 majority noting that justifidation of
the dissenting opinion would require legislative action to clarify the
posited intent), and overrule US Bank N.A. v Saintus, 153 AD3d 1380,
1381-1382 (2d Dept 2017) and its progeny (e.g., Bayview Loan Servicing,
LLC v Tanvir H Chaudhury, 188 AD3d 1128, 1128-1130 2d Dept 2020).

Outside the context of residential mortgage foreclosures, which has been
of special interest to the legislature over the last 15 years, the
legislature is unaware of another area of law where rampant improper and
defective service is condoned on such a routine basis.  It.was never the
intent of the legislature to enable the courts to regularly deem bad
service "good cause" to grant an extension under CPLR 306-b, nor that
the "interest of justice" be routinely furthered by and through defec-
tive service. Rather, it was the judiciary that specifically requested
the legislature to repeal the former version of the statute and enact
CPLR 306-b to mirror Federal Rule of Civil Procedure 4(m)-authorizing a
court to extend the 120-day service mandate for good cause or in the
interest of justice, upon a plaintiff's timely cross-motion.

Nevertheless, at this point/ the majority of extensions under the stat-
ute are granted to mortgage foreclosure plaintiffs having provided home-
owners, mortgagors and/or borrowers with improper or defective service-
usually many years after the fact (see e.g., Wachovia Bank, N. A. v
Greenberg, 190 AD3d 1007 2d Dept 2021 -9 years after improper service;
U.S. Bank N.A. v Aoudou,AD3d, 2020 NY Slip Op 07619, *2 2d Dept 2020 5
years after improper service; Tanvir H Chaudhury, 188 AD3d at 1128-1130
-9 years after improper service; U.S. Bank N.A. v Viers, 187 AD3d 818,
818-820 2d Dept 2020 -10 years after service defective; accord HSBC
Bank, USA v Gibatov, 183 AD3d 555, 555-557 2d De- pt 2020 same).

The legislature's expressed desire to protect homeownership is not
reflected when the extension permitted under CPLR 306-b is utilized by
plaintiffs and the courts as a mechanism to not only routinely condone
but, in effect, reward the plaintiffs for defective service of process
upon a defendant-sometimes even 10 years after fact.  While there is
undoubtedly a benefit for the courts to be empowered to extend service
deadlines under CPLR 306-b, at this point, that benefit, left unfet-
tered, has been far outweighed by habitual improper service practices
being relied upon by plaintiffs, and ultimately rewarded under the stat-
ute.

Therefore, CPLR 306-b is hereby amended to clarify the legislature's
intent and strike a balance in the underlying equities.

 
CPLR 2001:

The amendments to CPLR 2001 are made to:

(1) clarify and reaffirm that the court has neither the discretionary
authority to disregard pre-commencement mistakes, omissions, or
defects-e.g., failures to strictly comply with the pre-foreclosure
conditions precedents mandated under RPAPL 1301, 1304, and 1306 (see
CPLR 103 a b; 105 b; Aurora Loan Servs., LLC v Weisblum, 85 AD3d 95,
103, 107-108 2d Dept 2011; TD Bank, N.A. v Leroy, 121 AD3d 1256,
1258-1260 3d Dept 2014; CIT Bank, N.A. v Anderson, No. 16-CV-1712, 2019
US Dist LEXIS 137755, at *6-8 EDNY Aug. 14, 2019; U.S. Bank N.A.  v
Beymer, 161 AD3d 543, 544 1st Dept 2018; Sec. Natl. Servicing Corp.  v
Liebowitz, 281 AD2d 615, 616 2d Dept 2001), nor post-commencement plead-
ing or service mistakes, defects, or omissions involving the substantial
rights afforded to property owners, mortgagors and borrowers under RPAPL
1301, 1302 and 1303; and

