Alert

The Second Department Rejects Constitutional Challenge to FAPA

January 2, 2025

On December 4, 2024, the Appellate Division, Second Department affirmed the trial court’s retroactive application of the Foreclosure Abuse Prevention Act (FAPA) to dismiss the re-commenced foreclosure action as time-barred and rejected the mortgagee’s constitutional challenge thereto.

Background

In Jarrett, plaintiff’s predecessor-in-interest commenced a foreclosure action in August 2011. On February 28, 2017, the court dismissed the foreclosure because plaintiff’s predecessor-in-interest failed to move for an order of reference after twice being directed to do so by the court. Subsequently, the mortgage was assigned to plaintiff in June 2017, and plaintiff’s motion to vacate the dismissal order was denied by the court on July 5, 2019. As such, plaintiff commenced a new action on February 5, 2020, and in August 2020, moved for an extension of time to serve defendants with process and for leave to serve by publication. Defendants, however, cross-moved to dismiss the new action as time-barred under FAPA. The trial court denied plaintiff’s motion and dismissed the foreclosure as untimely, prompting the appeal.   

On appeal, plaintiff argued that the second action was timely because it was commenced within the applicable six-month extension period afforded by CPLR § 205(a). However, the Second Department disagreed and held that “plaintiff is not entitled to the benefit of the savings provision because the 2011 action was dismissed for a ‘form of neglect’ upon the failure of the plaintiff’s predecessor in interest to move for an order of reference within 90 days from the issuance of the order dated November 22, 2016.” Additionally, the Jarrett court pointed out that plaintiff is not “the ‘original plaintiff’ or acting on behalf of the original plaintiff that commenced the 2011 action [since it] was only assigned the mortgage after that action was dismissed [and failed to] complete service of … [process] within six months after the termination of the 2011 action.”

Court’s Analysis

Although plaintiff contended that the retroactive application of CPLR § 205–a, which was enacted by FAPA specifically for mortgage foreclosure claims, would be unconstitutional and that the pre-FAPA CPLR § 205(a) should be applied to the re-commenced action, the Second Department summarily rejected such arguments. Notably, the court found that the action is untimely under either CPLR § 205(a) or CPLR § 205–a since plaintiff did not effectuate service of process on defendants within six months of the termination of the first action, as required under CPLR § 205(a).  

Key Takeaway

Jarrett signals that without a properly framed constitutional challenge, the Second Department will continue to retroactively apply FAPA to all pending foreclosures. This court may still find that the retroactive application of FAPA is unconstitutional when the facts dictate different outcomes under CPLR § 205–a and CPLR § 205(a), which governed recommencement of actions prior to the enactment of FAPA.