Citibank, N.A. v. Inga

Citibank, N.A. v Inga

2025 NY Slip Op 30073(U)

January 8, 2025

Supreme Court, Queens County

Docket Number: Index No. 710451/2020

Judge: Ulysses B. Leverett

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

State and local government sources, including the New

York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official

publication.

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SUPREME COU RT OF THE STATE OF NEW YORK

COUNTY OF QU EE S

1/13/2025

------------------------------ ----------------------------------------------x

CITIBANK, N.A. , AS TR USTEE FOR CMLTI ,

ASSET TRUST,

Plaintiff,

Ind ex No.: 710451 /2020

-agai nst- Motion Sequence Nos. 5 and 6

LUIS INGA, "JOHN DOE" and "JANE DOE,'" said names DECISION and ORDER

being ficti tious, it being the in tention of Pia inti ff to designate

any and all occupants of the premises being foreclosed herein,

EAST ELMH URST ASSETS LLC,

Defendants.

---------- - ---- - -------------------------------- - -- -- --- --- -- ----- --- ---- --- x

Present: HO . ULYSSES B. LEVERETT, J.S .C.

Papers umbered

Notice of Motion - Affirmation/ Affidavit in Support -

Statement of Facts - Exhibits (Motion Sequence o. 5) EF I 81-190

Notice of Amended Motion - Affirmation - Exhibits

(Mo tion Sequence o . 5) EF 191-193

Affirmation in Reply (M otion Sequence No. 5) EF 196

otice of Motion - Affirmations - Exh ibits - Statement of Facts -

Memo randum (Motion Sequence o. 6) EF 197-204

Affi m1ation In Opposition - Statement of Facts - Exhibits EF 210-2 12

(Motion Sequence o. 6)

Affi rmation in Rep ly (Motion Sequence No . 6) EF 213

Upon the foregoi ng papers, De fendant East Elmhurst Assets LLC's (Elmhurst LLC)

motion fo r an order granting summary judgment, pursuant to CPLR § 3212, on Defendant ' s third

affirmative defense that Plaintiffs Complaint is time-barred pursuant to the statute of limitations;

and Defendant's counterclaim to cancel and discharge Plai ntiffs mortgage, pursuant to RPAPL

§ 1501 (4) (Motion Sequence No. 5); Plaintiff Citibank , N .A. , as trustee fo r CM L Tl , Asset

Trust' s (Citibank) motion (Motion Sequence No . 6) for summary judgment for dism issal of

Defendant' s affirmati ve defenses pursuant to CPLR 32 11(b); default judgment against the non-

appearing Defendants, pursuant to CPLR § 32 15 ; appointment of a referee, pursuant to RP APL §

1321; and substi tution of Maria Vilchis, Felix Vilchis, Marlene Munere, Maria Gonzalez,

Francisco Ramirez, Ana Gonzalez, and Edgar Pelaez in place of John and Jane Does; and

amendment of the caption is decided as follows:

On July 17, 2020, Plaintiff Citibank commenced this foreclo sure action against

Defendant Inga. Defendant Inga was the fee simple owner of the subject premises known and

located at 100-02 31st A venue, East Elmhurst, ew York, Block 1686: Lot 1, pursuant to a deed,

dated November l 0, 2004, recorded in ew York City Department of Finance Office of the City

Register, under CRF 2004000 742942. On March 16, 2006, Defend ant Inga executed a

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mortgage and note for $668,000.00, in favo r of Option One Mortgage Corporation securing the

subject premises as collateral security for the note. The mortgage was assigned to H&R Block

Bank FSB on June 30 2010, and recorded on August 5, 2010 . The mortgage was then assigned

to HRB Holding, LLC on February 26, 2014 , and recorded March 5, 2014. The mortgage was

thereafter assigned to Plaintiff Citibank on March 31, 2017, and recorded on April 19, 2017.