(2) expressly overrule judicial interpretations inconsistent with the
intent of the legislature. Bank of Am., N.A. v Colagrande, 171 AD3d
1124, 1124-1125 (2d Dept 2019) and Bank of NY Mellon v Dougherty, 63
Misc 3d 216, 224-225 (Sup Ct, Suffolk County 2019) (failure to strictly
comply with RPAPL 1306 disregarded); Citimortgage, Inc. Sbm ABN Arnro
Mtge. Group, Inc. v Bunger, 58 Misc 3d 333, 343 (Sup Ct, Suffolk County
2017) (failure to strictly comply with RPAPL 1304 disregarded); Trustco
Bank v Alexander, 23 Misc 3d 1129(A), 2009 NY Slip Op 50996(U), *4 (Sup
Ct, Saratoga. County 2009) (failure to strictly comply with RPAPL 1303
disregarded); Wells Fargo Bank, N.A.  v Irizarry, 142 AD3d 610, 611 (2d
Dept 2016) and its progeny (failure to strictly comply with RPAPL 1301
disregarded).

 
CPLR 3212 (D):

Amended to clarify and affirm that successive motions for summary judg-
ment should not be granted unless made, and entitlement established,
under CPLR 2221 (d), (e), (f), or 5015 (a). E.g., Deutsche Bank Natl.
Trust Co. v Elshiekh, 179 AD3d 1017, 1020-1021 (2d Dept 2020). Outside
the context of CPLR 2221 and 5015, successive motions for summary judg-
ment, by their very nature, neither promote the interest of substantial
justice nor .produce judicial efficiency. Contra, e.g., MTGLQ Invs., LP
v Collado, 183 AD3d 414, 414-415 (1st Dept 2020).

CPLR 3217 (D), GENERAL OBLIGATIONS LAW 17-103 (3), (4)(A) AND 17-105 (4)
AND (5):

Collectively amended to expressly overrule Freedom Mtge. Corp. v
Engel,NY3d, 2021 NY Slip Op 01090 (2021) by:

(1) codifying the relevant provisions of judicial rulings such as Fowler
v Bowery Say. Bank, 113 NY 450, 456 (1889), Conrow v Little, 115 NY 387,
394 (1889), John J. Kassner & Co. v New York, 46 NY2d 544, 550-552
(1979), Ost v Mindlin, 170 AD 558, 559-560 (1st Dept 1915), affd 224 NY
668 (1918), Sotheby's, Inc. v Mao, 173 AD3d 72, 76-81 (1st Dept 2019);
U.S. Bank N.A. v McCaffery, 186 AD3d 897, 899 (2d Dept 2020), and US
Bank N.A. v Szoffer, 58 Misc 3d 1220(A), 2017 NY Slip Op 51976(U), *2
(Sup Ct, Rockland County 2017);

(2) clarifying the legislature's intent that, where applicable, the
general obligations law be the exclusive means by which parties are
enabled to postpone, cancel, reset, toll, revive or otherwise effectuate
an extension of the time prescribed by law for the commencement of an
action or proceeding upon an instrument described under CPLR 213 (4);,
and

(3) clarifying that unless effectuated in strict accordance with the
relevant subdivisions of general obligations law 17-103 or 105, the
discontinuance of an action upon an instrument described under CPLR 213
(4), by any means, shall not, in form or effect:

a. act as a waiver, postponement, cancellation, resetting, or tolling of
accrual of the cause of action;
b. extend the limitations period prescribed by law to interpose the
claim; nor
c. automatically revoke or nullify an election of remedies made in any
complaint.

 
RPAPL 1304:

Amended to:

(1) clarify the legislature's intent for applicability of the statute to
include borrowers and non-borrowing mortgagors alike (contra Charles
Schwab Bank v Winitch, 179 AD3d 1003, 1005-1006 2d Dept 20201);

(2) update the proper website address listings provided in the notice;

(3) include information regarding free legal resources; and

(4) require the NYS Department of Financial Services to update, archive
and make publicly available certain important information concerning
housing counseling agency listings.

