Alert

Court Affirms Dismissal Under FAPA of Timely Restarted Foreclosure

December 20, 2024

On December 12, 2024, the Appellate Division, Third Department affirmed the trial court’s retroactive application of the Foreclosure Abuse Prevention Act (FAPA) to dismiss a foreclosure action as time-barred even though it was timely recommenced under the pre-FAPA “savings statute,” CPLR § 205(a). The court also declined plaintiff’s constitutional challenge, which was not preserved for appellate review.

Background

In Richards, plaintiff’s predecessor-in-interest commenced a foreclosure action in 2009. Plaintiff received the assignment of mortgage in 2013, but the court administratively marked the case as abandoned for plaintiff’s failure to move for an order of reference. Five years later, plaintiff unsuccessfully sought to restore the action. In July 2021, after the Third Department affirmed the denial of such relief, plaintiff commenced a new action pursuant to CPLR § 205(a). Nevertheless, following FAPA’s enactment, which created a new “savings statute” for mortgagees seeking to foreclose, the trial court dismissed the recommenced action as untimely under the new “savings statute,” prompting the appeal.   

Appellate Court’s Analysis

On appeal, plaintiff argued that the second action was timely because it was brought within the applicable six-month extension period afforded by CPLR § 205(a). However, the Third Department disagreed and applied FAPA retroactively, finding that “the savings provision of CPLR 205–a (a) applies to this action.” The court further observed that “a case ‘marked off or struck from the calendar’ and not restored within a year after that time ‘shall be deemed abandoned and dismissed without costs for neglect to prosecute.’” Consequently, it held that “[g]iven that [the first] action was administratively dismissed in 2013 as abandoned, which plaintiff does not dispute constitutes ‘a dismissal of the complaint for any form of neglect’ [under CPLR § 205–a], plaintiff is not entitled to the benefit of the savings provision of CPLR 205–a (a).”

Retroactive Application of FAPA

The court affirmed the trial court’s ruling even though prior to FAPA’s enactment, a plaintiff received the same six-month grace period to refile the action pursuant to CPLR § 205(a), which was substantially narrower in that it disqualified a plaintiff only due to dismissal of the prior action “for neglect to prosecute” based upon an explicit finding by the court setting forth on the record plaintiff’s specific conduct that warrants such a conclusion.

Constitutional Challenge Rejected

Finally, while plaintiff also asserted a constitutional challenge to the retroactive application of FAPA, the Third Department determined that it was not raised below and, accordingly, was unpreserved for appellate review.

Key Takeaway

Richards demonstrates the importance of properly preserving for appellate review any constitutional challenge to the retroactive application of FAPA, especially where the underlying facts dictate different outcomes under CPLR § 205(a) and CPLR § 205–a, or any other pre- and post-FAPA legal standard.