Preview
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
FILED: APPELLATE DIVISION - 2ND DEPT 03/27/2023 06:05 PM 2020-09391
NYSCEF DOC. NO. 15 RECEIVED NYSCEF: 03/27/2023
To be argued by:
MARK S. GRUBE
10 minutes requested
Supreme Court of the State of New York
Appellate Division – Second Department
No. 2020-09391
U.S. BANK NATIONAL ASSOCIATION, as Trustee for the
Structured Asset Investment Loan Trust 2006-BNC3,
Plaintiff-Appellant,
v.
ROBYN R. SIMON,
Defendant-Respondent,
NEW YORK CITY ENVIRONMENTAL CONTROL BOARD and JOHN DOE
(being fictitious, the names unknown to Plaintiff intended to be
tenants, occupants, persons or corporations having or claiming an
interest in or lien upon the property described in the complaint or
their heirs at law, distributes, executors, administrators, trustees,
guardians, assignees, creditors or successors),
Defendants,
LETITIA JAMES, Attorney General of the State of New York,
Intervenor-Respondent.
BRIEF FOR INTERVENOR-RESPONDENT
LETITIA JAMES
Attorney General
State of New York
BARBARA D. UNDERWOOD Attorney for Intervenor-Respondent
Solicitor General 28 Liberty Street
ESTER MURDUKHAYEVA New York, New York 10005
Deputy Solicitor General (212) 416-8028
MARK S. GRUBE mark.grube@ag.ny.gov
Assistant Solicitor General
of Counsel Dated: March 27, 2023
Supreme Court, Queens County – Index No. 702414/16
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ...................................................................... ii
PRELIMINARY STATEMENT ................................................................. 1
QUESTION PRESENTED ........................................................................ 3
STATEMENT OF THE CASE .................................................................. 3
A. Mortgage Agreements and the Statute of Limitations ............ 3
B. Foreclosure Litigation Following the 2007-2008
Financial Crisis ......................................................................... 6
C. The Foreclosure Abuse Prevention Act (FAPA) ....................... 9
D. This Foreclosure Action .......................................................... 11
ARGUMENT ........................................................................................... 13
FAPA COMPORTS WITH THE STATE AND FEDERAL CONSTITUTIONS....... 13
A. FAPA Comports with the Due Process Clause....................... 13
1. The Legislature intended FAPA to apply retroactively. ... 14
2. FAPA does not impair any vested rights. ....................... 17
3. FAPA’s retroactive scope is rational. .............................. 20
B. FAPA Comports with the Contract Clause. ........................... 21
CONCLUSION ........................................................................................ 25
i
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
TABLE OF AUTHORITIES
Cases Page(s)
American Economy Ins. Co. v. State of New York,
30 N.Y.3d 136 (2017) ......................................................... 14, 20-21, 23
Brothers v. Florence,
95 N.Y.2d 290 (2000) ..................................................................... 18-19
Capital One N.A. v. Saglimbeni,
170 A.D.3d 508 (1st Dep’t 2019) ........................................................... 7
Chase Sec. Corp. v. Donaldson,
325 U.S. 304 (1945) ............................................................................. 21
East Fork Funding LLC v. U.S. Bank, N.A.,
No. 20-cv-3404 (E.D.N.Y. Mar. 23, 2023) ........................................... 22
EMC Mtge. Corp. v. Patella,
279 A.D.2d 604 (2d Dep’t 2001) ............................................................ 8
Energy Reserves Group, Inc. v. Kansas Power & Light Co.,
459 U.S. 400 (1983) ........................................................................ 22-23
First Natl. Mtge. Assn. v. Mebane,
208 A.D.2d 892 (2d Dep’t 1994) ............................................................ 8
Freedom Mtge. Corp. v. Engel,
37 N.Y.3d 1 (2021) ...................................................................... passim
Freedom Mtge. Corp. v. Engel,
163 A.D.3d 631 (2d Dep’t 2018) ............................................................ 7
Funkhouser v. J.B. Preston Co.,
290 U.S. 163 (1933) ............................................................................. 13
General Motors Corp. v. Romein,
503 U.S. 181 (1992) ............................................................................. 21
GMAT Legal Title Trust 2014-1 v. Kator,
213 A.D.3d 915 (2d Dep’t 2023) .......................................................... 17
ii
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
Cases Page(s)
John J. Kassner & Co. v. City of New York,
46 N.Y.2d 544 (1979) .......................................................................... 23
Kilpatrick v. Germania Life Ins. Co.,
183 N.Y. 163 (1905) .............................................................................. 5
Landgraf v. USI Film Prods.,
511 U.S. 244 (1994) ....................................................................... 14, 17
LaValle v. Hayden,
98 N.Y.2d 155 (2002) .......................................................................... 13
Matter of Gleason (Michael Vee, Ltd.),
96 N.Y.2d 117 (2001) .......................................................................... 15
Matter of Regina Metropolitan Co., LLC v. New York State
Division of Housing and Community Renewal,
35 N.Y.3d 332 (2020) .......................................................................... 18
Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig.,
30 N.Y.3d 377 (2017) .......................................................................... 14
Milone v. US Bank N.A.,
164 A.D.3d 145 (2d Dep’t 2018) ......................................................... 7-8
NMNT Realty v. Knoxville 2012 Trust,
151 A.D.3d 1068 (2d Dep’t 2017) .......................................................... 7
Pension Benefit Guar. Corp. v. R.A. Gray & Co.,
467 U.S. 717 (1984) ....................................................................... 14, 20
People v. Allen,
198 A.D.3d 531 (1st Dep’t 2021) ......................................................... 18
Wells Fargo Bank, N.A. v. Liburd,
176 A.D.3d 464 (1st Dep’t 2019) ........................................................... 7
Wells Fargo Bank, N.A. v. Portu,
179 A.D.3d 1204 (3d Dep’t 2020) .......................................................... 7
iii
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
Laws Page(s)
Ch. 821, 2022 N.Y. Laws ............................................................... 9, 11, 16
C.P.L.R.
201 ....................................................................................................... 23
203 ......................................................................................................... 9
213 ......................................................................................................... 5
3217 ..................................................................................................... 10
General Obligations Law § 17-105.......................................................... 23
Miscellaneous Authorities
Bill Jacket for ch. 821 (2022)
Assembly Sponsor’s Mem. .......................................................... passim
Letter from N.Y. State Black, Puerto Rican, Hispanic,
& Asian Legislative Caucus, to Kathy Hochul,
Governor (Oct. 28, 2022) .......................................................... 10, 24
Letter from New Yorkers for Responsible Lending,
to Kathy Hochul, Governor (May 9, 2022) ................................ 4, 6-7
Mem. from Legal Servs. NYC (Feb. 16, 2022) .................................... 10
Senate Introducer’s Mem............................................................ passim
Fannie Mae, Fannie Mae Legal Documents (updated July 2021),
https://singlefamily.fanniemae.com/fannie-mae-legal-documents ...... 4
Fannie Mae, Security Instruments, New York Standard Form
(No. 3033) (July 2021), https://singlefamily.fanniemae.com/
media/document/docx/legal-documents/form-3033 ........................... 4-5
Lawrence K. Marks, 2015 Report of the Chief Administrator
of the Courts (2015), https://ww2.nycourts.gov/sites/default/
files/document/files/2018-06/2015ForeclosureReport.pdf .................... 6
N.Y. Assembly Debate on A. 7737B (Mar. 23, 2022) ......................... 15-16
N.Y. Senate Debate on S. 5473D (May 3, 2022) ...................................... 15
iv
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
PRELIMINARY STATEMENT
Prior to the New York Court of Appeals’ decision in Freedom Mortgage
Corporation v. Engel, 37 N.Y.3d 1 (2021), the Appellate Divisions had
long held that a lender’s unilateral, voluntary discontinuance of a prior
foreclosure action does not, standing alone, reset the applicable six-year
statute of limitations for future foreclosure actions. After the Court of
Appeals ruled to the contrary in Engel, the Legislature acted quickly to
enact the Foreclosure Abuse Prevention Act (FAPA), which clarified that
the longstanding view previously adopted by the Appellate Divisions was
the correct statutory interpretation and made those clarifications retro-
actively applicable to pending matters.