 
RPL 282:

Typically, where a mortgage foreclosure is dismissed without prejudice,
the mortgagee recommences suit and the attorneys' fees and costs from
the dismissed suit are added to those accrued within the subsequent
suit. Yet, under this exact scenario, the current jurisprudence of our
state prohibits mortgagors from recouping their attorneys' fees and
costs from the dismissed suit, which is inconsistent with "leveling the
playing field"-one of the express purposes for enacting the statute (see
L 2010, Ch 550, Governor's Bill Jacket at *15).

Accordingly, RPL 282 is amended to:

(1) clarify the legislature's intent for applicability of the statute to
include mortgagors and borrowers alike; and

(2) clarify the intent of the statute with respect to the definition of
a successful defense and overrule judicial interpretations to the
contrary (e.g., Bac Home Loans Servicing, LP v Hassett, 2013 NY Slip Op
30235 U, *2-5 Sup Ct, Suffolk County 2013; DKR Mtge Asset Trust 1 v
Rivera, 130 AD3d 774, 776 2d Dept 2015).

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
This act shall take effect immediately, except as provided in section 14
of the bill.
{1} Standardized residential mortgage instruments under CPLR 206 (e)
are, by definition, instruments described under CPLR 213 (4).
{2} The language "unless expressly permitted by law," is not intended to
be a "loophole" in the subdivision and should not be viewed or treated
as such. Rather, the language represents the legislature's recognition
of certain unique situations where the law, in effect, may technically
provide a party with the unilateral ability to toll or extend the time
prescribed by law to interpose a claim. For example, if, after accrual
of a cause of action, an individual claimant committed suicide, that
individual, in effect, unilaterally tolled or extended the time
as22sribixdblaiLtsjattam21,29142slaio
(3) The "not limited to" caveat is intended to cover neglect related
dismissals, formed under local rules or individual part rules, as may be
promulgated from time to time (e.g., Part F, Rule 8, of the Kings County
Supreme Court Uniform Civil Term General Foreclosure Rules).

                                 
BILL NUMBER: S5473C

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the civil practice law and rules, the general obli-
gations law, and the real property actions and proceedings law, in
relation to the rights of parties involved in foreclosure actions

 
PURPOSE AND INTENT OF BILL:

The legislature finds that there is an ongoing problem with abuses of
the judicial foreclosure process; that the problem has been exacerbated
by court decisions which, contrary to the intent of the legislature,
have given mortgage lenders and loan servicers opportunities to avoid
strict compliance with remedial statutes and manipulate statutes of
limitation to their advantage; and that the purpose of the present
legislation is to clarify the meaning of existing statutes, and to
rectify these erroneous judicial interpretations thereof.

Accordingly, this bill amends certain statutes and rules to clarify the
existing law and overturn certain court decisions to ensure the laws of
this state apply equally to all litigants, including those currently
              

involved in mortgage foreclosure actions. The aim of the bill is to
thwart and eliminate abusive and unlawful litigation tactics that have
been adopted and pursued in mortgage foreclosure actions to manipulate
the law and judiciary to yield to expediency and the convenience of
mortgage banking and servicing institutions.  The bill also clarifies
the rights of parties involved in actions commenced against real proper-
ty owners, mortgagors and borrowers, including foreclosure actions.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill provides that this act shall be known as the
"Foreclosure Process Abuse Prevention Act."

Section 2 of the bill amends CPLR 203 by adding subdivision (h) to clar-
ify that once a cause of action based upon an instrument described under
CPLR 213 (4) {1} has accrued, no party may unilaterally "de-accrue" the
cause or otherwise effectuate a unilateral extension of the limitations
period prescribed by law to interpose the claim, unless expressly
permitted by law.

Section 3 of the bill amends CPLR 205 (c) to specify that that section
205 shall not apply proceedings governed by CPLR 205-a.

