Opinion
Index No. 606771/2022 Mot. Seq. No. 001 - MG
03-07-2024
U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE ON BEHALF OF THE HOLDERS OF THE CITIGROUP MORTGAGE LOAN TRUST INC. ASSET-BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-FXI, Plaintiff, v. MISBAH IMTIAZ, ZOHAIB IMTIAZ, CLERK OF THE SUFFOLK COUNTY DISTRICT COURT, JOHN DOE (Those unknown tenants, occupants, persons or corporations or their heirs, distributees, executors, administrators, trustees, guardians, assignees, creditors or successors claiming an interest in the mortgaged premises.) Defendants.
GROSS POLOWY, LLC Attys. For Plaintiff BIOLSI LAW GROUP Atty for Defendant
Unpublished Opinion
MOTION DATE 1/13/23
SUBMIT DATE 9/1/23
GROSS POLOWY, LLC Attys. For Plaintiff
BIOLSI LAW GROUP Atty for Defendant
HON. THOMAS F. WHELAN JUSTICE
Upon the following papers read on this motion to appoint a referee to compute, among other things; Notice of Motion/Order to Show Cause and supporting papers NYSCEF Docs, 20-38; Notice of Cross Motion and supporting papers:; Opposing papers: NYSCEF Docs, 40 - 44; Reply papers NYSCEF Docs, 45 - 46; Other
Plaintiff supplemental NYSCEF Docs, 49-50: Defendant Supplemental NYSCEF Docs. 51-52: (and after hearing counsel in support and opposed to the motion) it is
ORDERED that this motion (#001) by the plaintiff for, inter alia, summary judgment, default judgments and appointment of a referee to compute is granted; and it is further
ORDERED that the proposed Order submitted by plaintiff, as modified by the Court, is signed simultaneously herewith; and it is further
ORDERED that plaintiff is directed to file a notice of entry within five days of receipt of this Order pursuant to 22 NYC RR §202.5-b(h)(2).
This is an action to foreclose a mortgage on residential property located in Deer Park, Tnessence, on July 31, 2006, defendant Misbah Imtiaz (hereinafter. Defendant Imtiaz) borrowed $368,000.00 from plaintiffs predecessor in interest and executed a note and mortgage. Defendant Imtiaz defaulted upon the terms of the loan documents by failing to pay the amounts due and owing on February 1.2009. On January' 25, 2010, an action titled Midland Mortgage Company v Imtiaz ("Action #1") was commenced at Suffolk County Index Number 2994-2010 to foreclose the mortgage and to obtain a directive that the Suffolk County Clerk record a certified copy of the mortgage to be effective the date the mortgage was signed. In May 2010, Defendant Imtiaz filed a motion to dismiss the complaint challenging the plaintiffs standing, and plaintiff filed a cross-motion to substitute the plaintiff and for the declaratory relief noted above. By Order dated June 23,2011 (Gazillo, A. J.S.C.), the Court denied Defendant Imtiaz's motion and granted plaintiffs cross-motion in its entirety. The mortgage was thereafter recorded in accordance therewith on October 13, 2011. Defendant Imtiaz subsequently appealed the June 23, 2011 Order and, on October 9, 2013, the Appellate Division, Second Department issued a Decision and Order reversing the June 23, 2011 Order and dismissing the complaint (Midland Mortg. Co. v Imtiaz, 110 A.D.3d 773, 973 N.Y.S.2d 257 [2d Dept 2013]). Defendant Imtiaz thereafter moved to vacate the recorded mortgage, which motion was granted without opposition, and subsequently affirmed on appeal (see U.S. Bank, N.A. v Imtiaz, 198 A.D.3d 1005. 155 N.Y.S.3d 590 [2d Dept 2021]).
A second action to foreclose the mortgage was commenced on January 21,2015 at Suffolk County Index Number 600593/2015 titled US Bank v Imtiaz ("Action #2"). Defendants Misbah and Joahib Imtiaz (hereinafter, together, "the Defendants") filed an answer, through counsel, on March 31,2015. and an amended answer, through different counsel, on April 20,2015. In October 2015, the plaintiff filed a motion for summary judgment, and the Defendants filed a cross-motion to dismiss the complaint challenging the plaintiff s standing. The Court granted the plaintiff s motion and denied the Defendants' cross-motion by Order dated August 3, 2017 (Heckman, J.S.C.). The Defendants filed an appeal of the August 3, 2017 Order. The plaintiff was thereafter granted a judgment of foreclosure and sale on March 15, 2019. However, on October 27, 2021, the Appellate Division. Second Department issued a Decision and Order vacating same and dismissed the complaint, noting that, pursuant to its previous holding in Action #1, the mortgage lien was "vacated, discharged and canceled, [therefore] the plaintiff could not maintain this foreclosure action predicated upon that lien" (U.S. Bank, NA v Imtiaz. 198 A.D.3d 1008, 1010, 156 N.Y.S.3d 380, 381 [2d Dept 2021]).
On April 7, 2022. the plaintiff, relying on the version of CPLR 205(a) in effect at the time, commenced the instant action for foreclosure of the mortgage noted above or, alternatively, a judgment directing the Suffolk County Clerk to record a copy of the mortgage as a first lien on the property and foreclosure of that lien. On May 21,2022, Defendant Imtiaz filed an answer, through counsel, alleging fourteen affirmative defenses. The plaintiff filed the instant motion (#001) on October 24, 2022 seeking, inter alia, summary judgment as against Defendant Imtiaz, default judgments against the remaining defendants, appointment of a referee to compute, and a directive that the Suffolk County Clerk record a copy of the mortgage at issue to be effective nunc pro tunc as of July 31, 2006. Defendant Imtiaz opposed the motion, alleging that the instant action is untimely pursuant to CPLR 213(4) and challenging plaintiff s standing and plaintiff s mailing of the default notice and notice pursuant to RPAPL 1304. The plaintiff filed a reply.
