The Foreclosure Abuse Prevention Act (the “FAPA”) (Senate Bill S5473, passed May 3, 2022, and the companion Legislature Bill A7737) was signed into law on December 30, 2022 by New York State Governor Kathy Hochul and addresses the various interpretations regarding statute of limitations for foreclosure actions. This is from the NY Senate:
"BILL NUMBER: S5473D Revised 5/4/2022
SPONSOR: SANDERS TITLE OF BILL: An act to amend the real property actions and proceedings law, the general obligations law and the civil practice law and rules, in relation to the rights of parties involved in actions commenced upon real property related instruments PURPOSE AND INTENT OF BILL: The Legislature finds that there is an ongoing problem with abuses of the judicial foreclosure process; that the problem has been exacerbated by court decisions which, contrary to the intent of the Legislature, have given mortgage lenders and loan servicers opportunities to avoid strict compliance with remedial statutes and manipulate statutes of limitation to their advantage; and that the purpose of the present reme- dial legislation is to clarify the meaning of existing statutes, codify correct judicial applications thereof, and rectify erroneous judicial interpretations thereof. Accordingly, this bill amends certain statutes and rules to clarify the
existing law and overturn those decisions that have strayed from legis-
lative prescription and intent. These amendments and clarifications will
ensure the laws of this state apply equally to all litigants, including
those currently involved in mortgage foreclosures and related actions.
The remedial 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. That some
of these tactics have been sanctioned by the judiciary has resulted in
perversion of longstanding law and created an unfair playing field that
favors the mortgage banking and servicing industry at the expense of
everyday New Yorkers.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill provides that this act shall be known as the
"Foreclosure Abuse Prevention Act."
Section 2 of the bill amends RPAPL 1301 (3) by clarifying that compli-
ance with the leave of court requirement thereof is a condition prece-
dent to the commencement of any other action to recover any part of the
mortgage debt, which includes an action to foreclose a mortgage, and the
failure to strictly comply with this condition precedent shall result in
the dismissal of such other action where, prior to the entry of a final
judgment in such other action, a defendant raises the failure to comply
with the condition precedent. Subdivision (3) is also amended to clari-
fy, harmonize, and codify, in part, developed decisional law concerning
"de facto" discontinuances, insofar as the commencement of any such
other action while a prior action is pending shall be deemed to discon-
tinue the prior action, unless a defendant raises the failure to comply
with the leave of court condition precedent or seeks dismissal upon a
ground set forth in CPLR 3211 (a) (4). The section further amends RPAPL
1301 by adding subdivision (4) to clarify that the leave of court
requirement under subdivision (3) shall not constitute a stay or statu-
tory prohibition within the meaning of CPLR 204 (a). New subdivision (4)
further clarifies that if the mortgage securing the bond or note repres-
enting the debt so secured by the mortgage is adjudicated as time barred
by a court of competent jurisdiction, any other action to recover any
part of the same mortgage debt is equally time barred.
Section 3 of the bill amends subdivisions (4) and (5) of Section 17-105
of the General Obligations Law to clarify that these subdivisions repre-
sent the exclusive means by which parties are enabled to effectuate a
waiver, postponement, cancellation, resetting, tolling, revival or
extension of time limited by statute for commencement of an action or
proceeding and interposition of a claim to foreclose a mortgage.
Section 4 of the bill amends CPLR 203 by adding subdivision (h) to clar-
ify that once a cause of action has accrued, no party may unilaterally
"de-accrue" the cause action or otherwise effectuate a unilateral exten-
sion of the limitations period prescribed by statute to commence an
action and to interpose the claim, unless expressly prescribed by stat-
ute.
Section 5 of the bill amends CPLR 205 (c) to specify that section 205
shall not apply to proceedings governed by CPLR 205-a.
Section 6 of the bill adds a new section CPLR 205-a to clarify the
existing law concerning CPLR 205 (a), insofar as its application to
actions upon certain real property related instruments. Subdivision (a)
of CPLR 205-a clarifies that the six-month extension afforded to the
original plaintiff under that subdivision is unavailable where the prior
action is terminated as a result of voluntary dismissal or discontin-
uance (e.g., CPLR 3217 (a) or (b); failure to obtain personal jurisdic-
tion over the defendant; final judgment upon the merits; or a dismissal
of the complaint for any form of neglect, including, but not limited to
those specified in CPLR 3126 (3), CPLR 3215 (c), CPLR 3216, CPLR 3404,
violation of any court rules or individual part rules, failure to comply
with any court scheduling orders, default due to nonappearance for
conference or at a calendar call, or failure to timely submit any order
or judgment, regardless of the specificity, or lack thereof, utilized in
the dismissal order. The statute removes the former requirement that
where a dismissal is warranted for neglect to prosecute, "the judge
shall set forth on the record the specific conduct constituting the
neglect." CPLR 205-a (a) (1) clarifies that a successor in interest or
assignee of the original plaintiff is not entitled to the six-month
extension, unless pleading and proving that such assignee is acting on
behalf of the original plaintiff, such that only the original plaintiff,
upon whose behalf the claim was timely asserted within the original
six-year limitations period prescribed by law (i.e., without the six-
month extension), may benefit from the savings provision. CPLR 205-a (a)
(2) provides and clarifies that, where applicable, the original plain-
tiff may only receive one six-month extension and no court shall allow
the original plaintiff to receive more than one six-month extension.
CPLR 205-a (b) provides and clarifies that, where applicable, any claim
or defense timely interposed by a defendant in an answer served in the
prior action will be deemed timely interposed in the new action.
Section 7 of the bill amends CPLR 213 (4) by adding two new paragraphs,
(a) and (b), to clarify, codify, and harmonize established principles of
estoppel applicable to the statute of limitations to commence an action
on an instrument described under the subdivision where multiple actions
exist upon such instruments and the validity of the cause of action
accrual events thereunder are challenged.
Section 8 of the bill amends CPLR 3217 by adding a new subdivision (e)
to clarify that the voluntary dismissal or discontinuance of any action
upon an instrument described in CPLR 213 (4), including an action to
foreclose a mortgage, by any means, shall not, in form or effect, waive,
postpone, cancel, toll, extend, revive, or reset the applicable limita-
tions period, or the expiration thereof, unless expressly prescribed by
statute. Once a cause of action has accrued, CPLR 3217 (e) clarifies
that the voluntary dismissal or discontinuance of an action upon an
instrument described under CPLR 213 (4) shall not effectuate a "de-ac-
crual" of the cause of action.
Section 9 of the bill contains the severability clause of the legis-
lation.
Section 10 of the bill provides for the effective date.