Section 4 of the bill adds a new section CPLR 205-a, which mirrors CPLR
205, but is limited to actions based upon instruments described under
CPLR 213 (4) and provides that the six-month extension afforded under
CPLR 205-a (a) is unavailable where the prior action was dismissed for
any form of neglect, including, but not limited to, those set forth
under CPLR 3126, 3215 (c), 3216, 3404, 22 NYCRR 202.27 or 202.48, or for
any violation of, or non-compliance with, any local court rule, individ-
ual judge part rule, or court order. The new section further clarifies
that an assignee of the original plaintiff is not entitled to the six-
month extension. Specifically, the section provides that a successor in
interest or representative of the plaintiff is not entitled to the six-
month extension, unless said successor in interest or representative
pleads and proves upon clear and convincing evidence it is acting on
behalf or asserting the rights of the original plaintiff. Finally, the
new section clarifies that the extension provided thereunder may only be
used once, to file the new action and serve the original defendant with-
in six months from the termination of the prior action.

Section 5 of the bill amends CPLR 206 by adding a new subdivision (e)
that clarifies that a cause of action to foreclose upon all sums secured
by a uniform or model mortgage instrument securing real property, as
adopted by the Federal National Mortgage Association (Fannie Mae),
Federal Home Loan Mortgage Corporation (Freddie Mac), or U.S. Department
of Housing and Urban Development (HUD), accrues at the first moment in
time where the right to demand immediate payment in full may be exer-
cised-not when, if ever, the demand is actually made. For purposes of
this subdivision only, there will be a rebuttable presumption that all
substantive conditions precedent to accrual of a cause of action to
foreclose upon any such mortgage instrument, if any, have been satis-
fied.

Section 6 of the bill amends CPLR 3217 by amending subdivision (d) and
adding a new subdivision (e) to clarify that unless effectuated in
strict accordance with the applicable provisions of article 17 of the
general obligations law, the voluntary discontinuance of an action based
upon an instrument described under CPLR 213 (4), by any means, shall
not, in form or effect: (1) act as a waiver, postponement, cancellation,
resetting, or tolling of accrual of the cause of action (i.e., effectu-
ate a "de-accrual" of the cause of action); (2) extend the limitations
period prescribed by law to interpose the claim; nor (3) automatically
revoke or nullify an election of remedies made in any complaint.

Section 7 of the bill amends subdivisions (4) and (5) of section 17-105
of the general obligations law to clarify that the statute represents
the exclusive means for parties to effectuate a waiver, postponement,
cancellation, resetting, tolling, revival or extension of the time
limited by statute for commencement of an action or proceeding based on
a cause of action to foreclose a mortgage, in part or whole.

Section 8 of the bill amends RPAPL 1301 to clarify that subdivision (3)
shall not be considered a stay or statutory prohibition within the mean-
ing of CPLR 204 when calculating the applicable statute of limitation
period. The bill further amends RPAPL 1301 to clarify that an adjudi-
cation that enforcement of the mortgage is time barred also means that
recovery under the mortgage debt represented by the bond or note so
secured by the mortgage is equally time-barred and vice versa (i.e., if
the note is time-barred, so is the mortgage; if the mortgage is time-
barred, so is the note).

Section 9 of the bill contains the severability clause of the legis-
lation.

Section 10 of the bill provides for the effective date and grace peri-
ods.

 
JUSTIFICATION:

There is an urgent need to pass this bill to overrule the Court of
Appeals decision in Freedom Mtge. Corp. v Engel__,NY3d__, 2021 NY Slip
Op 01090 (2021). As a direct result of this decision, a flurry of
motions have been filed by mortgage lenders and servicing institutions
to reopen time-barred cases that were dismissed years ago on the ground
there is a new change in the law that essentially exempts foreclosing
plaintiffs from having the statute of limitation applied to it in fore-
closure actions. Without this bill becoming law, scores of homeowners
will unlawfully and unjustly lose their homes. This bill levels the
fields for all homeowners, and ensures the statute of limitation applies
to all parties equally without exemption.