Plaintiff-appellant U.S. Bank National Association asserts that the
retroactive application of FAPA to this pending foreclosure claim violates
various provisions of the federal and state Constitutions. Following oral
argument, this Court ordered plaintiff to notify the New York Attorney
General of its constitutional challenges. Pursuant to Executive Law § 71
and C.P.L.R. 1012(b), the Attorney General now intervenes in this action
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
to defend the constitutionality of FAPA’s application to this and other
pending matters. 1
First, FAPA’s retroactive application does not violate the Due Process
Clause. The Legislature plainly intended to give FAPA retroactive effect
to effectuate its remedial purpose and restore the longstanding law govern-
ing the accrual of mortgage foreclosure claims. Plaintiff has no vested
right in pursuing successive mortgage foreclosure actions, nor does it
have any reliance interest in the aberrational holding of Engel, which
occurred years after plaintiff withdrew its first foreclosure action and the
statute of limitations had already run. And even if FAPA did disturb a
vested right, it would still withstand constitutional scrutiny because it
has a rational basis: ensuring that lenders cannot manipulate the statute
1 To date, the Attorney General has received over twenty notices of
constitutional challenges to FAPA in trial and appellate courts. In addition
to this case, the Attorney General has intervened in U.S. Bank National
Association v. Corcuera, No. 2020-06138 (2d Dep’t), and Deutsche Bank
National Trust Co. v. DeLuca, No. 534805 (3d Dep’t). Although the Attor-
ney General has declined to intervene in other cases, she has made clear
that no inference adverse to the State should be drawn from those decisions.
The Attorney General’s position supporting the constitutionality of the law
will be reflected in this brief and the briefs filed in Corcuera and DeLuca.
2
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
of limitations and thereby undermine the public interest in finality and
repose.
Second, FAPA’s retroactive application does not violate the Contract
Clause. FAPA does not interfere with the parties’ underlying mortgage
contract; instead, it simply establishes that certain actions do not reset
or cancel the statute of limitations. In any event, FAPA is consistent with
the Contract Clause because it is reasonably designed to advance signifi-
cant and legitimate public purposes.
QUESTION PRESENTED
Whether a lender’s unilateral discontinuance of a prior foreclosure
action resets the statute of limitations applicable to a subsequent fore-
closure action pending when the Foreclosure Abuse Prevention Act took
effect.
STATEMENT OF THE CASE
A. Mortgage Agreements and the Statute of Limitations
A loan to finance the purchase of residential property is generally
memorialized in two instruments. First, the borrower executes a promis-
sory note, in which the borrower agrees to be personally responsible for
3
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
repaying the loan. Second, the borrower executes a security instrument,
or mortgage, in which the noteholder receives a security interest in the
residential property. Borrowers generally agree to repay the loan in
installments over time, often a fifteen-to-thirty-year period, with interest.
See Engel, 37 N.Y.3d at 21. 2
In the event of a default, such as a failure to make an installment
payment, a common provision known as an “acceleration clause” gives
the lender the right, but not the obligation, to require immediate pay-
ment of the remaining balance owed under the promissory note and the
mortgage. A lender may invoke an acceleration clause by commencing a
foreclosure action, an equitable remedy permitting the noteholder to take
possession of the real property securing the debt.3 While the standard
form mortgage agreement contains no express contractual right for a
2See also Fannie Mae, Security Instruments, New York Standard
Form (No. 3033), § 1 (July 2021). See generally Fannie Mae, Fannie Mae
Legal Documents (updated July 2021). (For sources available online, full
URLs appear in the Table of Authorities. All URLs were last visited on
March 27, 2023.)
3See Engel, 37 N.Y.3d at 21; see also Letter from New Yorkers for
Responsible Lending, to Kathy Hochul, Governor 1-3 (May 9, 2022), in Bill
Jacket for ch. 821 (2022); Fannie Mae, New York Standard Form, supra,
§ 26.
4
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
lender to unilaterally revoke acceleration of a loan, 4 courts have held that
a lender can revoke an acceleration before a borrower changes his or her
position in reliance on the acceleration, at which time the lender’s election
becomes “final and irrevocable.” See Kilpatrick v. Germania Life Ins. Co.,
183 N.Y. 163, 168 (1905). A borrower may also have the right to reinstate
an accelerated loan by satisfying several conditions, including payment
of various fees incurred by the lender. See Fannie Mae, New York Standard
Form, supra, § 20.
Like other actions for breach of contract, actions arising from the
alleged breach of a mortgage agreement are subject to a six-year statute
of limitations. See C.P.L.R. 213(2), (4); see also Engel, 37 N.Y.3d at 19.
Before a lender elects to accelerate a loan, a six-year statute of limitations
runs anew with respect to each missed installment payment. After a lender
elects to accelerate a loan, however, the six-year statute of limitations
runs on the entire amount due under the note and mortgage as of the
4The “use of standardized instruments is common” in the residen-
tial mortgage industry, “facilitating a general discussion of the operation
of the statute of limitations” in mortgage foreclosure actions. Engel, 37
N.Y.3d at 20-21. The mortgage agreement in this appeal used Fannie Mae’s
New York Standard Form (Record on Appeal (R.) 87-104), as did three of
the four appeals considered in Engel, see 37 N.Y.3d at 20 & n.1.
5
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
date of acceleration. 5 As discussed in more detail below, the question of
whether and how a lender’s unilateral election to revoke the acceleration
of a loan affects the statute of limitations arose in recent years, largely
as a result of the 2007-2008 financial crisis.
B. Foreclosure Litigation Following the 2007-2008
Financial Crisis
In the years following the 2007-2008 financial crisis, New York
courts were flooded with residential foreclosure actions, most of which
were default proceedings without any involvement by the defendant
homeowners. The plaintiff lenders in many cases “relied on documents
‘robo-signed’ by bank representatives who claimed to have personally
reviewed thousands of documents in implausibly short periods of time.”
Lawrence K. Marks, 2015 Report of the Chief Administrator of the Courts
6 (2015) (pursuant to L. 2009, ch. 507). Because of inadequate documen-
tation “plaintiffs were unable to proceed with their cases.” Id. As a result,
many lenders discontinued initial foreclosure actions and subjected
borrowers to multiple, successive foreclosure actions. Throughout this
See Engel, 37 N.Y.3d at 21-22 & n.3; Letter from New Yorkers for
5
Responsible Lending, supra, at 1.
6
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
process, lenders often continued to bill borrowers for fully accelerated
balances, as well as accumulating interest and attorney’s fees. See Letter
from New Yorkers for Responsible Lending, supra, at 3.
As the issue began to percolate through litigation, courts uniformly
held that a lender’s unilateral discontinuance of a prior foreclosure action
was, by itself, insufficient to revoke acceleration and reset the statute of
limitations to running with respect to each missed installment payment.6
See, e.g., Freedom Mtge. Corp. v. Engel, 163 A.D.3d 631, 631-33 (2d Dep’t
2018), rev’d, 37 N.Y.3d 1; Wells Fargo Bank, N.A. v. Liburd, 176 A.D.3d
464, 464 (1st Dep’t 2019). As courts explained, discontinuances often
served as a mere “pretext to avoid the onerous effect of an approaching
statute of limitations” on the entire amount of the note and mortgage.
Milone v. US Bank N.A., 164 A.D.3d 145, 154 (2d Dep’t 2018); accord
Wells Fargo Bank, N.A. v. Portu, 179 A.D.3d 1204, 1207 (3d Dep’t 2020).
On occasion, the Appellate Division found a triable issue of fact as
6
to whether a lender revoked acceleration and reset the statute of limita-
tions when it discontinued a prior action and other relevant facts suggested
revocation of acceleration, such as a lender moving to dismiss a prior fore-
closure action, see NMNT Realty v. Knoxville 2012 Trust, 151 A.D.3d 1068,
1070 (2d Dep’t 2017), or a lender discontinuing a prior foreclosure action
based on a defective default notice, see Capital One N.A. v. Saglimbeni,
170 A.D.3d 508, 509 (1st Dep’t 2019).
7
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
Moreover, discontinuances provided no notice to the borrower that a loan
is de-accelerated and that the lender is now obligated to accept regular
installment payments. Accordingly, courts uniformly held that a lender
had to show an “affirmative act of revocation,” such as a “letter containing
a clear and unequivocal demand that the homeowner meet [his or] her
prospective monthly payment obligations,” in order to reset the statute
of limitations for purposes of future foreclosure actions. Milone, 164
A.D.3d at 154 (quotation marks omitted); see, e.g., EMC Mtge. Corp. v.
