Ditech Fin. v. Naidu
| Docket Number | Index No. 700387/2016 |
| Decision Date | 18 October 2023 |
| Parties | Ditech Financial LLC F/K/A GREEN TREE SERVICING LLC, Plaintiff, v. Santhana Kumar Nataraja Naidu, CITIMORTGAGE, INC., AND "JOHN DOE #1" THROUGH "JOHN DOE#12", THE LAST TWELVE NAMES BEING FICTITIOUS AND UNKNOWN TO PLAINTIFF, THE PERSONS OR PARTIES INTENDED BEING THE TENANTS, OCCUPANTS, PERSONS OR CORPORATIONS, IF ANY, HAVING OR CLAIMING AN INTEREST IN OR LIEN UPON THE PREMISES BEING FORECLOSED HEREIN, Defendant(s). |
| Court | New York Supreme Court |
Attorney for Plaintiff: Day Pitney LLP, Christina A. Livorsi Esq.
Attorney for Defendant: Law Office of Maggio & Meyer LLC, Holly C. Meyer, Esq.
Frederick D.R. Sampson, J.
The following papers numbered E 161 to E 186 read on Defendant Santhana Kumar Nataraja Naidu's motion for an Order granting leave to renew its previously denied cross motion pursuant to CPLR §2221(e), and upon renewal, vacate the Order which denied the application, and dismiss this action pursuant to CPLR §3211(a)(5) on the basis that this action is time-barred as a matter of law.
Notice of Motion-Affidavits-Exhibits E 161- E 168
Upon the foregoing papers, it is hereby ordered that the motion is disposed of as follows:
In this mortgage foreclosure action, defendant Santhana Kumar Nataraja Naidu moves inter alia pursuant to CPLR §2221(e) to vacate Order which denied defendant's previous cross motion to dismiss this action as time barred and upon renewal, dismiss this action pursuant to CPLR §3211(a)(5).
It appears upon the Court's record that plaintiff commenced a previous foreclosure action under Queens County Supreme Court Index Number 20090/2009 to foreclose upon the same mortgage and note as herein. It is undisputed that the commencement of the 2009 action accelerated the underlying mortgage debt. (Beneficial Homeowner Serv. Corp. v Tovar, 150 A.D.3d 657, 658 [2d Dept 2017]. It further appears that the 2009 foreclosure action was discontinued by Stipulation of Discontinuance dated February 18, 2014.
Thereafter plaintiff commenced the instant action with the filing of a Summons and Complaint on January 13, 2016. In March 2018 plaintiff moved for summary judgment and Order of Reference herein, and defendant cross-moved for dismissal pursuant to CPLR §3211(a)(5) based upon the Statute of Limitations arguing that as the debt was accelerated in 2009, the instant action is untimely as a matter of law. In a Court Order by the retired Justice Robert McDonald dated November 7, 2022, plaintiff's application was granted and defendant's cross-motion for dismissal was denied. In said decision, based upon the law at the time, Justice McDonald opined that the discontinuance of the 2009 action acted as a deacceleration of the underlying debt, and as such, the Statute of Limitations had been reset and the instant action was timely commenced.
Defendant filed an Appeal of the Court Order and the Appellate Division Second Department reversed, finding that the mere filing of a Stipulation of Discontinuance, without an affirmative act of revocation of acceleration, was insufficient to demonstrate that the loan was deaccelerated, and found that this action was indeed time-barred. Thereafter, plaintiff appealed the Second Department decision to the New York State Court of Appeals, which was granted in February 2020. In February 2021, the New York State of Court of Appeals reversed the Second Department determination and found that the Stipulation of Discontinuance of the 2009 action (the "withdrawal of the complaint") was an act of deacceleration ("revocation of acceleration") in accordance with the Court of Appeals holding in Freedom Mtge Corp. v. Engel, 37 N.Y.3d 1 [2021].). Applying this rational, the Court of Appeals found that the Stipulation of Discontinuance of the 2009 action "revoked" the acceleration of the underlying debt and therefore this action was timely commenced. The Court of Appeals reinstated the action and remitted the matter to the Appellate Division Second Department for consideration of issues raised but not resolved.
Thereafter, in December 2022 the New York State Legislature passed the "Foreclosure Abuse Prevention Act" (L 2022, ch 821) ("FAPA") which amended several sections of the CPLR. In passing FAPA the legislature stated that" [t]his act [FAPA] 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 in which a final judgment of foreclosure and sale has not been enforced" (2022 Sess. Law News of NY Ch. 821 §10). The section of the CPLR which was amended by FAPA relevant here is CPLR §3217, which states in pertinent part: "Effect of discontinuance upon certain instruments. In any action on an instrument described under subdivision four of section two hundred thirteen of this chapter, the voluntary discontinuance of such action, whether on motion, order, stipulation or by notice, shall not, in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period to commence an action and to interpose a claim, unless expressly prescribed by statute. (see CPLR §3217(e) as amended).