 
CPLR 203(H)

CPLR 203 (h) is proposed to: (1) overrule Freedom Mtge. Corp. v
Engel, __ NY3d__, 2021 NY Slip Op 01090 (2021), as violative of CPLR 201
and inconsistent with the legislative intent of CPLR 203; and (2) clari-
fy that no party may unilaterally waive, postpone, cancel, or reset the
accrual thereof, or otherwise effectuate a unilateral extension of the
limitations period prescribed by law to interpose the claim or, in other
words, self-effectuate "de-accrual" of his/her/its claim, unless
expressly permitted by law {2} (see e.g., Sotheby's, Inc. v Mao, 173
AD3d 72, 76-81, n 9 (1st Dept 2019), lv denied 34 NY3d 902 (2019)).

Stated simply, the same way personal injury plaintiffs cannot unilater-
ally reset or otherwise extend the applicable statute of limitations to
interpose their claim by "un-injuring" and then "re-injuring" them-
selves, this new subdivision makes clear that once a cause of action has
accrued (e.g., once an injury has been sustained, economic or other-
wise), parties have no unilateral right or ability to declare themselves
"un-harmed" and then "re-harmed" which, by design or happenstance,
effectuates an unlawful extension of the time limited by law for inter-
position of the claim, unless expressly permitted by law, rule or stat-
ue.

In the context of actions commenced against real property owners, mort-
gagors and borrowers, including foreclosure actions, and contrary to
Engel, a lender's unilateral "de-acceleration" of a mortgage loan, even
if permitted under the express terms of the mortgage loan documents,
cannot effectuate "de-accrual" of the cause of action (i.e., breach of
contract or foreclosure) or otherwise unwind the applicable limitations
period, under the guise of having been accomplished by operation of law.

 
CPLR 205-A

CPLR 205-a, applicable to actions based on real property related instru-
ments described under CPLR 213 (4), is added to clarify the intended
meaning of several words included within CPLR 205 (a) by codifying the
correct decisional law interpreting the same, while expressly rejecting
court opinions inconsistent therewith.

First, as both providently determined and correctly predicted by the
Court of Appeals in Reliance Ins. Co. v Polyvision Corp., 9 NY3d 52,
57-58 (2007), the six-month extension afforded under CPLR 205 is avail-
able only to "the plaintiff' and is not intended to be extended to a
different party asserting different rights because that "would open a
new tributary in the law, presumably available to individuals as well as
corporations, and breathe life into otherwise stale claims" (id. at 58).
"(M)indful of the potential ramifications of a rule allowing" otherwise,
the Court of Appeals correctly directed that CPLR 205 (a) should be read
"as it was written by the Legislature ...." (id.).

Yet, in direct contravention of Reliance, the majority in Wells Fargo
Bank, N.A. v Eitani, 148 AD3d 193, 201-203 (2d Dept 2017), appeal
dismissed 29 NY3d 1023 (2017), held that Wells Fargo Bank, N.A.  (Wells
Fargo), the assignee of a mortgage loan originated by Argent Mortgage
Company, LLC (Argent), was entitled to the six-month extension afforded
to "the plaintiff' under CPLR 205 (a) because the mortgage loan was
assigned by Argent to Wells Fargo during the pendency of the prior
action, which was commenced by Argent. This holding is wrong and must
not be followed. In Eitani, Wells Fargo was not asserting the rights of
Argent in the new action-i.e., Wells Fargo did not claim to be acting on
behalf or for the benefit of Argent.  Rather, as correctly explained by
the dissent in Eitani, Wells Fargo was seeking to enforce its own rights
in and to the mortgage loan; the rights it acquired from Argent (Eitani,
148 AD3d at 206-209 (Leventhal, J., dissenting)).