Defendant Inga asserted in its motion for summary j udgment (Motion Sequence o . 3),

filed March 17, 2023 , that the within foreclosure action commenced by Citibank on July 17,

2020, was barred by the statute of limitations as a result of Plaintiff predecessor in interest ' s

(H&R Block Bank FSB) substantially similar prior foreclosure action, being filed on August 10,

2010. Defendant Inga also argued that there was no tolling of the applicable six-year statute of

limitations for foreclosure actions due to the December 30, 2022 Foreclosure Abuse Prevention

Act (FAPA), which prevents the October 24 , 2016 voluntary discontinuance of a prior

foreclosure action, or extensions of foreclosure actions dismissed as abandoned . On July 8, 2015 ,

Judge Salvatore Modica dismissed as abandoned the August 10, 20 IO foreclosure action

(Supreme Court Index No. 20258/2010) by H&R Block Bank FSB. Judge Modica also granted

prior Plaintiff H&R Block Bank ' s motion to voluntarily discontinue the August 10, 2010

foreclosure , pursuant to an Order dated October 24 , 2016, and filed November 10, 2016.

On August 5, 2018, Defendant Inga commenced a quiet title action in Queens County

Supreme Court, Index o. 712086/2018, seeking cancellation and discharge of Defendant ' s

underly ing mortgage and executed note, dated March 16, 2006, for $668 ,000.00. Defendant Inga

alleged that the loan was accelerated when Plaintiff's predecessor in interest, H&R Block Bank,

commenced a foreclosure action on August I 0, 2010 , under Queens County Index No.

20258/2010, and that the statute of limitations continued to run after the foreclosure action was

dismissed by Judge Modica on July 8, 2015, but was later voluntarily discontinued on August I 0,

2010.

On April 12, 2021 , Defendant Inga moved to dismiss and for summary judgment in the

quiet title action pending before Judge Denis Butler, under Index o. 712086/2018. Defendant

Inga also moved for dismissal of the within foreclosure action on grounds similarly asserted in

the action before Justice Butler. On March 22 , 2021, this Court stayed Defendant Inga ' s motion

to dismiss the foreclosure complaint pursuant to CPLR § 220 I pending disposition of the parties

motion returnable before Justice Butler in April 2021 , seeking similar relief

Pursuant to an Order, dated November 9, 2021 , in the quiet title action before Justice

Butler, Inga's motion to cancel the mortgage based upon expiration of the six-year statute of

limitations was denied, and Defendant Citibank' s motion to dismiss the quiet title action was

granted. Justice Butler found that Defendant Citibank, N.A. deaccelerated the mortgage by letter

to Plaintiff Inga, dated September 24, 2015 , and that Defendant Citibank, N .A. timely

commenced the foreclosure action against Plaintiff.

Following Justice Butler' s ovember 9, 2021 decision, this Court by So-Ordered

Stipulation, dated May 25 , 2022 , granted Plaintiff Citibank ' s motion to vacate the March 22 ,

2021 stay of the foreclosure action. The May 25 , 2022 Stipulation also provided that Defendant

Inga' s motion to dismiss the foreclosure action was denied and Plaintiff Citibank ' s cross-motion

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to consolidate action's Index No. 712086/2018 with the current action's Index No. 710451/2020

was denied . Defendant Inga was given thirty (30) days to file an answer to the foreclosure

complaint. Defendant 's answer was filed on June 24, 2022.

Thereafter, this Court, pursuant to its Decision and Order, dated December 13 , 2023 ,

denied Defendant Inga ' s motion for summary judgment (Mo tion Sequence o. 3), filed March

17 2023. The Order provided in pertinent part :

The Court finds on the respective motions before the Court that

while the Foreclosure Abuse Prevention Act (FAPA), effective

December 30 2022 , time barred Plaintiff's foreclosure complaint,

Defendant Inga is not a necessary pa1iy to this forec losure action

and lacks standing to assert defenses of FAPA, as Defendant Inga,

on August 27, 2020, transferred his entire interest in the subject

property after the July 17, 2020 commencement of this foreclosure

action . or did Defendant Inga have fee sim ple ownership of the

subject premises at the filing of his March 17, 2023 summary

judgment motion .