Patella, 279 A.D.2d 604, 606 (2d Dep’t 2001); First Natl. Mtge. Assn. v.
Mebane, 208 A.D.2d 892, 894 (2d Dep’t 1994).
In February 2021, the Court of Appeals disturbed this settled law.
As relevant here, the Court held in Engel that a foreclosure plaintiff’s
voluntary discontinuance of a foreclosure action revoked the acceleration
of the mortgage and thereby reset the statute of limitations, absent a
contemporaneous statement to the contrary by the lender. See 37 N.Y.3d
at 28-35. According to the Court, when the lender’s only demand for
immediate payment is the foreclosure complaint, the withdrawal of the
complaint destroyed the effect of the acceleration and returned parties to
their pre-acceleration rights: allowing borrowers to remain in their homes
8
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
and resume installment payments, even if the lender continues to demand
payment of the full balance of its loan. See id. at 28, 31.
C. The Foreclosure Abuse Prevention Act (FAPA)
The Legislature passed FAPA in May 2022, and it was signed into
law by Governor Kathy Hochul in December 2022. See Ch. 821, 2022 N.Y.
Laws, p. 1. The purpose of FAPA is to address “ongoing problem[s] with
abuses of the judicial foreclosure process.” Assembly Sponsor’s Mem. 1,
in Bill Jacket, supra; accord Senate Introducer’s Mem. 1, in Bill Jacket,
supra. The Legislature found that these problems were “exacerbated by
recent court decisions which, contrary to the intent of the legislature”
gave lenders opportunities to “manipulate statutes of limitation to their
advantage” at the expense of the “finality and repose” provided by the
statute of limitations. Assembly Sponsor’s Mem., supra, at 1; accord Senate
Introducer’s Mem., supra, at 1. Two of FAPA’s substantive provisions are
relevant here.
First, FAPA § 4, codified at C.P.L.R. 203(h), provides that a party
may not “unilaterally waive, postpone, cancel, toll, revive, or reset the
accrual” of a claim based on an instrument secured by a mortgage on real
property. C.P.L.R. 203(h). This provision was intended to “overrule Engel”
9
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
as “inconsistent with” (1) the Legislature’s intent in enacting existing
statutory provisions governing the statute of limitations and (2) the public
policies of finality and repose furthered by the statute of limitations. See
Senate Introducer’s Mem., supra, at 7.
Second, FAPA § 8, codified at C.P.L.R. 3217(e), specifically provides
that the voluntary discontinuance of a foreclosure action “shall not, in
form or effect, waive, postpone, cancel, toll, extend, revive or reset the
limitations period.” C.P.L.R. 3217(e). This provision also responds to
Engel and “restore[s] longstanding law that made it clear that a lenders’
discontinuance of a foreclosure action that accelerated a mortgage loan
does not serve to reset the statute of limitations.” Assembly Sponsor’s
Mem., supra, at 2; see Senate Introducer’s Mem., supra, at 15.
Together, these provisions make clear that “after-the-fact asser-
tions of revocation of acceleration to evade the operation of the statute of
limitations are ineffective.” See Mem. from Legal Servs. NYC 2 (Feb. 16,
2022), in Bill Jacket, supra. FAPA thus “restores a fair and common-
sense principle: no party may unilaterally stop and restart the statute of
limitations to revive what would otherwise be a time-barred action.” See
Letter from N.Y. State Black, Puerto Rican, Hispanic, & Asian Legisla-
10
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
tive Caucus, to Kathy Hochul, Governor 1 (Oct. 28, 2022), in Bill Jacket,
supra.
To give FAPA its full remedial effect, the Legislature directed that
the law’s substantive provisions take “effect immediately” and apply to
all foreclosure actions pending as of December 30, 2022. See Ch. 821, § 10,
2022 N.Y. Laws at p. 3.
D. This Foreclosure Action
Defendant-respondent Robyn R. Simon purchased her home in 1982.
(R. 44.) In June 2006, she refinanced her mortgage to make necessary
repairs to her home. (R. 45; see R. 27-33, 87-104.) After a series of econo-
mic hardships, Simon fell behind on mortgage payments beginning in
March 2008, and plaintiff commenced a foreclosure action in September
2008. (R. 45, 112-125.) Plaintiff unilaterally discontinued that action in
November 2008. (R. 133-134.) Over seven years later, plaintiff commenced
this foreclosure action by filing a summons and complaint in March 2016.
(R. 197-213.)
In February 2020, Supreme Court, Queens County (Jackman Brown,
J.) granted summary judgment to Simon, concluding that this action was
time-barred. The court reasoned that plaintiff accelerated the debt when
11
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
it commenced the first foreclosure action in September 2008 and that the
six-year statute of limitations had expired in September 2014, well before
plaintiff filed this subsequent action. (R. 11-13.) The court entered an
order dismissing the complaint in December 2020. (R. 18-20.)
The Court of Appeals issued its decision in Engel shortly before
plaintiff’s deadline to perfect the appeal in June 2021. In its opening
brief, plaintiff argued that the subsequent foreclosure action was timely
because the voluntary discontinuance of the 2008 action reset the statute
of limitations under Engel. See Br. for Pl.-Appellant at 2-3. The appeal
remained pending in this Court when FAPA took effect.
In January 2023, defendant Simon asserted that FAPA (namely,
the addition of C.P.L.R. 203(h) and 3217(e)) foreclosed plaintiff’s argu-
ment and required affirmance of the orders below. See Letter Br. for Resp’t
from Christopher Newton, Queens Legal Servs. at 2-3 (Jan. 25, 2023).
Plaintiff responded that FAPA violates the state and federal Constitu-
tions to the extent it applies retroactively to pending actions. See Letter
Br. for Appellant from Andrew B. Messite, Reed Smith LLP at 2-5 (Jan.
25, 2023). Following oral argument, this Court ordered plaintiff to notify
the Attorney General of its constitutional challenge to FAPA. On February
12
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
9, 2023, the Attorney General advised the Court and the parties of her
intent to intervene under Executive Law § 71 and C.P.L.R. 1012(b) to
defend the constitutionality of FAPA.
ARGUMENT
FAPA COMPORTS WITH THE STATE AND FEDERAL CONSTITUTIONS
In assessing plaintiff’s constitutional challenges, FAPA receives “a
strong presumption of constitutionality,” and plaintiff must “demonstrat[e]
the statute’s invalidity beyond a reasonable doubt.” LaValle v. Hayden,
98 N.Y.2d 155, 161 (2002) (quotation marks omitted). Plaintiffs fall far
short of meeting this demanding standard, and this Court should accord-
ingly reject plaintiff’s constitutional arguments.
A. FAPA Comports with the Due Process Clause.
Plaintiff’s argument that FAPA impinges its due process rights
fails. The mere fact that legislation has retroactive application does not,
in and of itself, “bring it into conflict with the guarantees of the Federal
Constitution.” Funkhouser v. J.B. Preston Co., 290 U.S. 163, 167-68 (1933).
Legislation with retrospective effects can implicate substantive due process
if it “takes away or impairs vested rights acquired under existing laws,
13
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
or creates a new obligation, imposes a new duty, or attaches a new disabil-
ity, in respect to transactions or considerations already past.” Landgraf
v. USI Film Prods., 511 U.S. 244, 269 (1994) (quotation marks omitted).
Statutes with such retroactive effects are constitutional if the “retroactive
application of the legislation is itself justified by a rational legislative
purpose.” 7 Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717,
730 (1984). Here, FAPA comports with due process because it does not
impair any vested rights and the legislative history provides an ample
rational basis for FAPA’s retroactive scope.
1. The Legislature intended FAPA to apply retroactively.
Plaintiff does not dispute that the Legislature intended for C.P.L.R.
203(h) and 3217(e) to apply to pending foreclosure actions, like the one
here. See Letter Br. for Appellant at 2. In assessing “whether a statute
should be given retroactive effect” the Court of Appeals has indicated that
courts should consider several factors, including whether (1) the Legisla-
7 The same rational basis review applies under the Due Process
Clause of the New York State Constitution. See American Economy Ins.
Co. v. State of New York, 30 N.Y.3d 136, 158 (2017); Matter of World Trade
Ctr. Lower Manhattan Disaster Site Litig., 30 N.Y.3d 377, 400 (2017).
