Over a year after becoming law, New York’s Foreclosure Abuse Prevention Act, L. 2022, ch. 821 (eff. Dec. 30, 2022) (FAPA) continues to divide trial courts regarding the constitutionality of the law’s retroactive application. Appellate level guidance remains wanting.
FAPA amended certain New York rules related to the time limits for commencing mortgage foreclosures. Litigation subsequently arose as to whether the amendments applied prospectively, or instead reached back to alter the legal consequences of prior acts.
In a previous post, we summarized the judicial split that emerged in FAPA’s first six months. At that time, about a dozen trial court decisions were divided as to whether FAPA applied retroactively. Since then, at least another two dozen trial level decisions have issued.
About two thirds of them have applied FAPA retroactively, disagreeing with the constitutional challenges raised by the mortgage owners. HSBC Bank USA, N.A. v. Nicholas, Index No. 850043/2018 (Sup. Ct. N.Y. Cnty. Jan. 2, 2024); Pennymac Corp. v. Erneste, Index No. 707508/2017 (Sup. Ct. Queens Cnty. Dec. 6, 2023); 195-197 Hewes LLC v. CitiMortg. Inc., Index No. 516578/2018 (Sup. Ct. Kings Cnty. Nov. 2, 2023); Wilmington Sav. Fund Soc., FSB v. E. Fork Cap. Equities, LLC, Index No. 850236/2021 (Sup. Ct. N.Y. Cnty. Oct. 24, 2023); Wilmington Tr. v. Farkas, Index No. 850131/2022 (Sup. Ct. N.Y. Cnty. Oct. 23, 2023); Ditech Fin. LLC v. Naidu, Index No. 700387/2016 (Sup. Ct. Queens Cnty. Oct. 18, 2023); U.S. Bank N.A., etc. v. Szoffer, Index No. 031502/2023 (N.Y. Sup. Ct. Rockland Cnty. Oct. 13, 2023); Tomala v. Caliber Home Loans, Inc., Index No. 033268/2022 (N.Y. Sup. Ct Rockland Cnty. Oct. 11, 2023); Nationstar Mortg., LLC v. Naar, Index No. 67859/2021 (N.Y. Sup. Ct Westchester Cnty Aug. 29, 2023); Bayview Loan Servicing, LLC v. Dalal, Index No. 32090/2016E (N.Y. Sup. Ct. Bronx Cnty. Aug. 28, 2023); Bank of America v. 1429 Pacific, Index No. 518845/2018 (N.Y. Sup. Ct. Kings Cnty. Aug. 4, 2023); Q&O Estates Corp. v. US Bank, N.A., Index No. 515765/2016 (N.Y. Sup. Ct. Kings Cnty. Aug. 2, 2023); FV-1 Inc. v. Palaguachi, Index No. 710424/2017 (N.Y. Sup. Ct. Queens Cnty. July 28, 2023); U.S. Bank N.A. v. Williams, 80 Misc.3d 258 (N.Y. Sup. Ct. Putnam Cnty. June 23, 2023).
In contrast, a smaller set found such application to be unconstitutional. U.S. Bank N.A. v. Speller, Index No. 500088/2022 (Sup. Ct. Putnam Cnty. Oct. 31, 2023); Boreshesky v. U.S. Bank Tr., N.A., Index No. 620139/2016 (Sup. Ct. Suffolk Cnty. Oct. 20, 2023); Wells Fargo Bank, N.A. v. Irizarry, Index No. 15217/2013 (N.Y. Sup. Ct. Nassau Cnty. Oct. 16, 2023); Deutsche Bank Nat’l Tr. Co. v. Warren, Index No. 705801/2019, (N.Y. Sup. Ct. Queens Cnty. Oct. 11, 2023); Wilmington Trust N.A. v Gawlowski, Index No. 610595/2021 (N.Y. Sup. Ct. Suffolk Cnty. Oct. 6, 2023); US Bank Nat’l Ass’n v. Johns, Index No. 703341/2021 (N.Y. Sup. Ct. Queens Cnty. July 28, 2023).
None of New York’s four appellate divisions has yet decided the issue.
In December, the First Department concluded that FAPA should be read to apply retroactively, but refused to address any constitutional challenges to such application because the state’s attorney general had not been given the required opportunity to brief the issue. Genovese v. Nationstar Mortg. LLC, (1st Dep’t Dec. 19, 2023).
The Third and Fourth Departments have not reached the issue, but oral argument is scheduled for January 16, 2024 before the Third Department in an appeal where FAPA’s constitutionality is at issue. Deutsche Bank Nat’l Tr. Co., etc. v. DeLuca, Case No. 534805 (3d Dep’t).
The Second Department has issued over two dozen decisions in the last year applying FAPA retroactively, but none has addressed its constitutionality. So far, all constitutional challenges to FAPA raised before the Second Department have been remanded for further consideration by the trial court. Wells Fargo v. Cafasso, (2d Dep’t Jan 10, 2024); U.S. Bank N.A. v. Santos, 218 A.D.3d 827 (2d Dep’t 2023); Deutsche Bank Nat’l Tr. Co. v. Wong, 218 A.D.3d 742 (2d Dep’t 2023); U.S. Bank, N.A. v. Simon, 216 A.D.3d 1041 (2d Dep’t 2023).
At the same time, at least one trial court has affirmatively refused to address FAPA’s constitutionality on the grounds that the appellate courts will do so. HSBC Bank, N.A. etc. v. Mathew, Index No. 504492/2017 (N.Y. Sup Ct. Kings Cnty. Sept. 6, 2023) (“this Court elects not to wade into the fray at this juncture and applies the statute as written” because “[t]he various Appellate Division[s] – and, likely, the Court of Appeals – will opine on the issue in due course”); Morgan Stanley v. DeJesus, Index No. 506414/2017 (N.Y. Sup Ct. Kings Cnty. July 18, 2023) (same). Clearly, the issue is ripe for binding precedent.