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A07737 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7737--B
                                                                Cal. No. 274
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 20, 2021
                                       ___________
 
        Introduced  by M. of A. WEINSTEIN, ZINERMAN, SOLAGES, SEAWRIGHT, COLTON,
          SIMON, ZEBROWSKI,  PRETLOW,  BURDICK,  BRONSON,  DAVILA,  ENGLEBRIGHT,
          DINOWITZ,  GLICK, SAYEGH -- read once and referred to the Committee on
          Judiciary -- reported and referred to the Committee on Rules --  Rules
          Committee  discharged,  bill amended, ordered reprinted as amended and
          recommitted to the Committee on Rules -- ordered to a  third  reading,
          amended  and  ordered  reprinted,  retaining its place on the order of
          third reading
 
        AN ACT to amend the real  property  actions  and  proceedings  law,  the
          general  obligations  law  and  the  civil  practice law and rules, in
          relation to the rights of parties involved in actions  commenced  upon
          real property related instruments
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "foreclosure abuse prevention act".
     3    §  2.  Subdivision  3 of section 1301 of the real property actions and
     4  proceedings law, as added by chapter 312 of the laws of 1962, is amended
     5  and a new subdivision 4 is added to read as follows:
     6    3. While the action is pending or after final judgment for the  plain-
     7  tiff  therein,  no  other  action  shall  be  commenced or maintained to
     8  recover any part of the mortgage debt, including an action to  foreclose
     9  the  mortgage, without leave of the court in which the former action was
    10  brought. The procurement of such leave shall be a condition precedent to
    11  the commencement of such other action and the failure  to  procure  such
    12  leave  shall  be  a  defense  to such other action. For purposes of this
    13  subdivision, in the event such other action is commenced  without  leave
    14  of  the  court,  the former action shall be deemed discontinued upon the
    15  commencement of the other action, unless prior to the entry of  a  final
    16  judgment  in such other action, a defendant raises the failure to comply
    17  with this condition precedent therein, or seeks dismissal thereof  based
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11254-08-2

        A. 7737--B                          2
 
     1  upon  a  ground  set  forth in paragraph four of subdivision (a) of rule
     2  thirty-two hundred eleven of the civil  practice  law  and  rules.  This
     3  subdivision  shall not be treated as a stay or statutory prohibition for
     4  purposes  of  calculating  the  time  within  which  an  action shall be
     5  commenced and the claim interposed pursuant to sections two hundred four
     6  and two hundred thirteen of the civil practice law and rules.
     7    4. If an action to foreclose a mortgage or recover  any  part  of  the
     8  mortgage  debt  is adjudicated to be barred by the applicable statute of
     9  limitations, any other action  seeking  to  foreclose  the  mortgage  or
    10  recover  any  part of the same mortgage debt shall also be barred by the
    11  statute of limitations.
    12    § 3. Subdivisions 4 and 5 of section 17-105 of the general obligations
    13  law are amended to read as follows:
    14    4. [Except as provided in subdivision  five,  no]  An  acknowledgment,
    15  waiver  [or promise has any effect to], promise or agreement, express or
    16  implied in fact or in law, shall  not,  in  form  or  effect,  postpone,
    17  cancel,  reset,  toll,  revive  or otherwise extend the time limited for
    18  commencement of an action to foreclose [or] a mortgage for  any  greater
    19  time  or  in  any other manner than that provided in this section, [nor]
    20  unless it is made as provided in this section.
    21    5. This section does not change the requirements[,] or the effect with
    22  respect to the accrual of a cause of action, nor the  time  limited  for
    23  commencement of an action[, of] based upon either:
    24    a.  a  payment or part payment of the principal or interest secured by
    25  the mortgage, or
    26    b. a stipulation made in an action or proceeding.
    27    § 4. Section 203 of the civil practice law and  rules  is  amended  by
    28  adding a new subdivision (h) to read as follows:
    29    (h) Claim and action upon certain instruments.  Once a cause of action
    30  upon  an instrument described in subdivision four of section two hundred
    31  thirteen of this article has accrued, no party may, in form  or  effect,
    32  unilaterally waive, postpone, cancel, toll, revive, or reset the accrual
    33  thereof,  or  otherwise  purport to effect a unilateral extension of the
    34  limitations period prescribed by law to commence an action and to inter-
    35  pose the claim, unless expressly prescribed by statute.
    36    § 5. Subdivision (c) of section 205 of  the  civil  practice  law  and
    37  rules, as amended by chapter 216 of the laws of 1992, is amended to read
    38  as follows:
    39    (c)  Application.  This  section  also applies to a proceeding brought
    40  under the workers' compensation law but shall not apply to any  proceed-
    41  ing governed by section two hundred five-a of this article.
    42    §  6.  The  civil  practice  law  and rules is amended by adding a new
    43  section 205-a to read as follows:
    44    § 205-a. Termination of certain actions related to real property.  (a)
    45  If  an  action  upon  an  instrument described under subdivision four of
    46  section two hundred thirteen of this article is timely commenced and  is
    47  terminated  in any manner other than a voluntary discontinuance, a fail-
    48  ure to obtain personal jurisdiction over the defendant, a  dismissal  of
    49  the  complaint  for  any  form of neglect, including, but not limited to
    50  those specified in subdivision three of section thirty-one hundred twen-
    51  ty-six, section thirty-two  hundred  fifteen,  rule  thirty-two  hundred
    52  sixteen and rule thirty-four hundred four of this chapter, for violation
    53  of  any court rules or individual part rules, for failure to comply with
    54  any court scheduling orders, or by  default  due  to  nonappearance  for
    55  conference  or  at  a  calendar call, or by failure to timely submit any
    56  order or judgment, or  upon  a  final  judgment  upon  the  merits,  the

