Supreme Court, Nassau County, June 12, 2023

Justin F. Pane, P.C., Bohemia (Justin Pane of counsel), for Joseph P. Leonardo, defendant.

Friedman Vartolo, LLP, New York City (Zachary Gold of counsel), for plaintiff.

Defendant Joseph P. Leonardo (hereinafter defendant) has moved by order to show cause seeking leave to renew, pursuant to CPLR 2221 (e), with respect to the judgment of foreclosure entered November 30, 2015, and, upon renewal, for an order dismissing the underlying action based on the expiration of the applicable statute of limitations pursuant to CPLR 1001, 1003, and RPAPL 1311 (1) based upon the enactment of the Foreclosure Abuse Prevention Act. Plaintiff opposed and the motion was deemed submitted on February 28, 2023.

This action was commenced on November 26, 2013, to foreclose with respect to a note and mortgage executed by Joseph Leonardo and Audrey Leonardo on June 10, 2008, in the amount of $504,000.00 for real property known as 2848 Riverside Dr, Wantagh, New York 11793 (hereinafter the property) based on defendants' default on the loan as of February 22, 2010, and continuing thereafter without exception, as conceded in defendant's moving papers.

On or about August 5, 2010, plaintiff's predecessor in interest commenced a foreclosure action in this court (hereinafter the 2010 action) under index No. 014885/2010. Defendant appeared and participated in the 2010 action by, inter alia, serving an answer.

The 2010 action was voluntarily discontinued by order discontinuing action and cancelling notice of pendency entered December 21, 2015, which granted plaintiff's predecessor's unopposed motion for voluntary discontinuance.

On or about November 23, 2013, while the 2010 action remained active, new counsel for plaintiff's same predecessor{**79 Misc 3d at 1077} in interest commenced the instant foreclosure action in this court.

Defendant filed a motion to dismiss which was denied for defective service. Plaintiff moved for summary judgment, and defendant cross-moved to dismiss. On February 23, 2015, this court granted plaintiff summary judgment and denied defendant's cross-motion.

Defendant filed a third motion to dismiss, which was denied by the court on February 20, 2015. Defendant moved to reargue that decision, which motion was denied on August 3, 2016.

Plaintiff moved for judgment of foreclosure and sale and defendant cross-moved to dismiss for the fifth time. Judgment of foreclosure and sale was entered on November 24, 2015 (hereinafter the 2015 JFS), and defendant's cross-motion was denied.

On November 24, 2015, defendant moved to dismiss for the sixth time, which motion was denied by order dated March 10, 2016. Defendant's wife Audrey (Audrey), also named as a defendant herein, then filed two motions to dismiss which were later withdrawn.

Audrey moved in March of 2016 to vacate the 2015 JFS by order to show cause, and defendant moved to reargue the 2015 JFS. Both motions were jointly denied by order dated [*2]September 22, 2016.

Defendant moved again for dismissal in August of 2016 and plaintiff cross-moved for sanctions. Defendant and Audrey then further moved for, inter alia, reargument with respect to the September 22, 2016 order, and for vacatur of the 2015 JFS. By order dated April 11, 2017 (hereinafter the 2017 order), this court (Adams, J.) granted two motions by plaintiff for sanctions (mot seq Nos. 15, 19) to the extent that "any future motions by defendants shall be by submission of an Order to Show Cause submitted on thirty-six (36) hours written notice to counsel for plaintiff of the time of submission," and denied defendant's then-pending motions (mot seq Nos. 16, 17, 18, 19, 20).

The 2017 order was appealed, and the Appellate Division, Second Department denied all pending appeals, including reargument thereof (Wells Fargo Bank, N.A. v Leonardo, 167 AD3d 816 [2d Dept 2018]). Defendant then filed a motion to appeal to the Court of Appeals which was denied by the Court of Appeals on January 14, 2020, and reargument was thereafter{**79 Misc 3d at 1078} denied as well (Wells Fargo Bank, N.A. v Leonardo, 34 NY3d 908 [2020]; Wells Fargo Bank, N.A. v Leonardo, 35 NY3d 984 [2020]).