On December 30, 2022, while the motion was pending decision, the Foreclosure Abuse Prevention Act ("FAPA," L 2022, ch 821) went into effect. The parties submitted supplemental briefs regarding its application to the instant case. The plaintiff addressed the timeliness of the action and its reliance on CPLR 205(a) and CPLR 213(4), and noted that application of FAPA would constitute an unconstitutional and improper retroactive application. Defendant Imtiaz contends that FAPA is to be applied retroactively, and that CPLR 205(a) and CPLR 213(4) as amended by FAPA require that the action be dismissed as untimely.
Foreclosure Abuse Prevention Act
On February 18. 2021. the Court of Appeals rendered its decision in Freedom Mtge. Corp. v Engel (37 N.Y.3d 1 [2021]) and reaffirmed the circumstances under which the acceleration of amounts due under a note secured by a mortgage are "deaccelerated'' or. in other words, when the acceleration of a mortgage debt is revoked. The Engel Court held that the voluntary discontinuance of an action constituted a revocation of the debt which was accelerated with the commencement of a foreclosure action.
New York State Legislature Reaction
Nearly two years later, on December 30, 2022, FAPA went into effect. According to the legislative sponsor in the New' York State Senate, FAPA's purpose is to "overrule the Court of Appeals' recent decision in Freedom Mtge. Corp, v Engel (Senate Introducer's Mem in Support, Bill Jacket, L 2022, ch 821 [#S5473(D), Sanders, revised 5-4-2022]). The sponsor notes that "abuses of the Judicial foreclosure process . . . have been sanctioned by the Judiciary . . . [resulting] in perversion of long-standing law and creat[ing] an unfair playing field that favors the mortgage banking and servicing industry at the expense of every day New' Yorkers" (id.). The "aim of the bill is to thwart and eliminate abusive and unlawful litigation tactics that have been employed by foreclosure plaintiffs to the prejudice of homeowners throughout New York," and to "level the playing field ... 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; and (2) misunderstood and/or misapplied by the courts'" (id. [emphasis added]).
The legislative sponsor in the New York State Assembly noted that a section of the new legislation was "a response to the Court of Appeals' recent holding Freedom Mtge. Corp. v Engel, 37 N.Y.3d 1 (2021). This will restore longstanding law that made it clear that a lenders' discontinuance of a foreclosure action that accelerate a mortgage loan does not serve to reset the statute of limitations" (Assembly Introducer's Mem in Support. Bill Jacket, L 2022, ch 821 [#A7737B, Weinstein]).
FAPA amended six laws: CPLR 203, CPLR 205, CPLR 213, CPLR 3217, RPAPL § 1301 and GOL § 17-105. FAPA section 10 provides that it "shall take effect immediately and shall apply to all actions commenced on [a note and mortgage] in which a final judgment of foreclosure and sale has not been enforced" (FAPA § 10).
FAPA's Misunderstanding of Existing Law
The legislature's unprecedented attack upon the judiciary, with its assault upon the Court of Appeals holding in Engel, ignores the long line of cases which stood for the judicial standard that historically existed in this area of law - that is, that where there is a validly filed stipulation of discontinuance resolving a case, it is as if the case "had never been begun" (Yonkers Fur Dressing Co. Inc. v Royal Ins. Co. Ltd., 247 NY 435, 444 ¶ 1928]).
In the ancient case of Loeb v Willis, 100 NY 231, 235 (1885), the Court of Appeals stated:
The foreclosure action was discontinued and all the proceedings therein thus annulled. There was no longer any record or adjudication in that action which bound any one. By the discontinuance of an action the further proceedings in the action are arrested not only, but what has been done therein is also annulled, so that the action is as if it never had been.(Loeb, 100 NY at 235 [italics added], see also Brown v Cleveland Tr. Co., 233 NY 399,406 [1922].)
The Court of Appeals in Kilpatrick v Gerinainia Life Ins. Co., 183 NY 163 (1905), explained that in the face of a discontinuance, the election made in a foreclosure action to treat a mortgage debt as due only becomes "final and irrevocable after [the mortgagor's] change of position and assumption of legal obligations, the direct result of that election" (Kilpatrick, 183 NY at 168).
The Second Department had long adhered to the above rules. In Newman v Newman. 245 A.D.2d 353, 665 N.Y.S.2d 423 (2d Dept 1997), the court held, "[w]hen an action is discontinued, it is as if it had never been; everything done in the action is annulled and all prior orders in the case are nullified (Brown v Cleveland Trust Co., 233 NY 399; Weldotron Corp. v. Arbee Scales. 161 A.D.2d 708; Miehle Print. Press &Mfg. Co. v Amtorg Trading Corp., 278 A.D. 682)" (Newman, 245 A.D.2d at 354).
In Golden v Ramapo Imp. Corp.. 78 A.D.2d 648.432 N.Y.S.2d 238 (2d Dept 1980). the Second Department noted that "[t]he general rule is that waiver of the right to accelerate the mortgage debt is discretionary with the mortgagee" (Golden, 78 A.D.2d at 650. citing Adler v Berkowitz, 254 N.Y. 433, 437 [1930]; Odell v. Hoyt, 73 NY 343 [ 1878]). The Court went on to hold, "That she [plaintiff] was under no restraint in changing her mind is likewise clear: only if a mortgagor can show substantial prejudice will a court in the exercise of its equity jurisdiction restrain the mortgagee from revoking its election to accelerate" (Golden, 78 A.D.2d at 650, citing Kilpatrick, 183 NY 163 [additional citations omitted]).
As noted by then Justice Daniel F. Luciano in Housberg v Blake, 146 Misc.2d 960, 553 N.Y.S.2d 280 (Sup Ct, Suffolk County 1990), quoting a treatise on New York law:
"When an action is discontinued, it is as if the action had never been; all prior orders in the case are nullified. Once an action has been discontinued, there can be no judgment or appeal, and no objection to another action for the same relief on the ground that a prior action is pending." (7A Carmody-Wait 2d. NY Prac §47:42) Further, with respect to the New York rule it is stated that "[o]nce an action has been discontinued by consent or stipulation, it is [as though] the action never existed;..." (7A Carmody-Wait 2d, NY Prac §47:51.)