14
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
ture has “made a specific pronouncement about retroactive effect” or has
“conveyed a sense of immediacy” because it “acted swiftly” after a Court
of Appeals decision and “directed that the amendment was to take effect
immediately”; and (2) “the purpose of the amendment was to clarify what
the law was always meant to do and say.” Matter of Gleason (Michael Vee,
Ltd.), 96 N.Y.2d 117, 122 (2001). Where the factors establish that the
amendment is “remedial legislation,” then the law “should be given retro-
active effect in order to effectuate its beneficial purpose.” Id.
The plain text of FAPA, as well as the sponsors’ memoranda and
statements in floor debates, expressly demonstrates the Legislature’s
intent to apply it retroactively. FAPA § 10 makes “clear that this legis-
lation will apply immediately, and will apply to” all pending actions.
Assembly Sponsor’s Mem., supra, at 2; see N.Y. Senate Debate on S. 5473D,
at 3025 (May 3, 2022) (statement of Sen. Brian Kavanagh). Indeed, the
Assembly Sponsor expressly invoked Matter of Gleason in stating that
FAPA was designed to have “a retroactive effect” consistent with Court
of Appeals precedent. N.Y. Assembly Debate on A. 7737B, at 9 (Mar. 23,
2022) (“Assembly Debate Tr.”) (statement of Assemblymember Helene E.
Weinstein).
15
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
The other Matter of Gleason factors similarly indicate that C.P.L.R.
203(h) and 3217(e) apply to existing claims like this one. First, the Legis-
lature conveyed urgency by directing that the amendment “shall take
effect immediately.” Ch. 821, § 10, 2022 N.Y. Laws at p. 3. Second, the
Legislature acted quickly after Engel to restore the longstanding principle
that a lender’s voluntary discontinuance of a foreclosure action does not
reset the six-year limitations period, and the sponsors’ memoranda
stated that FAPA was “expressly intended to overrule Engel.” 8 Third, the
sponsors’ memoranda indicated that FAPA did not invent new law, but
restored prior law by “clarify[ing] the meaning of existing statutes” and
“restor[ing] longstanding law that made it clear that a lenders’ discon-
tinuance of a foreclosure action that accelerated a mortgage loan does not
serve to reset the statute of limitations.” 9 Finally, the sponsors’ memo-
randa made clear that the amendment’s purpose was remedial. 10 The
Senate Introducer’s Mem., supra, at 15; see id. at 7; Assembly
8
Sponsor’s Mem., supra, at 2-3.
Assembly Sponsor’s Mem., supra, at 2-3; see Senate Introducer’s
9
Mem., supra, at 1-2, 5.
Assembly Sponsor’s Mem., supra, at 1-2; Senate Introducer’s Mem.,
10
supra, at 1; see Assembly Debate Tr., supra, at 9 (statement of Assembly-
member Helene E. Weinstein).
16
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
Legislature thus intended the rule embodied in C.P.L.R. 203(h) and
3217(e), which had been the law prior to Engel, to apply once again to
foreclosure claims that had already accrued. See GMAT Legal Title Trust
2014-1 v. Kator, 213 A.D.3d 915, 917 (2d Dep’t 2023) (holding that FAPA
“had the effect of nullifying” Engel in pending action).
2. FAPA does not impair any vested rights.
In determining whether a statute has retroactive effect that triggers
concerns under the Due Process Clause, courts look to whether the statute
“impair[s] rights a party possessed when he [or she] acted, increase[s] a
party’s liability for past conduct, or impose[s] new duties with respect to
transactions already completed.” Landgraf, 511 U.S. at 280.
FAPA impairs no such rights. Plaintiff did not possess any rights
under the Engel rule “when [it] acted” in 2008 because no authority at
that time entitled plaintiff to reset the statute of limitations by unilat-
erally discontinuing a foreclosure action. See id. Similarly, to the extent
that plaintiff could conceivably claim any reliance interest in avoiding the
statute of limitations by filing a voluntary discontinuance, that interest
would cover conduct only “for the brief period” that Engel was law—from
February 18, 2021, to December 30, 2022—well after the statute of limit-
17
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
ations on plaintiff’s claim had already expired. See People v. Allen, 198
A.D.3d 531, 532 (1st Dep’t 2021).
The decision in Matter of Regina Metropolitan Co., LLC v. New York
State Division of Housing and Community Renewal, 35 N.Y.3d 332 (2020),
is not to the contrary. That decision concerned a statutory change that
was not limited to a revision of a statute of limitations, but also funda-
mentally “alter[ed] the method for determining legal regulated rent for
overcharge purposes and substantially expand[ed] the nature and scope
of owner liability in rent overcharge cases.” Id. at 349. It was the combined
effect of these changes that led the Court of Appeals to find that the new
statute triggered the due process concerns identified in Landgraf. See id.
at 369-70. Here, by contrast, the Legislature did not amend the substantive
scope of liability in a foreclosure action or even the longstanding six-year
statute of limitations that governs such claims. Indeed, it restored rather
than deviated from longstanding past precedents that held that the
voluntary discontinuance of a foreclosure action does not reset the statute
of limitations.
Brothers v. Florence, 95 N.Y.2d 290 (2000), also does not support
plaintiff’s constitutional challenge to FAPA’s retroactive application. In
18
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
that decision, the Court of Appeals concluded that a legislative amend-
ment that shortened the statute of limitations for medical malpractice
actions applied retroactively based on an analysis looking to the same
factors stated in Matter of Gleason. See id. at 298-300. But the Court
concluded that due process requires that litigants be afforded a “reason-
able time” to commence an action when a limitations period is shortened
and effectively would bar a plaintiff from bringing any action at all. Id.
at 300 (quotation marks omitted). Here, by contrast, FAPA did not abruptly
change the statute of limitations; rather, it restored and clarified the law
governing accrual of claims. Moreover, unlike the litigants in Brothers
who were foreclosed from bringing any action at all, plaintiff had the
discretion to choose when its claim accrued (by invoking the acceleration
clause) and has already had an opportunity to file a mortgage foreclosure
action. Nothing in Brothers suggests that a plaintiff has a vested right in
bringing a successive action years after its initial lawsuit has failed. 11
11 Although plaintiff has not raised a Takings Clause challenge to
the retroactive application of FAPA in this case, litigants have raised the
argument in other constitutional challenges to FAPA. See, e.g., Reply Br.
for Pl.-Appellant at 9-13, Deutsche Bank Natl. Trust Co. v. DeLuca, No.
534805 (3d Dep’t Jan. 13, 2023). FAPA does not implicate the Takings
Clause for several reasons, including that a takings claim requires inter-
(continued on the next page)
19
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
3. FAPA’s retroactive scope is rational.
In any event, even if FAPA impaired vested rights, it still withstands
constitutional scrutiny because it is “justified by a rational legislative
purpose,” Pension Benefit Guar. Corp., 467 U.S. at 730; see American
Economy Ins. Co., 30 N.Y.3d at 157-58.
In enacting FAPA, the Legislature sought to prevent abusive fore-
closure practices and reverse Engel, a decision which allowed foreclosure
plaintiffs to unilaterally manipulate the statute of limitations by deter-
mining both when a claim accrues and when the statute of limitations
resets, a privilege not afforded to any other civil litigant. See Senate
Introducer’s Mem., supra, at 1, 3-4, 7-9, 13-15. The Engel rule encourages
excessive litigation by allowing lenders to file successive, flawed actions,
resetting the statute of limitations at their sole convenience without any
consequence.
ference with “a vested property interest,” American Economy Ins. Co., 30
N.Y.3d at 155, and lenders have no vested property interest in resetting
the statute of limitations and bringing a successive action. The Attorney
General will further explain the defects in Takings Clause challenges to
the retroactive application of FAPA in her brief in DeLuca.
20
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015
NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023
The Legislature also determined that the Engel rule was contrary
to the purpose of the statute of limitations, which “not only save[s] liti-
gants from defending stale claims, but also express[es] a societal interest
or a public policy of giving repose to human affairs.” Id. at 4 (quotation
marks omitted). FAPA is a rational response to further that public policy,
and it is not the role of the courts to second guess how the Legislature
weighs the competing interests of lenders and borrowers. See Chase Sec.
Corp. v. Donaldson, 325 U.S. 304, 311-12 (1945).
