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

AUGUST TERM 2023

No. 23-659

EAST FORK FUNDING LLC, 

Plaintiff-Appellee, 

NEW YORK STATE ATTORNEY GENERAL, 

Intervenor, 

v.

U.S. BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR GREENPOINT 

MORTGAGE FUNDING TRUST MORTGAGE PASS-THROUGH 

CERTIFICATES, SERIES 2006-AR6, 

Defendant-Appellant.

On Appeal from the United States District Court 

for the Eastern District of New York

ARGUED: FEBRUARY 29, 2024

DECIDED: OCTOBER 1, 2024
2 

Before: LOHIER and MENASHI, Circuit Judges, and LIMAN, 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 sixyear 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.
3 

ANTHONY R. FILOSA, Rosenberg, Fortuna & Laitman, 

LLP, Garden City, NY (Steven A. Biolsi, Biolsi Law 

Group, P.C., New York, NY, on the brief), for PlaintiffAppellee. 

MARK S. GRUBE, 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. BRODERICK (Steven Lazar, on the brief),

Greenberg Traurig, LLP, New York, NY, for DefendantAppellant. 

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 
4 

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. 
5 

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 
6 

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 
7 

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. 
8 

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. 
9 

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.’”)
10 

(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).
11 

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, 
12 

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 
13 

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 
14 

“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)). 
15 

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-
16 

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). 
17 

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. 
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.
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, 
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”). 
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 
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 
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 successorin-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”).
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 
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). 
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.
23-659 

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

LIMAN, 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.
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 
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 
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.