JUSTIFICATION:
There is an urgent need to pass this bill to overrule the Court of
Appeals' recent decision in Freedom Mtge. Corp. v Engel (37 NY3d 1
(2021) ("Engel"). Engel effectively put the ability to unilaterally
manipulate, arrest, stop, and restart the limitations period prescribed
CPLR 213 (4), at will, directly in the hands of mortgage foreclosure
plaintiffs and their servicers, to the clear detriment of New York home-
owners. No other civil plaintiff in this state is extended such unilat-
eral and unfettered powers. As a direct result of Engel, trial and
appellate courts throughout the State have been bombarded with a flurry
of motions made by mortgage lenders and servicers to re-open cases, some
having been dismissed years ago on statute of limitations grounds, on
the basis that Engel represents a change or clarification in the deci-
sional law that, in effect, not only exempts mortgage foreclosure plain-
tiffs from having the statute of limitation applied to them, but gives
them unilateral and unbridled control to manipulate calculation of the
six-year period provided under CPLR 213 (4) (contra Bank of N.Y. v
Silverberg, 86 AD3d 274, 283 (2d Dept 2011) ("(T)he law must not yield
to expediency and the convenience of lending institutions. Prop er
procedures must be followed to . . . assure the enforcement of the rules
that govern real property")). This, in turn, has led to an overburdening
of the judicial system and uncertainty on the part of innumerable home-
owners currently trapped in an undue state of judicial purgatory, with
the fate of their homes suspended in incertitude. Thus, while the Legis-
lature fully agrees with the judiciary that "clear" and "bright line"
rules should govern actions involving real property related instruments
(see Bank of Am., N.A. v Kessler, 202 AD3d 10, 14 (2d Dept 2021); citing
Engel, 37 NY3d at 19, 20, 24), the rules pronounced in Engel' contravene
the legislative purpose and express language of numerous statutes and
undermine the important public policy of giving repose to human affairs.
Accordingly, this remedial legislation seeks to level the playing field
for all parties engaged in litigation involving mortgage related real
property instruments and ensure the statute of limitations not only
applies equally to all, but is impervious to unilateral manipulation. In
doing so, the bill aims to 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) misunder-
stood and/or misapplied by the courts.
The Legislature recognizes that "statutes of limitation not only save
litigants from defending stale claims, but also 'express a societal
interest or a public policy of giving repose to human affairs' (ACE
Securities Corp. v DB Structured Products, Inc., 25 NY3d 581, 593
(2015); quoting John J. Kassner & Co. v City of New York, 46 NY2d 544,
550 (1979)). If the law were to permit lenders to unilaterally reset the
statute of limitations, a great number of foreclosure cases that would
otherwise be time barred could proceed ad infinitum, with the strain on
judicial resources ultimately being subsidized by New York taxpayers
(see U.S. Bank N.A. v Papanikolaw, 62 Misc 3d 1207(A), 2019 NY Slip Op
50026(U), *3 (Sup Ct, Rockland County 2019) (recognizing "protracted
uncertainty" and "notable... expenditure of judicial resources" caused
by multiple successive foreclosure actions)). Therefore, the consistent
and evenhanded enforcement of the statute of limitations advances the
interests of litigants, relieves burdens on courts, and is a matter of
fundamental fairness.
RPAPL 1301
Insertion of the phrase "including an action to foreclose the mortgage"
in subdivision (3) clarifies that a mortgage foreclosure action is
another action "to recover any part of the mortgage debt" within the
meaning of RPAPL 1301 (3), thereby codifying the Court's holding in
Jamaica Say. Bank v M.S. Inv. Co. (274 NY 215, 219 (1937) ("An action to
foreclose a mortgage is not an action to recover the mortgage debt from
the mortgagor personally, but to collect it out of the land by enforcing
the lien of the mortgage") (internal quotation marks & citations omit-
ted)). Prior judicial rulings - which had narrowly interpreted the leave
of court requirement from maintaining simultaneous actions to enforce
the note without prior leave of court - are no longer to be followed
(e.g., Deutsche Bank Natl. Tr. Co. v Gould, 189 AD3d 576, 576 (1st Dept
2020)).
The use of the imperative "shall" with respect to the requirement to
obtain prior leave of court connotes a mandatory requirement (e.g.,
People v Ricken, 29 AD2d 192, 193 (3d Dept 1968), affd 27 NY2d 923
(1970)). Yet, the mandate of the subdivision has been whittled away by
judicial interpretation. The clarification of condition precedent
language is to ensure RPAPL 1301 (3) is afforded the same strict compli-
ance standard as its kindred RPAPL Article 13 condition precedents (see
RPAPL 1303, 1304, 1306 (each section containing the phrase "shall be a
condition precedent"); cf. Aurora Loan Servs., LLC v Weisblum, 85 AD3d
95, 102-103 (2d Dept 2011) (applying strict compliance standard to RPAPL
1303 and 1304); accord TD Bank, N.A. v Leroy, 121 AD3d 1256, 1259-1260
(3d Dept 2014) (same strict compliance standard applied to RPAPL 1306)).
While courts have, on occasion, correctly recognized compliance with
RPAPL 1301 (3) to be a condition precedent to the commencement of an
action (e.g., Sabbatini v Galatini, 43 AD3d 1136, 1139 (2d Dept 2007)),
with the failure to strictly comply requiring dismissal (e.g., Sec.
Natl. Servicing Corp. v Liebowitz, 281 AD2d 615, 616 (2d Dept 2001)),
RPAPL 1301 (3) is the only RPAPL Article 13 condition precedent in which
courts routinely, and inappropriately, apply CPLR 2001 or common-law
doctrines (now clarified and codified herein) to disregard or otherwise
excuse violations thereof, typically under the guise of the prior action
being "de facto" discontinued or "effectively abandoned," thereby excus-
ing the plaintiff from seeking the leave of court expressly required by
the subdivision (see e.g., Wells Fargo Bank, N.A. v Irizarry, 142 AD3d
610, 611 (2d Dept 2016); accord Bosco Credit V Trust Series 2012-1 v
Johnson, 177 AD3d 561, 562 (1st Dept 2019); U.S. Bank Trust, N.A. v
Humphrey, 173 AD3d 811, 811-812 (2d Dept 2019); MLB Sub I, LLC v Grimes,
170 AD3d 992, 994 (2d Dept 2019)). The failure to satisfy a pre-action
condition precedent can neither be cured nor disregarded after the fact;
the existence of prejudice or a lack thereof is irrelevant (see Weisb-
lum, 85 AD3d at 107; citing CPLR 2001 ("Where, as here, the condition
sought to be disregarded is a mandatory condition precedent, the plain-
tiffs failure to comply cannot be disregarded"); accord Leroy, 121 AD3d
at 159-1260; CIT Bank, N.A. v Anderson, No. 16-CV-1712, 2019 US Dist
LEXIS 137755, at *5-8 (EDNY Aug. 14, 2019)). The amendment reinforces
this conclusion insofar as RPAPL 1301 (3) is concerned.