Accordingly, CPLR 205-a (a) (1) explicitly provides that unless acting
on behalf or asserting the rights of the original plaintiff, a successor
in interest or representative of that plaintiff is not entitled to the
extension afforded under the statute. Therefore, Eitani and its progeny
should not be followed (e.g., U.S. Bank N.A. v Gordon, 158 AD3d 832,
838-839 (2d Dept 2018)). Similarly, CPLR 205-a (a) specifies  
THE
ORIGINAL DEFENDANT. This specification clarifies that the plaintiff
must both timely file and effectuate service upon not just any defend-
ant, but the original defendant, within the six-month extended period
(e.g., Rayo v New York, 882 F Supp 37, 39 (NDNY 1995) ("In examining the
language of Section 205(a), it is plain that the six month extension
applies only if the original court had personal jurisdiction over the
same defendant as in the second case"); accord Raji v SG Americas Sec.,
LLC, 189 AD3d 514, 515 (1st Dept 2020) ("CPLR 205(a) cannot apply to
render plaintiffs claims against defendant SG Americas Securities, Inc.
(SG Inc.) timely, however, since SG Inc. was not a party to the federal
action"); see also Cazsador by Cazsador v Greene Cent. Sch., 243 AD2d
867, 868-869 (3d Dept 1997); Caplan v Winslett, 218 AD2d 148, 153-154
(1st Dept 1996). This is consistent with the intention of CPLR 205 (a)
that the intended defendant have had actual prior notice of the action
within the applicable statute of limitations period (Matter of Goldstein
v NY State Urban Dev. Corp., 13 NY3d 511, 521 (2009)).

CPLR 205-a (a) also aims to codify the Court of Appeals holding in
Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape
Architects, P.C. (Habiterra Assoc.), 5 NY3d 514, 520 (2005) and further
make clear that a dismissal for any form of neglect includes, but is not
limited to, {3} dismissals made pursuant to, inter alia, CPLR 3126, 3215
(c), 3216, 3404, 22 NYCRR 202.27 and 202.48.  Moreover, to address the
issues confronted by the court in Sokoloff v Schor, 176 AD3d 120,
128-133 (2d Dept 2019) and Deutsche Bank Natl.  Trust Co. v Baque-
ro,__AD3d_, 2021 NY Slip Op 01246, *1-4 (2d Dept 2021) (split opinion),
CPLR 205-a (a) deletes the language in CPLR 205 (a) that subjectively
hinges non-entitlement to the 6-month extension thereunder upon the
"sufficiency" of the judge in the prior action having set forth on the
record the specific conduct constituting the neglect that formed the
basis of the dismissal of that action.

Finally, CPLR 205-a (a) further clarifies the legislature's intent that:

(1) the six-month extension applies only where the applicable limita-
tions period prescribed by law for the underlying cause of action has

already expired (United States Fid. & Guar. Co. v E. W.  Smith Co., 46
NY2d 498, 505 (1979)); and

(2) the plaintiff shall receive no more than one six-month extension
under the statute (L 1992, ch 216, Governor's Bill Jacket at *12, Mem of
Assemblyman Lentol at *1 ("the party would receive no more extra time
than the six-month period set forth in this section ...."); see Shuhab
HDFC v Bates, 2008 NY Misc LEXIS 3725, *4-5, 239 NYLJ 118 (NY Civ Ct,
New York County 2008) (the plaintiff may not benefit from CPLR 205(a)'s
6-month extension more than once)).

 
CPLR 206 (E)

This new subdivision expressly overrules Freedom Mtge. Corp. v
Engel,__NY3d__, 2021 NY Slip Op 01090 (2021), which effectively exempts
mortgage lenders and servicer institutions from having the statute of
limitation applied to it in all foreclosure actions. This new subdivi-
sion expresses the legislature's intent that accrual of an action to
foreclose upon a uniform or model mortgage instrument adopted by Fannie
Mae, Freddie Mac, or HUD, shall not be measured from the "acceleration
date," but rather from the time the right to demand immediate payment in
full of all sums so secured thereby may be exercised.

CPLR 206 (e) further clarifies that the statute of limitations to fore-
close a standard mortgage instrument shall be treated no different than
similar causes of action (see CPLR 203(a); 206(a); Hahn Auto. Warehouse,
Inc. v Am. Zurich Ins. Co., 18 NY3d 765, 770 (2012); quoting Aetna Life
& Cas. Co. v Nelson, 67 NY2d 169, 175 (1986)).

