E. Fork Funding LLC v. U.S. Bank, Nat’l Ass’n

23-659
E. Fork Funding LLC v. U.S. Bank, Nat’l Ass’n
In the
United States Court of Appeals
FOR THE SECOND CIRCUIT
A UGUST TERM 2023
No. 23-659
E AST FORK FUNDING LLC,
Plaintiff-Appellee,
N EW Y ORK STATE ATTORNEY G ENERAL,
Intervenor,
v.
U.S. BANK, N ATIONAL A SSOCIATION , A S T RUSTEE FOR G REENPOINT
MORTGAGE FUNDING T RUST M ORTGAGE PASS -THROUGH
C ERTIFICATES, S ERIES 2006-AR6,
Defendant-Appellant.
On Appeal from the United States District Court
for the Eastern District of New York
A RGUED: FEBRUARY 29, 2024
D ECIDED: O CTOBER 1, 2024

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Before: L OHIER and MENASHI, Circuit Judges, and L IMAN, Judge.*
In 2020, Plaintiff-Appellee East Fork Funding LLC filed this
quiet title action against Defendant-Appellant U.S. Bank, N.A., on a
mortgage recorded against East Fork’s property. The mortgage had
already been subject to three foreclosure actions, two of which had
been voluntarily discontinued by the mortgagee. The district court
granted summary judgment in favor of East Fork, holding that under
the Foreclosure Abuse Prevention Act (“FAPA”), enacted in
December 2022, the voluntary discontinuances did not reset the six-
year statute of limitations to bring a foreclosure action. The statute of
limitations therefore continued to run from the commencement of the
first foreclosure action in 2010 and ran out six years later, entitling
East Fork to quiet title. On appeal, U.S. Bank argues that FAPA does
not apply to voluntary discontinuances that took place prior to
FAPA’s enactment, that such retroactive application would be
unconstitutional, and that under pre-FAPA law the voluntary
discontinuances did reset the statute of limitations.
Whether and to what extent FAPA applies retroactively to
voluntary discontinuances is a novel question of state law and
answering it is necessary to resolve this appeal. We therefore certify
the following question to the New York Court of Appeals: Whether
Sections 4 and/or 8 of the Foreclosure Abuse Prevention Act, codified
at N.Y. C.P.L.R. 203(h) and 3217(e), respectively, apply to a unilateral
voluntary discontinuance taken prior to the Act’s enactment.
Judge Menashi concurs in a separate opinion. Judge Liman
concurs in a separate opinion.
* Judge Lewis J. Liman of the United States District Court for the Southern
District of New York, sitting by designation.

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A NTHONY R. F ILOSA, Rosenberg, Fortuna & Laitman,
LLP, Garden City, NY (Steven A. Biolsi, Biolsi Law
Group, P.C., New York, NY, on the brief), for Plaintiff-
Appellee.
MARK S. G RUBE , Senior Assistant Solicitor General
(Barbara D. Underwood, Solicitor General, Ester
Murdukhayeva, Deputy Solicitor General, on the brief), for
Letitia James, Attorney General of the State of New York,
New York, NY, for Intervenor.
PATRICK G. B RODERICK (Steven Lazar, on the brief),
Greenberg Traurig, LLP, New York, NY, for Defendant-
Appellant.
MENASHI, Circuit Judge:
In 2020, Plaintiff-Appellee East Fork Funding LLC filed this
quiet title action against Defendant-Appellant U.S. Bank, N.A., on a
mortgage recorded against East Fork’s property. East Fork purchased
the property in September 2016. At that time, the mortgage had
already been subject to three foreclosure actions, two of which had
been voluntarily discontinued by the mortgagee: (1) an action
commenced in 2010 and voluntarily discontinued in 2011, (2) an
action commenced in 2011 and voluntarily discontinued in 2016, and
(3) an action commenced in 2016 for which an amended judgment of
foreclosure and sale was issued in 2022.
The district court granted summary judgment in favor of East
Fork, holding that under the Foreclosure Abuse Prevention Act
(“FAPA”), enacted by the New York State legislature in December

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2022, the voluntary discontinuances did not reset the six-year statute
of limitations to bring a foreclosure action. The statute of limitations
therefore continued to run from the commencement of the first
foreclosure action in 2010 and ran out six years later, entitling East
Fork to quiet title. On appeal, U.S. Bank argues that FAPA does not
apply retroactively to voluntary discontinuances that occurred prior
to FAPA’s enactment, that such retroactive application would be
unconstitutional, and that under pre-FAPA law the voluntary
discontinuances did reset the statute of limitations.
Whether and to what extent FAPA applies retroactively to
voluntary discontinuances is a novel question of state law and
answering it is necessary to resolve this appeal. We therefore certify
the following question to the New York Court of Appeals pursuant to
22 N.Y.C.C.R.R. § 500.27(a) and 2d Cir. R. 27.2(a): Whether Sections 4
and/or 8 of the Foreclosure Abuse Prevention Act, codified at N.Y.
C.P.L.R. 203(h) and 3217(e), respectively, apply to a unilateral
voluntary discontinuance taken prior to the Act’s enactment.
BACKGROUND
In 2006, Sean and Patricia Dros obtained a mortgage loan to
purchase a condominium and parking space in Queens, New York
(together, “the Property”). By 2010, the Droses had defaulted on the
mortgage, and in July 2010 the mortgagee—GMAC Mortgage, LLC—
commenced a foreclosure action. The Droses did not appear in the
action and in May 2011 GMAC voluntarily discontinued it. In
November 2011, GMAC brought a second foreclosure action. The
Droses did not appear in this action either. In 2015, the mortgage was
assigned to U.S. Bank. In February 2016, GMAC voluntarily
discontinued the 2011 action. In July 2016, U.S. Bank commenced a
third foreclosure action. In April 2022, the state court granted U.S.