The failure to comply with the leave of court condition precedent may
not be excused by finding that the prior action was "de facto
discontin(ued)" or "effectively abandoned" (Humphrey, 173 AD3d at 812);
or that the defendant was not prejudiced thereby (Irizarry, 142 AD3d at
611); nor by deeming the pre-action failure a mistake, omission, defect,
or irregularity that could be overlooked or disregarded (id.; citing
2001). Accordingly, the "deemed discontinued" language of the amended
RPAPL 1301 (3) harmonizes and codifies longstanding jurisprudence that
the commencement of a second action constitutes a discontinuance of the
first action (see Credit-Based Asset Servicing & Securitization, LLC v
Grimmer, 299 AD2d 887, 887-888 (4th Dept 2002); Bank of America, N.A. v
Ali,AD3d, 2022 NY Slip Op 00838, *4 (2d Dept 2022) (Hinds- Radix, J.,
dissenting)), except where a defendant, prior to the entry of a final
judgment in the latter action, raises the failure to comply with this
leave-of-court condition precedent, or seeks dismissal or vacatur upon a
ground set forth in CPLR 3211 (a) (4), in which case the prior action
shall not be deemed discontinued, as was always the intent of the stat-
ute.
The amendment to subdivision (3) and the new subdivision (4) are also
intended to overrule Citimortgage, Inc. v Ramirez (192 AD3d 70 (3d Dept
2020)) by clarifying that under well-established election of remedies
principles:
(1) RPAPL 1301 (3) shall not constitute a stay or statutory prohibition
within the meaning of CPLR 204 (a); and
(2) If the mortgage securing the bond or note representing the debt so
secured by the mortgage (collectively, the mortgage debt) is adjudicated
as time barred by a court of competent jurisdiction, any other action
upon all or part of the same mortgage debt is equally time barred.
Indeed, since the leave of court requirement is a condition precedent,
and not a statutory prohibition, it never tolls the statute of limita-
tions (Daldan, Inc. v Deutsche Bank Natl. Tr. Co., 188 AD3d 989, 991 (2d
Dept 2020); see generally Barchet v New York City Transit Authority, 20
NY2d 1, 6 (1967)).
GOL 17-105
Subdivisions (4) and (5) are amended to expressly overrule Engel by:
(1) clarifying the Legislature's intent that the general obligations
law be the exclusive means by which parties are enabled to postpone,
cancel, reset, toll, revive or otherwise effectuate an extension of the
time prescribed by law for the commencement of an action or proceeding
upon an instrument described under CPLR 213 (4);
(2) clarifying that unless effectuated in strict accordance with
section 17-105 of the general obligations law, the discontinuance of an
action upon an instrument described under CPLR 213 (4), by any means,
shall not, in form or effect, function as a waiver, postponement,
cancellation, resetting, tolling, or extension of the statute of limita-
tions; and
(3) codifying the relevant provisions of judicial rulings such as John
J. Kassner & Co. (46 NY2d at 550-552); Petito v Piffath (85 NY2d 1, 8-9
(1994)); Sotheby's, Inc. v Mao (173 AD3d 72, 76-81 (1st Dept 2019), lv
denied 34 NY3d 902 (2019)); HSBC Bank USA, N.A. v Khemraj (72 Misc 3d
1206(A), 2021 NY Slip Op 50656(U), *3-4 (Sup Ct, Westchester County
2021)); and US Bank N.A. v Szoffer (58 Misc 3d 1220(A), 2017 NY Slip Op
51976(U), *2 (Sup Ct, Rockland County 2017), revd 196 AD3d 666 (2d Dept
2021)).
With its enactment of General Obligations Law 17-105 (L 1963, ch 576, §
1), the Legislature provided the exclusive means by which parties to a
mortgage may agree to waive, extend, postpone, or promise not to plead
the statute of limitations. Yet, this provision has been largely ignored
in practice, with lenders resorting to the voluntary dismissal or
discontinuance of foreclosure actions (by stipulation, notice, or
motion) or unilateral writings such as so-called "de-acceleration
letters" to reset and, in effect, extend the statute of limitations to
foreclose a mortgage. These unilateral writings flout the requirements
of the General Obligations Law.
In Engel, the Court held that, as a matter of law, a stipulation of
discontinuance of a foreclosure action revokes the election to acceler-
ate, absent the noteholder's contemporaneous statement to the contrary,
and thus resets the statute of limitations (37 NY3d at 19). A stipu-
lation of discontinuance is a contract (Brad H. v City of New York, 17
NY3d 180, 185 (2011); Yonkers Fur Dressing Co. v Royal Ins. Co., 247 NY
435, 444 (1928)). "The public policy represented by the statute of limi-
tations (and the General Obligations Law) becomes pertinent where the
contract not to plead the statute is in form or effect a contract to
extend the period as provided by statute or to postpone the time from
which the period of limitations is to be computed" (Deutsche Bank Natl.
Trust Co. V Flagstar Capital Mkts., 32 NY3d 139, 152 (2018), quoting
John J. Kassner & Co., 46 NY2d at 551 (internal quotation marks omitted)
(first set of emphasis added, second set in original)). Thus, the effect
of a stipulation of discontinuance under Engel is to extend, postpone,
and ultimately reset the accrual of the statute of limitations on an
action to foreclose a mortgage. By interpreting a stipulation of discon-
tinuance, which is silent to the statute of limitati ons and contains
none of the language required by General Obligations Law 17-105, as a
revocation of acceleration, the courts have permitted such revocation to
"reset" the statute of limitations - meaning a claim for which the stat-
ute of limitations has already accrued, is then treated, in effect,
"de-accrued," after the fact, such that the statute of limitations is no
longer running on the claim. Under Engel, this back-and-forth yo-yo
effect of "accrual" then "de-accrual" may go on, ad infinitum, and has
the effect of extending and resetting the accrual of the statute of
limitations without strict compliance with General Obligations Law
17-105. While the parties to an action may agree to waive or postpone
the accrual of the statute of limitations on an action to foreclose a
mortgage after the claim has accrued, that agreement must strictly
comply with the General Obligations Law (Petito, 85 NY2d at 8-9).
The amendments are intended to clarify that General Obligation Law
17-105 is the exclusive means by which the statute of limitations for an
action to foreclose a mortgage may be unilaterally waived or postponed,
thus codifying such decisional law as Batavia Townhouses, Ltd. v Council
of Churches Hous. Dev. Fund Co., Inc. (189 AD3d 20, 24-27 (4th Dept
2020), lv granted, 36 NY3d 906 (2021)) and expressly rejecting Wells
Fargo Bank N.A. v Grover (165 AD3d 1541 (3d Dept 2018); cf. Bradley v
New Penn Fin., LLC, 198 AD3d 1273, 1274-1275 (4th Dept 2021), lv denied
198 AD3d 1273 (4th Dept 2021); Nationstar Mtge., LLC v Dorsin, 180 AD3d
1054, 1057 (2d Dept 2020) (Bradley and Dorsin correctly declining to
follow Grover)). The amendments further clarify that neither General
Obligations Law 17-101 nor an acknowledgment of the debt shall apply to
affect the statute of limitations of a mortgage foreclosure action (see
Mem of St Dept of Law in Support, NYS Attorney General, at 1-3, Bill
Jacket, L 1961, ch 582; Letter in Support from St Law Rev Comm, March
10, 1961 at 1-10, Bill Jacket, L 1961, ch 582; Memo of Law in Support
from Law Rev Comm to Legis, at 7-14, Bill Jacket, L 1961, ch 582; Letter
in Support from St Jud Conf, March 8, 1961 at 1-2, Bill Jacket, L 1961,
ch 582; accord Batavia, 189 AD3d at 24-27).