It is on this basis that defendant now moves for leave to renew, as she contends that FAPA constitutes a change in the law that would alter this Court's prior determination. Specifically, here, defendant argues that CPLR §3217(e) as amended by FAPA rejects the determination that the 2009 Stipulation of Discontinuance revoked acceleration of the underlying debt, and as such, this action is time-barred as a matter of law.
It is well settled that "A motion for leave to renew shall... demonstrate that there has been a change in the law that would change the prior determination." (CPLR §2221(e); see Dinallo v DAL Elec., 60 A.D.3d 620, 621, 874 N.Y.S.2d 246 [2d Dept. 2009]; see also McLaughlin v Snowlift, Inc. 214 A.D.3d 720, 721, 185 N.Y.S.3d 212 [2d Dept 3/8/2023]). "A motion for leave to renew is the appropriate vehicle for seeking relief from a prior order based on a change in the law. Ordinarily, a motion for leave to renew "must be made before the time to appeal the final judgment has expired" (id.), yet FAPA specifically applies to "all actions commenced on an instrument described under [CPLR § 213 (4)] in which a final judgment of foreclosure and sale has not been enforced." (FAPA, § 10; see generally Matter of Tucker v Bd. of Educ., Community School Dist. # 10, 82 N.Y.2d 274, 278 [1993]; Matter of World Trade Ctr. Lower Manhattan Disaster Site Litigation., 30 N.Y.3d 377, 4000 [2017].)
Here, the Court finds that FAPA presents a change in the law which is sufficient to grant defendant's application pursuant to CPLR §2221(e)(2). Further, as the Court has not issued a final Judgment of Foreclosure and Sale, and as no such Judgement has been enforced, the motion is timely.
With regards to defendant's application pursuant to CPLR §3211(a)(5) based upon FAPA, plaintiff opposes defendant's motion arguing that FAPA's should not be applied retroactively as such application would: (i) violate plaintiff's constitutional rights; (ii) constitute a taking without just compensation; (iii) impair plaintiff's vested rights to litigate a timely action; and (iv) rewrite the underlying mortgage and note. It appears, in sum, that plaintiff constrains its opposition to whether the Court can or should apply FAPA retroactively, and, whether applying FAPA retroactively herein, would violate plaintiff's constitutional rights.
The Court shall consider plaintiff's arguments in turn below.
As an initial matter, it is well settled that "Legislative enactments are entitled to a strong presumption of constitutionality" (Dalton v Pataki, 5 N.Y.3d 243, 255, 835 N.E.2d 1180, 802 N.Y.S.2d 72 [2005]; Schulz v State of New York, 84 N.Y.2d 231, 241, 639 N.E.2d 1140, 616 N.Y.S.2d 343 [1994]), and "courts strike them down only as a last unavoidable result" (Matter of Van Berkel v Power, 16 N.Y.2d 37, 40, 209 N.E.2d 539, 261 N.Y.S.2d 876 [1965]) and only after "every reasonable mode of reconciliation of the statute with the Constitution has been resorted to, and reconciliation has been found impossible." (Matter of Fa y, 291 NY 198, 207, 52 N.E.2d 97 [1943]). Thus, while the presumption of constitutionality is not irrefutable, when plaintiff is challenging the statute, plaintiff bears "the initial burden of demonstrating invalidity 'beyond a reasonable doubt.'" (LaValle v Hayden, 98 N.Y.2d 155, 161, 773 N.E.2d 490, 746 N.Y.S.2d 125 [2002], quoting People v Tichenor, 89 N.Y.2d 769, 773, 680 N.E.2d 606, 658 N.Y.S.2d 233 [1997]; see also Matter of Moran Towing Corp. v Urbach, 99 N.Y.2d 443, 448, 787 N.E.2d 624, 757 N.Y.S.2d 513 [2003]; Matter of Saratoga Water Servs. v Saratoga County Water Auth., 83 N.Y.2d 205, 211, 630 N.E.2d 648, 608 N.Y.S.2d 952 [1994]; Wiggins v Town of Somers, 4 N.Y.2d 215, 218-219, 149 N.E.2d 869, 173 N.Y.S.2d 579 [1958]).
Plaintiff's opposition first argues that FAPA was not intended to, and should not be, applied retroactively. There is, however, no presumption against applying a statute retroactively when the law does not "attach new legal consequences to events completed before its enactment." (Am. Economy Ins. Co. v State, 30 N.Y.3d 136, 147 [2017]). Here, in applying FAPA to the case at bar, it does not appear that any new legal consequences attach. Rather, it appears that the retroactive application of FAPA merely restores the legal consequence of plaintiff's 2009 discontinuance, in effect at the time the stipulation of discontinuance was executed and when the Appellate Division Second Department dismissed this action as untimely in 2...
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