FAPA as a Change in Law: Voluntary Discontinuance Cannot De‑Accelerate a Mortgage; Renewal Granted and Foreclosure Claims Time‑Barred — U.S. Bank N.A. v. Mongru (App Div 2d Dept, 2025)

Introduction

U.S. Bank N.A. v. Mongru concerns an important intersection of New York’s mortgage-foreclosure statute of limitations, default vacatur standards, and the sweeping retroactive effect of the Foreclosure Abuse Prevention Act (FAPA). The Appellate Division, Second Department, held that FAPA constitutes a “change in the law” warranting renewal under CPLR 2221(e), and — critically — that a voluntary discontinuance of a prior foreclosure action no longer de-accelerates the mortgage debt or resets the limitations clock. Applying these principles, the court reinstated and granted a statute-of-limitations defense, vacated a default under CPLR 317, and dismissed the foreclosure claims as time-barred as against the current property owner, G & Q Estates Corp.

The decision clarifies and consolidates the Second Department’s FAPA jurisprudence: once a mortgage has been accelerated by the commencement of a foreclosure action, the six-year statute of limitations runs on the entire debt, and a later voluntary discontinuance does not restart or revive that period. Moreover, where a prior action was terminated as abandoned, the plaintiff cannot rely on CPLR 205(a) or its foreclosure-specific counterpart, CPLR 205-a, to save a new action.

Case Background and Key Issues

• In 2007, the borrower, Carl Mongru, executed a note and mortgage. He allegedly defaulted beginning April 1, 2007.
• In September 2007, Countrywide — a successor to the original lender — commenced a foreclosure action (the “2007 action”), accelerating the debt in its complaint.
• In July 2008, Countrywide voluntarily discontinued the 2007 action. Shortly thereafter, Mongru conveyed the property to G & Q Estates Corp. The mortgage was later assigned to U.S. Bank in 2014, which then filed the present action in July 2014.
• G & Q Estates defaulted in appearing but cross-moved to vacate that default under CPLR 317 and to dismiss on statute-of-limitations grounds under CPLR 3211(a)(5). In 2017, the trial court found G & Q had no timely notice (satisfying CPLR 317’s notice prong) but rejected its statute-of-limitations defense as not “meritorious.” An intermediate reargument victory was later reversed by the Second Department.
• After FAPA became law on December 30, 2022, G & Q moved to renew under CPLR 2221(e), invoking the new statutory regime to reassert the time-bar; the Supreme Court denied renewal. G & Q appealed.

Key issues:

• Does FAPA work retroactively as a change in law that justifies renewal of a previously denied motion (CPLR 2221[e])?
• Did the 2007 action accelerate the debt and trigger the six-year limitations period, and did the 2008 voluntary discontinuance have any de-accelerating or tolling effect after FAPA?
• Can the plaintiff invoke CPLR 205(a) or CPLR 205-a to save the 2014 action given the termination of an intervening 2008 foreclosure action as abandoned?
• Did G & Q Estates now establish a meritorious statute-of-limitations defense sufficient to vacate its default under CPLR 317?

Summary of the Judgment

The Second Department reversed the Supreme Court’s denial of renewal. It held that FAPA is a change in the law within the meaning of CPLR 2221(e) that would alter the prior determination on timeliness. The 2007 foreclosure filing accelerated the debt, starting the six-year clock; under FAPA, the 2008 voluntary discontinuance did not de-accelerate or reset the limitations period, which therefore expired in September 2013. The 2014 action was untimely. Although a second action was filed in 2008 before the limitations period expired, it was later dismissed as abandoned; accordingly, neither CPLR 205(a) nor CPLR 205-a applied to save the 2014 action. Because the trial court had already found G & Q lacked actual notice in time to defend, and because the statute-of-limitations defense is meritorious under FAPA, G & Q met CPLR 317’s requirements. The Appellate Division granted renewal, vacated the 2017 denial of G & Q’s default and dismissal requests, and ordered those branches granted.