Plaintiff argues that Defendant Inga's affirmative defense and

counterclaim of the expiration of the six-year statute of limitation

for foreclosure is precluded by the doctrine of res judicata and

collateral estoppel. Plaintiff Citibank relies on the res judicata and

collateral estoppel of Justice Butler's 1ovember 9, 2021 finding

that Plaintiff properly deaccelerated Defendant Inga's mo1igage

loan and thereafter timely commenced the foreclosure action

against Inga. However, F APA became effective on December 30,

2022, and Justice Butler' s prior ovember 2021 Order did not rule

on the applicabi lity off APA. The Court notes that FAPA

establishes that:

(a) a unilateral de -acceleration notice does not revoke acceleration

of mortgage loan pursuant to CPLR § 203(h);

(b) a voluntary discontinuance also does not act to revoke

acce leration of a mortgage debt pursuant to CPLR § 32 l 7(e) ;

(c) that an acknowledgement, promise or agreement, express or

implied , shall not postpone, cancel , reset, toll, revive, or otherwise

extend the statute of limitations. GOL § 17-105(4); and

(d) no saving statute applies pursuant to CPLR § 205-a to prior

action dismissed as abandoned and voluntari ly discontinued.

These statutory interpretations of F AP A have been upheld by the

Appellate Courts. See Bank of New York Mellon v. Stewart, 216

A.D .3d 720 (2d Dept. 2023) and U.S. Bank .A . v. Fox , 213

A.D.3d 445 (I st Dept. 2023) ...

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However, when a borrower transfers his entire interest in the

subject property , after commencement of a foreclosure action, and

the Plaintiff waives any claim for deficiency judgment against the

borrower, the borrower lacks standing to defend the action. See

US Bank NA. Nur, 208 A.D.3d 708 (2d Dept. 2022) and

Nationstar Mortgage LLC v. Lisa M. Leib, 216 A.D .3d 65 1 (2d

Dept. 2023).

To make a claim to cancel and discharge a mortgage pursuant to

RAPL § 1501(4) the party must have an interest in the real

property. See Guccione v. Est. of Guccione , 84 A. D.3d 867 (2d

Dept. 2011 ).

This Court found that Defendant Inga transfe1Ted his interest in the subject property to

East Elmhurst Assets LLC on August 27, 2020. This Court accordingly granted Plaintiff

Citibank ' s motion to discontinue the foreclosure action against Defendant Inga as a non-

necessary party without interest and standing.

Defendant Elmhurst LLC now seeks an Order for summary judgment on its third

affirmative defense that Plaintiff Citibank ' s foreclosure complaint is time barred pursuant to

CPLR § 213(4)'s six-year statute of limitations and FAPA, even though contrary to Justice

But ler' s November 9, 2021 Order. Jus tice Butler found in Luis Inga ' s RPAPL § 1501(4) quiet

title action, that Citibank's letter to Plaintiff Inga, dated September 24, 2015 , lawfu lly revoked

any purported acceleration, and deaccelerated the mortgage loan. The Court granted Defendant

Citibank's motion to dismiss Plaintiff Inga' s claim that the statute of limitations expired since the

mortgage was again accelerated by the commencement of the action.

Here, Plaintiff Ci ti bank argues that Justice Butler's prior November 9, 2021 final

disposition on the merits as to the timeliness of Plaintiff Citibank's foreclosure action must be

given claim preclusion under the doctrine ofres judicata or issue preclusion under the principle

of collateral estoppel. Plaintiff Citibank also argues that even if FAPA's additions ofCPLR §§

32 l 7(e) and 203(h) prohibited a mortgagee bank from unilaterally extending, waiving,

postponing, cancelling, tolling, reviving, or resetting the accrual of the statute of limitations, the

indefinite retroactive application of CPLR § 203(h) is unconstitutional. Plaintiff Citibank asserts

that the September 24, 2015 de-acceleration letter sent approximate ly seven (7) years prior to the

December 30, 2022 effective date of F APA, absent indefinite retroactivity, would have been

timely under ew York State law in existence when the letter was sent.

This Court in its previous December 13 , 2023 Decision and Order noted that Justice

Butler' s November 9, 2021 Decision did not rule upon the applicability of FAPA, that did not

become effective until December 30, 2022. The Appellate Courts in this department have

determined that the legislature intended that FA PA be applied retroactively. See Bank of New

York Mellon v. Denise Stewart, et al., Supreme Court Appellate Division, Second Department,

Docket No. 2019-13971, Wells Fargo Bank N A. v. Edwards, 2024 .Y. Slip Op. 05368 (2d

Dept. 2024) and Anglestone Real Estate Venture Partner Corp. v. Bank of New York Mellon , 221

A.D.3d 943 (2d Dept. 2023). The Appellate Division, in Wells Fargo v. Edwards, exam ined the

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effect of the voluntary discontinuanc e of an action under CPLR § 3217 . The Court held in part:

Wells Fargo's contention that CPLR § 32 l 7(e), added under

F AP A , was not intended to have retroactive effect is with out merit.