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Bank’s motion to issue an amended judgment of foreclosure and sale
against the Property. The foreclosure sale “has not yet occurred due
to the pending appeal in this action.” Appellant’s Br. 6.
In 2016, East Fork purchased the Property through a judicial
sale ordered in a separate foreclosure action that the board of
managers of the Droses’ condominium association brought pursuant
to a lien for unpaid common charges. In 2020, East Fork filed this quiet
title action against U.S. Bank seeking to cancel and discharge the
mortgage on the ground that the mortgage’s Schedule A describes a
different property than the Property against which it was recorded
and therefore is not a valid encumbrance on the Property. The parties
filed cross-motions for summary judgment.
On December 30, 2022, while the summary judgment motions
were still pending, the New York State legislature enacted FAPA.
FAPA provides that “the voluntary discontinuance of [an action on a
mortgage] … shall not … reset the limitations period to commence an
action.” FAPA § 8 (codified at N.Y. C.P.L.R. 3217(e)). The parties then
filed supplemental briefing on the question of whether FAPA would
time-bar any future foreclosure action because, under FAPA, the
voluntary discontinuances of the 2010 and 2011 actions did not reset
the statute of limitations to foreclose on the mortgage.
On March 23, 2023, the district court granted East Fork’s motion
for summary judgment and denied U.S. Bank’s motion. The district
court held, first, that FAPA applies retroactively to the prior
voluntary discontinuances so that those discontinuances did not reset
the statute of limitations. Thus, the statute of limitations began
running with the filing of the 2010 action, was not reset by the 2011
and 2016 voluntarily discontinuances, and so ran out before East Fork
commenced this quiet title action. Second, it held that retroactive

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application of FAPA does not violate the Contracts Clause of the U.S.
Constitution. Third, it held that even if FAPA did not apply to the
prior discontinuances, the statute of limitations had still expired
because the 2011 and 2016 discontinuances did not reset the statute of
limitations even under pre-FAPA law.
DISCUSSION
Under New York law, a property owner may bring an action to
cancel and discharge a mortgage encumbering its property after the
“statute of limitation for the commencement of an action to foreclose
[the] mortgage … has expired.” N.Y. Real Prop. Acts. Law § 1501(4).
The statute of limitations for a mortgage foreclosure action is six
years. N.Y. C.P.L.R. 213(4). “For a mortgage payable in installments,
‘separate causes of action accrue for each installment that is not paid,
and the statute of limitations begins to run, on the date each
installment becomes due.’” 53rd St., LLC v. U.S. Bank, N.A., 8 F.4th 74,
78 (2d Cir. 2021) (alteration omitted) (quoting Wells Fargo Bank, N.A.
v. Burke, 943 N.Y.S.2d 540, 542 (2d Dep’t 2012)). However, once a
mortgage debt is accelerated—such as by commencement of a
foreclosure action—“the entire amount is due and the Statute of
Limitations begins to run on the entire debt.” Id. (quoting Ditmid
Holdings, LLC v. JPMorgan Chase Bank, N.A., 120 N.Y.S.3d 393, 394 (2d
Dep’t 2020)).
In certain circumstances, parties to a mortgage may
deaccelerate a previously accelerated mortgage loan and thereby reset
the statute of limitations. See N.Y. Gen. Oblig. Law § 17-105. But
whether a mortgagee’s unilateral deacceleration—such as by a
voluntary discontinuance of a foreclosure action—resets the
limitations period has been subject to debate. In 2021, the New York
Court of Appeals held that when a bank accelerates a loan “via the

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commencement of a foreclosure action, a voluntary discontinuance of
that action … constitutes a revocation of that acceleration” that resets
the statute of limitations. Freedom Mortg. Corp. v. Engel, 37 N.Y.3d 1,
31 (2021). The question was one of first impression for the New York
Court of Appeals, but Engel concluded that a noteholder may “revoke
an election to accelerate … by an ‘affirmative act’ of the noteholder
within six years of the election to accelerate.” Id. at 28-29.
In 2022, the New York State legislature enacted FAPA in part
to overrule this holding of Engel. FAPA has ten sections, of which
three are relevant here. Section 4 provides that “[o]nce a cause of
action upon [a mortgage] has accrued, no party may … effect a
unilateral extension of the limitations period.” FAPA § 4 (codified at
N.Y. C.P.L.R. 203(h)). Section 8 provides that “the voluntary
discontinuance of [an action on a mortgage] … shall not … reset the
limitations period to commence an action.” FAPA § 8 (codified at N.Y.
C.P.L.R. 3217(e)). Section 10 provides that “[t]his act shall take effect
immediately and shall apply to all actions commenced on [a
mortgage] in which a final judgment of foreclosure and sale has not
been enforced.” FAPA § 10 (2022 N.Y. Laws, Ch. 821, § 10).
I
The parties’ arguments on appeal turn mainly on whether the
voluntary discontinuances of the 2010 and 2011 actions—in 2011 and
2016, respectively—reset the limitations clock. If FAPA applies
retroactively to those actions, then the voluntary discontinuances did
not reset the clock and East Fork could be entitled to quiet title. If
FAPA does not apply retroactively to that extent, then the voluntary
discontinuances would have reset the clock assuming the
discontinuances were properly executed under Engel.

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U.S. Bank argues as follows. First, FAPA as a matter of statutory
interpretation does not apply retroactively to a voluntary
discontinuance that occurred prior to FAPA’s enactment. Second,
such a retroactive application of FAPA would violate the Contracts
Clause, the Takings Clause, and the Due Process Clause of the U.S.
Constitution. Third, if FAPA does not apply then the statute of
limitations for bringing a foreclosure action has not run out because
the 2010 and 2011 actions were properly discontinued under Engel.
East Fork responds with several points of its own. First, FAPA
as a matter of statutory interpretation does apply retroactively to
voluntary discontinuances occurring before its enactment. Second,
retroactive application of FAPA would not be unconstitutional. Third,
if FAPA does not apply then the statute of limitations has run out
because the 2010 and 2011 actions were not properly discontinued
under Engel. Additionally, East Fork contends that it is entitled to
quiet title even if the statute of limitations has not run out because the
mortgage is not a valid encumbrance on the Property, that U.S. Bank
is estopped from arguing otherwise, and that the 2022 amended
judgment of foreclosure and sale is not binding on East Fork due to
jurisdictional and other defects.
Answering the question of whether and to what extent FAPA
applies retroactively to voluntary discontinuances is necessary to
resolve this appeal and is one of first impression for the New York
Court of Appeals. We therefore certify the following question to the
New York Court of Appeals:
Whether Sections 4 and/or 8 of the Foreclosure Abuse
Prevention Act, codified at N.Y. C.P.L.R. 203(h) and
3217(e), respectively, apply to a unilateral voluntary
discontinuance taken prior to the Act’s enactment.