CPLR 203 (H)
CPLR 203 (h) is added to: (1) overrule Engel as violative of CPLR 201,
and inconsistent with the legislative intent of CPLR 203 and the public
policy of the statute of limitations; and (2) clarify that no party may
unilaterally waive, postpone, cancel, toll, revive, or reset the accrual
of a cause of action, or otherwise effectuate a unilateral extension of
the limitations period prescribed by law to commence an action and to
interpose the claim or, in other words, self-effectuate a "de-accrual"
of a claim, unless expressly prescribed by statute(2) (see e.g., Mao,
173 AD3d at 76-81, n 9). Prior to the accrual of a cause of action,
parties may not agree to extend or waive the statute of limitations (see
John J. Kassner & Co., Inc., 46 NY2d at 551; Gen. Oblig. Law 17-105(1)).
Stated simply, the same way personal injury plaintiffs cannot unilater-
ally reset or otherwise extend the applicable statute of limitations to
interpose their claim by "un-injuring" and then "re-injuring" them-
selves, this new subdivision makes clear that once a cause of action has
accrued - meaning once an injury has been sustained, economic or other-
wise - parties have no unilateral right or ability to declare themselves
"un-harmed" and then "re-harmed" which, by design or happenstance,
effectuates an unlawful extension of the time limited by law for inter-
position of the claim, unless expressly prescribed by statute.
In the context of actions commenced against real property owners, mort-
gagors, and borrowers, including foreclosure actions, and contrary to
Engel, a lender's unilateral "de-acceleration" of a mortgage loan, even
if permitted under the express terms of the mortgage loan documents(3),
cannot effectuate "de-accrual" of the cause of action or otherwise
unwind the applicable limitations period, under the guise of having been
accomplished by operation of law. Thus, this section is added to clari-
fy that a lender's unilateral written revocation of its demand for imme-
diate payment in full-otherwise known as a "de-acceleration" notice or
letter (see e.g., Pennymac Corp. v Smith, 199 AD3d 820, 822 (2d Dept
2021); Bayview Loan Servicing v Dalal, 184 AD3d 547, 547 (1st Dept
2020))-has no effect on the running of the statute of limitations nor
the expiration thereof.
Under CPLR 201, "(a)n action . . . must be commenced within the time
specified in this article unless a different time is prescribed by law
or a shorter time is prescribed by written agreement. No court shall
extend the time limited by law for the commencement of an action"
(emphasis added). This amendment clarifies that a lender's unilateral
revocation of its demand for immediate payment in full is not a means
"prescribed by law" to postpone, reset, or otherwise affect the accrual
of the statute of limitations (accord Mao, 173 AD3d at 77-78). A party
to a contract may not, by waiving or extending the other party's accrued
obligation to render a performance when due under the contract (but not
the performance itself), extend its time under the statute of limita-
tions to sue for breach without complying with Article 17 of the General
Obligations Law.
The Legislature has specified the methods by which the statute of limi-
tations in a mortgage foreclosure action could be waived or extended in
Article 17 of the General Obligations Law (see Gen. Oblig. Law 17-105
(express written agreement to extend, waive or not plead as a defense
the statute of limitations); 17-107 (unqualified payment on account of
mortgage indebtedness effective to revive statute of limitations)). A
bare stipulation of discontinuance or a lender's unilateral decision to
revoke its demand for full payment is not a method prescribed by the
Legislature for waiving, extending, or modifying the statute of limita-
tions.
"De-acceleration" is merely the lender's election to revoke its demand
for full payment; it does not "de-accrue" the claim for statute of limi-
tations purposes. "Under the statute of limitations, the time within
which a plaintiff must commence an action 'shall be computed from the
time the cause of action accrued to the time the claim is interposed'
(McCoy v Feinman, 99 NY2d 295, 300-301 (2002), quoting CPLR 203(a); see
Hahn Auto. Warehouse, Inc. v Am. Zurich Ins. Co., 18 NY3d 765, 770-771
(2012)).4 CPLR 201, Article 17 of the General Obligations Law, and
public policy all demonstrate that the statute of limitations is not a
device a party may unilaterally manipulate to its advantage (e.g.,
Ackerman v Price Waterhouse, 84 NY2d 535, 543 (1994) (rejecting accrual
date calculation method that "is subject to manipulation, rendering it
inconsistent with the definite statutory period")). To permit a lender's
unilateral "de-acceleration" or a mere stipulation of discontinuance to
reset the statute of limitations would be inconsistent not only with the
statute of limitations, itself, "but also with the mandate of CPLR 201
that '(n)o court shall extend the time limited by law for the commence-
ment of an action" (Fourth Ocean Putnam Corp. v I nterstate Wrecking
Co., Inc., 66 NY2d 38, 42 (1985), quoting CPLR 201; cf. McCoy, 99 NY2d
at 300-301 ("While courts have discretion to waive other time limits for
good cause (see CPLR 2004), the Legislature has specifically enjoined
that '(n)o court shall extend the time limited by law for the commence-
ment of an action"')).
While a "de-acceleration" notice or letter (or other unilateral writing
or act of a lender) purporting to revoke a prior demand for immediate
payment in full may not expressly reference the statute of limitations,
its effect, as erroneously permitted under existing decisional law, is
to reset the statute of limitations on an already-accrued cause of
action (e.g., Smith, 199 AD3d at 822). Since the public policy of the
statute of limitations is implicated where a writing is "in form or
effect a contract to extend the period as provided by statute or to
postpone the time from which the period of limitation is to be computed"
(Deutsche, 32 NY3d at 152; quoting John J. Kassner & Co., Inc., 46 NY2d
at 551 (internal quotation marks omitted) (first set of emphasis added,
second set in original)), this section clarifies that no party may, in
form or effect, unilaterally waive, extend, reset or postpone the
accrual of the statute of limitations, unless expressly prescribed by
statute.