(Housberg, 146 Misc.2d at 962.)
The Second Department affirmatively declared the breaking away from this traditional rule in its determination in Christiana Trust v Barua, 184 A.D.3d 140, 125 N.Y.S.3d 420 (3-1 dissent) (2d Dept 2020), in which the Court held that the mere discontinuance of an action, in and of itself, did not nullify any debt acceleration demanded in a foreclosure plaintiff s complaint. The Court rejected the claim that a discontinuance within six years of the action's acceleration of the full balance due on the note operated as a de-acceleration of the debt and declared that cases to the contrary "should no longer be followed" (Barua, 184 A.D.3d at 147). The dissent, however, noted that the Second Department's earlier holding in Engel "departed from its prior precedent, without acknowledgment or explanation" and that "[t |he new evidentiary burden imposed in Engel finds no support in the prior case law ..." (id. at 167).
The Court of Appeals, in Engel, simply rejected the different rule that had emerged in the Second Department (Engel. 37 N.Y.3d at 30) and concluded that "[a] voluntary discontinuance withdraws the complaint and, when the complaint is the only expression of a demand for immediate payment of the entire debt, this is the functional equivalent of a statement by the lender that the acceleration is being revoked" (id. at 32).
So, indeed, it was the Second Department that altered this long-held judicial interpretation, which the Court of Appeals corrected when it issued its Engel decision and reaffirmed over one-hundred years of long-standing precedent. The state legislature's misguided and intimidating attack on the Court of Appeals holding in Engel can have a chilling effect on the administration of justice and judicial independence.
In fact, much has been written on this topic in recent months (see Michael Miller, Intimidation by Another Name: Attacking Judges With Good Government Rhetoric and the Chilling Effect on Judicial Independence, NYLJ, August 7, 2023; Rolando T. Acosta, Report on 'Carceral' Judges Is Flawed and Dangerous, NYLJ, June 13, 2023; Y. David Scharf and David B. Saxe, Recent Attacks on Judicial Independence Impair the Proper Functioning of The Judiciary in New York, NYLJ, July 24, 2023, at 7; Brian Lee, Retired Presiding Justice Acosta Uses Award State to Denounce 'Threats to Judicial Independence NYLJ, May 12, 2023; Rolando T. Acosta, A House Again Divided: Our Democracy and Courts in Peril, NYLJ, May 15, 2023; A. Gail Prudenti, The Importance of our Independent Judiciary, Long Island Business News, June 8, 2023).
The New CPLR 205-a(a)
Here, the defendant challenges the instant foreclosure action pursuant to the CPLR 205-a(a) "savings provision" as amended by EAPA, which now provides, in part:
If an action upon [a note and mortgage] is timely commenced and is terminated in any manner other than a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for any form of neglect, including but not limited to those specified in subdivision three of Section 3126, Section 3215, Rule 3216 and Rule 3404 of this chapter, ... the original plaintiff may commence a new action ... within six months following the termination, provided that the new action would have been timely commenced within the applicable limitations period prescribed by law at the time of the commencement of the prior action and that service upon the original defendant is completed within such six-month period.
(CPLR 205-a[a].)
FAPA also adds a new subdivision which states "a successor in interest or an assignee of the original plaintiff shall not be permitted to commence the new action, unless pleading and proving that such assignee is acting on behalf of the original plaintiff' (CPLR 205-a[a](1)).
The New CPLR 213(4)
CPLR 213(4) at the time the action was commenced provides for a six-year statute of limitations for a foreclosure action. As amended by FAPA, CPLR 213(4) includes a new subparagraph (a) which provides that "[i]n any action on an instrument described under 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" (CPLR 213 [4]).
FAPA - Retroactivity
Any discussion of retroactivity must begin with the words of Justice Cardozo in Jacobus v Colgate, 217 NY 235 (1916),
The general rule is that statutes are to be construed as prospective only. 27 Halsbury's Laws of England, p. 159. It takes a clear expression of the legislative purpose to justify a retroactive application.
(Jacobus, 217 NY at 240 [citations omitted].)
Justice Cardozo went on to conclude:
To hold that this statute is retroactive would therefore be to give a remedy for ancient and forgotten wrongs.
(Jacobus. 217 NY at 245.)
As set forth by the Supreme Court in Martin v Hadix, 527 U.S. 343, 119 S.Ct. 1998,144 L.Ed.2d 347, in keeping with the landmark holding in Landgraf v USI Film Product. 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994):
The inquiry into whether a statute operates retroactively demands a commonsense, functional judgment about "whether the new provision attaches new legal consequences to events completed before its enactment." [Landgraf 511 US] at 270, 114 S.Ct. 1483. This judgment should be informed and guided by "familiar considerations of fair notice, reasonable reliance, and settled expectations." Ibid.
(Martin, 527 U.S. at 357-58.)
On numerous occasions, the Court of Appeals has held against retroactive application of amendments to statutes (see e.g. Majewski v Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 587 [ 1998]) (holding that "grave injury" amendments to Workers' Compensation Law did not apply retroactively to actions pending on effective date of amendment). In James Square Assocs. LP v Mullen, 21 N.Y.3d 233 (2013), the Court set forth the following rule:
"[F]or centuries our law has harbored a singular distrust of retroactive statutes" (Eastern Enterprises v Apfel, 524 U.S. 498, 547, 118 S.Ct. 2131, 141 L.E.2d4 51 [1998], Kennedy, J., dissenting in part]). The
United States Supreme Court stated in Landgraf v USI Film Products that "[e]lementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and to conform their conduct accordingly; settled expectations should not be lightly disrupted" (511 U.S. 244, 265).
(Mullen, 21 N.Y.3d at 246.)