Detailed Analysis

1) Precedents and Authorities Cited

• CPLR 2221(e): A motion to renew may be based on a change in the law that would alter the prior determination. The court cites JPMorgan Chase Bank, N.A. v Eze (232 AD3d 865, 866) to confirm that renewal is the appropriate vehicle when the legal landscape has materially shifted.
• Statute of Limitations and Acceleration:
  • CPLR 213(4) imposes a six-year statute of limitations on mortgage foreclosure actions.
  • When a mortgage is payable in installments, each missed payment is a separate accrual; however, when accelerated, the full debt is due at once and the six-year period runs on the entire loan (FV-1, Inc. v Palaguachi, 234 AD3d 818, 820–821; Sarkar v Deutsche Bank Trust Co. Ams., 225 AD3d 641, 643; Collins v Bank of N.Y. Mellon, 227 AD3d 948, 950).
  • Here, the 2007 complaint’s acceleration triggered accrual; the court pegged expiration at September 2013 (Bank of N.Y. Mellon v Stewart, 216 AD3d 720, 723).
• Freedom Mtge. Corp. v. Engel (37 NY3d 1, 32): Before FAPA, New York’s high court allowed lenders to revoke acceleration via unilateral acts such as a voluntary discontinuance or a clear de-acceleration letter. The Second Department stresses FAPA’s abrogation of that principle in the foreclosure context.
• Foreclosure Abuse Prevention Act (FAPA):
  • FAPA expressly overrode Engel’s de-acceleration regime in mortgage foreclosure cases by amending CPLR 3217(e) to provide that a voluntary discontinuance “shall not, in form or effect, waive, postpone, cancel, toll, extend, revive or reset the limitations period … unless expressly prescribed by statute” (97 Lyman Ave., LLC v MTGLQ Invs., L.P., 233 AD3d 1038, 1041).
  • CPLR 203(h) now provides that once a foreclosure cause of action has accrued, no party may unilaterally “revive or reset the accrual” or otherwise extend the statute of limitations (FV-1, Inc. v Palaguachi, 234 AD3d at 821).
  • The court also notes the legislative provenance and enactment (Bayview Loan Servicing, LLC v Dalal, 232 AD3d 487, 488; Bill Jacket cited in the decision).
  • The Second Department has consistently treated FAPA as applying in pending cases and as a cognizable change in the law supporting renewal (e.g., FV-1, Inc. v Palaguachi, 234 AD3d 818, 819–821).
• Savings Statutes:
  • Even assuming the 2014 action was commenced within six months of the termination of a 2008 action, the court held the plaintiff cannot invoke CPLR 205(a) or 205-a because the 2008 case was dismissed as abandoned (Wells Fargo Bank, N.A. v Cafasso, 223 AD3d 695, 697; U.S. Bank Trust, N.A. v Giangrande, 229 AD3d 834, 836; see also U.S. Bank N.A. v Corcuera, 217 AD3d 896, 898).
  • This tracks FAPA’s narrowing of the savings doctrine in mortgage foreclosure litigation, where dismissals for neglect/abandonment disqualify a plaintiff from refiling under the six-month saving window.
• Procedural History in this Case:
  • The decision acknowledges its own earlier ruling in U.S. Bank N.A. v Mongru (184 AD3d 595, 596), where, under pre-FAPA law, G & Q had “failed to demonstrate” the action was time-barred. FAPA’s enactment changed that outcome.

2) The Court’s Legal Reasoning

The Second Department’s reasoning proceeds in three steps: change in law, timeliness under acceleration, and unavailability of savings statutes.

• Renewal based on a change in law (CPLR 2221[e]).

  The court first recognizes FAPA as a true change in the law that would alter the result reached under Engel and its progeny. Renewal is not restricted to presenting “new facts”; it explicitly encompasses intervening legal developments. Because the trial-level and earlier appellate outcomes rested on pre-FAPA principles (especially Engel’s de-acceleration doctrine), the intervening FAPA amendments (CPLR 3217[e], 203[h]) warranted reexamination.

• Acceleration and the six-year clock.

  The 2007 filing accelerated the debt and started the six-year limitations period on the entire mortgage (CPLR 213[4]). Under FAPA, the 2008 voluntary discontinuance did not de-accelerate or otherwise affect accrual. There being no valid toll or reset, the limitations period expired in September 2013, making the 2014 action time-barred (Bank of N.Y. Mellon v Stewart, 216 AD3d 720, 723).

• No refuge in CPLR 205(a) or 205-a.

  Although a second foreclosure was begun in 2008, it was “dismissed as abandoned.” Even if the 2014 action were filed within six months of that termination, FAPA and Second Department cases hold that dismissals for abandonment or neglect generally preclude reliance on the six‑month saving statutes (Wells Fargo Bank, N.A. v Cafasso, 223 AD3d 695, 697; U.S. Bank Trust, N.A. v Giangrande, 229 AD3d 834, 836). Thus, the 2014 action remains untimely.

• CPLR 317 default vacatur.

  The trial court had already found — back in 2017 — that G & Q Estates did not receive actual notice in time to defend, satisfying CPLR 317’s notice requirement. What it previously lacked was a meritorious defense. FAPA supplied that missing element: the statute-of-limitations defense is now undeniably meritorious under the new law. With both CPLR 317 elements satisfied, vacatur of G & Q’s default and dismissal of the claims against it was required.

3) Impact and Significance

The decision carries several practical and doctrinal implications:

• FAPA’s retroactive force is potent. The case confirms that FAPA is not merely prospective; it can reopen prior adverse rulings through renewal motions and lead to dismissal in cases where plaintiffs had previously relied on Engel’s de‑acceleration doctrine. Lenders can no longer assume that a voluntary discontinuance — even one filed years ago — reset the limitations clock.
• Acceleration timing is dispositive. The date of the first acceleration (often the filing date of an early foreclosure complaint) may govern the statute of limitations forever afterward, absent a saving statute. Practitioners must reconstruct the earliest acceleration event, not the most recent one, to evaluate timeliness.
• Savings statutes are narrowly available in foreclosure cases. When an intervening action was dismissed as abandoned or for neglect, neither CPLR 205(a) nor CPLR 205-a will rescue a later filing. This strongly incentivizes diligent prosecution of any first or intervening foreclosure action.
• Defaulting property owners still have viable paths to relief. CPLR 317 remains a critical mechanism. If a non-personally served defendant lacked actual notice in time to defend, a subsequent change in law can supply the “meritorious defense” prong on renewal and lead to vacatur of default and dismissal.
• Title holders after acceleration are protected. Investors or transferees like G & Q Estates are not foreclosed from raising a time-bar defense triggered by an earlier lender’s acceleration, even if they were not involved in that earlier litigation.