F APA took effect " immediately," applying "to all actions

commenced on an instrument described under [CPLR § 213(4)] in

which a final judgment of foreclosure and sale has not been

enforced" (L 2022 , ch 821 , 10). Thus, "[a]lthough the Legislature

did not explicitly state that F APA should apply retroactively, it

clearly indicated that it should." (Genovese v. Nation.star Mortgage

LLC, 223 A.D .3d 37, 44 (1st Dept. 2023)).

The Appellate Court in Wells Fargo v. Edwards retroactively applied the F APA

Amendments and found that the voluntary discontinuanc e of the 2005 action did not serve to

reset the statute of limitations. However, the Court also remitted the matter for determination of

constitutional challenges of F AP A.

Plaintiff also argues that the application of F APA Amendment CPLR § 203(h)

prohibiting a mo11gagee from unilaterally extending, waiving, postponing, cancelling, tolling,

reviving, or resetting the accrual of the statute of limitations is an unconstitution al indefinite

retroactivity. Plaintiff contends that the September 24, 2015 de-acceleratio n letter mailed to Inga

seven (7) years prior to the December 30, 2022 effective date of the F APA Amendment of CPLR

§ 203(h) is an unconstitution al retroac tive taking of a prior procedural and substantive right.

Plaintiff states the retroactive procedural statute, such as CPLR § 203(h), should be applied

prospectively to pending proceeding and procedural steps taken after the enactment. Plaintiff

notes that amendments are presumed to have prospective application unless the Legislature's

preference for retroactivity is explicitly stated or clearly indicated. Citing Nelson v. HSBC Bank

USA, 87 A.D.3d 995(2011) and Regina Metropolitan Co., LLC v. N YS Div. of Housing and

Community Renewal (DHCR), 35 N.Y.3d 332 (2020).

In Regina v. DHCR, the Court of Appeals provided a framework to determine whether a

statute had an unconstitution al retroactive effect. The Court of Appeals used a three-part analysis

derived from the U.S. Supreme Court case of Landgrafv. US! Film Products, 511 U.S. 244

( 1994 ). The Cou11 stated that, absent clear legislative intent to the contrary, a new statute should

not be applied to events preceding its enactment if " (l) it would impair rights a party possessed

when he acted, (2) increase a party's liability for past conduct, or (3) impose new duties with

respect to transactions already completed, thus impacting ' substantive ' rights. On the other hand,

a statute that affects only 'the proprietary of prospective relief .. . has no potentially problematic

retroactive effect even when the liability arises from past conduct." 35 N .Y.3d at 365 (citations

omitted)."

Defendant Elmhurst LLC, in opposition, argues that FAPA is constitutional and applies

to all pre-enforcem ent foreclosure cases retroactively by its explicit terms and legislative intent

and Citi bank shows no vested interest. Defendant argues that clear factors that show legislative

intent for a new statute to be applied retroactively include, "( l) whether the Legislature made a

specific pronounceme nt about retroacti ve effect or conveyed a sense of urgency ; (2) whether the

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statute was designed to rewrite an unintended judicial interpretation; and (3) whether the

enactment itself reaffirms a legislative judgment about what the law in question should be.

Matter of Gleason , 96 N.Y.2d 117, 122 (200 1)."

Here, FAPA § 10 provides that "this Act shall take effect immediately ," and " shal I apply

to all actions commenced on an instrument described under CPLR § 213(4 ), in which a final

judgment of foreclosure and sale has not been enforced. " F APA 's legislati ve memorandum in

support (202 1 Bill Text 7737) explained that "there is an urgent need to pass this bill to overrule

the Court of Appeals ' recent decision in Freedom Mortgage Corp. v. Engel , 33 N.Y.3d 1

(2021 )," and that "the purpose of the remedial legislation is to clarify the meaning of existing

statutes , codify co1Tect judicial applications thereof, and rectify erroneous judicial

interpretations thereof .. . " to "ensure the laws of this state apply equally to all litigants, including

those currently involved in mortgage foreclos ures and related actions. "

However, F APA arguably would have the effect of retroactively nullifying prior final

judicial determinations that dismissed prior owner Inga' s RP APL § 1501 (4) quiet title action in

violation of substantive constitutional due process claims to vested rights to enforce the

mortgage contract.