The overwhelming majority of mortgage foreclosure actions filed in New
York are predicated upon suits seeking to foreclose upon the entirety of
all sums secured by a standard Fannie Mae, Freddie Mac, or HUD uniform
mortgage instrument. Regarding all facts required for the commencement
of a foreclosure action upon such a uniform mortgage instrument on the
basis of non-payment, the occurrence of which being necessary for a note
holder to be entitled to demand the entire loan balance secured by the
mortgage immediately due and payable in full, i.e., accelerate; they
include: (1) the borrower's payment default; (2) the borrower being sent
a notice of default and opportunity to cure; and (3) the borrower's
failure to cure the default on or before the expiration date set forth
in the notice (see e.g., Elizon Master Participation Trust I v Clarke,
65 Misc 3d 1231(A), 2019 NY Slip Op 51935(U), *2 (Sup Ct, Queens County
2019) ("(T)he Court finds that the limitations period began to run
on ... the date the defendant was obligated to cure her default by
pursuant to the terms of the Acceleration Notice")).

Since noteholders control if and when to send the requisite default
notice, the legislature's intent for consistency and predictability in
identifying and calculating limitations periods in actions involving
uniform instruments securing real property is achieved and realigned
with various judicial determinations from around the state which have
been strayed away from in the recent years (see e.g., CDR Creances S.A.
v Euro-American Lodging Corp., 43 AD3d 45, 51 (1st Dept 2007) ("(I)t is
well established that the six-year period begins to run when the lender
first has the right to foreclose on the mortgage ..."); Zinker v Makler,
298 AD2d 516, 517 (2d Dept 2002) ("The statute of limitations in a mort-
gage foreclosure action begins to run ... from ... the time the mortga-
gee is entitled to demand full payment"); Saini v Cinelli Enters., 289
AD2d 770, 771 (3d Dept 2001) ("The Statute of Limitations in a mortgage
foreclosure action begins to run six years from the due date for each
unpaid installment or the time the mortgagee is entitled to demand full
payment ...."); Wendover Fin. Servs. v Ridgeway, 137 AD3d 1718, 1719
(4th Dept 2016); quoting Hahn, 8 NY3d at 770; accord ACE Sec. Corp.,
Home Equity Loan Trust, Series 2006-SL2 v DB Structured Prods., Inc., 25
NY3d 581, 593-594 (2015)). Thus, a foreclosure action must be commenced,
and in the case of an amended complaint, the foreclosure claim must be
interposed (see Rols Capital Co. v Beeten, 264 AD2d 724, 725 (2d Dept
1999); Gateway State Bank v Puma, 229 AD2d 373, 374 (2d Dept 1996)),
within six years of the date on which the plaintiff had the right to
demand payment in full. For the purposes of the interposition of a claim
against an additional defendant (see CPLR 203(c), (f)), the additional
defendant must be united in interest with the original defendant at the
time of the commencement of the action and through the interposition of
the claim against the additional defendant (see Jones v Bill, 10 NY3d
550, 554 (2008); Nevling v Chrysler Corp., 206 AD2d 221, 224-226 (2d
Dept 1994)).

Finally, service of a predicate notice of default under a uniform or
model mortgage instrument adopted by Fannie Mae, Freddie Mac, or HUD,
may constitute a substantive condition precedent to accrual of the cause
of action and therefore calculation of the limitations period.  However,
with the passage of time, documents may be lost, and the memories of
witnesses may fade. Allowing the accrual of the statute of limitations
to potentially turn upon proof of service of a predicate notice-evidence
which may no longer be available due to the passage of time-is an unde-
sirable result. The legislature also recognizes the inherent difficulty
that a defendant will encounter in establishing a valid statute of limi-
tations defense when such defense may depend upon information and docu-
ments that may be unavailable due to the passage of time. The proposed
language of subdivision (e) of CPLR 206 is meant to remedy such diffi-
culty. In particular, to avoid litigation concerning the proof service
and propriety of these notices, proposed subdivision (e) of CPLR 206
would create, upon a defendant's allegation that a default on the rele-
vant mortgage instrument(s) has occurred, a rebuttable presumption for
the purposes of CPLR 206 (e) only that all substantive conditions prece-
dent, if any, to the accrual of a cause of action to foreclose the mort-
gage have been satisfied. The presumption may be rebutted by clear and
convincing evidence and will exclusively apply to calculation of accrual
and the statute of limitations. For example, a defendant may raise the
affirmative defenses of payment or the plaintiff's failure to comply
with a contractual condition precedent, or otherwise the plaintiff's
failure to prove the default, without regard to the presumption concern-
ing the accrual of the statute of limitations arising under proposed
subdivision (e).