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II
We next review the parties’ statutory interpretation arguments
and explain why certification is appropriate in this case. The parties
dispute whether FAPA, as a matter of statutory interpretation, applies
retroactively to voluntary discontinuances that occurred before FAPA
was enacted.
A
U.S. Bank argues that FAPA’s text does not overcome the
longstanding presumption against the retroactive application of
statutes and that FAPA should not be applied “retroactively to a
voluntary discontinuance that occurred … before FAPA was enacted”
in light of the constitutional concerns that such a retroactive
application would raise. Appellant’s Br. 27.
First, U.S. Bank invokes the “deeply rooted” presumption
against retroactive legislation. Landgraf v. USI Film Prods., 511 U.S.
244, 265 (1994); see Jacobus v. Colgate, 217 N.Y. 235, 240 (1916)
(Cardozo, J.) (“It takes a clear expression of the legislative purpose to
justify a retroactive application.”); In re Gleason (Michael Vee, Ltd.),
96 N.Y.2d 117, 122 (2001) (“Amendments are presumed to have
prospective application unless the Legislature’s preference for
retroactivity is explicitly stated or clearly indicated.”).
Second, U.S. Bank contends that FAPA’s text does not
overcome this presumption. It points out that Sections 8 and 10 are
“framed in future words, such as ‘shall’ or ‘hereafter,’” which are
“construed as prospective only.” Kuryak v. Adamczyk, 705 N.Y.S.2d
739, 740 (4th Dep’t 1999) (quoting N.Y. Stat. Law § 51, comment
(McKinney 2024)); see also Landgraf, 511 U.S. at 288 (Scalia, J.,
concurring in the judgments) (“‘Shall take effect upon enactment,’ is
presumed to mean ‘shall have prospective effect upon enactment.’”)

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(alteration omitted). Section 8 provides that a voluntary
discontinuance “shall not … reset the limitations period.” FAPA § 8
(codified at N.Y. C.P.L.R. 3217(e)) (emphasis added). Likewise,
Section 10 provides that FAPA “shall take effect immediately and shall
apply to all actions commenced on [a mortgage] in which a final
judgment of foreclosure and sale has not been enforced.” FAPA § 10
(2022 N.Y. Laws, Ch. 821, § 10) (emphasis added). U.S. Bank observes
that Section 4 similarly uses the future tense in providing that “no
party may … effect a unilateral extension of the limitations period.”
FAPA § 4 (codified at N.Y. C.P.L.R. 203(h)) (emphasis added).
U.S. Bank further notes that FAPA uses the term “prior action”
in some sections to explain the effect that a pre-FAPA action has on a
present action, but the statute does not use that term in Section 4 or
Section 8. For example, Section 7 provides that a mortgagee in an
existing action is estopped from arguing that a “prior action” was not
validly accelerated. FAPA § 7 (codified at N.Y. C.P.L.R. 213(4)(a)-(b)).
U.S. Bank argues that FAPA’s use of the term “prior action” in some
sections but not in Sections 4 and 8 indicates that Sections 4 and 8 do
not apply to an action discontinued before FAPA’s enactment.1
Third, U.S. Bank urges us to interpret the statute prospectively
so “as to avoid doubtful constitutional questions.” Arizona v. United
States, 567 U.S. 387, 415 (2012); see People v. Viviani, 36 N.Y.3d 564, 579
(2021) (“[A] statute should be construed, whenever possible, in a way
that avoids placing its constitutionality in doubt.”).
1 The Attorney General responds that Section 8 applies to the voluntary
discontinuance of a prior action despite the lack of a specific reference to
“prior actions” because it expressly applies to “the voluntary
discontinuance” of “any action.” FAPA § 8 (codified at N.Y.
C.P.L.R. 3217(e)) (emphasis added).

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B
East Fork counters that, under New York law governing the
retroactive application of statutes, FAPA applies to prior voluntary
discontinuances. “In determining whether a statute should be given
retroactive effect,” New York courts “have recognized two axioms of
statutory interpretation”: (1) “[a]mendments are presumed to have
prospective application unless the Legislature’s preference for
retroactivity is explicitly stated or clearly indicated,” and
(2) “remedial legislation should be given retroactive effect in order to
effectuate its beneficial purpose.” Gleason, 96 N.Y.2d at 122; see also
Regina Metro. Co. v. New York State Div. of Hous. & Cmty. Renewal,
35 N.Y.3d 332, 370 (2020). New York courts also consider “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.” Gleason, 96 N.Y.2d at 122.
East Fork contends that both axioms apply here. First, FAPA’s
text and legislative history show that the legislature intended for the
statute to apply retroactively. Section 10 states that FAPA “shall apply
to all actions … in which a final judgment of foreclosure and sale has
not been enforced.” FAPA § 10 (2022 N.Y. Laws, Ch. 821, § 10). And
the legislators’ statements likewise indicate that FAPA was intended
to apply to all pending actions. See Special App’x 19 (Committee
Report) (“Section 10 … makes it clear that [FAPA] … will apply to all
such actions commenced where a final judgment of foreclosure and
sale has not been enforced.”); Add. 38-39 (Senate Debate Tr.)
(statement of Senator Brian P. Kavanagh) (“[I]f … an action has been
commenced and is pending at the time this bill comes into effect, then
[FAPA] would apply. But if an action has been concluded,

