On December 6, 2023, Justice Grays of the Queens County Commercial Division issued a decision in Pennymac Corp. v. Erneste, 2023 NY Slip Op. 23411, rejecting a constitutional challenge to New York’s Foreclosure Abuse Prevention Act, explaining:
In support of her motion and in opposition to the cross-motion, the defendant argues that she is entitled to summary judgment as a matter of law because this action is time-barred by the six-year statute of limitation under CPLR §213, given the acceleration of the subject mortgage in 2009. The defendant relies on the passage of the Foreclosure Abuse Prevention Act (FAPA) on December 30, 2022, to assert that the plaintiff cannot unilaterally revoke acceleration through prior discontinuance. The defendant maintains that the plaintiff had until November 13, 2015, to commence another foreclosure action against her and failed to do so timely.
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To establish a violation of the contract clause, there must be a substantial impairment of a contractual right. Where there is no existing contractual agreement regarding the terms changed by the legislation, there is no need to consider whether there was in fact an impairment and whether it was substantial. There is no constitutional violation herein, as there is no showing the plaintiff had a contractual right to unilaterally decelerate the subject loan. The terms of the subject loan do not include the plaintiff’s right to unilaterally cancel acceleration. Consequently, the plaintiff fails to show that there was a taking of a substantial right, holding that FAPA did not take any vested rights of the plaintiff). In this case, there is no evidence that the plaintiff’s contractual rights were impaired.
The FAPA is remedial in nature and was passed to clarify and enforce existing law that mandates a six-year statute of limitation in foreclosure cases. The FAPA serves to limit the methods which a plaintiff in a foreclosure action can reset the accrual date and extend the statute of limitations beyond the six-year period. As has been held, under the instant circumstance, FAPA does not violate the federal or state constitution or any due process right. Further, there is a strong presumption that the legislation is constitutional. The cases cited by the plaintiff to argue that the retroactive application of FAPA violates the constitution or infringes on the Bill of Attainder or Contract Clauses are inapplicable and inapposite to the facts and law herein. The plaintiff’s evidence, or lack thereof, does not defeat the statute’s constitutionality. Consequently, the FAPA applies, and the statute of limitations was not tolled.
Moreover, as has been held, FAPA did not shorten the six-year statute of limitations and, since it only applies when a final judgment had not yet been entered, the legislation did not affect a party’s vested property rights. Consequently, the plaintiff’s cross-motion based on constitutional and due process grounds is denied in its entirety. The remainder of the plaintiff’s cross-motion is also denied. The action is time-barred pursuant to CPRL §213 (4), and the defendant is entitled to dismissal.
(Internal citations omitted).