The Court of Appeals recently addressed the issue of retroactivity in Gottwald v Sebert, 40 N.Y.3d 240.197 N.Y.S.3d 694 (June 13,2023). The Court there acknowledged "the strong presumption of prospective application" in the absence of a clear statement concerning retroactivity (Gottwald. 40 N.Y.3d at 260, quoting Majewski v Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 587(1998]). This is so "unless the language expressly or by necessary implication requires it" (id. at 258, quoting Majewski, 91 N.Y.2d at 584). Notably, that a statute "directs that it 'shall take effect immediately' . . . is not 'enough to require application [of that statute] to pending litigation,'" as such a "phrase is equivocal" (Gottwald, 40 N.Y.3d at 259 [citations omitted]).
Similarly, in People v Galindo, 38 N.Y.3d 199 (2022), Judge Rivera, writing for the Court, held that amendments to the speedy trial statute did not apply retroactively to criminal actions commenced before its effective date, noting that nothing in the text or legislative history supported such an interpretation (Galindo, 38 N.Y.3d at 207).
The Appellate Division Second Department recently addressed this issue in VIP Pet Grooming Studio, Inc. v Sproule, ____ N.Y.S.3d ____, 2024 WL 172927, 2024 NY Slip Op. 00205 (2d Dept Jan. 17,2024). There, the Court applied the analysis from the Gottwald decision and ultimately recognized that the retroactive application of the amendments at issue "to the pre-amendment complaint in this action could negatively impact substantive rights that VIP possessed at the time the action was commenced, which is a further ground in favor of the presumption against retroactivity" (VIP Pet Grooming Studio, Inc. v Sproule at *6, citing Matter of Regina Metro. Co., LLC v New York State Div. of Hous. & Community Renewal, 35 N.Y.3d 332, 370 [2020]). The Court acknowledged that "[h]ad the Legislature intended for the 2020 amendments to the anti-SLAPP statute to be applied retroactively, it could have said so" (id.).
In Matter of Mia S. (212 A.D.3d 17, 21, 179 N.Y.S.3d 732 [2d Dept 2022], Iv dismissed 39 N.Y.3d 1118 [2023]), the Appellate Division, Second Department noted that legislation is subject to the presumption against retroactive application if it "affects substantive rights, such as a statute that 'would impair rights a party possessed when he [or she] acted, [or] increase a party's liability for past conduct, or impose new duties with respect to transactions already completed'" (Matter of Mia S. (212 A.D.3d at 21, citing Landgraf v. USI Film Products, 511 U.S. at 280; see also Matter of Regina Metro. Co., LLC, 35 N.Y.3d at 365). The Court in Matter of Mia S. further held that the amendment in that case, which changed the statutory presumption of neglect based upon a parent's repeated use of drugs, could be applied retroactively because it "does not impose a burden or penalty upon individuals. It does the opposite; by placing a restriction on the kind of proof that can establish a prima facie case of neglect. . ." (Matter of Mia S., 212 A.D.3d at 21).
Applying these interpretations to the instant case, it is clear that FAPA and its amendments are to be applied prospectively to actions commenced on or after December 30, 2022, FAPA's effective date. A foreclosure plaintiff who commenced an action prior to December 30, 2022 relied on the law on the commencement date in seeking to recover the amounts due as a result of the defendant's failure to pay his or her contractually agreed to mortgage obligations. For those actions "where acceleration occur[s] by virtue of the filing of a complaint in a foreclosure action, the noteholder's voluntary discontinuance of that action constitutes an affirmative act of revocation of that acceleration as a matter of law, absent an express, contemporaneous statement to the contrary by the noteholder" (Engel, 37NY3d at 32). The Court of Appeals holding in Engel, mistakenly attacked on the law by the State Legislature in the FAPA amendments, provided that the plaintiff could recommence an action.
Similarly, CPLR 205(a), in effect at the time of commencement, authorized the recommencement of a new action. Here, the amendment affects the substantive rights of a party - by actually eliminating that right, if this amendment is to be applied retroactively.
There is no doubt that the amendments, if applied retroactively, would impair rights a party possessed when it acted, increase the party's liability for past conduct, and impose new duties with respect to transactions already completed, all contrary to Landgraf and Matter of Regina Metro.
Unlike the recent holding in Matter of Regina Metro., which found that the retroactive application of Part F of the overcharge calculation amendments in the Housing Stability and Tenant Protection Act did not comport with due process, the effective date language was even more broadly expansive than that of FAPA. Therein, Part F "shall take effect immediately and shall apply to any claims pending or filed on and after such date." The "any claims pending" language is not set forth in FAPA, and the Court of Appeals, in Matter of Regina Metro., still found that retroactive application implicated all three Landgraf retroactivity criteria.
Movants here seek dismissal by reviving legal defenses that did not exist or challenges that were time-barred at the time of the new legislation, without any showing that the legislative body considered the potential unfairness of the retroactive application. As universally acknowledged, "[r]evival is an extreme exercise of legislative power" (Hopkins v Lincoln Trust Co., 233 NY 213, 215 [1922] [Cardozo, J.]).
FAPA section 10 provides that it "shall take effect immediately and shall apply to all actions commenced on [a note and mortgage] in which a final judgment of foreclosure and sale has not been enforced" (FAPA § 10). Similar sounding language has been found by the Court of Appeals to be ambiguous and lacking in intent to resurrect a claim (see 35 Park Ave. Corp, v Campagna. 48 N.Y.2d 813 [1979]). As noted above, the Supreme Court, in Martin v Hadix, rejected the claim of retroactivity in enabling language that was even broader than that set forth herein.
This Court is troubled by the fact that the state legislature ignores the bedrock "finality of judgment'' case law and places importance upon the ministerial act of a referee in effectuating a final judgment of foreclosure and sale. It is the judgment which one appeals from (see CPLR 5501) and not the eventual sale. It is the judgment that settles the legal rights of the parties, not a future scheduled sale date. Indeed, the Court of Appeals has held that even new court holdings should not be applied retroactively to undue final judgments (see People v McMann, 24 N.Y.2d 233 [1965]).