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presumably it would not apply to that action.”). Moreover, the
sponsor of FAPA in the State Assembly explained that the legislation
was designed to have “retroactive effect” in accordance “with the
recent Court of Appeals precedent in the Regina and Gleason cases.”
Add. 33 (Assembly Debate Tr.) (statement of Assembly Member
Helene E. Weinstein).
Second, FAPA is remedial legislation because it was enacted to
correct how the “law stood at the making of the act.” Am. Hist. Soc’y
v. Glenn, 248 N.Y. 445, 451 (1928) (quoting 1 William Blackstone,
Commentaries *87); see also N.Y. Stat. Law § 54, comment (McKinney
2024) (“[R]emedial statutes are those designed to correct
imperfections in the prior law.”). The sponsoring assembly member
explained that FAPA is “remedial legislation” that was intended to
restore the law concerning statutes of limitations in
mortgage foreclosures cases to where it was before the
Engel decision … so that foreclosing financial institutions
are not excused from longstanding statute of limitations
principles at the expense of New York’s struggling
homeowners. … The bill … was specifically designed to
solve the problem created by court decisions which
veered from our original legislative intent to create a
narrow and focused foreclosure remedy for mortgage
lenders and not allow unlimited bites of the foreclosure
apple.
Add. 33 (Assembly Debate Tr.) (statement of Assembly Member
Helene E. Weinstein); see also Add. 22, 30 (Senate Introducer’s Mem.)
(stating that Sections 4 and 8 were intended to “overrule Engel”).
East Fork argues that the other Gleason factors also indicate that
FAPA applies retroactively. The legislature conveyed a sense of
urgency by acting quickly to overturn Engel after that decision was

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issued and by directing that the act take effect immediately. The
legislature did not regard FAPA as establishing a new legal
requirement but as “clarify[ing] the meaning of existing statutes” and
“restor[ing] longstanding law that made it clear that a lenders’
discontinuance of a foreclosure action that accelerated a mortgage
loan does not serve to reset the statute of limitations.” Special App’x
18-19 (Committee Report); see also Add. 16 (Senate Introducer’s Mem.)
(“[T]he purpose of the present remedial legislation is to clarify the
meaning of existing statutes, codify correct judicial applications
thereof, and rectify erroneous judicial interpretations thereof.”).
Third, East Fork contends that retroactive application would be
“sensible and equitable” because—in East Fork’s view—the case law
before Engel held that a voluntary discontinuance does not
deaccelerate a loan and reset the statute of limitations. Appellee’s Br.
32 (citing cases that predate Engel).
C
We have discretion to certify a question to the New York Court
of Appeals “[w]henever it appears … that determinative questions of
New York law are involved in a case pending before [our] court for
which no controlling precedent of the Court of Appeals exists.”
22 N.Y.C.C.R.R. § 500.27(a); see 2d Cir. R. 27.2(a) (“If state law permits,
the court may certify a question of state law to that state’s highest
court.”). When we do so, we retain jurisdiction over the appeal
“pending the state court’s response to the certified question.” 2d Cir.
R. 27.2(a).2
2 We may certify a question even when the parties have not requested it.
Beck Chevrolet Co. v. Gen. Motors LLC, 787 F.3d 663, 681-82 (2d Cir. 2015). In
any event, the Attorney General, as Intervenor, suggested that we certify

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“We resort to certification sparingly.” Highland Cap. Mgmt. LP
v. Schneider, 460 F.3d 308, 316 (2d Cir. 2006). On the one hand, it is
“our job to predict how the forum state’s highest court would decide
the issues before us,” at least when “sufficient precedents exist for us
to make this determination.” Khan v. Yale Univ., 27 F.4th 805, 831 (2d
Cir. 2022) (quoting DiBella v. Hopkins, 403 F.3d 102, 111 (2d Cir. 2005)).
On the other hand, the “certification of novel or unsettled questions
of state law for authoritative answers by a State’s highest court … may
save time, energy, and resources and help build a cooperative judicial
federalism.” Arizonans, 520 U.S. at 77 (internal quotation marks and
alteration omitted). “[B]asic principles of federalism” suggest that
“the controlling interpretation of the relevant statute be given by
state, rather than federal, courts” because “a federal court ‘risks
friction-generating error when it endeavors to construe a novel state
Act not yet reviewed by the State’s highest court.’” Serio, 261 F.3d at
150 (quoting Arizonans, 520 U.S. at 79).
In light of these considerations, our decision to certify a
question is discretionary:
[W]hen exercising that discretion we consider whether:
(1) “the New York Court of Appeals has not squarely
addressed an issue and other decisions by New York
courts are insufficient to predict how the Court of
Appeals would resolve it”; (2) “the statute’s plain
language does not indicate the answer”; (3) “a decision
on the merits requires value judgments and important
public policy choices that the New York Court of
the question. See Intervenor’s Br. 22 n.11. We have stated that “under these
conditions, a certification request ‘merits more respectful consideration.’”
Allstate Ins. Co. v. Serio, 261 F.3d 143, 154 (2d Cir. 2001) (alteration omitted)
(quoting Arizonans for Off. Eng. v. Arizona, 520 U.S. 43, 78 (1997)).

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Appeals is better situated than we to make”; and (4) “the
questions certified will control the outcome of the case.”
CIT Bank N.A. v. Schiffman, 948 F.3d 529, 537 (2d Cir. 2020) (quoting
Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 42 (2d Cir. 2010)).
These factors favor certification in this case.
First, the New York Court of Appeals has not addressed
FAPA’s retroactive scope, and the rulings of the intermediate
appellate courts are insufficient to predict how the Court of Appeals
would decide the issue. “Although we are not strictly bound by state
intermediate appellate courts, rulings from such courts are a basis for
ascertaining state law which is not to be disregarded by a federal
court unless it is convinced by other persuasive data that the highest
court of the state would decide otherwise.” DiBella, 403 F.3d at 112
(internal quotation marks omitted). For example, “we are unlikely to
rely on lower state court decisions if they appear to conflict with a
ruling of the state’s highest court, the courts are divided on the issue,
or we are convinced by other persuasive data that the highest court
of the state would decide otherwise.” AEI Life LLC v. Lincoln Benefit
Life Co., 892 F.3d 126, 139 n.15 (2d Cir. 2018) (internal quotation marks
omitted). In this case, the decisions of the Appellate Division are not
sufficient to determine how the Court of Appeals would rule. The
Second Department has applied FAPA retroactively to voluntary
discontinuances that occurred prior to FAPA’s enactment. See, e.g.,
GMAT Legal Title Tr. 2014-1 v. Kator, 184 N.Y.S.3d 805, 807 (2d Dep’t
2023); MTGLQ Invs., L.P. v. Singh, 216 A.D.3d 1087, 1088 (2d Dep’t
2023). 3 But some New York courts have declined to follow those
3 The First Department has held that some of FAPA’s provisions apply
retroactively and suggested that the entire statute does too, but it has not
addressed Sections 4 and 8. See U.S. Bank N.A. v. Fox, 216 A.D.3d 445, 446-

