Supreme Court, Queens County, April 12, 2023

McCarter & English, LLP (Jessie D. Bonaros of counsel) for plaintiff.

David J. Broderick LLC (David J. Broderick of counsel) for Frantz Dagrin and another, defendants.

It is ordered that these motions are determined as follows:

Plaintiff's motion for leave to reargue the June 16, 2022 and September 15, 2022 court orders is denied, as plaintiff failed to present evidence that the court overlooked or misapprehended the facts or law presented in its motions for summary judgment. Defendants Frantz Dagrin and Daniella Dagrin's cross-motion to dismiss plaintiff's complaint pursuant to CPLR 3211 (a) (5); 213 (4); 203 (h) and 3217 (e) is granted, as defendants demonstrated that the instant foreclosure action is time-barred by the six-year statute of limitations. (See L 2022, ch 821; see also GMAT Legal Title Trust 2014-1 v Kator, 213 AD3d 915 [2d Dept, Feb. 22, 2023].)[*2]

Plaintiff commenced this action on March 8, 2018, to foreclose on real property located at 2240 New Haven Avenue, Far Rockaway, New York. Plaintiff's summons and complaint indicated that on May 19, 2006, defendant Frantz Dagrin executed and delivered a note to New Century Mortgage Corporation secured by a mortgage on the above stated real property. A deed was executed on May 19, 2006, and recorded on August 3, 2006, transferring the title of the property from defendant Dagrin to codefendants Dagrin and Daniella Dagrin. Plaintiff alleged defendant Frantz Dagrin defaulted on the note and mortgage as of July 1, 2012. Plaintiff further alleged that a{**79 Misc 3d at 395} prior foreclosure action was filed on March 28, 2008, under Queens Supreme Court index No. 7995/2008, but was discontinued on July 10, 2013. Defendants filed an answer on May 30, 2018, with affirmative defenses including but not limited to the defense of statute of limitations.

A motion to reargue pursuant to CPLR 2221 shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion but shall not include any matters of fact not previously offered on the prior motion. (Ahmed v Pannone, 116 AD3d 802 [2d Dept 2014], lv dismissed 25 NY3d 964 [2015], rearg denied 26 NY3d 944 [2015].) While the determination to grant a motion to reargue rests within the sound discretion of the trial court, a motion to reargue is not designed to grant an unsuccessful party successive opportunities to reargue issues previously decided, or to present arguments different from those presented in the initial papers. (Id.; see also Williams v Abiomed, Inc., 173 AD3d 1115 [2d Dept 2019].)

Here, it appears that plaintiff is merely seeking to relitigate the same arguments that were presented in its prior papers and did not present sufficient evidence that the court misapprehended or overlooked the facts or law. (See id.) Plaintiff herein makes the same arguments that defendants' affidavit was insufficient to raise a material issue of fact in dispute. As plaintiff is relitigating the same arguments, plaintiff's motion for leave to reargue the June 16, 2022 and September 15, 2022 court orders is denied.

Defendants cross-move to dismiss plaintiff's complaint arguing that it is time-barred. They argue that plaintiff filed a prior action on March 28, 2008, which was discontinued on July 3, 2013. Defendants further argue that pursuant to recent legislation, the discontinuance does not constitute a de-acceleration of the note and mortgage as it did not include an expressed judicial determination, and therefore the statutory six-year time frame expired on March 28, 2014. As the applicable statute of limitations has expired, defendants argue their cross-motion should be granted and the complaint must be dismissed.

Plaintiff opposes defendants' cross-motion and argues that a retroactive application of the foreclosure legislation known as the Foreclosure Abuse Prevention Act is unfair and unconstitutional. Plaintiff acknowledges that under the new foreclosure legislation, it would be time-barred from proceeding in this case. However, plaintiff argues this court should invalidate the{**79 Misc 3d at 396} law because the legislature failed to express a clear intent for the law to apply retroactively, retroactive application is not justified by a rational legislative purpose, and retroactive application violates due process, the Contracts Clause, and the Bill of Attainder Clause. Plaintiff argues that the legislature failed to consider and acknowledge the severe impact the legislation would have on lenders, and the long-standing history that permitted lenders to de-accelerate by express statement. By removing plaintiff's ability to de-accelerate the note and mortgage, the legislature violated its constitutional rights and plaintiff argues this court should hold the legislation as unconstitutional and void.

