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STATE OF NEW YORK
________________________________________________________________________

9096

IN ASSEMBLY

January 20, 2012
___________

Introduced  by M. of A. RA -- read once and referred to the Committee on
  Judiciary

AN ACT to amend the civil practice law and rules, in relation to  manda-
  tory settlement conferences

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision (f) of rule 3408 of the civil practice law  and
rules, as added by chapter 507 of the laws of 2009, is amended and a new
subdivision (i) is added to read as follows:
  (f)  Both the plaintiff and defendant shall negotiate in good faith to
reach a mutually agreeable resolution, including a loan modification, if
possible. FOR THE PURPOSES OF THIS SECTION, FAILURE TO ACT IN GOOD FAITH
SHALL INCLUDE BUT NOT BE LIMITED TO:
  (I) FAILURE OF EITHER PARTY TO ATTEND  AND  PARTICIPATE  IN  MEDIATION
SETTLEMENT SESSIONS WITHOUT CAUSE;
  (II) FAILURE OF THE PLAINTIFF TO DESIGNATE A REPRESENTATIVE TO PARTIC-
IPATE  IN THE SETTLEMENT CONFERENCE AUTHORIZED TO MAKE COMMITMENTS BIND-
ING ON THE PLAINTIFF;
  (III) FAILURE OF THE PLAINTIFF TO FOLLOW A COURT'S  ORDER  TO  MAKE  A
REASONABLE OFFER OF SETTLEMENT; OR
  (IV)  FAILURE OF THE PLAINTIFF TO FULFILL REQUIREMENTS UNDER STATE AND
FEDERAL LAW.
  THE PLAINTIFF'S FAILURE TO REDUCE, RESTRUCTURE, REFINANCE  OR  FORGIVE
THE DEBT SHALL NOT IN AND OF ITSELF BE EVIDENCE OF LACK OF GOOD FAITH BY
THE PLAINTIFF.
  (I)  THE FAILURE OF A PLAINTIFF TO ACT IN GOOD FAITH SHALL ENTITLE THE
DEFENDANT TO APPROPRIATE RELIEF AS DETERMINED BY  THE  COURT  INCLUDING,
BUT  NOT LIMITED TO, IMPOSING A CIVIL PENALTY IN AN AMOUNT NOT TO EXCEED
THE PRINCIPAL BALANCE DUE ON THE LOAN, ATTORNEY FEES, DISMISSAL  OF  THE
PROCEEDING AND/OR CANCELLATION OF THE UNDERLYING LOAN WHERE APPROPRIATE.
  S 2. This act shall take effect immediately.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13884-03-2