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decisions on the ground that the Second Department gave “FAPA’s
provisions retroactive effect without so much as mentioning the issue
of ‘retroactivity’ or conducting the analysis required by [Regina
Metropolitan] to determine whether the legislation is to be
retroactively applied.” U.S. Bank N.A. v. Speller, 197 N.Y.S.3d 925, 2023
WL 7174591, at *16 n.4 (N.Y. Sup. Ct. 2023). Indeed, trial courts even
within the Second Department continue to disagree on the issue of
retroactivity. See, e.g., U.S. Bank Tr. N.A. v. Joerger, 214 N.Y.S.3d 876,
885 (N.Y. Sup. Ct. 2024) (“[I]t is clear that FAPA and its amendments
are to be applied prospectively.”); U.S. Bank, N.A. v. Nicholson, 208
N.Y.S.3d 853, 2024 WL 1903298, at *7 (N.Y. Sup. Ct. 2024) (“[T]his
Court holds that both sections 6 and 8 of FAPA … apply
retroactively.”).
Second, the statute’s plain language does not dictate the
answer. Even if FAPA applies retroactively to all pending actions
involving mortgage contracts signed before the statute’s enactment, it
is not clear whether it must also apply to a noteholder’s voluntary
dismissal—taken before FAPA’s enactment—of a foreclosure action
that itself is no longer pending.
47 (1st Dep’t 2023) (applying FAPA § 6 retroactively); Genovese v. Nationstar
Mortg. LLC, 223 A.D.3d 37, 45 (1st Dep’t 2023) (concluding that “FAPA
applies retroactively” and applying FAPA § 7 retroactively). The trial courts
in the Third Department have disagreed on whether Section 8 applies
retroactively. See, e.g., Newrez LLC v. Kalina, 185 N.Y.S.3d 651, 2023 WL
2721698, at *2 (N.Y. Sup. Ct. 2023) (holding that FAPA § 8 does not apply to
prior voluntary discontinuances because “there is no indication that the
legislative intent was to impair already vested rights”); Ditech Fin. LLC v.
Temple, 201 N.Y.S.3d 920, 2024 WL 105732, at *4 (N.Y. Sup. Ct. 2024)
(holding that “FAPA was intended to have retroactive effect” and applying
FAPA § 8 to a prior voluntary discontinuance).

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Third, FAPA’s interpretation has implications for the New
York mortgage market, New York property owners, and New York
state law governing retroactive application of statutes.4 To the extent
that the statutory interpretation question implicates state public
policy choices, the New York Court of Appeals is better situated to
answer it.
Fourth, answering the certified question is necessary to resolve
this appeal. We note that it does not resolve the case entirely. If the
Court of Appeals were to hold that FAPA does apply retroactively to
prior voluntary discontinuances, we would then consider whether
such retroactive application is constitutional. If the Court of Appeals
were to hold that FAPA does not apply retroactively in that way, we
would then consider East Fork’s arguments that the voluntary
discontinuances were invalid even under Engel and that it is entitled
to quiet title even if a foreclosure action is not time-barred. Either way,
however, the retroactivity question must be decided and it will
determine how the appeal will be resolved.
Finally, certification is particularly appropriate here for two
additional reasons. Several New York courts have already addressed
the question of FAPA’s retroactivity, and we expect that the Court of
Appeals will eventually render a decision on the issue. Moreover,
FAPA “is susceptible of an interpretation that would eliminate the
constitutional issue” in this case. Tunick v. Safir, 209 F.3d 67, 75 (2d Cir.
2000) (internal quotation marks omitted). “Normally this Court ought
not to consider the Constitutionality of a state statute in the absence
of a controlling interpretation of its meaning and effect by the state
4 See Brief of Amici Curiae New York Bankers Ass’n et al. in Support of
Defendant-Appellant at 18-22; Brief of Amicus Curiae United Jewish
Organizations of Williamsburg, Inc. in Support of Plaintiff-Appellee at 4-8.

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18
courts.” Nicholson v. Scoppetta, 344 F.3d 154, 167 (2d Cir. 2003) (quoting
Arizonans, 520 U.S. at 75). Accordingly, we seek such a controlling
interpretation here.
CONCLUSION
We certify the following question to the New York Court of
Appeals:
Whether Sections 4 and/or 8 of the Foreclosure Abuse
Prevention Act, codified at N.Y. C.P.L.R. 203(h) and
3217(e), respectively, apply to a unilateral voluntary
discontinuance taken prior to the Act’s enactment.
The New York Court of Appeals may reformulate or expand on this
question as it sees fit.
It is hereby ordered that the Clerk of this Court transmit to the
Clerk of the New York Court of Appeals this opinion as our
certificate, together with a complete set of briefs, appendices, and the
record filed in this case by the parties. We retain jurisdiction to resolve
this appeal after the New York Court of Appeals has responded to
this certification.