        A. 7737--B                          3
 
     1  original  plaintiff, or, if the original plaintiff dies and the cause of
     2  action survives, his or her executor or administrator,  may  commence  a
     3  new  action  upon the same transaction or occurrence or series of trans-
     4  actions  or  occurrences  within  six  months following the termination,
     5  provided that the new action would have been timely commenced within the
     6  applicable limitations period prescribed by  law  at  the  time  of  the
     7  commencement  of  the  prior  action  and that service upon the original
     8  defendant is completed within such six-month  period.  For  purposes  of
     9  this subdivision:
    10    1.  a  successor  in interest or an assignee of the original plaintiff
    11  shall not be permitted to commence the new action, unless  pleading  and
    12  proving  that  such  assignee is acting on behalf of the original plain-
    13  tiff; and
    14    2. in no event shall the original  plaintiff  receive  more  than  one
    15  six-month extension.
    16    (b)  Where  the  defendant has served an answer and the action upon an
    17  instrument described under subdivision four of section two hundred thir-
    18  teen of this article is terminated in any manner, and a new action  upon
    19  the  same  transaction or occurrence or series of transactions or occur-
    20  rences is commenced by the original plaintiff, or a successor in  inter-
    21  est or assignee of the original plaintiff, the assertion of any cause of
    22  action  or defense by the defendant in the new action shall be timely if
    23  such cause of action or defense was timely asserted in the prior action.
    24    § 7. Subdivision 4 of section 213 of the civil practice law and  rules
    25  is amended by adding two new paragraphs (a) and (b) to read as follows:
    26    (a)  In  any action on an instrument described under this subdivision,
    27  if the statute of limitations is  raised  as  a  defense,  and  if  that
    28  defense is based on a claim that the instrument at issue was accelerated
    29  prior to, or by way of commencement of a prior action, a plaintiff shall
    30  be  estopped from asserting that the instrument was not validly acceler-
    31  ated, unless the prior action was dismissed based on an expressed  judi-
    32  cial  determination,  made  upon  a  timely interposed defense, that the
    33  instrument was not validly accelerated.
    34    (b) In any action seeking cancellation and discharge of record  of  an
    35  instrument  described  under subdivision four of section fifteen hundred
    36  one of the real property actions and proceedings law, a defendant  shall
    37  be  estopped  from  asserting  that the period allowed by the applicable
    38  statute of limitation for the commencement of an action upon the instru-
    39  ment has not expired because the instrument was not validly  accelerated
    40  prior  to, or by way of commencement of a prior action, unless the prior
    41  action was dismissed based on an expressed judicial determination,  made
    42  upon  a  timely  interposed defense, that the instrument was not validly
    43  accelerated.
    44    § 8. Rule 3217 of the civil practice  law  and  rules  is  amended  by
    45  adding a new subdivision (e) to read as follows:
    46    (e)  Effect  of discontinuance upon certain instruments. In any action
    47  on an instrument described under subdivision four of section two hundred
    48  thirteen of this chapter, the voluntary discontinuance of  such  action,
    49  whether  on  motion, order, stipulation or by notice, shall not, in form
    50  or effect, waive, postpone, cancel, toll, extend, revive  or  reset  the
    51  limitations  period  to  commence  an  action  and to interpose a claim,
    52  unless expressly prescribed by statute.
    53    § 9. Severability clause. If any clause, sentence, paragraph,  section
    54  or  part  of this act shall be adjudged by any court of competent juris-
    55  diction to be invalid, such judgment shall not affect, impair or invali-
    56  date the remainder thereof, but shall be confined in  its  operation  to

        A. 7737--B                          4

     1  the  clause,  sentence,  paragraph,  section  or  part  thereof directly
     2  involved in the controversy in  which  such  judgment  shall  have  been
     3  rendered.
     4    §  10.  This  act shall take effect immediately and shall apply to all
     5  actions commenced on an instrument described under subdivision  four  of
     6  section  two  hundred  thirteen  of  the civil practice law and rules in
     7  which a final judgment of foreclosure and sale has not been enforced.
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