B. FAPA Comports with the Contract Clause.
Plaintiff’s claim that FAPA violates the Contract Clause fails as
well. In assessing a challenge under the Contract Clause, the Court must
first determine “whether there is a contractual relationship, whether a
change in law impairs that contractual relationship, and whether the
impairment is substantial.” General Motors Corp. v. Romein, 503 U.S.
181, 186 (1992); accord American Economy Ins. Co., 30 N.Y.3d at 150. If
the Court identifies a substantial impairment, the statute is still consti-
tutional if the State has “a significant and legitimate p
Preview
FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 FILED: APPELLATE DIVISION - 2ND DEPT 03/27/2023 06:05 PM 2020-09391 NYSCEF DOC. NO. 15 RECEIVED NYSCEF: 03/27/2023 To be argued by: MARK S. GRUBE 10 minutes requested Supreme Court of the State of New York Appellate Division – Second Department No. 2020-09391 U.S. BANK NATIONAL ASSOCIATION, as Trustee for the Structured Asset Investment Loan Trust 2006-BNC3, Plaintiff-Appellant, v. ROBYN R. SIMON, Defendant-Respondent, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD and JOHN DOE (being fictitious, the names unknown to Plaintiff intended to be tenants, occupants, persons or corporations having or claiming an interest in or lien upon the property described in the complaint or their heirs at law, distributes, executors, administrators, trustees, guardians, assignees, creditors or successors), Defendants, LETITIA JAMES, Attorney General of the State of New York, Intervenor-Respondent. BRIEF FOR INTERVENOR-RESPONDENT LETITIA JAMES Attorney General State of New York BARBARA D. UNDERWOOD Attorney for Intervenor-Respondent Solicitor General 28 Liberty Street ESTER MURDUKHAYEVA New York, New York 10005 Deputy Solicitor General (212) 416-8028 MARK S. GRUBE mark.grube@ag.ny.gov Assistant Solicitor General of Counsel Dated: March 27, 2023 Supreme Court, Queens County – Index No. 702414/16 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 TABLE OF CONTENTS Page TABLE OF AUTHORITIES ...................................................................... ii PRELIMINARY STATEMENT ................................................................. 1 QUESTION PRESENTED ........................................................................ 3 STATEMENT OF THE CASE .................................................................. 3 A. Mortgage Agreements and the Statute of Limitations ............ 3 B. Foreclosure Litigation Following the 2007-2008 Financial Crisis ......................................................................... 6 C. The Foreclosure Abuse Prevention Act (FAPA) ....................... 9 D. This Foreclosure Action .......................................................... 11 ARGUMENT ........................................................................................... 13 FAPA COMPORTS WITH THE STATE AND FEDERAL CONSTITUTIONS....... 13 A. FAPA Comports with the Due Process Clause....................... 13 1. The Legislature intended FAPA to apply retroactively. ... 14 2. FAPA does not impair any vested rights. ....................... 17 3. FAPA’s retroactive scope is rational. .............................. 20 B. FAPA Comports with the Contract Clause. ........................... 21 CONCLUSION ........................................................................................ 25 i FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 TABLE OF AUTHORITIES Cases Page(s) American Economy Ins. Co. v. State of New York, 30 N.Y.3d 136 (2017) ......................................................... 14, 20-21, 23 Brothers v. Florence, 95 N.Y.2d 290 (2000) ..................................................................... 18-19 Capital One N.A. v. Saglimbeni, 170 A.D.3d 508 (1st Dep’t 2019) ........................................................... 7 Chase Sec. Corp. v. Donaldson, 325 U.S. 304 (1945) ............................................................................. 21 East Fork Funding LLC v. U.S. Bank, N.A., No. 20-cv-3404 (E.D.N.Y. Mar. 23, 2023) ........................................... 22 EMC Mtge. Corp. v. Patella, 279 A.D.2d 604 (2d Dep’t 2001) ............................................................ 8 Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400 (1983) ........................................................................ 22-23 First Natl. Mtge. Assn. v. Mebane, 208 A.D.2d 892 (2d Dep’t 1994) ............................................................ 8 Freedom Mtge. Corp. v. Engel, 37 N.Y.3d 1 (2021) ...................................................................... passim Freedom Mtge. Corp. v. Engel, 163 A.D.3d 631 (2d Dep’t 2018) ............................................................ 7 Funkhouser v. J.B. Preston Co., 290 U.S. 163 (1933) ............................................................................. 13 General Motors Corp. v. Romein, 503 U.S. 181 (1992) ............................................................................. 21 GMAT Legal Title Trust 2014-1 v. Kator, 213 A.D.3d 915 (2d Dep’t 2023) .......................................................... 17 ii FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 Cases Page(s) John J. Kassner & Co. v. City of New York, 46 N.Y.2d 544 (1979) .......................................................................... 23 Kilpatrick v. Germania Life Ins. Co., 183 N.Y. 163 (1905) .............................................................................. 5 Landgraf v. USI Film Prods., 511 U.S. 244 (1994) ....................................................................... 14, 17 LaValle v. Hayden, 98 N.Y.2d 155 (2002) .......................................................................... 13 Matter of Gleason (Michael Vee, Ltd.), 96 N.Y.2d 117 (2001) .......................................................................... 15 Matter of Regina Metropolitan Co., LLC v. New York State Division of Housing and Community Renewal, 35 N.Y.3d 332 (2020) .......................................................................... 18 Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig., 30 N.Y.3d 377 (2017) .......................................................................... 14 Milone v. US Bank N.A., 164 A.D.3d 145 (2d Dep’t 2018) ......................................................... 7-8 NMNT Realty v. Knoxville 2012 Trust, 151 A.D.3d 1068 (2d Dep’t 2017) .......................................................... 7 Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717 (1984) ....................................................................... 14, 20 People v. Allen, 198 A.D.3d 531 (1st Dep’t 2021) ......................................................... 18 Wells Fargo Bank, N.A. v. Liburd, 176 A.D.3d 464 (1st Dep’t 2019) ........................................................... 7 Wells Fargo Bank, N.A. v. Portu, 179 A.D.3d 1204 (3d Dep’t 2020) .......................................................... 7 iii FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 Laws Page(s) Ch. 821, 2022 N.Y. Laws ............................................................... 9, 11, 16 C.P.L.R. 201 ....................................................................................................... 23 203 ......................................................................................................... 9 213 ......................................................................................................... 5 3217 ..................................................................................................... 10 General Obligations Law § 17-105.......................................................... 23 Miscellaneous Authorities Bill Jacket for ch. 821 (2022) Assembly Sponsor’s Mem. .......................................................... passim Letter from N.Y. State Black, Puerto Rican, Hispanic, & Asian Legislative Caucus, to Kathy Hochul, Governor (Oct. 28, 2022) .......................................................... 10, 24 Letter from New Yorkers for Responsible Lending, to Kathy Hochul, Governor (May 9, 2022) ................................ 4, 6-7 Mem. from Legal Servs. NYC (Feb. 16, 2022) .................................... 10 Senate Introducer’s Mem............................................................ passim Fannie Mae, Fannie Mae Legal Documents (updated July 2021), https://singlefamily.fanniemae.com/fannie-mae-legal-documents ...... 4 Fannie Mae, Security Instruments, New York Standard Form (No. 3033) (July 2021), https://singlefamily.fanniemae.com/ media/document/docx/legal-documents/form-3033 ........................... 4-5 Lawrence K. Marks, 2015 Report of the Chief Administrator of the Courts (2015), https://ww2.nycourts.gov/sites/default/ files/document/files/2018-06/2015ForeclosureReport.pdf .................... 6 N.Y. Assembly Debate on A. 7737B (Mar. 23, 2022) ......................... 15-16 N.Y. Senate Debate on S. 5473D (May 3, 2022) ...................................... 