CPLR 205 (C))
The Legislature finds that there has been extraordinary abuse and judi-
cial misinterpretation of the "savings provision" of CPLR 205 (a) in the
context of mortgage foreclosure actions (see e.g., Wells Fargo Bank,
N.A. v Eitani, 148 AD3d 193 (2d Dept 2017), appeal dismissed 29 NY3d
1023 (2017); U.S. Bank N.A. v Gordon, 158 AD3d 832 (2d Dept 2018),
appeal dismissed 31 NY3d 1144 (2018); Bank of NY Mellon v Slavin, 156
AD3d 1073 (3d Dept 2017), appeal dismissed 33 NY3d 1128 (2019); Deutsche
Bank Natl. Trust Co. v Gouin, 194 AD3d 479 (1st Dept 2021)). In light of
this finding, CPLR 205 (c), as amended, clarifies that CPLR 205 shall
not apply to an action commenced upon an instrument described under CPLR
213 (4). Rather, CPLR 205-a shall be the operative "savings statute" for
such actions (see generally Matter of World Trade Ctr. Lower Manhattan
Disaster Site Litig., 30 NY3d 377, 394-400, 401-406 (2017) (claim
revival statues affecting real property have always been treated differ-
ently and with heightened constitutional scrutiny in comparison to non-
real property related revival statutes)).
CPLR 205-A
This new section CPLR 205-a is hereby added to clarify the intended
meaning of several words contained in the existing statute from which it
is modeled (CPLR 205(a)) and included within the subdivision by codify-
ing the correct decisional law interpreting the same, while expressly
rejecting court opinions inconsistent therewith.
First, CPLR 205 (a), as amended and reconstituted under CPLR 205-a (a),
codifies the Court's holding in Andrea v Arnone, Hedin, Casker, Kennedy
& Drake, Architects & Landscape Architects, P.C. (Habiterra Assoc.) (5
NY3d 514, 520 (2005); accord Marrero v Nails, 114 AD3d 101, 110 (2d Dept
2013); Weisman, Geller, Spett & Modlin v Fischbach LLC, 111 AD3d 566,
567568 (1st Dept 2013); Wright v Venugopal, 58 AD2d 680, 681 (3d Dept
1977)) and clarifies that a dismissal for any form of neglect includes,
but is not limited to, a dismissal made pursuant to CPLR 3126 (3), CPLR
3215 (c), CPLR 3216, CPLR 3404, violation of any court rules or individ-
ual part rules, failure to comply with any court scheduling orders,
default due to nonappearance for conference or at a calendar call, or
failure to timely submit any order or judgment, regardless of the
specificity, or lack thereof, utilized in the dismissal order.
The amendment deletes the requirement that the court "set forth on the
record the specific conduct constituting the neglect, which conduct
shall demonstrate a general pattern of delay in proceeding with the
litigation" (CPLR 205
A). This language, added in 2008 (L 2008, ch 156,
§ 1), has occasioned erroneous judicial interpretations that the court's
recitation of the "specific conduct . . . (which) demonstrate(s) a
general pattern of delay" is a condition precedent to the bar against an
extension of the statute of limitations for a neglect based dismissal
(see Wells Fargo Bank N.A. v Kehres, 199 AD3d 869, 869-871 (2d Dept
2021); U.S. Bank N.A., Tr. to Bank of Am., N.A. v Kim, 192 AD3d 612,
613 (1st Dept 2021), appeal dismissed 37 NY3d 932 (2021); United States
Bank N.A. v Jalas, 195 AD3d 1122, 1123-1125 (3d Dept 2021); Deutsche
Bank Natl. Trust Co. v Baquero, 192 AD3d 660, 661-665 (2d Dept 2021);
HSBC Bank USA, N.A. v Janvier, 187 AD3d 999, 1001 (2d Dept 2020)).
Although we intended for the 2008 amendment to bring clarity as to "what
specifically constitutes a neglect to prosecute particularly where it
falls outside Rule 3216" (Introducer's Mem in Support, Bill Jacket, L
2008, ch 156 at 6, 10), it appears the implemented language has not
provided the clarity we sought, at least not in the context of mortgage
foreclosure actions (see generally NYSBA Mem in Opposition, Bill Jacket,
L 2008, ch 156 at 12-13 (pointing out potential shortcomings of the
amendment)).
To be clear, the Legislature never intended to bring clarity to the
neglect-based termination carve-out of CPLR 205 (a) by hinging the same
upon subjectivities, such as the idiosyncratic writing and descriptive
preferences inherent to, and invariably exercised by, different judges
and justices of the courts (see generally CPLR 2219(a) (empowering the
courts with the discretion to "give the determination or direction in
such details as the judge deems proper")). Under such an approach, the
same conduct could (and has) lead to differing statute of limitations
results, depending upon how detailed the prior court's recitation of the
facts constituting the neglect in each instance. Such an outcome is
contrary to the public policy of the statute of limitations of promoting
the objectives of "finality, certainty and predictability," to the bene-
fit of both plaintiffs and defendants (ACE Sec. Corp., 25 NY3d at 593;
Matter of Regina Metro. Co., LLC v New York State Division of Hous. &
Community Renewal, 35 NY3d 332, 372 (2020)).
Nor should any act or omission of a court in detailing the extent of the
neglect be the arbiter of the expiration or extension of the statute of
limitations, especially where it is the subsequent court, not the nisi
prius, that is given the ultimate power of review and interpretation
(see Sokoloff v Schor, 176 AD3d 120, 129-133 (2d Dept 2019) (analyzing
interplay of CPLR 205(a) with 5519(a)); cf., CPLR 201). Rather, it is
the dismissal based on the fact of neglect, itself, not the extent to
which the court detailed the conduct constituting such neglect, that is
determinative. Neglectful plaintiffs should not avoid the consequences
of their neglect depending on how concise a prior court's determination
reads on any given day, and it has never been the Legislature's intent
for such subjectivities to control important matters concerning the
application of the statute of limitations and the limited availability
of extensions thereto. All this is now clarified by CPLR 205-a (a).
Second, CPLR 205 (a), as amended and reconstituted under CPLR 205-a (a)
and (a) (1), codifies the Court's holding in Reliance Ins. Co. v Polyvi-
sion Corp (9 NY3d 52, 57-58 (2007); accord U.S. Bank N.A. v DLJ Mtge.
Capital, Inc., 141 AD3d 431, 433 (1st Dept 2016), affd 33 NY3d 72
(2019); Craft EM CLO 2006-1, Ltd. v Deutsche Bank AG, 178 AD3d 552, 553
(1st Dept 2019)) and clarifies the six-month extension afforded under
the section is available only to the original plaintiff and is not
intended to be extended to a different party because that "would open a
new tributary in the law, presumably available to individuals as well as
corporations, and breathe life into otherwise stale claims" (Reliance, 9
NY3d at 58). "(M)indful of the potential ramifications of a rule allow-
ing" otherwise, the Court correctly directed that CPLR 205 (a) should be
read "as it was written by the Legislature . . . ." (id.).