Complex Concepts Simplified

• Acceleration: A lender’s decision to declare the entire mortgage balance due immediately (often by filing a foreclosure complaint that demands the full debt). Once accelerated, the six-year statute of limitations runs on the whole loan, not just future installments.
• De‑acceleration: Before FAPA, lenders could “undo” acceleration by clear written notice or by voluntarily discontinuing a foreclosure. FAPA now bars that in foreclosure cases: unilateral steps like a discontinuance cannot reset or revive the limitations period (CPLR 3217[e], 203[h]).
• Voluntary Discontinuance (CPLR 3217): A procedural step by which a plaintiff ends a lawsuit. After FAPA, discontinuing a foreclosure case does not affect the already-running limitations clock.
• Statute of Limitations (CPLR 213[4]): The deadline to bring a foreclosure action — six years in New York. The clock starts at acceleration for the entire debt.
• Dismissed as Abandoned: Courts may dismiss a case as “abandoned” when plaintiffs fail to take required steps (for example, failing to seek default judgment within a year under CPLR 3215[c]). Such dismissals usually bar reliance on the six-month saving statutes (205[a]/205-a).
• CPLR 205(a) / 205-a (Savings Statutes): These can sometimes allow a plaintiff to refile within six months after a prior timely action ended. In foreclosure cases, FAPA added CPLR 205-a and restricts its use; dismissals for neglect/abandonment typically disqualify plaintiffs from invoking the saving rule.
• CPLR 317 (Default Vacatur): Allows a defendant who was served by a method other than personal delivery, and who did not get actual notice in time to defend, to open a default if they also show a potentially winning defense (here, a time-bar).
• Motion to Renew (CPLR 2221[e]): A request asking the court to reconsider an earlier motion based on new facts or a change in the law. The change must be significant enough that it would likely alter the previous ruling.

Practice Pointers

• For lenders/servicers:
  • Conduct a thorough “acceleration audit.” Identify the first acceleration event and compute the six-year period from that date. Do not rely on past discontinuances or de‑acceleration letters to reset the clock.
  • Evaluate the procedural history of any intervening actions. A dismissal as abandoned will likely foreclose the 205(a)/205-a saving route.
  • If suit is contemplated after six years from the earliest acceleration, consider whether any non-unilateral tolls or statutory exceptions apply; unilateral acts will not suffice under FAPA.
• For homeowners and subsequent title holders:
  • Scrutinize the docket for early foreclosure filings that accelerated the debt. If more than six years have passed with no qualifying toll or saving statute, a 3211(a)(5) motion may succeed.
  • If you defaulted in appearing and were not personally served (or lacked actual notice), consider a CPLR 317 motion paired with the FAPA-based limitations defense.

Case Timeline at a Glance

• February 2007: Note and mortgage executed.
• April 1, 2007: Alleged payment default.
• September 2007: Countrywide files first foreclosure; acceleration occurs.
• July 2008: Countrywide voluntarily discontinues the 2007 action.
• 2008: Another foreclosure action is commenced; later dismissed as abandoned.
• April 2014: Mortgage assigned to U.S. Bank.
• July 2014: U.S. Bank files the present foreclosure action.
• 2017: Trial court finds no timely actual notice for G & Q (CPLR 317) but rejects SOL defense; later reargument granted, but Appellate Division reverses under pre-FAPA law.
• December 30, 2022: FAPA signed into law.
• February 2023: G & Q moves to renew based on FAPA.
• June 13, 2023: Supreme Court denies renewal.
• August 27, 2025: Appellate Division reverses; grants renewal, vacates default denial, and dismisses as time-barred against G & Q.

Conclusion

U.S. Bank N.A. v. Mongru crystallizes the Second Department’s post‑FAPA framework: the earliest acceleration controls the six-year statute of limitations; a voluntary discontinuance cannot de‑accelerate or reset the limitations period; and dismissals as abandoned generally bar reliance on the saving statutes. Just as importantly, the court confirms that FAPA’s changes are sufficiently transformative to warrant renewal under CPLR 2221(e), allowing defendants to revive previously unsuccessful statute-of-limitations challenges and, where appropriate, to combine them with default vacatur under CPLR 317.

The decision thus serves as both a doctrinal milestone and a practical roadmap for litigants navigating New York’s foreclosure landscape after FAPA. Lenders must carefully audit historical accelerations and prosecute actions diligently; borrowers and subsequent titleholders should reexamine old files for acceleration events that might now render long-pending or newly filed actions untimely. In sum, Mongru underscores FAPA’s central message: unilateral lender actions cannot manipulate foreclosure limitations periods, and courts will enforce the six-year deadline strictly.