Defendant now moves, by motion sequence No. 27, some eight years postjudgment, for an order vacating the 2015 JFS and dismissing the action arguing that the instant case is barred by the statute of limitations in light of the enactment of the Foreclosure Abuse Prevention Act (hereinafter FAPA) on December 30, 2022, and its retroactive application.

Plaintiff argues that FAPA does not apply retroactively in this matter, and that, if it does, they have, in any event, "enforced" the 2015 JFS through their attempts to schedule sales. Plaintiff further contends that the retroactive application would render FAPA unconstitutional.

FAPA amended six laws (CPLR 203, CPLR 205, CPLR 213, CPLR 3217, RPAPL 1301 and General Obligations Law § 17-105) and added CPLR 205-a (L 2022, ch 821). According to the legislative history, the stated purpose and intent of FAPA, inter alia, is to "ensure the laws of this state apply equally to all litigants, including those currently involved in mortgage foreclosures and related actions," and "to thwart and eliminate abusive and unlawful litigation tactics that have been employed by foreclosure plaintiffs" (Senate Introducer's Mem in Support of 2021 NY Senate Bill S5473D [same-as bill to 2021 NY Assembly Bill A7737B, enacted as L 2022, ch 821]). FAPA recognized 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." (Id.)

Defendant now argues that he is entitled to renewal pursuant to CPLR 2221 (e) based upon a change in the law.

Plaintiff argues that FAPA cannot be applied retroactively in the instant matter; however this claim is belied by the express language of the statute. (See Deutsche Bank Natl. Trust Co. v Dagrin, 79 Misc 3d 393 [Sup Ct, Queens County 2023].)[*3]

FAPA (§ 10) states that "[t]his act shall take effect immediately and shall apply to all actions commenced on an instrument described under subdivision four of section two hundred thirteen of the civil practice law and rules in which a final judgment of foreclosure and sale has not been enforced." (L 2022, ch 821, § 10.){**79 Misc 3d at 1079}

As a general matter, enforcement of a foreclosure judgment occurs upon the conducting of the sale (CPLR 5240; see Guardian Loan Co. v Early, 47 NY2d 515 [1979]). However, it is well-settled that property rights that are vested by the action of the court are placed beyond the reach of legislative power to affect (Gilman v Tucker, 128 NY 190 [1891]). "After adjudication the fruits of the judgment become rights of property" (id. at 204). "[V]ested property rights under a final judgment or determination in the nature of a judgment cannot be affected by subsequent legislation" (People ex rel. H.D.H. Realty Corp. v Murphy, 194 App Div 530, 537 [1st Dept 1920], citing Gilman v Tucker).

In the instant matter, plaintiff has been attempting to schedule a sale for nearly a decade and has been thwarted over and over again by defendant's vexatious motion practice and delay tactics. This court (Adams, J.) imposed limitation on further motion practice in the 2017 order.

In circumstances where a motion is pending seeking the vacatur of a judgment of foreclosure and sale, or any other relief that would impact the validity of the judgment, but no temporary restraining order is issued, a plaintiff is left with a quagmire. Plaintiff may conduct the sale at their peril, thus risking that the sale is ultimately cancelled, or that the subsequent transfer of the property while decision is pending potentially divests them of their investment at the eleventh hour and could leave them owing restitution. The choice does not always lie with the plaintiff, as is the case here, where multiple sales have been cancelled as a result of temporary restraining orders issued in connection with repeated orders to show cause ultimately determined to be meritless. Thus, a defendant, through the mere filing of a motion when a sale is already scheduled, regardless of its merits, is empowered to thwart plaintiff's efforts to enforce their judgment and, if FAPA is to be retroactively applied at this very particular stage of the proceedings, denies a plaintiff the fruits of their judgment which by virtue of the adjudication are vested property rights. Those vested property rights are beyond the reach of subsequent legislative alteration, and thus an interpretation of FAPA that results in an impairment of already vested rights cannot be inferred to be the legislative intent of the statute. (See Newrez LLC v Kalina, 78 Misc 3d 1217[A], 2023 NY Slip Op 50249[U] [Sup Ct, Albany County 2023]; MTGLQ Invs., L.P. v Gross, 79 Misc 3d 353 [Sup Ct, Westchester County 2023]; Gilman v Tucker.){**79 Misc 3d at 1080}

