Background
A predecessor lender accelerated Bertha Pittman’s mortgage debt by filing a foreclosure action in 2002, then voluntarily discontinued that case. DLJ Mortgage Capital commenced a new foreclosure in 2013. An earlier appeal in the same litigation rejected a limitations argument tied to a different, 2003 action.
While the 2013 case continued, New York enacted the Foreclosure Abuse Prevention Act (FAPA). Among other changes, FAPA prevents a lender’s voluntary discontinuance from unilaterally de-accelerating a mortgage or resetting the six-year statute of limitations. Vista Holding, which claimed an interest in the property, renewed the limitations attack under the new statute.
Supreme Court granted Vista summary judgment and dismissed the foreclosure against it as untimely. DLJ appealed, arguing that payments had revoked acceleration, that retroactive application of FAPA was unconstitutional, and that the earlier appellate ruling became law of the case and foreclosed reconsideration.
The Court’s Holding
The Second Department affirmed dismissal. The 2002 complaint accelerated the entire debt and started the six-year limitations period. The 2013 action arrived more than six years later, and under FAPA the voluntary discontinuance of the earlier case neither de-accelerated the loan nor revived or reset the limitations clock.
DLJ did not raise a factual dispute that later borrower payments validly revoked acceleration. The panel also rejected its constitutional and retroactivity objections, following controlling New York authority applying FAPA to pending foreclosure disputes.
Law of the case did not bar Vista’s motion. Although the earlier appeal addressed timeliness, FAPA was a subsequent change in governing law that justified reconsideration. A prior appellate ruling binds later stages absent new facts, additional relevant evidence, or an intervening legal change; the statute supplied that exception here.
Key Takeaways
- A pre-FAPA voluntary discontinuance generally does not undo an earlier mortgage acceleration or restart the six-year period.
- An intervening statute can permit reconsideration of a limitations issue previously resolved on appeal.
- Lenders relying on post-acceleration payments must show that the payments legally revoked acceleration, not merely that money was received.
Why It Matters
The decision is significant for New York foreclosure counsel, loan servicers, investors, and title holders managing long-running cases that span FAPA’s enactment. Procedural decisions made years earlier—especially voluntary discontinuances—may now have decisive limitations consequences. A file review should reconstruct every acceleration, discontinuance, payment, modification effort, and subsequent action rather than beginning with the current complaint. Purchasers of distressed debt should price limitations risk before acquisition, because a facially valid lien may no longer support an enforceable foreclosure.
The law-of-the-case analysis is useful beyond foreclosure practice. It confirms that an intervening change in governing law can reopen an issue that otherwise would remain settled within the litigation. Parties should audit old acceleration events and prior appellate rulings against the current statute before assuming a foreclosure remains viable. At the same time, the exception is not an invitation to repeat rejected arguments: the movant must identify a genuine legal change bearing on the issue. Borrower and title counsel should preserve the complete procedural record needed to show when acceleration occurred and whether any legally effective revocation followed. FAPA has changed the economics of legacy mortgage litigation by restricting unilateral acts that lenders once used to control acceleration and limitations. Servicers should coordinate litigation decisions with detailed loan histories, because dismissing a complaint without resolving the acceleration problem can consume the remaining limitations period. Defendants asserting untimeliness should obtain complaints, notices of discontinuance, orders, and servicing records from every prior action. Evidence of later payments must be analyzed for legal effect in context; a partial payment entry by itself does not necessarily establish a mutual decision to revoke acceleration or acknowledge a newly enforceable debt. Foreclosure complaints should plead the relevant chronology accurately, and motion papers should address FAPA directly rather than rely on pre-enactment de-acceleration doctrine. Title insurers and prospective purchasers also need the complete litigation history when evaluating whether an old mortgage remains enforceable.