Yet, in direct contravention of Reliance, the majority in Eitani held
that Wells Fargo Bank, N.A. (Wells Fargo), the assignee of a mortgage
loan originated by Argent Mortgage Company, LLC (Argent), was entitled
to the six-month extension afforded to "the plaintiff' under CPLR 205
(a) because the mortgage loan was assigned by Argent to Wells Fargo
during the pendency of the prior action, which was commenced by Argent
(see 148 AD3d at 200-203). This holding is wrong and must not be
followed. In Eitani, Wells Fargo was not asserting the rights of Argent
in the new action. That is, Wells Fargo did not claim to be acting on
behalf or for the benefit of Argent. Rather, as correctly explained by
the dissent in Eitani, Wells Fargo was seeking to enforce its own rights
in and to the mortgage loan; the rights it acquired from Argent (148
AD3d at 206-209 (Leventhal, J., dissenting)). Therefore, Eitani and its
progeny should not be followed (e.g., Gordon, 158 AD3d at 837-839).
Accordingly, CPLR 205-a (a) (1) now makes clear that unless acting on
behalf of the original plaintiff, a successor in interest or assignee of
that original plaintiff is not entitled to the six-month extension
afforded under the subdivision, unless pleading and proving he, she, or
it is acting on behalf of the original plaintiff. For instance, if a
mortgage loan were held in a mortgage backed securitized loan trust, and
the original trustee of that loan trust, Bank A, which previously
commenced a timely foreclosure proceeding on behalf of the loan trust
that terminated for a reason not specified under CPLR 205-a (a), is
succeeded and replaced as trustee of the loan trust by Bank B, and an
assignment of mortgage is recorded to reflect that change; Bank B,
although both a successor in interest and assignee to Bank A, the
original plaintiff, would nonetheless still be acting on behalf of the
original plaintiff within the meaning of CPLR 205-a (a) (1) in a subse-
quent action, since the holder of the loan and the rights and benefits
thereunder (i.e., the loan trust) remained the same. The same would be
true in the context of a mortgage loan held by an estate where the
original representative thereof was succeeded or replaced by a new re
presentative. However, if the estate or the loan trust sold, assigned,
or otherwise transferred the mortgage loan to any other person or enti-
ty, related or not, outside of the foregoing limited circumstances, the
transferee would be ineligible for the extension under CPLR 205-a (a)
(accord Reliance, 9 NY3d at 57-58; contra Eitani, 148 AD3d at 200-203;
Gordon, 158 AD3d at 837-839).
Third, CPLR 205-a (a) specifies "the original defendant." This specifi-
cation clarifies that the plaintiff must both timely file and effectuate
service upon not just any defendant, but the original defendant, within
the six-month extended period (e.g., Rayo v New York, 882 F Supp 37, 39
(NDNY 1995) ("In examining the language of Section 205(a), it is plain
that the six month extension applies only if the original court had
personal jurisdiction over the same defendant as in the second case");
accord Raji v SG Americas Sec., LLC, 189 AD3d 514, 515 (1st Dept 2020)
("CPLR 205(a) cannot apply to render plaintiff's claims against defend-
ant SG Americas Securities, Inc. (SG Inc.) timely, however, since SG
Inc. was not a party to the federal action"); see also Cazsador by
Cazsador v Greene Cent. Sch., 243 AD2d 867, 868-869 (3d Dept 1997);
Caplan v Winslett, 218 AD2d 148, 153-154 (1st Dept 1996)). This is
consistent with the intention of CPLR 205 (a) - that the claim be
asserted against the original defendant within the original limitations
period (e.g., CPLR 213
4 (six years)), and the defendant be provided
actual notice of the action within the original limitations period,
before such period may be tolled or extended (see e.g., Matter of Gold-
stein v NY State Urban Dev. Corp., 13 NY3d 511, 521 (2009)).
Fourth, CPLR 205-a (a) (2) provides and clarifies that, where applica-
ble, the original plaintiff may receive no more than one six-month
extension under the subdivision, and no court shall allow the original
plaintiff to receive more than a single six-month extension. The
original plaintiff may only benefit from the subdivision once (L 1992,
ch 216, Governor's Bill Jacket at *12, Mem of Assemblyman Lentol at *1
("the party would receive no more extra time than the six-month period
set forth in this section . ."); see Ray v Ray, 22 F4th 69, 74 (2d Cir
2021) ("CPLR section 205(a), New York's Saving Statute,' does not permit
a litigant to file an otherwise untimely 'new action' within six months
of a 'prior action,' where that prior action was, itself, only made
timely by a previous application of section 205(a)"); accord Shuhab HDFC
v Bates, 2008 NY Misc LEXIS 3725, *4-5, 239 NYLJ 118 (NY Civ Ct, New
York County 2008)).
Fifth, CPLR 205-a (b) mirrors CPLR 205 (b), while at the same time modi-
fying the subdivision to include the clarified language set forth in
CPLR 205-a (a) and (a) (1), concerning the "original plaintiff."
CPLR 213 (4)
"Statutes of Limitation are designed to promote justice by preventing
surprises through the revival of claims that have been allowed to slum-
ber until evidence has been lost, memories have faded, and witnesses
have disappeared" (Britt v Legal Aid Socy., Inc., 95 NY2d 443, 448
(2000) (internal quotation marks & citations omitted)). In recent years,
foreclosure plaintiffs have avoided the peril of the statute of limita-
tions lapsing by successfully arguing the accrual event, generally the
acceleration of the mortgage debt, was invalid due to their very own, or
their predecessors': (a) lack of capacity or standing to validly accel-
erate the debt by or before the commencement of a prior action; and/or
(b) failure to provide the borrower with a contractual notice of
default/acceleration, which is generally a procedural condition prece-
dent to acceleration of the mortgage debt (see e.g., Wilmington Say.
Fund Socy., FSB v Rosenbaum, 197 AD3d 1132, 1133 (2d Dept 2021)
(addressing arguments of the original acceleration being invalid due to
the prior plaintiff's lack of standing to sue); Everhome Mtge. Co. v
Aber, 195 AD3d 682, 685-689 (2d Dept 2021) (majority opinion); cf. id.
at 692-694 (minority opinion) (addressing arguments of the original
acceleration event being invalid due to alleged non-compliance with the
notice of default/acceleration requirements of the mortgage)).
The Legislature finds that it imposes an undue burden on the courts and
the opposing party for a litigant to assail it or its predecessor's
acceleration of a mortgage debt, by or before the commencement of a
prior foreclosure action, to avoid a statute of limitations dismissal in
a later action, especially (but not limited to) where that litigant or
its predecessor made affirmative representations to a court regarding
its lawful standing to sue or otherwise validly accelerate the mortgage
debt. Rather, the law was well settled, for quite some time, insomuch as
"(w)hen a party moves . . . for a judgment dismissing a claim on the
ground that it is barred by the Statute of Limitations, it is that
party's burden initially to establish the affirmative defense by prima
facie proof that the Statute of Limitations had elapsed. This burden
does not include an obligation on the moving party's part to negate any
or all exceptions that might apply to the statutory period" (Hoosac Val.