As cited in FAPA's sponsor memo as it pertained to the effective date of the legislation, and thus its retroactivity, the Court of Appeals articulated the standard for statutory retroactivity analysis in Matter of Gleason (Michael Vee, Ltd.) (96 NY2d 117 [2001]) stating that

"[i]n determining whether a statute should be given retroactive effect, we have recognized two axioms of statutory interpretation. Amendments are presumed to have prospective application unless the Legislature's preference for retroactivity is explicitly stated or clearly indicated. However, remedial legislation should be given retroactive effect in order to effectuate its beneficial purpose. Other factors in the retroactivity analysis [*4]include whether the Legislature has made a specific pronouncement about retroactive effect or conveyed a sense of urgency; whether the statute was designed to rewrite an unintended judicial interpretation; and whether the enactment itself reaffirms a legislative judgment about what the law in question should be" (id. at 122 [citations omitted]).

"Retroactivity is generally disfavored in the law" (Eastern Enterprises v Apfel, 524 US 498, 532 [1998]). However, courts defer to the legislature where the applicable legislation contains express language pertaining to retroactivity "unless it reaches so far into the past or so unfairly as to constitute a deprivation of property without due process" (Matter of Varrington Corp. v City of N.Y. Dept. of Fin., 85 NY2d 28, 32 [1995]; Deutsche Bank Natl. Trust Co. v Dagrin).

"An interpretation which is contrary to the dictates of reason or leads to unreasonable results is presumed to be against the legislative intent, and some other construction should be placed upon the statute, if possible without violation of its language" (McKinney's Cons Laws of NY, Statutes § 143, Comment).

In articulating the justification for FAPA, the sponsor notes that

"[t]hus, while the Legislature 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 [Freedom Mtge. Corp. v] Engel, 37 NY3d [1,] 19, 20, 24 [2021]), the rules pronounced in Engel . . . contravene the legislative purpose and express language of numerous{**79 Misc 3d at 1081} 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." (Senate Introducer's Mem in Support of 2021 NY Senate Bill S5473D [same-as bill to 2021 NY Assembly Bill A7737B, enacted as L 2022, ch 821] [emphasis added].)

In the instant matter the application of FAPA retroactively at the specific moment in the timeline of the action where a plaintiff has undertaken affirmative steps toward the enforcement of the judgment by scheduling the sale would effectively take the proverbial sword from the hands of a plaintiff and rather than shielding the defendant, hand them the sword. This flies in the face of the legislature's stated intent to thwart unilateral manipulation of statutory limitations and would be directly contrary to the public policy of giving repose to human affairs by denying plaintiff, rather than defendant, repose.

In this case, plaintiff's near-decade-long efforts to sell the subject property have been forestalled due to a series of ultimately denied motions such that the 2015 JFS has not been "enforced." A statute explicitly intended to level the playing field and ensure that plaintiffs do not have access to the perpetual ability to reset their own statute of limitations cannot be reasonably construed as to have been intended to instead provide a savvy and/or litigious defendant the infinite opportunity to prevent a plaintiff from enforcing their judgment and reaching the case's conclusion. Beyond a retroactive deprivation of vested rights, such a construction would reward dilatory tactics and lead to patently unreasonable results.[*5]

Therefore, to the extent that defendant seeks renewal based upon the retroactive application of FAPA where plaintiff has already scheduled a sale, despite the fact that the sale was not actually conducted, the court finds that such would not be a reasonable interpretation of FAPA. For the purposes of the retroactive applicability of FAPA, once a sale has been scheduled the judgment is deemed enforced, and therefore defendant is not entitled to renewal.

It is axiomatic that a constitutional question must be bypassed if the constitutional issue can be avoided by deciding{**79 Misc 3d at 1082} the matter in some other fashion. (People v Felix, 58 NY2d 156 [1983], citing McKinney's Cons Laws of NY, Book 1, Statutes § 150; Nestor I LLC v Moriarty-Gentile, 78 Misc 3d 1233[A], 2023 NY Slip Op 50408[U] [Sup Ct, Suffolk County 2023].) Inasmuch as the instant matter is resolved on other grounds, this court need not reach the issue of constitutionality.

Accordingly, it is hereby: ordered that the motion is hereby denied in its entirety. Plaintiff may proceed.