"A judgment of foreclosure and sale is final as to all questions at issue between the parties, and concludes all matters of defense which were or could have been litigated in the foreclosure action" (Ciraldo v JP Morgan Chase Bank, N.A., 140 A.D.3d 912, 913, 34 N.Y.S.3d 113 [2d Dept 2016]). The finality of judgments is an important aspect of real property jurisprudence (see Retained Realty', Inc. v Herbert E. Koenig, 166 A.D.3d 691,88 N.Y.S.3d 48 [2d Dept 2018]: Archibald v Wells Fargo Bank, N.A., 166 A.D.3d 573, 87 N.Y.S.3d 298 [2d Dept 2018]).
This new legislative notion of "enforcement of the final judgment" is not a clear express prescription of the statute's reach - does the statutory notice of publication in the local paper (see RPAPL § 231) demonstrate enforcement of the judgment? Once again, the state legislature is seemingly willing to cast aside long-standing rules of law without clearly stating in the legislation or offering support for the claim of retroactivity (compare Replan Devi., Inc. v Department of Housing Preservation and Development of the City' of New York, 70 N.Y.2d 451 [1987] [tax amendments were made expressly retroactive] with People v Graves, 280 NY 405 [1939] [retroactive law unconstitutional] ["The constitutional validity of law' is to be tested, not by what has been done under it, but by what may, by its authority, be done''][citations omitted]).
After one painstakingly reads the eighteen pages of the NYS Senate Sponsor's Memo, one realizes the words "retroactive" or "to be applied retroactively" are nowhere to be found. Yet, the intention to overrule the holding in Engel is a constant refrain ("urgent need to pass this bill to overrule [Engel]"; ". . . are amended to expressly overrule Engel"; "In Engel, the Court held as a matter of law . . ."; "Under Engel, this back-and-forth yo-yo effect. . a new section is added to "overrule Engel as violative of CPLR 201"; "new subdivision [CPLR 203(H)] makes clear . . . contrary to Engel "CPLR 3217 (e) expressly intended to overrule Engel."
The eighteen-page Sponsor Memo appears to mimic the various amicus curiae briefs submitted by the New York State Foreclosure Defense Bar to the Court of Appeals in the Engel litigation. It is common knowledge among the foreclosure bar that the Senate sponsor has been involved, as a defendant, in a foreclosure action for the past 14 years in Queens County, Index Number 2009-28746 and e-filing NYSCF.F Index #12882/2020 (see Plaintiffs Supplemental Brief, ¶¶ 30, 32 [NYSCEF Doc. No. 49]). For much of that time, his counsel in that litigation was also employed by the State Senate as a member of the Senator's staff on the senate legislative committee. Nowhere does the Sponsor Memorandum state that the legislation was the subject of legislative hearings.
As to CPLR 205-a "[t]his new section ... is hereby added to clarify the intended meaning of several words contained in the existing statute from which it is modeled . . ." This is a new section "as amended and reconstituted under CPLR 205-a(a)..." and the Sponsor Memo appears to, in this particular respect, be a compilation of various appellate decisions over the years that were found by the foreclosure defense bar to be offensive. The Sponsor Memo is written with a strong reliance upon either dissents or lower court holdings. The Memo concludes this section by stating that the criticized caselaw "should not be followed." Once again, in the discussion of the statute of limitations under CPLR 213 (4), the Sponsor Memo decrees that "[d]ecisions such as these should no longer be followed."
In the height of irony, as with Engel, the Sponsor's Memo clearly states that long-existing caselaw "should no longer be followed" and, in essence, should be disregarded and treated "as if it had never been" (Loeb v Willis, supra).
Constitutionality
If necessary to reach the constitutionality of the retroactivity of the FAPA amendments, this Court concludes that retroactivity does not comport with due process, guaranteed by the Fifth and Fourteenth Amendments to the Constitution, since there is no "legitimate legislative purpose" supporting the retroactive administration of FAPA (see Matter of Regina Metro., 35 N.Y.3d at 375). As detailed above, the genesis for the FAPA amendments was the clear misunderstanding of the applicable Court of Appeals case law and the recent change of case interpretations from the Second Department. Such mis-characterization of long-standing case law cannot be the basis for a "legitimate purpose" supporting the retroactive application of FAPA. The absence of a rational basis justifying retroactive application of FAPA is an important consideration in seeking to apply it retroactively. As in Janies Square Assocs. LP v Mullen, supra, the legislature fails to set forth a valid public purpose for the retroactive application of the amendments.
Importantly, as noted in Matter of Regina Metro.
Moreover, retroactivity concerns are further heightened where, as here, the new statutory provisions "affect[ ] contractual or property rights, matters in which predicability and stability are of prime importance" (Landgraf, 511 U.S. at 271).
(Matter of Regina Metro., 35 N.Y.3d at 382.)
As in Matter of Regina Metro., where no explanation was offered for retroactive application (id. at 383), here, the explanation offered is based upon a complete misapplication of existing case law'. While the legislature can impose future burdens and grant new rights to alleviate public issues, without a rational justification for imposing new burdens on settled, substantial rights, retroactivity should not prevail. It is important to note that, unlike the legislation before the Court in Matter of Regina Metro, which was seen by the dissent (Wilson, J.) as economic regulation where the legislature is often afforded wide latitude, as set forth above, there is no judicial confusion which was sought to be corrected, nor does this case, in any way, implicate the long overruled holding of People v Lochner, 198 U.S. 45, 25 S.Ct. 539. 49 L.Ed 937 (1905).
As explained by the Court of Appeals, in People v LaValle, 3 N.Y.3d 88 (2004):
It is the responsibility of the judiciary to safeguard the rights afforded under our State [and Federal] Constitution[].
(LaValle. 3 N.Y.3d at 128.)