Farmers Exch., Inc. v AG Assets, Inc., 168 AD2d 822, 823 (3d Dept 1990);
accord Doyon v Bascom, 38 AD2d 645, 645-646 (3d Dept 1971)). However,
courts have recently permitted foreclosure plaintiffs to depart from the
established law, going so far as to unduly enl arging the movant's
burden and requiring negation of any exception that might be found or
raised by the opponent (see e.g., HSBC Bank USA, N.A. v Greene, 190 AD3d
417, 417-418 (1st Dept 2021); Bank of NY Mellon v Lagasse, 188 AD3d 775,
777 (2d Dept 2020)). Decisions such as these should no longer be
followed.
For example, litigants confronted with running afoul the statute of
limitations have assailed their very own, or their predecessor's, stand-
ing to sue or capacity to validly accelerate the mortgage debt, regard-
less of whether the issue was actually, timely, or otherwise properly
asserted or raised by a defendant in the prior action (see e.g., J & JT
Holding Corp. v Deutsche Bank Natl. Trust Co., 173 AD3d 704 (2d Dept
2019); Deutsche Bank Natl. Trust Co. v Gambino, 153 AD3d 1232 (2d Dept
2017)), by seeking an order of voluntary discontinuance a/k/a voluntary
dismissal (CPLR 3217
B; 3212(b); Fed Rules Civ Pro rule 41(a)(2); cf.
Fed Rules Civ Pro rule 41(b); see e.g., Deutsche Bank Natl. Trust Co.
Ams. v Bernal, 56 Misc 3d 915, 920-921 (Sup Ct, Westchester County
2017), affd 186 AD3d 1491 (2d Dept 2020); see generally Brenhouse v
Anthony Indus., Inc., 156 AD2d 411, 412 (2d Dept 1989); Westbury Sleep
Prods., Inc. v Paramount Sleep Prods., Inc., 98 AD2d 746, 747, n (2d
Dept 1983)). In essence, requesting the court for a judicial declaration
that acceleration of the mortgage debt was invalid which, in form and
effect, constitutes an unlawful unilateral act by the plaintiff to reset
the accrual of the cause of action, or otherwise effectuate an unlawful
unilateral extension of the limitations period (CPLR 201; 203(h);
3217(e)).
Whether a plaintiff is the owner or holder of the mortgage note as of
the commencement date of an action (i.e., whether that plaintiff has
standing to foreclose) is a fact which the plaintiff has (or should
reasonably have) superior knowledge before invoking judicial assistance
with the commencement of a legal action (see US Bank N.A. v Nelson, 36
NY3d 998, 1011 (2020) (Wilson, J. concurring) (identity of owner or
holder of note at time of commencement of foreclosure action "is infor-
mation principally in the possession of the plaintiff and often unknown
to the defendant")). The rules of judicial conduct impose an obligation
upon litigants and attorneys alike to undertake a reasonably diligent
factual investigation before commencing an action (22 NYCRR 130-1.1a(b);
22 NYCRR 130-1.1(c)). The prosecution of foreclosure actions by plain-
tiffs initially having affirmatively alleged the lawful standing to sue
and/or made a prima facie showing thereof (e.g., Selene Fin., L.P. v
Coleman, 187 AD3d 1082, 1084 (2d Dept 2020); citing U.S. Bank N.A. v
Auguste, 173 AD3d 930, 933 (2d Dept 2019)), or who knew or should have
known of their lack standing, only to later "realize" or "discover" this
alleged lack of standing to avoid a statute of limit ations dismissal
bar in a later action is deceitful, unlawful, and cannot be countenanced
(see CPLR 3012-b(a); RPAPL 1302 (1)(a); Matter of Hartsdale Fire Dist. v
Eastland Constr., Inc., 65 AD3d 1345, 1346 (2d Dept 2009); quoting Maas
v Cornell Univ., 253 AD2d 1, 5 (3d Dept 1999), affd 94 NY2d 87 (1999)
('Under the doctrine of judicial estoppel, or estoppel against incon-
sistent positions, a party is precluded from inequitably adopting a
position directly contrary to or inconsistent with an earlier assumed
position in the same proceeding'); cf. Festinger v Edrich, 32 AD3d 412,
413 (2d Dept 2006) ("application of the doctrine (of judicial estoppel)
. . . was essential to avoid a fraud upon the court and a mockery of the
truth-seeking function"); accord Karasik v Bird, 104 AD2d 758, 758-759
(1st Dept 1984)). At best, judicial condonation of this conduct allows a
litigant to avoid the consequences of its own lack of diligence. At
worst, judicial condonation of this conduct permits a litigant to avoid
sanction for its affirmative misrepresentation to the court that it had
standing to maintain an action. Thus, while courts have correctly held
that the signing of a foreclosure complaint, which contains a provision
declaring the mortgage debt immediately due and payable in full, even if
unfiled, constitutes one manner a valid election to accelerate the mort-
gage debt may occur (Puzzuoli v JPMorgan Chase Bank, NA., 55 Misc 3d
417, 427-428 (Sup Ct, Dutchess County 2016); Deutsche Bank Natl. Trust
Co. v Ahmed, 174 AD3d 855, 856 (2d Dept 2019)), the lack thereof shall
not be accorded with a negative inference, but shall too be met with a
presumption of validity (see generally David L. Ferstendig, 5 New York
Civil Practice: CPLR P 3020.00 (2019); contra HSBC Bank, USA, NA v
Margineanu, 61 Misc 3d 973, 977-979 (Sup Ct, Suffolk County 2018), over-
ruled on other grounds by Dieudonne, 171 AD3d at 40).
The same holds true for a plaintiff or its predecessor's alleged failure
to comply with a contractual condition precedent, such as the service of
a predicate contractual written notice of default/acceleration prior to
the commencement of a foreclosure action (see Aber, 195 AD3d at 685-689;
cf. id. at 692-694; see also Capital One, N.A. v Saglimbeni, 170 AD3d
508, 508-509 (1st Dept 2019)). A plaintiff knows or reasonably should
know whether it or its predecessor has complied with this contractual
condition precedent prior to the commencement of an action and, to the
extent that a lender other than the original lender (i.e., an assignee
or transferee of the note) is the plaintiff in a subsequent action,
these parties routinely profess to possess and rely on the business
records of their predecessors in their ordinary course of business and
routinely rely upon these records to establish a prima facie cause of
action for foreclosure (see e.g., U.S. Bank N.A. v Kropp-Somoza, 191
AD3d 918, 921 (2d Dept 2021)). Thus, the estoppel under CPLR 213 (4) (a)
and (b) creates no undue imposition upon litigants.