Plaintiff Citibank argues that Justice Butler's November 9, 2021 Order dismissing Luis

Inga ' s qu iet title ac tion against Citi bank, under Supreme Court Index o. 712086/2018, was a

final adjudication of a claim oflnga ' s interest in the subject property , based on statutorily

permitted vo luntary de-acceleration of the mortgage debt, and reset of the statute of limitations.

Citibank argues that Inga did not perfect its Notices of Appeals, dated December 6, 202 1 and

December 14, 2021 , and that appeals were deemed dismissed as of September 15, 2022 . See also

Citibank NA . v. Kerszko , 203 A.D.3d 42 (2d Dept. 2022) . Citibank further argues that the

judicial determination that the statute of limitations did not expire is res j udicata in that (I) there

is a judgment on the merits rendered by a Court of competent jurisdiction; and (2) the party

against whom the doctrine is invoked was a party to the previous action, or in privity with a party

who was. See Albanez v. Charles 20 .Y.S.3d 567 (2d Dept. 2015).

The Coui1 finds the judicial determination made by Justice Butler on ovember 9, 2021

is res judicata and that the statute of limitations did not expire after the service of the de-

acceleration notice on September 24, 2015, and establ ished a substantive due process accrned

vested right to enforce the mortgage under ew York law prior to CPLR § 203 (h), and which is

not constitutionall y retroactive under FAPA.

The purpose of res judicata is to ensure finality, prevent vexatious litigations, and

promote judicial economy . The finality of rights under litigation is the province of the Court

based upon the constitutional separation of powers. See Art. I § I; A11. II , § 1, Cl. 1; A11. III § 1

of the U.S. Constitution. See also ew York State Co nstituti on Art. Ill, § l ; Art. IV, § l ; Art. VI,

§ 5. The legislative branch makes the laws, the executive branch executes the laws and the

judiciary interprets and applies the law to cases brought before the Court for final determination.

Readjudication of controversies that have been litigated to final judgment by the Courts is

not the function of the legislature. See Ruiz v. United States, 243 F.3d 941 (5th Cir. 200 I) , and

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Wilmington Trust, .A . v. Edward Gawlo wski, 81 Misc. 3d 683 (2023). It is the province and the

duty of the Courts to say what the law is and to declare unconstitutional a law it deems contrary

to the Constitution. See Marbwy ,. Madison , 5 .S. 137 (1803). Statutory amendments are

presumed to be prospective to prevent upsetting reliance , interest, and triggering fundamental

concerns of fairness in attaching new legal consequences to events completed before its

enactment. See Landgrafv. US! Film Products, 511 U.S . 244 (1994). Here, a judicial

determination of a permitted deacceleratio n to allow for a remedy of a breach of the mortgage

contract, and not just to avoi d a statute of limitation , is a vested right.

The retroacti vity clause of a statute must have a rational basis to avoid constitutional due

process violation. However, judicially vested rights that are no longer reviewable by a higher

Court have been found to be res judicata and not subject to the retroactivity clause of a statute.

See Opalinski v. City of New York, 205 A.D.3d 917 (2d Dept. 2022). See also Wilmington Trust,

NA. v. Gawlowski, 81 Misc. 3d 683 (2023), striking the unconstitutional retroactive clause.

The Court finds that the ovember 9, 2021 decision of Justice Butler was a final

determination on the statute of limitations issue, that has res judicata effect and is not subject to

the unconstitutional retroactivity clause of F AP A.

Accordingly , De fend ant East Elmhurst Assets LLC ' s Motion for Summary Judgment to

dismiss the Complaint and discharge the mortgage is denied.

Plaintiff Citibank's Motion for Summary Judgment to dismiss Defendant 's affirmative

defenses, appoint a referee, substitute named Defendants in place of John and Jane Does, and to

amend the caption is granted in its entirety.

This is the Decision and Order of thi s Court.

1/13/2025 'HON:-ULYSSES 8. LEVERETT

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