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23-659
E. Fork Funding LLC v. U.S. Bank, Nat’l Ass’n
MENASHI , Circuit Judge, concurring:
I agree that certification of the statutory interpretation question
to the New York Court of Appeals is appropriate. I write separately
to make two points. First, the primary dispute between the parties to
this appeal is not really about whether the Foreclosure Abuse
Prevention Act (“FAPA”) is retroactive but about the degree to which
it is retroactive. Second, the district court erred in failing to consider
the res judicata effect of the state court judgment of foreclosure and
sale against the Property, and further proceedings in this case should
not perpetuate that mistake.
I
The parties dispute whether FAPA, as a matter of statutory
interpretation, applies retroactively to a voluntary discontinuance
that occurred before FAPA was enacted. U.S. Bank does not appear to
dispute, however, that FAPA may be interpreted to apply to the
voluntary discontinuance of an action that was pending when FAPA
was enacted. It states in its brief that FAPA “only applies to
discontinuances that occur after its enactment.” Appellant’s Br. 19
(capitalization omitted). That interpretation of FAPA still entails the
retroactive application of the statute because it “attaches new legal
consequences to events completed before its enactment.” Landgraf v.
USI Film Prods., 511 U.S. 244, 270 (1994). Before FAPA was enacted, a
mortgagee may have had the right under the mortgage contract to
reset the statute of limitations by voluntarily discontinuing a
foreclosure action. See Freedom Mortg. Corp. v. Engel, 37 N.Y.3d 1, 31
(2021). After FAPA, the mortgagee would no longer have the same
contractual right it may have had when the contract was signed. Thus,

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2
FAPA would attach a different legal consequence to a mortgage
contract than obtained when the parties executed the contract.1
The issue in this appeal, then, is whether FAPA applies
retroactively not only to a contract that was executed before the
enactment date but also to a voluntary discontinuance that occurred
before that date. This additional level of retroactivity would change
the legal effect of the discontinuance of a foreclosure action that was
dismissed before the pending action was commenced. Such increased
retroactivity is more difficult to harmonize with the text of FAPA.
FAPA expressly provides that “[t]his act shall take effect immediately
and shall apply to all actions commenced on [a mortgage] in which a
final judgment of foreclosure and sale has not been enforced.” FAPA
§ 10 (2022 N.Y. Laws, Ch. 821, § 10). That language naturally suggests
that FAPA applies to an open action that is not yet complete—and
therefore would determine the legal effect of a voluntary
discontinuance of such an action—but it is less clear that the language
requires altering the legal effect of the discontinuance of an action that
had already been dismissed when FAPA came into force. The court
therefore properly concludes that “the statute’s plain language does
not dictate the answer” to the question presented in this appeal. Ante
at 16.
1 At oral argument, U.S. Bank agreed that its position in this case was that
FAPA “is retroactive to some extent” because it “wouldn’t deny that if there
were a pending foreclosure action right now that were voluntarily
discontinued, that would not … prompt a deacceleration of a loan.” Oral
Argument Audio Recording at 5:23. U.S. Bank suggested, however, that
even that interpretation might raise constitutional concerns. See id. at 6:40,
23:29-25:14; see also Appellant’s Br. 31 (arguing that the retroactive
application of FAPA would be unconstitutional because it would eliminate
the lender’s “contractual right to de-accelerate a loan”).

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3
II
Before the district court granted summary judgment in favor of
East Fork, a New York state court issued a judgment of foreclosure
and sale against the Property in favor of U.S. Bank. The district court
did not consider the effect of the state court judgment on this action
even though, under res judicata principles, that judgment may well
preclude East Fork’s claim.
A
In July 2016, U.S. Bank commenced the third foreclosure action
on the mortgage. The complaint in that action, however, asserted that
the mortgage pertained to a different property within the same
condominium complex. The confusion arose because the mortgage’s
Schedule A—which provides a description of the mortgaged
property—describes a different condominium unit and parking space
located within the same complex that Sean and Patricia Dros also
owned (the “Unrelated Property”). See App’x 136. In November 2019,
after the Droses failed to appear in the action, the state court issued a
judgment of foreclosure and sale against the Unrelated Property. A
few months later, U.S. Bank reversed itself—now arguing that the
mortgage had been correctly indexed to the Property all along—and
moved to correct nunc pro tunc the notices of pendency, order of
reference, and judgment of foreclosure and sale in order to reference
the Section Block and Lot information of the Property rather than the
Unrelated Property. In February 2020, the state court granted the
motion. But the resulting order was incorrectly recorded against the
Unrelated Property rather than the Property. In August 2021, U.S.
Bank moved again, this time to correct nunc pro tunc the legal
description in the mortgage’s Schedule A, notices of pendency, order
of reference, and judgment of foreclosure and sale to reflect the legal

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4
description of the Property. The state court granted the motion in
April 2022, and the amended judgment was recorded against the
Property. The foreclosure sale “has not yet occurred due to the
pending appeal in this action.” Appellant’s Br. 6.
B
In July 2020, East Fork filed this quiet title action in the Eastern
District of New York. East Fork sought to discharge the mortgage on
the ground that the mortgage described a different property than the
property against which it was recorded and therefore was not a valid
encumbrance.
The parties’ initial summary judgment briefing in the spring of
2022 turned on whether the mortgage properly encumbered the
Property. East Fork contended that U.S. Bank was estopped from
arguing that the mortgage encumbered the Property because U.S.
Bank had asserted in the 2016 action that the mortgage encumbered
the Unrelated Property—and in 2019 the state court had issued a
judgment of foreclosure and sale against the Unrelated Property. U.S.
Bank countered that it was not estopped or otherwise precluded from
arguing that the mortgage encumbered the Property because in early
2020 it had noticed the error in its foreclosure complaint and had
moved the state court to amend nunc pro tunc the judgment of
foreclosure and sale to reference the Block and Lot numbers of the
Property. However, U.S. Bank did not argue in its briefs that the
amended judgment precluded East Fork’s quiet title action.
In December 2022, while these motions were pending, FAPA
was enacted. The district court then ordered supplemental briefing on
the question of whether the mortgage was time-barred under FAPA
because the voluntary discontinuances in the 2010 and 2011 actions
did not reset the statute of limitations. The district court, however, did

