Senate Bill S10086

                                 
BILL NUMBER: S10086

SPONSOR: MYRIE
 
TITLE OF BILL:

An act to amend the civil practice law and rules and the real property
actions and proceedings law, in relation to residential foreclosure
actions

 
PURPOSE OR GENERAL IDEA OF BILL:

To clarify provisions governing when foreclosure actions are deemed
abandoned for failure of a plaintiff to timely seek a default judgment,
governing when foreclosure actions are deemed terminated for purposes of
the savings clause permitting actions to be recommenced following termi-
nation of a prior action and be deemed timely, and governing the finali-
ty of dismissed or discontinued residential foreclosure actions.

 
SUMMARY OF PROVISIONS:

Section 1 - Amends CPLR Section 3408 to clarify that the filing of a
request for judicial intervention in a residential foreclosure action
              

shall not constitute taking proceedings for the entry of judgement for
purposes of the CPLR Section 3215(c) deadline to take proceedings for
entry of a default within one year of a defendant's default. Also clari-
fies that the time period for seeking entry of default shall resume upon
the removal of the case from the conference calendar.

Section 2 - Amends CPLR Section 205-a to clarify that actions are termi-
nated for purposes of triggering the six-months savings clause upon
entry of the order dismissing the action and that appeals or motions
made after the order of dismissal do not extend the time in which a new
action may be commenced.

Section 3 - Adds a new RPAPL Section 1394 to ensure that courts may not
entertain motions pertaining to dismissed actions more than 30 days
after service of notice of entry of an order dismissing or discontinuing
an action except for motions to vacate pursuant to CPLR 5015.

Section 4 - Sets forth the effective date.

 
JUSTIFICATION:

In the past decade, the legislature and Governor have enacted strong,
common-sense protections for New Yorkers facing residential foreclosure
proceedings. These laws have curbed myriad abuses associated with the
judicial foreclosure process and have adopted consumer protections in
the judicial foreclosure process that have helped hundreds of thousands
of homeowners, including many seniors, veterans, and families of color,
avert foreclosure and retain their homes, preserve generational wealth
and have helped communities avoid the destabilizing impacts of foreclo-
sures on the community at large.  Such state-level safeguards are espe-
cially critical today as the federal government has largely abdicated
enforcement of homeowner protections in their purview, especially under
the Consumer Financial Protection Bureau and Federal Trade Commission.
However, our strong state laws are not always fully realized in residen-
tial foreclosure proceedings due to misinterpretation. This legislation
would therefore make minor clarifications to the Civil Practice Laws and
Rules and the Real Property Actions and Proceedings Law to ensure our
existing protections are being accurately applied throughout the entire-
ty of the foreclosure legal process.

First, the bill would correct appellate division decisions that have
held that filing of a request for judicial intervention (RJI) is deemed
"taking proceedings" for a default judgment for purposes of excusing
plaintiffs from the deadline to seek a default judgment within one year
of defendants' default. Because CPLR Rule 3408 affords homeowner defend-
ants a second opportunity to interpose an answer within 30 days of the
first settlement conference, defendants are not actually in default at
the time the RJI is filed. Plaintiffs who diligently pursue their cases
are not harmed by this provision, as it makes clear that their one-year
deadline to take proceedings for a default would resume upon release
from settlement conferences, with the time the case was in conferences
not counting towards their deadline.

Next, the legislation offers clarity in CPLR Section 205-a about when a
case is deemed "terminated" for purposes of this savings period, as
courts have reached different conclusions. "Termination" is unclear in
the context of New York civil procedure law, which typically refers to
cases being "dismissed", and this ambiguity has led some courts to inad-
vertently extend the period to recommence an action beyond what was
contemplated by recent amendments to the statute. The bill corrects this
error by anchoring the savings period to when the court enters the order
dismissing the case, which would ensure that plaintiffs could not
prolong the savings period by noticing an appeal or filing additional
motions in the dismissed action. This amendment ensures finality and
would curb plaintiffs from dragging the process out by filing appeals
that they fail to perfect, or motions they know are likely to be denied,
for the purpose of effectively extending the six-months savings period,
and the foreclosure process generally. The savings period is in deroga-
tion of important statute of limitations principles and should not be
extended by the filing or conclusion of appeals when what it intends is
a brief period in which a plaintiff whose case is dismissed under
certain circumstances can recommence a new action and have it deemed
timely.

Lastly, the bill addresses the phenomenon of plaintiffs commencing new
actions after a prior action is dismissed, which new actions are often
barred by the statute of limitations that was triggered by a prior
action that they brought. When confronted with the dismissal of their
later-commenced cases, many plaintiffs have invoked the technicality
that no "judgment" was entered dismissing the prior case and have sought
to move in such dismissed case to restore it and to vacate the dismiss-
al. This provision would prohibit this conduct and ensure that when
actions are dismissed, a plaintiff may not seek to revive it more than
30 days after entry of the order dismissing it, except as provided in
CPLR Section 5015.

 
PRIOR LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all actions
commenced on an instrument described under subdivision four of section
two hundred thirteen of the civil practice law and rules inwhich a final
judgment of foreclosure and sale has not been enforced.