Customer Login   |  Quick Order   |  Contact Us  |  Site Map     
  
Home > Underwriting > Title News > Eighteen Volume Six

SERIES: Eighteen VOLUME: Six DATED: June, 2003

~ TAX SALE OF MORTGAGED PROPERTY UPHELD WITHOUT NOTICE TO MORTGAGEE OF RECORD ~

A recently decided Appellate Division case, Citibank v. Tebsherany, et al (Appellate Division, Fourth Department, decided June 13, 2003) has upheld the tax sale of a mortgaged parcel of real property despite the fact that the mortgagee of record was not given a notice of sale and failed to receive a notice to redeem the property in question. In that action the court upheld the tax sale with the following decision:

"Memorandum:

Plaintiff commenced an action pursuant to article 15 of the Real Property Actions and Proceedings Law seeking to compel the determination of its claim to a parcel of real property. Plaintiff held a purchase money mortgage encumbering property purchased by defendant Diane M. Tebsherany and another individual in 1988. It is undisputed that the mortgage was duly recorded in the Oneida County Clerk's Office. Plaintiff, however, was not listed as a mortgagee on the tax assessment rolls for defendant City of Utica (City). The City sold the property at a tax lien foreclosure sale on March 31, 1999 for nonpayment of taxes for the 1998-1999 tax year. Plaintiff was not given notice of the sale. Thereafter, the certificate of sale was assigned to defendant Community Bank, N.A. FSO Robert D. Bedell IRA/SEP (Bedell). On April 6, 2000, Bedell mailed a notice to redeem the property to plaintiff at the Syracuse address listed on the recorded mortgage. The notice to redeem advised plaintiff that July 7, 2000 was the last day on which to redeem the property. The notice was returned to Bedell on April 11, 2000 as 'undeliverable' because plaintiff no longer had a place of business at that address. Bedell thereafter mailed a notice to plaintiff's address in St. Louis, Missouri, but plaintiff contends that it did not receive the notice. Upon application of Bedell, the City deeded the property to defendant Branjen Holdings, Inc. on July 11, 2000. Plaintiff, which had commenced a foreclosure action in April 2000, did not learn until August 2000 that the property had been sold at a tax lien foreclosure sale in March 1999.

Supreme Court properly denied the motion of plaintiff seeking, inter alia, summary judgment vacating the tax lien foreclosure and the tax sale deeds and granted the cross motion of Bedell, Branjen Holdings, Inc., Diane Quadraro-Kain, Shawn M. Kain and Venderbilt Mortgage and Finance, Inc. (defendants) seeking summary judgment confirming the validity of the tax lien foreclosure and tax sale deeds and dismissing the complaint. Contrary to the contention of plaintiff, it was not denied due process because the City did not provide it with notice of the tax lien foreclosure sale. Pursuant to Utica City Code 8.031(c), notice of a tax foreclosure sale must be 'sent by first class mail to the names and addresses of the owners and mortgagees, as shown on the [tax] assessment roll, of each parcel to be sold' (emphasis added). Plaintiff failed to exercise its right to file a declaration of interest with the City (see RPTL 1126) and thus was not shown on the tax assessment roll of the subject parcel. Where, as here, the Utica City Code has a specific notice provision, that provision supersedes the notice requirement set forth in RPTL 1125(1), requiring the taxing authority to provide notice of the pending tax lien foreclosure sale to, inter alia, a mortgagee whose right, title or interest in the property is a matter of public record . . . We conclude that the City complied with due process requirements by providing notice to interested parties of the pending sale pursuant to its City Code.

Contrary to the further contention of plaintiff, its alleged failure to receive the notice of redemption does not amount to a denial of due process. By submitting the affidavits of service of Bedell stating that he mailed the notice of redemption to plaintiff at two addresses, defendants established that the notice redemption was sent to plaintiff in compliance with defendants' due process obligations . . . 'Plaintiff's denial to receipt of the notice, standing along, is insufficient to rebut the presumption that the notice was received by plaintiff' . . . We have reviewed plaintiff's remaining contention and conclude that it is without merit."

~ ADVERSE POSSESSION ~

A recently decided Appellate Division decision, Zolotov v. Toussie (Appellate Division, Second Department, decided June 2, 2003) the Appellate Court upheld a lower court judgment which declared plaintiffs to be owners of a strip of property under a claim of adverse possession which was not based upon a written instrument pursuant to the provisions of Real Property Actions and Proceedings Law Section 522 which establishes the requirements for such adverse possession as follows:

"§522. Essentials of adverse possession under claim of title not written.

For the purpose of constituting an adverse possession by a person claiming title not founded upon a written instrument or a judgment or decree, land is deemed to have been possessed and occupied in either of the following cases, and no others:

1.Where it has been usually cultivated or improved.
2.Where it has been protected by a substantial inclosure."

In the Zolotov case the court issued the following Decision and Order:

"The disputed property is an approximately 104 - by 20-foot grass strip which runs from east to west and abuts the southern border of the plaintiffs' property, which was purchased by them from the estate of Claire Kamiel. This action arises from an incident in which the defendant removed a fence located at the edge of the grass strip, constructed a new fence 20 feet closer to the plaintiff's house, and excluded the grass strip from the plaintiffs' property. The plaintiffs moved for summary judgment, arguing that their predecessors in interest acquired title to the grass strip by adverse possession, and that the grass strip was conveyed to the plaintiffs when they purchased the property. The defendant opposed the plaintiffs' motion, arguing, inter alia, that the Kamiels' possession of the grass strip was not hostile and under a claim of right. The Supreme Court granted the plaintiffs' motion. We affirm.

A party seeking to obtain title to real property by adverse possession on a claim not based upon a written instrument must establish that the property was 'usually cultivated or improved' or 'protected by a substantial inclosure' (RPAPL 522...) In addition, the party must satisfy the common-law requirement of demonstrating, by clear and convincing evidence, that the possession of the property was hostile and under a claim of right, actual, open and notorious, exclusive, and continuous for the statutory period. . .

The plaintiffs established their entitlement to judgment as a matter of law by showing that the Kamiels acquired title to the grass strip by adverse possession under both RPAPL 522 and the common law. Although the plaintiffs' deed did not include the grass strip in its description, the plaintiffs demonstrated that the executors of the estate intended to convey the grass strip to them . . . In opposition, the defendant failed to raise a triable issue of fact as to whether the Kamiels' possession of the grass strip had been hostile and under a claim of right. Thus, the Supreme Court properly granted the plaintiffs' motion. . ."


  Copyright 2006 by Monroe Title Insurance Corporation