Some lower courts have recently addressed the issue of retroactivity. In US Bank v Speller (80 Mise 3d 1233[A], 2023 NY Slip Op 51153[U] [Sup Ct, Putnam County, October 31, 2023, Grossman, J.]), the Court compared the issue at hand in Marrero v Crystal Nails (114 A.D.3d 101, 112-13 [2d Dept 2013]) - that is, the 2008 amendment to CPLR 205(a) - to the facts of the case at bar, and noted two similarities. First, the legislature did not state that either of the amendatory statutes should be retroactively applied. Additionally, pursuant to the text of each, the amendments were to "take effect immediately" (see L 2008, ch 156, § 2 [effective July 7, 2008]; FAPA § 10; see also Marrero, 114 A.D.3d at 111, citing to McKinney's Cons Laws of NY. Book 1, Statutes § 52, Comment at 101-102 ["it is the general rule that an amendment will have prospective application only, and will have no retroactive effect, unless its language clearly indicates that it shall receive a contrary interpretation" (footnotes omitted)]). The Speller Court ultimately found that "retroactive application of CPLR §205-a(a) would not ensure 'equal' application of the law to all litigants but instead subject U.S. Bank [the plaintiff] to harshly unequal treatment in derogation of its vested rights by causing dismissal of a claim that was viable under the law existing at the time this action was commenced" (Speller, 80 Mise 3d 1233(A); see Newrez LLC v Kalina, 78 Mise 3d 1217(A), 2023 NY Slip Op 50249[U] [Sup Ct, Albany County, March 22, 2023] ["there is no indication that the legislative intent was to impair already vested rights"]); see also Nestor I LLC v Moriarty-Gentile, 78 Mise 3d 1233(A), 2023 NY Slip Op 50408[U] [Sup Ct, Suffolk County, May 2, 2023]; HSBC Bank USA, N.A. v Besharat, 80 Mise 3d 269,283,195 N.Y.S.3d 380 [Sup Ct, Putnam County 2023]).
As Warned by the Supreme Court, "[t]he Legislature's unmatched powers allow it to sweep away settled expectations suddenly and without individualized consideration" and "[i]ts responsivity to political pressure poses a risk that it may be tempted to use retroactive legislation as a means of retribution against unpopular groups or individuals" (Landgraf, 511 U.S. at 266).
Given the above, the Court now addresses each of Defendant Imtiaz's contentions in accordance with the statutes and regulations, without application of FAPA amendments.
The plaintiff addresses its burden of proof in the moving papers on this summary judgment motion and refutes the affirmative defenses of the answer with the submission of the affidavit of Madison Graspo, a Vice President of MidFirst Bank, loan servicer for the plaintiff herein, sworn to on October 10, 2022 (Graspo Aff. [NYSCEF Doc. No. 22]). Ms. Graspo notes that she has knowledge of MidFirst Bank's records and record making procedures, including how such records are created and maintained. She avers that the records are made at or near the time of the event by persons with knowledge and are kept in the course of MidFirst Bank's ordinarily conducted business. Additionally, she avers that it is the regular practice of the MidFirst Bank to make such records, and annexes the records she relies upon in making her averments in the affidavit. The Court finds that the plaintiff has demonstrated, by due proof in admissible form, its prima facie burden on this summary judgment motion (see HSBC Bank USA, Natl. Assn, v Espinal, 137 A.D.3d 1079, 28 N.Y.S.3d 107 [2d Dept 2016]; U.S. Bank Natl. Assn, v Cox, 148 A.D.3d 962,49 N.Y.S.3d 527 [2d Dept 2017]).
The burden then shifts to the defendants (see Bank of Am., N.A. v DeNardo, 151 A.D.3d 1008, 58 N.Y.S.3d 469 [2d Dept 2017]), and it was incumbent upon the answering defendant to submit proof sufficient to raise a genuine question of fact rebutting plaintiffs prima facie showing or in support of the affirmative defenses asserted in the answer or otherwise available to them (see Flagstar Bank v Bellafiore, 94 A.D.3d 1044. 943 N.Y.S.2d 551 [2d Dept 2012]; Grogg Assocs. v South Rd. Assocs., 74 A.D.3d 1021,907N.Y.S.2d22 [2d Dept 2010]; Wells Fargo Bank v Das Karla, 71 A.D.3d 1006, 896 N.Y.S.2d 681 [2d Dept 2010]; Washington Mut. Bank v O'Connor, 63 A.D.3d 832, 880 N.Y.S.2d 696 [2d Dept 2009]; J.P. Morgan Chase Bank, N.A. v Agnelio, 62 A.D.3d 662, 878 N.Y.S.2d 397 [2d Dept 2009]; Aames Funding Corp. v Houston. 44 A.D.3d 692, 843 N.Y.S.2d 660 [2d Dept 2007]).
Where a defendant fails to oppose some or all matters advanced on a motion for summary judgment, the facts as alleged in the movant's papers may be deemed admitted as there is, in effect, a concession that no question of fact exists (see Kuehne & Nagel, Inc. v Baiden, 36 N.Y.2d 539, 369 N.Y.S.2d 667 [1975]; see also Madeline D'Anthony Enters., Inc. v Sokolowsky, 101 A.D.3d 606, 957 N.Y.S.2d 88 [1st Dept 2012]; Argent Mtge. Co., LLC v Mentesana, 79 A.D.3d 1079, 915 N.Y.S.2d 591 [2d Dept 2010]). In addition, the failure to raise pleaded affirmative defenses in opposition to a motion for summary judgment renders those defenses abandoned and thus without any efficacy (see New York Commercial Bank v Realty F Rockaway, Ltd., 108 A.D.3d 756, 969 N.Y.S.2d 796 [2d Dept 2013]; Starkman v City of Long Beach, 106 A.D.3d 1076, 965 N.Y.S.2d 609 [2d Dept 2013]).
Defendant Imtiaz's opposition alleges that the instant action is untimely and challenges plaintiff s standing. The defendant also denies receipt of the default notice and 90-day notice. The Court will address each contention herein, however, in accordance with the above, all other affirmative defenses and claims raised in the answer and not addressed in the opposition are dismissed as abandoned (see JPMorgan Chase Bank, Natl. Assn, v Cao. 160 A.D.3d 821, 76 N.Y.S.3d 82 [2d Dept 2018]).