15 iv FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 PRELIMINARY STATEMENT Prior to the New York Court of Appeals’ decision in Freedom Mortgage Corporation v. Engel, 37 N.Y.3d 1 (2021), the Appellate Divisions had long held that a lender’s unilateral, voluntary discontinuance of a prior foreclosure action does not, standing alone, reset the applicable six-year statute of limitations for future foreclosure actions. After the Court of Appeals ruled to the contrary in Engel, the Legislature acted quickly to enact the Foreclosure Abuse Prevention Act (FAPA), which clarified that the longstanding view previously adopted by the Appellate Divisions was the correct statutory interpretation and made those clarifications retro- actively applicable to pending matters. Plaintiff-appellant U.S. Bank National Association asserts that the retroactive application of FAPA to this pending foreclosure claim violates various provisions of the federal and state Constitutions. Following oral argument, this Court ordered plaintiff to notify the New York Attorney General of its constitutional challenges. Pursuant to Executive Law § 71 and C.P.L.R. 1012(b), the Attorney General now intervenes in this action FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 to defend the constitutionality of FAPA’s application to this and other pending matters. 1 First, FAPA’s retroactive application does not violate the Due Process Clause. The Legislature plainly intended to give FAPA retroactive effect to effectuate its remedial purpose and restore the longstanding law govern- ing the accrual of mortgage foreclosure claims. Plaintiff has no vested right in pursuing successive mortgage foreclosure actions, nor does it have any reliance interest in the aberrational holding of Engel, which occurred years after plaintiff withdrew its first foreclosure action and the statute of limitations had already run. And even if FAPA did disturb a vested right, it would still withstand constitutional scrutiny because it has a rational basis: ensuring that lenders cannot manipulate the statute 1 To date, the Attorney General has received over twenty notices of constitutional challenges to FAPA in trial and appellate courts. In addition to this case, the Attorney General has intervened in U.S. Bank National Association v. Corcuera, No. 2020-06138 (2d Dep’t), and Deutsche Bank National Trust Co. v. DeLuca, No. 534805 (3d Dep’t). Although the Attor- ney General has declined to intervene in other cases, she has made clear that no inference adverse to the State should be drawn from those decisions. The Attorney General’s position supporting the constitutionality of the law will be reflected in this brief and the briefs filed in Corcuera and DeLuca. 2 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 of limitations and thereby undermine the public interest in finality and repose. Second, FAPA’s retroactive application does not violate the Contract Clause. FAPA does not interfere with the parties’ underlying mortgage contract; instead, it simply establishes that certain actions do not reset or cancel the statute of limitations. In any event, FAPA is consistent with the Contract Clause because it is reasonably designed to advance signifi- cant and legitimate public purposes. QUESTION PRESENTED Whether a lender’s unilateral discontinuance of a prior foreclosure action resets the statute of limitations applicable to a subsequent fore- closure action pending when the Foreclosure Abuse Prevention Act took effect. STATEMENT OF THE CASE A. Mortgage Agreements and the Statute of Limitations A loan to finance the purchase of residential property is generally memorialized in two instruments. First, the borrower executes a promis- sory note, in which the borrower agrees to be personally responsible for 3 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 repaying the loan. Second, the borrower executes a security instrument, or mortgage, in which the noteholder receives a security interest in the residential property. Borrowers generally agree to repay the loan in installments over time, often a fifteen-to-thirty-year period, with interest. See Engel, 37 N.Y.3d at 21. 2 In the event of a default, such as a failure to make an installment payment, a common provision known as an “acceleration clause” gives the lender the right, but not the obligation, to require immediate pay- ment of the remaining balance owed under the promissory note and the mortgage. A lender may invoke an acceleration clause by commencing a foreclosure action, an equitable remedy permitting the noteholder to take possession of the real property securing the debt.3 While the standard form mortgage agreement contains no express contractual right for a 2See also Fannie Mae, Security Instruments, New York Standard Form (No. 3033), § 1 (July 2021). See generally Fannie Mae, Fannie Mae Legal Documents (updated July 2021). (For sources available online, full URLs appear in the Table of Authorities. All URLs were last visited on March 27, 2023.) 3See Engel, 37 N.Y.3d at 21; see also Letter from New Yorkers for Responsible Lending, to Kathy Hochul, Governor 1-3 (May 9, 2022), in Bill Jacket for ch. 821 (2022); Fannie Mae, New York Standard Form, supra, § 26. 4 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 lender to unilaterally revoke acceleration of a loan, 4 courts have held that a lender can revoke an acceleration before a borrower changes his or her position in reliance on the acceleration, at which time the lender’s election becomes “final and irrevocable.” See Kilpatrick v. Germania Life Ins. Co., 183 N.Y. 163, 168 (1905). A borrower may also have the right to reinstate an accelerated loan by satisfying several conditions, including payment of various fees incurred by the lender. See Fannie Mae, New York Standard Form, supra, § 20. Like other actions for breach of contract, actions arising from the alleged breach of a mortgage agreement are subject to a six-year statute of limitations. See C.P.L.R. 213(2), (4); see also Engel, 37 N.Y.3d at 19. Before a lender elects to accelerate a loan, a six-year statute of limitations runs anew with respect to each missed installment payment. After a lender elects to accelerate a loan, however, the six-year statute of limitations runs on the entire amount due under the note and mortgage as of the 4The “use of standardized instruments is common” in the residen- tial mortgage industry, “facilitating a general discussion of the operation of the statute of limitations” in mortgage foreclosure actions. Engel, 37 N.Y.3d at 20-21. The mortgage agreement in this appeal used Fannie Mae’s New York Standard Form (Record on Appeal (R.) 87-104), as did three of the four appeals considered in Engel, see 37 N.Y.3d at 20 & n.1. 5 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 date of acceleration. 5 As discussed in more detail below, the question of whether and how a lender’s unilateral election to revoke the acceleration of a loan affects the statute of limitations arose in recent years, largely as a result of the 2007-2008 financial crisis. B. Foreclosure Litigation Following the 2007-2008 Financial Crisis In the years following the 2007-2008 financial crisis, New York courts were flooded with residential foreclosure actions, most of which were default proceedings without any involvement by the defendant homeowners. The plaintiff lenders in many cases “relied on documents ‘robo-signed’ by bank representatives who claimed to have personally reviewed thousands of documents in implausibly short periods of time.” Lawrence K. Marks, 2015 Report of the Chief Administrator of the Courts 6 (2015) (pursuant to L. 2009, ch. 507). Because of inadequate documen- tation “plaintiffs were unable to proceed with their cases.” Id. As a result, many lenders discontinued initial foreclosure actions and subjected borrowers to multiple, successive foreclosure actions. Throughout this See Engel, 37 N.Y.3d at 21-22 & n.3; Letter from New Yorkers for 5 Responsible Lending, supra, at 1. 6 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 process, lenders often continued to bill borrowers for fully accelerated balances, as well as accumulating interest and attorney’s fees. See Letter from New Yorkers for Responsible Lending, supra, at 3. As the issue began to percolate through litigation, courts uniformly held that a lender’s unilateral discontinuance of a prior foreclosure action was, by itself, insufficient to revoke acceleration and reset the statute of limitations to running with respect to each missed installment payment.6 See, e.g., Freedom Mtge. Corp. v. Engel, 163 A.D.3d 631, 631-33 (2d Dep’t 2018), rev’d, 37 N.Y.3d 1; Wells Fargo Bank, N.A. v. Liburd, 176 A.D.3d 464, 464 (1st Dep’t 2019). As courts explained, discontinuances often served as a mere “pretext to avoid the onerous effect of an approaching statute of limitations” on the entire amount of the note and mortgage. Milone v. US Bank N.A., 164 A.D.3d 145, 154 (2d Dep’t 2018); accord Wells Fargo Bank, N.A. v. Portu, 179 A.D.3d 1204, 1207 (3d Dep’t 2020). On occasion, the Appellate Division found a triable issue of fact as 6 to whether a lender revoked acceleration and reset the statute of limita- tions when it discontinued a prior action and other relevant facts suggested revocation of acceleration, such as a lender moving to dismiss a prior fore- closure action, see NMNT Realty v. Knoxville 2012 Trust, 151 A.D.3d 1068, 1070 (2d Dep’t 2017), or a lender discontinuing a prior foreclosure action based on a defective default notice, see Capital One N.A. v. Saglimbeni, 170 A.D.3d 508, 509 (1st Dep’t 2019). 