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5
not address the effect that the 2016 action would have on the quiet
title action—even though the 2016 action was brought within six years
of the 2010 action and for that reason was not time-barred regardless
of how FAPA applies. The district court merely stated in a footnote
that “the parties agree that [the 2016 action] has no effect on the
instant summary judgment motion.” E. Fork Funding LLC v. U.S. Bank,
N.A., No. 20-CV-3404, 2023 WL 2660645, at *1 n.2 (E.D.N.Y. Mar. 23,
2023).
U.S. Bank also did not argue in its opening brief on appeal that
the judgment of foreclosure precluded East Fork’s quiet title action,
although it did argue in its reply brief that “East Fork is bound by the
judgment in the 2016 foreclosure action because it [is] the successor-
in-interest to the borrower who is a party in that action.” Reply Br. 6.
Counsel for East Fork, meanwhile, conceded at oral argument that the
2016 judgment would be binding on East Fork but for the purported
defects in that judgment that East Fork identified in its brief and at
the oral argument.2
C
“If the proceedings of a state trial court comported with due
process, every federal court must afford the final judgment entered
therein the same preclusive effect it would be given in the courts of
that state.” Conopco, Inc. v. Roll Int'l, 231 F.3d 82, 87 (2d Cir. 2000); see
also 28 U.S.C. § 1738. Under New York law, res judicata “bars
successive litigation based upon the same transaction or series of
connected transactions if: (i) there is a judgment on the merits
2 See Oral Argument Audio Recording at 41:48 (Judge Menashi asking, “If
[the state court judgment] were a valid judgment, there would be a res
judicata effect, right?” and counsel for East Fork responding that, “as an
elementary matter, we would be bound by that”).

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6
rendered by a court of competent jurisdiction, and (ii) the party
against whom the doctrine is invoked was a party to the previous
action, or in privity with a party who was.” People ex rel. Spitzer v.
Applied Card Sys., Inc., 11 N.Y.3d 105, 122 (2008) (internal quotation
marks and citation omitted). A default judgment “is conclusive for res
judicata purposes as to any matters actually litigated or that might
have been litigated in that action.” Albanez v. Charles, 20 N.Y.S.3d 567,
568-69 (2d Dep’t 2015); see also EDP Med. Comput. Sys., Inc. v. United
States, 480 F.3d 621, 626 (2d Cir. 2007) (“Res judicata does not require
the precluded claim to actually have been litigated; its concern, rather,
is that the party against whom the doctrine is asserted had a full and
fair opportunity to litigate the claim. That is why it has long been the
law that default judgments can support res judicata as surely as
judgments on the merits.”) (citation omitted).
A party may collaterally attack a judgment that would
otherwise be preclusive on the ground of a lack of due process, a lack
of subject matter or personal jurisdiction, or extrinsic fraud. See
Conopco, 231 F.3d at 87 (addressing due process); Stone v. Williams,
970 F.2d 1043, 1057 (2d Cir. 1992) (“[O]ne may collaterally attack the
subject matter or in personam jurisdiction of the court rendering a
judgment put forth as preclusive.”); Bell v. Town Bd. of the Town of
Pawling, 537 N.Y.S.2d 214, 215 (2d Dep’t 1989) (“[A] collateral attack
will be successful only against a judgment rendered by a court that
did not have jurisdiction over the parties or the subject matter.
Although fraud is a ground for a collateral attack, the fraud must be
such as to deprive the court of jurisdiction. A challenger … must show
fraud in the very means by which the judgment was procured.”)
(citations omitted).
The district court was aware of the 2016 action, so it should
have considered the res judicata effect of the judgment on East Fork’s

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7
claim. It is not clear what the district court meant when it said that
“the parties agree” that the judgment “has no effect on the instant
summary judgment motion.” E. Fork Funding, 2023 WL 2660645, at *1
n.2. The district court might have meant either that the parties agreed
that there was some fatal defect in the 2016 action or that the default
judgment somehow lacked res judicata effect.3 But the parties do not
agree that the 2016 action was defective, and there is no other
apparent reason to conclude that the resulting judgment lacked res
judicata effect.
It may be that the amended judgment of foreclosure and sale
precludes this action. The judgment of foreclosure and sale and this
quiet title action arose out of the same transaction or occurrence. See
Ciraldo v. JP Morgan Chase Bank, N.A., 34 N.Y.S.3d 113, 115 (2d Dep’t
2016) (“A judgment of foreclosure and sale is final as to all questions
at issue between the parties, and concludes all matters of defense
which were or could have been litigated in the foreclosure action. The
issues raised by the plaintiff in this action were or could have been
litigated in the foreclosure action, and she is therefore precluded from
relitigating them in an action [for quiet title].”) (citations omitted).
East Fork, as the successor-in-interest to the owners of the Property,
is in privity with the state court defendants. See Wells Fargo Bank, NA
v. McKenzie, 123 N.Y.S.3d 148, 150 (2nd Dep’t 2020). And a default
judgment is generally conclusive for res judicata purposes. See
Albanez, 20 N.Y.S.3d at 568-69.
3 The sentence does not appear to refer to a waiver, but in any event “a
court is free to raise [the res judicata] defense sua sponte, even if the parties
have seemingly waived it.” Scherer v. Equitable Life Assurance Soc’y of U.S.,
347 F.3d 394, 398 n.4 (2d Cir. 2003).

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8
Before the district court and on appeal, East Fork raised
collateral challenges to the judgment on the grounds of jurisdiction,
due process, and fraud. East Fork argued that the state court lacked
subject matter jurisdiction to issue a nunc pro tunc order that makes
substantive amendments to a judgment; that the state court had no
power to issue a default judgment for the sale of property other than
the property described in the complaint; that the state court lacked
personal jurisdiction over East Fork with respect to the amended
judgment; that the amendment violated East Fork’s due process
rights; and that the amended judgment was procured by extrinsic
fraud because in seeking the amendment U.S. Bank represented to the
state court that “the priority and position of the subject mortgage is
not at dispute.” App’x 1545 ¶ 18.
The district court, ruling only on the statute of limitations, did
not address these arguments—and neither does our court today. Yet
the “doctrine of res judicata is not a mere matter of practice or
procedure inherited from a more technical time than ours. It is a rule
of fundamental and substantial justice, of public policy and of private
peace, which should be cordially regarded and enforced by the
courts.” Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 401 (1981)
(internal quotation marks omitted) (quoting Hart Steel Co. v. R.R.
Supply Co., 244 U.S. 294, 299 (1917)). “[R]es judicata and collateral
estoppel not only reduce unnecessary litigation and foster reliance on
adjudication, but also promote the comity between state and federal
courts that has been recognized as a bulwark of the federal system.”
Allen v. McCurry, 449 U.S. 90, 95-96 (1980). Accordingly, I would not
resolve this case without giving due regard to the preexisting state
court judgment.