The Court first addresses the allegations regarding the statute of limitations. As discussed above, Action #1 was dismissed by Decision and Order dated October 9,2013 (Midland Mortg. Co. v Imtiaz. 110 A.D.3d 773), and Action #2 was dismissed by Decision and Order dated October 27, 2021 (U.S. Bank, NA v Imtiaz, 198 A.D.3d 1008). The instant action was thereafter commenced by filing a summons and complaint on April 7, 2022. wherein the plaintiff relied upon CPLR 205(a). "CPLR 205(a) provides an additional six months in which to recommence a prior action that has been dismissed on grounds other than voluntary discontinuance, lack of personal jurisdiction, neglect to prosecute, or a final judgment on the merits" (Wells Fargo Bank, N.A. v Eitani, 148 A.D.3d 193,195, 47 N.Y.S.3d 80 [2d Dept 2017]). A party may rely on this provision "provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period" (CPLR 205[a]).
The affidavit of service upon the Defendant shows that the process server effected service on April 18, 2022. and mailed the notices to the Defendant on April 19, 2022 and filed the affidavit of service on that date. The Defendant opines that the instant action is untimely for two reasons: first, pursuant to CPLR 213(4) as the instant action was commenced more than six years from dismissal of Action #1; and second, that plaintiff's reliance on CPLR 205(a) is misplaced, because service was not "complete" until ten days after the affidavit was filed - in this case, May 1, 2023- beyond six months from the dismissal of Action #2.
The plaintiff notes that the statutory text of CPLR 205(a) requires "that service upon defendant [be] effected within such six-month period" to allow plaintiff to utilize the provision (CPLR 205 [emphasis added]), and contends that such was the case here. The Court agrees. By definition, to "effect" means "to cause to come into being" and "to put into operation" (Merriam-Webster Dictionary [2023]). To "complete" on the other hand, is "to bring to an end and especially into a perfected state" (id.) In the process of service, an attempt at service is effecting such service while a final step in a process - here, filing an affidavit of service - is completing that act. Here, the plaintiff was timely in its attempt in bringing about the result of completed service upon the defendant within six months of the dismissal of the prior action.
To the extent Defendant Imtiaz challenges the timeliness of the instant action in relation to Action #1, such is without merit. As noted. Action#l was dismissed as a result of that plaintiffs failure to demonstrate standing. "[T]he filing of a foreclosure complaint does not accelerate the mortgage debt where the lender did not, at the time, have the authority to accelerate the debt" (Reinman v Deutsche Bank Natl. Tr. Co., 215 A.D.3d 704, 707, 187 N.Y.S.3d 666 [2d Dept 2023], citing Herzl Dev. Group, LLC v Federal Natl. Mtge. Assn., 175 A.D.3d 665, 666, 108 N.Y.S.3d 197 [2d Dept 2019]; J &JT Holding Corp, v Deutsche Bank Natl. Trust Co., 173 A.D.3d 707, 104 N.Y.S.3d 112 f 2d Dept 2019]; U.S. Bank N.A. v Gordon. 158 A.D.3d 832, 836, 72 N.Y.S.3d 156 [2d Dept 2018]; 21st Mtge. Corp. v. Adames, 153 A.D.3d 474, 475, 60 N.Y.S.3d 198 [2d Dept 2017]). Therefore, the loan was not accelerated and Action #1 has no bearing on the timeliness of the instant action.
The Court turns next to the Defendant's challenge to plaintiff s standing. One of the various methods standing may be established is by due proof that the plaintiff or its custodial agent was in possession of the endorsed note prior to the commencement of the action. The production of such proof is sufficient to establish, prima facie, the plaintiffs possession of the requisite standing to prosecute its claims for foreclosure and sale (see Aurora Loan Servs., LLC v Taylor, 25 N.Y.3d 355, 12N.Y.S.3d 612 [2015]; U.S. Bank Natl. Assn, v Valme, 210 A.D.3d 1034, 179 N.Y.S.3d 677 [2d Dept 2022]). "[W]here the note is affixed to the complaint, 'it is unnecessary to give factual details of the delivery in order to establish that possession was obtained prior to a particular date'" (U.S. Bank N.A. v Henry, 157 A.D.3d 839, 841,69 N.Y.S.3d 656, 659 [2d Dept 2018] [citations omitted]). Notably, any "contention that the affidavits submitted by the plaintiff contained inadmissible hearsay is unavailing, as these submissions were not required under the circumstances to establish the plaintiff s standing" (JPMorgan Chase Bank, N.A. v Escobar, 177 A.D.3d 721,723, 111 N.Y.S.3d639,641 [2d Dept2019], citing JPMorgan Chase Bank, N.A. v Weinberger, 142 A.D.3d 643, 645, 37 N.Y.S.3d 286. 288 [2d Dept 2017]; cf Wells Fargo Bank, N.A. v Valley, 153 A.D.3d 583, 59N.Y.S.3d 743 [2d Dept 2017]; Arch Bay Holdings, LLC v Albanese, 146 A.D.3d 849, 45 N.Y.S.3d 506 [2d Dept 2017]).