7 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 Moreover, discontinuances provided no notice to the borrower that a loan is de-accelerated and that the lender is now obligated to accept regular installment payments. Accordingly, courts uniformly held that a lender had to show an “affirmative act of revocation,” such as a “letter containing a clear and unequivocal demand that the homeowner meet [his or] her prospective monthly payment obligations,” in order to reset the statute of limitations for purposes of future foreclosure actions. Milone, 164 A.D.3d at 154 (quotation marks omitted); see, e.g., EMC Mtge. Corp. v. Patella, 279 A.D.2d 604, 606 (2d Dep’t 2001); First Natl. Mtge. Assn. v. Mebane, 208 A.D.2d 892, 894 (2d Dep’t 1994). In February 2021, the Court of Appeals disturbed this settled law. As relevant here, the Court held in Engel that a foreclosure plaintiff’s voluntary discontinuance of a foreclosure action revoked the acceleration of the mortgage and thereby reset the statute of limitations, absent a contemporaneous statement to the contrary by the lender. See 37 N.Y.3d at 28-35. According to the Court, when the lender’s only demand for immediate payment is the foreclosure complaint, the withdrawal of the complaint destroyed the effect of the acceleration and returned parties to their pre-acceleration rights: allowing borrowers to remain in their homes 8 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 and resume installment payments, even if the lender continues to demand payment of the full balance of its loan. See id. at 28, 31. C. The Foreclosure Abuse Prevention Act (FAPA) The Legislature passed FAPA in May 2022, and it was signed into law by Governor Kathy Hochul in December 2022. See Ch. 821, 2022 N.Y. Laws, p. 1. The purpose of FAPA is to address “ongoing problem[s] with abuses of the judicial foreclosure process.” Assembly Sponsor’s Mem. 1, in Bill Jacket, supra; accord Senate Introducer’s Mem. 1, in Bill Jacket, supra. The Legislature found that these problems were “exacerbated by recent court decisions which, contrary to the intent of the legislature” gave lenders opportunities to “manipulate statutes of limitation to their advantage” at the expense of the “finality and repose” provided by the statute of limitations. Assembly Sponsor’s Mem., supra, at 1; accord Senate Introducer’s Mem., supra, at 1. Two of FAPA’s substantive provisions are relevant here. First, FAPA § 4, codified at C.P.L.R. 203(h), provides that a party may not “unilaterally waive, postpone, cancel, toll, revive, or reset the accrual” of a claim based on an instrument secured by a mortgage on real property. C.P.L.R. 203(h). This provision was intended to “overrule Engel” 9 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 as “inconsistent with” (1) the Legislature’s intent in enacting existing statutory provisions governing the statute of limitations and (2) the public policies of finality and repose furthered by the statute of limitations. See Senate Introducer’s Mem., supra, at 7. Second, FAPA § 8, codified at C.P.L.R. 3217(e), specifically provides that the voluntary discontinuance of a foreclosure action “shall not, in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period.” C.P.L.R. 3217(e). This provision also responds to Engel and “restore[s] longstanding law that made it clear that a lenders’ discontinuance of a foreclosure action that accelerated a mortgage loan does not serve to reset the statute of limitations.” Assembly Sponsor’s Mem., supra, at 2; see Senate Introducer’s Mem., supra, at 15. Together, these provisions make clear that “after-the-fact asser- tions of revocation of acceleration to evade the operation of the statute of limitations are ineffective.” See Mem. from Legal Servs. NYC 2 (Feb. 16, 2022), in Bill Jacket, supra. FAPA thus “restores a fair and common- sense principle: no party may unilaterally stop and restart the statute of limitations to revive what would otherwise be a time-barred action.” See Letter from N.Y. State Black, Puerto Rican, Hispanic, & Asian Legisla- 10 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 tive Caucus, to Kathy Hochul, Governor 1 (Oct. 28, 2022), in Bill Jacket, supra. To give FAPA its full remedial effect, the Legislature directed that the law’s substantive provisions take “effect immediately” and apply to all foreclosure actions pending as of December 30, 2022. See Ch. 821, § 10, 2022 N.Y. Laws at p. 3. D. This Foreclosure Action Defendant-respondent Robyn R. Simon purchased her home in 1982. (R. 44.) In June 2006, she refinanced her mortgage to make necessary repairs to her home. (R. 45; see R. 27-33, 87-104.) After a series of econo- mic hardships, Simon fell behind on mortgage payments beginning in March 2008, and plaintiff commenced a foreclosure action in September 2008. (R. 45, 112-125.) Plaintiff unilaterally discontinued that action in November 2008. (R. 133-134.) Over seven years later, plaintiff commenced this foreclosure action by filing a summons and complaint in March 2016. (R. 197-213.) In February 2020, Supreme Court, Queens County (Jackman Brown, J.) granted summary judgment to Simon, concluding that this action was time-barred. The court reasoned that plaintiff accelerated the debt when 11 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 it commenced the first foreclosure action in September 2008 and that the six-year statute of limitations had expired in September 2014, well before plaintiff filed this subsequent action. (R. 11-13.) The court entered an order dismissing the complaint in December 2020. (R. 18-20.) The Court of Appeals issued its decision in Engel shortly before plaintiff’s deadline to perfect the appeal in June 2021. In its opening brief, plaintiff argued that the subsequent foreclosure action was timely because the voluntary discontinuance of the 2008 action reset the statute of limitations under Engel. See Br. for Pl.-Appellant at 2-3. The appeal remained pending in this Court when FAPA took effect. In January 2023, defendant Simon asserted that FAPA (namely, the addition of C.P.L.R. 203(h) and 3217(e)) foreclosed plaintiff’s argu- ment and required affirmance of the orders below. See Letter Br. for Resp’t from Christopher Newton, Queens Legal Servs. at 2-3 (Jan. 25, 2023). Plaintiff responded that FAPA violates the state and federal Constitu- tions to the extent it applies retroactively to pending actions. See Letter Br. for Appellant from Andrew B. Messite, Reed Smith LLP at 2-5 (Jan. 25, 2023). Following oral argument, this Court ordered plaintiff to notify the Attorney General of its constitutional challenge to FAPA. On February 12 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 9, 2023, the Attorney General advised the Court and the parties of her intent to intervene under Executive Law § 71 and C.P.L.R. 1012(b) to defend the constitutionality of FAPA. ARGUMENT FAPA COMPORTS WITH THE STATE AND FEDERAL CONSTITUTIONS In assessing plaintiff’s constitutional challenges, FAPA receives “a strong presumption of constitutionality,” and plaintiff must “demonstrat[e] the statute’s invalidity beyond a reasonable doubt.” LaValle v. Hayden, 98 N.Y.2d 155, 161 (2002) (quotation marks omitted). Plaintiffs fall far short of meeting this demanding standard, and this Court should accord- ingly reject plaintiff’s constitutional arguments. A. FAPA Comports with the Due Process Clause. Plaintiff’s argument that FAPA impinges its due process rights fails. The mere fact that legislation has retroactive application does not, in and of itself, “bring it into conflict with the guarantees of the Federal Constitution.” Funkhouser v. J.B. Preston Co., 290 U.S. 163, 167-68 (1933). Legislation with retrospective effects can implicate substantive due process if it “takes away or impairs vested rights acquired under existing laws, 13 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 or creates a new obligation, imposes a new duty, or attaches a new disabil- ity, in respect to transactions or considerations already past.” Landgraf v. USI Film Prods., 511 U.S. 244, 269 (1994) (quotation marks omitted). Statutes with such retroactive effects are constitutional if the “retroactive application of the legislation is itself justified by a rational legislative purpose.” 7 Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 730 (1984). Here, FAPA comports with due process because it does not impair any vested rights and the legislative history provides an ample rational basis for FAPA’s retroactive scope. 1. The Legislature intended FAPA to apply retroactively. Plaintiff does not dispute that the Legislature intended for C.P.L.R. 203(h) and 3217(e) to apply to pending foreclosure actions, like the one here. See Letter Br. for Appellant at 2. In assessing “whether a statute should be given retroactive effect” the Court of Appeals has indicated that courts should consider several factors, including whether (1) the Legisla- 7 The same rational basis review applies under the Due Process Clause of the New York State Constitution. See American Economy Ins. Co. v. State of New York, 30 N.Y.3d 136, 158 (2017); Matter of World Trade Ctr. Lower Manhattan Disaster Site Litig., 30 N.Y.3d 377, 400 (2017). 