Pursuant to CPLR 213 (4), an action to foreclose a mortgage is subject to a six-year [*3]statute of limitations. (See Federal Natl. Mtge. Assn. v Bandhu, 214 AD3d 705 [2d Dept 2023].) Even if the mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and payable, and the statute of limitations begins to run on the entire debt. (See Federal Natl. Mtge. Assn. v Metz, 214 AD3d 709 [2d Dept 2023].) Acceleration may occur by the commencement of a foreclosure action wherein the plaintiff elects in the complaint to call due the entire amount secured by the mortgage. (See Ditech Fin., LLC v Connors, 206 AD3d 694 [2d Dept 2022].)

The issue in question is the validity of a de-acceleration by voluntary discontinuance of a foreclosure action. Defendants argue that pursuant to new state legislation, the discontinuance filed on July 3, 2013, did not constitute a proper de-acceleration, and therefore the commencement of this action on March 8, 2018, was time-barred. Plaintiff argues that the Court of Appeals determined a voluntary discontinuance constitutes a de-acceleration, which permitted plaintiff to timely recommence the action on March 8, 2018, and the recent legislation is unconstitutional and should be rejected by this court. It is undisputed that the 2013 voluntary discontinuance was not based upon an expressed judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated. Therefore, the only question is whether the discontinuance, as it exists, was a proper de-acceleration of the mortgage loan.

The recently enacted Foreclosure Abuse Prevention Act (hereinafter referred to as FAPA) amended CPLR 213 (4) by adding, among other things, paragraph (a), which provides that

"[i]n any action on an instrument described under {**79 Misc 3d at 397}this subdivision, if the statute of limitations is raised as a defense, and if that defense is based on a claim that the instrument at issue was accelerated prior to, or by way of commencement of a prior action, a plaintiff shall be estopped from asserting that the instrument was not validly accelerated, unless the prior action was dismissed based on an expressed judicial determination, made upon a timely interposed defense, that the instrument was not validly accelerated." (GMAT Legal Title Trust 2014-1 v Kator at 916-917.)

Prior to FAPA's enactment, the Court of Appeals held that the noteholder's voluntary discontinuance of a foreclosure action constituted an affirmative act of revocation of acceleration as a matter of law. (See Freedom Mtge. Corp. v Engel, 37 NY3d 1 [2021].) The Court of Appeals in Engel effectively overruled the Second Department decisions which found that discontinuance of an action did not constitute a de-acceleration as it was not a clear and unequivocal de-acceleration of the note and mortgage. (See Christiana Trust v Barua, 184 AD3d 140, 146-147 [2d Dept 2020] ["this Court has repeatedly held that a lender's mere act of discontinuing an action, without more, does not constitute, in and of itself, an affirmative act revoking an earlier acceleration of the debt"]; see also Milone v US Bank N.A., 164 AD3d 145, 153-154 [2d Dept 2018] ["To the extent this Court has held that acceleration notices must be clear and unambiguous to be valid and enforceable, we likewise hold here that de-acceleration notices must also be clear and unambiguous to be valid and enforceable" (citations omitted)].) Instead, the Court in Engel held that a voluntary discontinuance may constitute a revocation of the acceleration of the note and mortgage, absent the noteholder's contemporaneous statement to the contrary. (See Engel, 37 NY3d at 2.)

However, FAPA effectively nullified the holding in Engel by amending CPLR 3217 to add subdivision (e) that provides

"[i]n any action on an instrument described under [CPLR 213 (4)], 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 [*4]period to commence an action and to interpose a claim, unless expressly prescribed by statute." (GMAT Legal Title Trust 2014-1 v Kator at 917.){**79 Misc 3d at 398}

Further, the legislation was enacted to apply retroactively to some pending foreclosure cases, as pursuant to section 10 of the 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." (See L 2022, ch 821.)

Defendants' cross-motion to dismiss plaintiff's complaint is granted, as defendants demonstrated prima facie that the action is time-barred. Defendants demonstrated that plaintiff commenced a prior action in 2008 that was discontinued in 2013, and not recommenced until 2018. Pursuant to the plain language in FAPA, defendants demonstrated that plaintiff's 2013 voluntary discontinuance of a foreclosure action did not reset the applicable statute of limitations, as it did not comport with CPLR 213 (4) to qualify as a de-acceleration.