The plaintiff here attached a copy of the note, endorsed in blank, to the complaint, establishing that it was in its possession prior to commencement of the action (see Nationstar Mtge LLC v Balducci, 165 A.D.3d 959, 86 YS3d 172 [2d Dept 2018]; HSBC Bank USA, NA v Oscar, 161 A.D.3d 1055, 78 N.Y.S.3d 428 [2d Dept 2018]; Wells Fargo Bank, NA v Frankson , 157 A.D.3d 844, 66 YS3d 529 [2d Dept 2018]). The Court finds that the plaintiff, has demonstrated the requisite possession of the note prior to the commencement of the action (see Citibank, N.A. v Saldarriaga , 2 13 A.D.3d 73 2,733, 184 N.Y.S.3d 351 [2d Dept 2023]). As Defendant Imtiaz has failed to raise an issue of fact with regard to same, the court hereby declares, pursuant to CPLR § 3212(g), that the issue of the plaintiffs standing is resolved in favor of the plaintiff for all purposes of this action. The affirmative defenses regarding same are therefore stricken
The Defendant next denies receipt of the default notice required pursuant to the terms of the mortgage, as well as the RPAPL 1304 notice. While an affidavit of service is the preferred demonstration of mailing, "[t]here is no requirement that a plaintiff in a foreclosure action rely on any particular set of business records to establish a prima facie case, so long as the plaintiff satisfies the admissibility requirements of CPLR §4518(a), and the records themselves actually evince the facts for which they are relied upon" (Aurora Loan Services, LLC v Vrionedes. 167 A.D.3d 829. 832, 91 N.Y.S.3d 150 [2d Dept 2018]. citing Citigroup v Kopelowitz, 147A.D.3d 1014, 1015,48 N.Y.S.3d 223; see also HSBC Bank USA, N.A. v Ozcan (154 A.D.3d 826,64 N.Y.S.3d 38 [2d Dept 2017]). It is well settled that a foreclosure plaintiff or its servicer can demonstrate mailing by "providing proof of the actual mailings, such as affidavits of mailing or domestic return receipts with attendant signatures, or proof of a standard office mailing procedure designed to ensure that items are properly addressed and mailed, sworn to by someone with personal knowledge of the procedure' (Heartwood 2, LLC v DeBrosse, 197 A.D.3d 1152, 1153, 154 N.Y.S.3d 65 [2d Dept 2021], citing Wells Fargo Bank, NA v Mandrin, 160 A.D.3d 1014, 1016. 76 N.Y.S.3d 182 [2d Dept 2018]; see also Citibank, N.A. v Wood. 150 A.D.3d 813, 55 N.Y.S.3d 109 [2d Dept 2017]).
Here, to demonstrate plaintiff s mailing of the RPAPL 1304 notice, plaintiff submits an Affidavit of Service by Mail from Amy L. Toy, sworn to on December 15, 2020, who attests to her mailing of the notices on December 29, 2021. Indeed, it is well settled that "an affidavit of service may be a preferable method" to prove mailing (see U.S. Bank N.A. v Goldberg, 171 A.D.3d 981,982, 97 N.Y.S.3d 714 [2d Dept 2019]; HSBC Bank USA, N.A. v Ozcan. 154 A.D.3d 826 [citation omitted]; see also Flagstar Bank, FSB v Mendoza, 139 A.D.3d 900, 32 N YS3d 278 [2d Dept 2016]). As noted by the Court of Appeals, "[i]t is a general rule that the law presumes that a letter properly addressed, stamped and mailed is duly delivered to the addressee'' (Trust & Guar. Co. v Bornhardt, 270 NY 350 [1936]; see also Engel v Lichterman, 95 A.D.2d 536, 538,467 N.Y.S.2d 642 [2d Dept 1983] ["[i]t has long been recognized in the law of evidence that a letter properly mai led is presumed to have been received"]). Thus, plaintiff has met its burden (Citibank, NA v Wood, 150A.D.3d at 813; CitiMortgage, Inc. v Pappas, 147 A.D.3d 900, 47 N.Y.S.3d 415 [2d Dept 2017], JPMorgan Chase Bank, N.A. v Schott, 130 A.D.3d 875, 15 N.Y.S.3d 359 [2d Dept 2015]; Wells Fargo v Moza, 129 A.D.3d 946, 13 N.Y.S.3d 127 [2d Dept 2015]). That the mailing was completed by a third party is of no moment (see generally HSBC Bank USA, N.A. v Butt. 199A.D.3d662,156N.Y.S.3d393 [2d Dept 2021]).
The plaintiffs mailing of the default notice has been demonstrated via the Graspo affidavit, discussed above. There, Ms. Graspo notes that she has received training and has personal knowledge of Midfirst Bank's regular processes and procedures in preparing and mailing notices, and details such procedures and practices in her affidavit. She avers that, in this case, the preparation and mailing of the default notices to the defendants took place in accordance with such regular practices, by first class mail, in accordance with the terms of the loan documents. Attached to the affidavit is a copy of the letter as indicated.
The Court finds the plaintiff has properly demonstrated proof of its mailing of the default notice and RPAPL 1304 notices, and the affirmative defenses are hereby stricken.
The Court finds that the plaintiff has sufficiently demonstrated its entitlement to those branches seeking appointment of a referee to compute amounts due under the subject note and mortgage as contemplated by RPAPL § 1321 and for the fixation of the defendants' defaults in answering as requested on this motion (see CPLR § 3215; RPAPL § 1321; Todd v Green, 122A.D.3d 831.832, 997 N.Y.S.2d 155.156 [2d Dept 2014]; U.S. Bank, N.A. v Razon, 115 A.D.3d 739, 740, 981 N.Y.S.2d 571, 572 [2d Dept 2014]; Countrywide Home Loans, Inc. v Hershkop, 188 A.D.3d 1148, 1149, 132 N.Y.S.3d 785, 786 [2d Dept 2020], citing Shultis v Woodstock Land Dev. Assocs., 195 A.D.2d 677, 678. 599 N.Y.S.2d 340, 341 [2d Dept 1993]). The moving papers also established the plaintiffs entitlement to an order amending the caption to reflect the defendants sued herein as ''John Does" (see CPLR § 1024; Deutsche Rank Natl. Trust Co. v Islar, 122 A.D.3d 566, 996 N.Y.S.2d 130 [2d Dept 2014]; Flagstar Bank v Bellafiore, 94 A.D.3d 1044,1046.943 N.Y.S.2d 551,552-53 [2d Dept 2012]; Neighborhood Hous. Servs. of N.Y.City, Inc. v Meltzer, 67 A.D.3d 872. 873-74, 889 N.Y.S.2d 627, 629 [2d Dept 2009]).
Thus, the plaintiff s motion (#001) is granted to the extent indicated herein. The proposed order of reference, as modified by the court, has been signed simultaneously with this memorandum decision and order.