 
CPLR 3217 (D) AND GENERAL OBLIGATIONS LAW 17-105 (4) AND (5) Collec-
tively amended to expressly overrule Freedom Mtge. Corp. v
Engel,__NY3d__, 2021 NY Slip Op 01090 (2021) by:

(1) codifying the relevant provisions of judicial rulings such as Fowler
v Bowery Say. Bank, 113 NY 450, 456 (1889), Conrow v Little, 115 NY 387,
394 (1889), John J. Kassner & Co. v New York, 46 NY2d 544, 550-552
(1979), Ost v Mindlin, 170 AD 558, 559-560 (1st Dept 1915), affd 224 NY
668 (1918), Sotheby's, Inc. v Mao, 173 AD3d 72, 76-81 (1st Dept 2019);
U.S. Bank N.A. v McCaffery, 186 AD3d 897, 899 (2d Dept 2020), and US

Bank N.A. v Szoffer, 58 Misc 3d 1220(A), 2017 NY Slip Op 51976(U), *2
(Sup Ct, Rockland County 2017);

(2) clarifying the legislature's intent that, where applicable, the
general obligations law be the exclusive means by which parties are
enabled to postpone, cancel, reset, toll, revive or otherwise effectuate
an extension of the time prescribed by law for the commencement of an
action or proceeding upon an instrument described under CPLR 213 (4);
and

(3) clarifying that unless effectuated in strict accordance with the
relevant subdivisions of general obligations law 17-103 or 105, the
discontinuance of an action upon an instrument described under CPLR 213
(4), by any means, shall not, in form or effect:
a. act as a waiver, postponement, cancellation, resetting, or tolling of
accrual of the cause of action;
b. extend the limitations period prescribed by law to interpose the
claim; nor
c. automatically revoke or nullify an election of remedies made in any
complaint.

 
RPAPL 1301

Amended to overrule Citimortgage, Inc. v Ramirez, 192 AD3d 70 (3d Dept
2020) by clarifying that under election of remedies principles:

(1) RPAPL 1301 (3) shall not constitute a stay or statutory prohibition
within the meaning of CPLR 204 (a); and

(2) if the mortgage securing the bond or note representing the debt so
secured by the mortgage (collectively, the mortgage debt) is adjudicated
as time barred by a court of competent jurisdiction, then any other
action based solely upon all or part of the same mortgage debt is equal-
ly time barred.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
This act shall take effect immediately, except as provided in section 10
of the bill.
(1) Standardized residential mortgage instruments under CPLR 206 (e)
are, by definition, instruments described under CPLR 213 (4).
(2) The language "unless expressly permitted by law," is not intended to
be a "loophole" in the subdivision and should not be viewed or treated
as such. Rather, the language represents the legislature's recognition
of certain unique situations where the law, in effect, may technically
provide a party with the unilateral ability to toll or extend the time
prescribed by law to interpose a claim. For example, if, after accrual
of a cause of action, an individual claimant committed suicide, that
individual, in effect, unilaterally tolled or extended the time
prescribed by law to interpose the claim (e.g., CPLR 208, 210(a)).
(3) The "not limited to" caveat is intended to cover neglect related
dismissals formed under local rules or individual part rules, as may be
promulgated from time to time (e.g., Part F, Rule 8, of the Kings County
Supreme Court Uniform Civil Term General Foreclosure Rules).