Hence, the addition of paragraphs (a) and (b), which: (1) clarify and
codify the applicable principles of estoppel, insofar as all acceler-
ation events, whether occurring prior to or by way of commencement of an
action, are presumptively valid, unless a prior action was dismissed
upon a timely interposed defense (see CPLR 3015(a); 3211(e)), asserted
in a defendant's motion or application (see CPLR 3211(a); 3212
B)5,
based on an express judicial determination that no valid election to
accelerate the instrument occurred prior to or by way of the commence-
ment of that action (e.g., Puzzuoli, 55 Misc 3d at 427-428; see Saglim-
beni, 170 AD3d at 508-509; Aber, 195 AD3d at 686; Avail Holding LLC v
Ramos, 820 F App'x 83, 86 (2d Cir 2020); Bank of NY Mellon v Cort, 171
AD3d 1275, 1276 (3d Dept 2019)); and (2) reflect the Legislature's
recognition of the inherent difficulties defendants encounter in estab-
lishing a valid statute of limitations defense which, as per recent case
law, may now depend on information and documents that are generally not
in their possession and may otherwise be unavailable due to the passage
of time (see generally 21st Mtge. Corp. v Rudman,AD3d, 2022 NY Slip Op
00031, *2-4 (2d Dept 2022) (Barron, J., dissenting)). We note, it is our
intent that the estoppel set forth in CPLR 213 (4) (a) and (b) shall not
preclude a mortgage foreclosure defendant or RPAPL Article 15 plaintiff
from successfully arguing expiration of the limitations period on other
or separate grounds (e.g., Aber, 195 AD3d at 686).
CPLR 3217
CPLR 3217 (e) is expressly intended to overrule Engel. The new subdivi-
sion clarifies that unless made in strict compliance with the General
Obligations Law, the mere voluntary dismissal or discontinuance of a
foreclosure action, whether by motion, order, stipulation, or notice,
cannot waive, postpone, cancel, toll, extend, revive, or reset the stat-
ute of limitations period, nor the expiration thereof (e.g., Petito, 85
NY2d at 8-9). The phrase "unless expressly prescribed by statute" is in
recognition of the fact that existing New York statutory law allows
parties a strictly defined means of extending a statute of limitations
after a claim predicated on non-payment of a mortgage debt has accrued
(Gen. Oblig. Law 17-105).
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None to the State.
EFFECTIVE DATE:
This act, which seeks to clarify and codify existing law and is remedial
in nature, shall take effect immediately and shall apply to all actions
commenced on an instrument described under CPLR 213 (4) in which a final
judgment of foreclosure and sale has not been enforced.
(1) We note, while constitutional constraints concerning preservation of
issues in Engel clearly limited the scope of the Court's judicial rule
making authority (37 NY3d at 36-37 (Wilson, J., concurring; Rivera, J.,
dissenting, in part)), the Legislature suffers no such constraint.
(2) The language "unless expressly prescribed by statute," is not
intended to be a "loophole" in the subdivision and should not be viewed
or treated as such. Rather, the language represents the legislature's
recognition of certain unique situations where the law, in effect, may
technically provide a party with the unilateral ability to toll or
extend the time prescribed by law to commence an action and to interpose
a claim (see Gen. Oblig. Law 17-105, 17-107; see also 11 USC 362 (auto-
matic bankruptcy stay tolls statutes of limitation as per the unilateral
act by the debtor of filing the petition).
(3) Although it appears that the standard Fannie Mae/Freddie Mac Form
3033 mortgage instrument expressly permits a borrower the right to
de-accelerate a loan, via reinstatement (Bank of NY Mellon v Dieudonne,
171 AD3d 34, 39, 40 (2d Dept 2019), lv denied 34 NY3d 910 (2020)), it
does not permit the lender to exercise such unilateral action, either
expressly or impliedly (Khemraj, 72 Misc 3d 1206(A), 2021 NY Slip Op
50656(U) at *3-4; cf id., Index No. 50068/2016, at NYSCEF Doc No. 62
(court held the form 3033 mortgage underlying the action did not provide
the plaintiff with unilateral authority to "de-accelerate" the loan)),
and longstanding principles of New York jurisprudence, including the
maxim expresslo unius est exclusio alterius, disallow such a right to be
read into the mortgage contract (see e.g., Quadrant Structured Prods.
Co., Ltd. v Vertin, 23 NY3d 549, 560 (2014); citing In re Ore Cargo,
Inc., 544 F2d 80, 82 (2d Cir 1976); accord Two Guys from Harrison-N.Y. v
S.F.R. Realty Assoc., 63 NY2d 396, 403-404 (1984); citing Woodmere Acad-
emy v Steinberg, 41 NY2d 746, 750 (1977); see also Prudence Co. v 160 W.
Seventy--Third St. Corp., 260 NY 205, 212 (1932) ("(I)n no event is
. . . the mortgagee accorded rights beyond the stipulati ons of the
mortgage")). We note, the primary purpose of CPLR 203 (h) is to clarify
that upon accrual of a cause of action, the aggrieved party - meaning
the party with the right to commence an action and interpose a claim -
may not unilaterally extend its own time to assert its own claim. Thus,
the subdivision has no adverse impact on a borrower's contractual or
statutory right to "reinstate" a mortgage loan (i.e., pay the total
amount of his or her arrears and thereby bring the mortgage loan back to
a regular monthly installment contract), which effectively "de-acceler-
ates" a/lc/a "de-accrues" a lender's cause of action to sue upon the
prior, but subsequently cured, mortgage loan default(s) (see e.g.,
Fannie Mae/Freddie Mac Form 3033 mortgage  19; cf. Gen. Oblig. Law
17-105, 17-107). Accordingly, "de-accrual" under the General Obli-
gations Law (e.g., §§ 17-105, 17-107 (the exercise of a borrower's
contractual right to reinstate a mortgage loan or a borrower's execution
of a properly drafted loan modification agreement)), constitutes permis-
sive means "expressly prescribed by statute" (CPLR 203(h)).
4 We note, for the purposes of the interposition of a claim against a
defendant joined to an action after its commencement (CPLR 203(c), (f)),
the additional defendant's unity of interest with the original defendant
must have existed from the time of the commencement of the action
through the interposition of the claim against the additional defendant
(see Jones v Bill, 10 NY3d 550, 554 (2008); Nevling v Chrysler Corp.,
206 AD2d 221, 224-226 (2d Dept 1994)); Rols Capital Co. v. Beeten, 264
AD2d 724 (2d Dept 1999); Filigree Films Pension Plan v. CBC Realty
Corp., 229 AD2d 862 (3d Dept 1996)).
5 Reliance on a motion made by the foreclosing plaintiff or its prede-
cessor, or by the RPAPL Article 15 defendant or its predecessor (CPLR
213(4)(a), (b)), for dismissal or discontinuance of its own action on
invalid acceleration grounds would be impermissive under this section
because, if granted, such a unilateral act could result, in form or
effect, to an unlawful resetting of the accrual of the cause of action,
or otherwise to an unlawful extension of the limitations period (CPLR
201; 203(h); 3217(e)).
6 See generally Gleason v Michael Vee, Ltd., 96 NY2d 117, 122-123
(2001)."
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