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23-659
E. Fork Funding LLC v. U.S. Bank, Nat’l Ass’n
L IMAN, District Judge, concurring:1
I concur in the certification decision and in the opinion of the
Court.
Although I agree that the plain language of the statute does not
resolve the question we face, in reaching the decision to certify I place
greater importance on the unsettled state of New York law. The
certification factors are commonly phrased as “(1) whether there are
authoritative state court interpretations of the statutory language; (2)
whether the issue is important to a state policy; and (3) whether
certification can resolve the appeal.” Jones v. Cattaraugus-Little Valley
Cent. Sch. Dist., 96 F.4th 539, 544 (2d Cir. 2024) (quoting Nitkewicz v.
Lincoln Life & Ann. Co. of N.Y., 49 F.4th 721, 729 (2d Cir. 2022)). Some
formulations, such as the one used in the opinion of the Court, discuss
the plain language of the statute as a fourth factor. See CIT Bank N.A.
v. Schiffman, 948 F.3d 529, 537 (2d Cir. 2020) (quoting Penguin Grp.
(USA) Inc. v. Am. Buddha, 609 F.3d 30, 42 (2d Cir. 2010)). The
addition of the “plain language” factor clarifies that sometimes the
meaning of a statute under New York law will be obvious even in the
absence of judicial decisions on point. But I do not take it to mean
that, in deciding whether to certify a question to the New York Court
of Appeals, the Court should consider the plain meaning of the statute
1 Judge Lohier concurs in Judge Liman’s opinion insofar as it confirms that
the certified question is the only question presented by our court to the New
York Court of Appeals, that, respectfully, any other issues raised in any
other separate opinion are, in his view, irrelevant to the resolution of that
question, and that the New York Court of Appeals may amend the certified
question as it sees fit.

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2
independently from the meaning the statute would be given under
New York law.
Doing so would lie uneasily with this Court’s duty “to predict
how the New York Court of Appeals would resolve the question”
based on New York, and not federal, principles of statutory
interpretation. Jones, 96 F.4th at 544 (quoting Benesowitz v. Metro. Life
Ins. Co., 471 F.3d 348, 351 (2d Cir. 2006)); cf. Brunozzi v. Cable
Commc'ns, Inc., 851 F.3d 990, 998 (9th Cir. 2017) (“[W]hen interpreting
a state statute . . . we must follow the state’s rules of statutory
interpretation.” (internal quotation omitted)); Camacho v. Ford Motor
Co., 993 F.3d 308, 311 (5th Cir. 2021) (same); Arkansas Times LP v.
Waldrip as Tr. of Univ. of Arkansas Bd. of Trustees, 37 F.4th 1386, 1392
(8th Cir. 2022) (same). New York courts may not always place the
same importance on the plain text of a statute passed by the New York
Legislature as the federal courts place on the plain text of a statute
passed by the United States Congress. See Town of Aurora v. Vill. of
E. Aurora, 32 N.Y.3d 366, 372 (2018) (noting that while the plain
meaning of the text is a “starting point,” “our primary consideration
is to ascertain and give effect to the intent of the Legislature” (internal
citations and quotations omitted)). The certification decision turns
on whether the question is unsettled under New York law, not
whether it is unsettled under principles of statutory interpretation
applicable to federal statutes. Here, the Appellate Division cases
clearly show that the question is unsettled under New York law.
Even when a question of state law is unsettled, certification
should not be undertaken lightly. Certification increases costs,
delays resolution of the dispute, and deprives diverse parties of a

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3
federal forum. See 53rd St., LLC v. U.S. Bank Nat'l Ass'n, 8 F.4th 74,
80–82 (2d Cir. 2021). Having both federal and state courts render
decisions on a disputed issue can lead to productive dialogue and
improve the quality of decisions for federal and state courts alike.
Cf. McCray v. New York, 461 U.S. 961 (1983) (Stevens, J., respecting
denial of certiorari) (noting that state courts may “serve as
laboratories” in which federal issues “receive[] further study” prior
to being addressed by the Supreme Court). State judges can benefit
from the considered views of their federal counterparts on state
issues, just as federal judges benefit from the considered views of their
state colleagues on federal issues.
However, certification is particularly appropriate in this case
because it involves an ongoing discussion between the New York
Legislature and New York state judiciary. Prior to 2021, “no clear
rule ha[d] emerged” regarding the effect of a voluntary
discontinuance on the statute of limitations in a foreclosure action.
Freedom Mortg. Corp. v. Engel, 37 N.Y.3d 1, 6 (2021). In Engel, the
Court of Appeals held that voluntary discontinuance revoked
acceleration of the loan and restarted the statute of limitations. Id. at
7–9. By enacting FAPA, the legislature suggested that this was an
incorrect interpretation of the law, and that homeowners who had
been foreclosed upon more than six years prior should be entitled to
repose. See Add. 33 (Assembly Debate Tr.) (statement of Assembly
Member Helene E. Weinstein); Add. 16 (Senate Introducer’s Mem.).
Here, the issue is what law should apply to a voluntary
discontinuance taken in the years prior to Engel. One view is that
during that time lenders could properly rely on the rule set out in
Engel; the other is that borrowers could rely on the rule that the

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4
legislature understands to have been the law. Because the question
implicates the balance of power between branches of state
government, it is especially suitable for certification.
Finally, I write to clarify that whether to accept the certified
question and the resolution of that specific question are the sole issues
presented by our Court to the New York Court of Appeals. Other
matters discussed in separate opinions regarding the disposition of
the panel as to the merits of other aspects of the underlying appeal
are, of course, irrelevant to the certified question.

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