14 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 ture has “made a specific pronouncement about retroactive effect” or has “conveyed a sense of immediacy” because it “acted swiftly” after a Court of Appeals decision and “directed that the amendment was to take effect immediately”; and (2) “the purpose of the amendment was to clarify what the law was always meant to do and say.” Matter of Gleason (Michael Vee, Ltd.), 96 N.Y.2d 117, 122 (2001). Where the factors establish that the amendment is “remedial legislation,” then the law “should be given retro- active effect in order to effectuate its beneficial purpose.” Id. The plain text of FAPA, as well as the sponsors’ memoranda and statements in floor debates, expressly demonstrates the Legislature’s intent to apply it retroactively. FAPA § 10 makes “clear that this legis- lation will apply immediately, and will apply to” all pending actions. Assembly Sponsor’s Mem., supra, at 2; see N.Y. Senate Debate on S. 5473D, at 3025 (May 3, 2022) (statement of Sen. Brian Kavanagh). Indeed, the Assembly Sponsor expressly invoked Matter of Gleason in stating that FAPA was designed to have “a retroactive effect” consistent with Court of Appeals precedent. N.Y. Assembly Debate on A. 7737B, at 9 (Mar. 23, 2022) (“Assembly Debate Tr.”) (statement of Assemblymember Helene E. Weinstein). 15 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 The other Matter of Gleason factors similarly indicate that C.P.L.R. 203(h) and 3217(e) apply to existing claims like this one. First, the Legis- lature conveyed urgency by directing that the amendment “shall take effect immediately.” Ch. 821, § 10, 2022 N.Y. Laws at p. 3. Second, the Legislature acted quickly after Engel to restore the longstanding principle that a lender’s voluntary discontinuance of a foreclosure action does not reset the six-year limitations period, and the sponsors’ memoranda stated that FAPA was “expressly intended to overrule Engel.” 8 Third, the sponsors’ memoranda indicated that FAPA did not invent new law, but restored prior law by “clarify[ing] the meaning of existing statutes” and “restor[ing] longstanding law that made it clear that a lenders’ discon- tinuance of a foreclosure action that accelerated a mortgage loan does not serve to reset the statute of limitations.” 9 Finally, the sponsors’ memo- randa made clear that the amendment’s purpose was remedial. 10 The Senate Introducer’s Mem., supra, at 15; see id. at 7; Assembly 8 Sponsor’s Mem., supra, at 2-3. Assembly Sponsor’s Mem., supra, at 2-3; see Senate Introducer’s 9 Mem., supra, at 1-2, 5. Assembly Sponsor’s Mem., supra, at 1-2; Senate Introducer’s Mem., 10 supra, at 1; see Assembly Debate Tr., supra, at 9 (statement of Assembly- member Helene E. Weinstein). 16 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 Legislature thus intended the rule embodied in C.P.L.R. 203(h) and 3217(e), which had been the law prior to Engel, to apply once again to foreclosure claims that had already accrued. See GMAT Legal Title Trust 2014-1 v. Kator, 213 A.D.3d 915, 917 (2d Dep’t 2023) (holding that FAPA “had the effect of nullifying” Engel in pending action). 2. FAPA does not impair any vested rights. In determining whether a statute has retroactive effect that triggers concerns under the Due Process Clause, courts look to whether the statute “impair[s] rights a party possessed when he [or she] acted, increase[s] a party’s liability for past conduct, or impose[s] new duties with respect to transactions already completed.” Landgraf, 511 U.S. at 280. FAPA impairs no such rights. Plaintiff did not possess any rights under the Engel rule “when [it] acted” in 2008 because no authority at that time entitled plaintiff to reset the statute of limitations by unilat- erally discontinuing a foreclosure action. See id. Similarly, to the extent that plaintiff could conceivably claim any reliance interest in avoiding the statute of limitations by filing a voluntary discontinuance, that interest would cover conduct only “for the brief period” that Engel was law—from February 18, 2021, to December 30, 2022—well after the statute of limit- 17 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 ations on plaintiff’s claim had already expired. See People v. Allen, 198 A.D.3d 531, 532 (1st Dep’t 2021). The decision in Matter of Regina Metropolitan Co., LLC v. New York State Division of Housing and Community Renewal, 35 N.Y.3d 332 (2020), is not to the contrary. That decision concerned a statutory change that was not limited to a revision of a statute of limitations, but also funda- mentally “alter[ed] the method for determining legal regulated rent for overcharge purposes and substantially expand[ed] the nature and scope of owner liability in rent overcharge cases.” Id. at 349. It was the combined effect of these changes that led the Court of Appeals to find that the new statute triggered the due process concerns identified in Landgraf. See id. at 369-70. Here, by contrast, the Legislature did not amend the substantive scope of liability in a foreclosure action or even the longstanding six-year statute of limitations that governs such claims. Indeed, it restored rather than deviated from longstanding past precedents that held that the voluntary discontinuance of a foreclosure action does not reset the statute of limitations. Brothers v. Florence, 95 N.Y.2d 290 (2000), also does not support plaintiff’s constitutional challenge to FAPA’s retroactive application. In 18 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 that decision, the Court of Appeals concluded that a legislative amend- ment that shortened the statute of limitations for medical malpractice actions applied retroactively based on an analysis looking to the same factors stated in Matter of Gleason. See id. at 298-300. But the Court concluded that due process requires that litigants be afforded a “reason- able time” to commence an action when a limitations period is shortened and effectively would bar a plaintiff from bringing any action at all. Id. at 300 (quotation marks omitted). Here, by contrast, FAPA did not abruptly change the statute of limitations; rather, it restored and clarified the law governing accrual of claims. Moreover, unlike the litigants in Brothers who were foreclosed from bringing any action at all, plaintiff had the discretion to choose when its claim accrued (by invoking the acceleration clause) and has already had an opportunity to file a mortgage foreclosure action. Nothing in Brothers suggests that a plaintiff has a vested right in bringing a successive action years after its initial lawsuit has failed. 11 11 Although plaintiff has not raised a Takings Clause challenge to the retroactive application of FAPA in this case, litigants have raised the argument in other constitutional challenges to FAPA. See, e.g., Reply Br. for Pl.-Appellant at 9-13, Deutsche Bank Natl. Trust Co. v. DeLuca, No. 534805 (3d Dep’t Jan. 13, 2023). FAPA does not implicate the Takings Clause for several reasons, including that a takings claim requires inter- (continued on the next page) 19 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 3. FAPA’s retroactive scope is rational. In any event, even if FAPA impaired vested rights, it still withstands constitutional scrutiny because it is “justified by a rational legislative purpose,” Pension Benefit Guar. Corp., 467 U.S. at 730; see American Economy Ins. Co., 30 N.Y.3d at 157-58. In enacting FAPA, the Legislature sought to prevent abusive fore- closure practices and reverse Engel, a decision which allowed foreclosure plaintiffs to unilaterally manipulate the statute of limitations by deter- mining both when a claim accrues and when the statute of limitations resets, a privilege not afforded to any other civil litigant. See Senate Introducer’s Mem., supra, at 1, 3-4, 7-9, 13-15. The Engel rule encourages excessive litigation by allowing lenders to file successive, flawed actions, resetting the statute of limitations at their sole convenience without any consequence. ference with “a vested property interest,” American Economy Ins. Co., 30 N.Y.3d at 155, and lenders have no vested property interest in resetting the statute of limitations and bringing a successive action. The Attorney General will further explain the defects in Takings Clause challenges to the retroactive application of FAPA in her brief in DeLuca. 20 FILED: RICHMOND COUNTY CLERK 10/19/2023 02:00 PM INDEX NO. 135266/2015 NYSCEF DOC. NO. 237 RECEIVED NYSCEF: 10/19/2023 The Legislature also determined that the Engel rule was contrary to the purpose of the statute of limitations, which “not only save[s] liti- gants from defending stale claims, but also express[es] a societal interest or a public policy of giving repose to human affairs.” Id. at 4 (quotation marks omitted). FAPA is a rational response to further that public policy, and it is not the role of the courts to second guess how the Legislature weighs the competing interests of lenders and borrowers. See Chase Sec. Corp. v. Donaldson, 325 U.S. 304, 311-12 (1945). B. FAPA Comports with the Contract Clause. Plaintiff’s claim that FAPA violates the Contract Clause fails as well. In assessing a challenge under the Contract Clause, the Court must first determine “whether there is a contractual relationship, whether a change in law impairs that contractual relationship, and whether the impairment is substantial.” General Motors Corp. v. Romein, 503 U.S. 181, 186 (1992); accord American Economy Ins. Co., 30 N.Y.3d at 150. If the Court identifies a substantial impairment, the statute is still consti- tutional if the State has “a significant and legitimate p