Plaintiff failed to present sufficient evidence to rebut defendants' prima facie case. Plaintiff acknowledged that application of FAPA would render the instant action time-barred, but argues that FAPA is unconstitutional and should be void. However, plaintiff failed to present sufficient evidence to hold FAPA as unconstitutional, as its claims are conclusory and unsubstantiated and the legislature had a rational basis in protecting homeowners from dilatory tactics in foreclosure litigation.

Plaintiff's argument that there is no clear legislative intent to apply FAPA retroactively is without merit, as a plain reading of section 10 states that the legislation takes effect immediately and applies to all pending foreclosure actions in which a final judgment of foreclosure and sale has not been enforced. (See id.) Plaintiff correctly points out that retroactive legislation is frowned upon by courts, due to the potential for unfairness and inequity to unsuspecting citizens, who conduct themselves based upon the laws then existing. (See Eastern Enterprises v Apfel, 524 US 498, 532 [1998] ["Retroactivity is generally disfavored in the law, in accordance with 'fundamental notions of justice' that have been recognized throughout history" (citation omitted)].) However, the courts will defer to the legislature when it creates retroactive legislation, unless it reaches so far into the past or so unfairly as to constitute a deprivation of property without due process. (Matter of Varrington Corp. v City of N.Y. Dept. of Fin., 85 NY2d 28, 32 [1995].){**79 Misc 3d at 399}

Plaintiff's next argument that the legislation is unconstitutional is also with merit. "[I]t is well settled that the acts of the Legislature are entitled to a strong presumption of constitutionality." (American Economy Ins. Co. v State of New York, 30 NY3d 136, 149 [2017].) Further, plaintiff bears the burden of overcoming this presumption by demonstrating the unconstitutionality of the legislation beyond a reasonable doubt. (Id.) Plaintiff claims that the legislation is unconstitutional because it alters the controlling law since 1905 with regard to de-acceleration of a mortgage loan. However, this argument is unavailing, as it is important to note that up until the Engel decision, actions commenced within the Second Department were routinely dismissed due to the failure of the discontinuance to constitute a clear and unequivocal de-acceleration. (See Trust v Barua.) Therefore, plaintiff's reliance on historical precedent is misplaced, as it is clear that prior to Engel, this action would have been dismissed as time-barred. (See GMAT Legal Title Trust at 917.)

Plaintiff's argument that FAPA's retroactivity is not justified by a rational legislative purpose is without merit. Whether a rational basis for legislative enactments exists is a [*5]determination subject to a strong presumption of constitutionality. (See Matter of Calverton Manor, LLC v Town of Riverhead, 160 AD3d 829, 832 [2d Dept 2018] [holding that "(l)egislative enactments are entitled to an exceedingly strong presumption of constitutionality" (internal quotation marks omitted)].) Plaintiff's contention that the legislature did not consider the harsh and destabilizing effects on lenders' settled expectations is without merit, as it is again noted that prior to Engel, lenders did not have a settled expectation that a voluntary discontinuance would constitute de-acceleration. Further, the legislature had a permissible basis to act, as the sponsoring memo clearly states that the bill was enacted to reflect abuses in the judicial foreclosure process that were allegedly exacerbated by court decisions that acted in contrary to legislative intent. Therefore, the legislation was meant to clarify the legislative intent of existing foreclosure legislation to ensure correct judicial application and rectify erroneous judicial interpretation.

Contrary to plaintiff's argument, FAPA's application in this action is constitutional, as it does not impair plaintiff's ability to contract. Rather, the parties' constitutional right to contract has always been constrained within the context of judicial decisions{**79 Misc 3d at 400} and legislative determinations, and when these varied interests intersect, that crossroad is one for the courts to consider and determine. (See Engel at 19 ["These appeals—each turning on the timeliness of a mortgage foreclosure claim—involve the intersection of two areas of law where the need for clarity and consistency are at their zenith: contracts affecting real property ownership and the application of the statute of limitations"].) Here, defendants clearly established the current law warrants dismissal of this action as time-barred, and plaintiff failed to demonstrate the applicability of the law is unconstitutional.

Accordingly, plaintiff's motion for leave to reargue the June 16, 2022 and September 15, 2022 court orders is denied, and defendants' cross-motion to dismiss plaintiff's complaint pursuant to CPLR 3211 (a) (5); 213 (4); 203 (h) and 3217 (e) is granted. Plaintiff's complaint is dismissed against defendants Frantz Dagrin and Daniella Dagrin.