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Home > Underwriting > Title News > Nineteen Volume Eight

SERIES: Nineteen VOLUME: Eight DATED: August, 2004

~ FILING OF SECOND NOTICE OF PENDENCY PERMITTED IN MORTGAGE FORECLOSURE ACTION ~

Another Appellate Department of New York State Supreme Court has now determined that multiple filings of notices of pendency are permissible in mortgage foreclosure actions. The Appellate Division, Fourth Department, in a recent decision (Atlantic Mortgage & Investment Corp. v. Wynn, decided June 14, 2004) permitted the multiple filing of a notice of pendency in a mortgage foreclosure with the following memorandum and order:

"It is hereby ORDERED that the judgment so appealed from be and the same hereby is unanimously affirmed without costs.

Memorandum: On this appeal from a judgment granting foreclosure of a mortgage and ordering the sale of the mortgaged premises, James Wynn, Sr., also known as James I. Wynn, Sr. (defendant), contends, inter alia, that the judgment should be reversed on the ground that the notice of pendency filed on August 25, 2000 was a nullity because it was filed after the expiration of the original notice of pendency, which was filed on March 13, 1997 (see CPLR 6513; RPAPL 1331; Matter of Sakow, 97 N.Y. 2d 436, 442). We reject that contention. We agree with the First and Second Departments that Sakow, which holds that a second notice of pendency in a partition action cannot be filed after the expiration or cancellation of the original notice, is not applicable to a mortgage foreclosure action . . .

We have considered defendant's remaining contentions and conclude that they are without merit."

~ ACTION BROUGHT BY PURCHASER OVER ACREAGE DISCREPANCY DISMISSED ~

In a recently decided appeal, Bennett v. Citicorp and Edelman et al (Appellate Division, 4th Department, decided June 14, 2004), the Appellate Court reversed a lower court decision which denied the defendants' motion to dismiss the lawsuit of a disgruntled purchaser whose deed conveyed ten (10) acres less than expected. The Appellate Court dismissed the complaint of the purchaser based on the fact that the precise description and size of the property being conveyed was a matter of public record fully accessible to the purchaser. The court's decision is as follows:

"It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously reversed on the law without costs, the motion is granted and the complaint and cross claims against defendant Audrey Edelman & Associates are dismissed.

Memorandum: Supreme Court erred in denying the motion of defendant Audrey Edelman & Associates (Edelman) seeking summary judgment dismissing the complaint and cross claims against it. This action arises from the purchase of real estate by plaintiffs from defendant Citicorp Mortgage, Inc. (Citicorp) in a transaction in which Edelman was the listing agent and defendant Commonfund Mortgage Corporation was the mortgagee. Plaintiffs commenced this action after discovering that the deed conveyed fewer acres than they expected. Plaintiffs seek damages from Edelman for fraud and negligent misrepresentation based on alleged misrepresentations by Edelman that Citicorp had 15 acres to sell and that all 15 acres were included in the purchase.

We agree with Edelman's contention that any reliance by plaintiffs upon those alleged misrepresentations was not justified or reasonable. Citicorp's ownership of only five acres was a matter of public record, readily ascertainable from the abstract of title provided to plaintiffs' attorney for her review prior to the closing. Indeed, the deed accurately sets forth the description and boundaries of the property. Plaintiffs 'had the means available to [them] of knowing, by the exercise of ordinary intelligence, the truth concerning the description and boundar[ies] of the land . . . [and, because they] failed to make use of such means, [they] will not be heard to complain that [they were] induced to enter into the purchase by misrepresentation' . . . We reject the contention of plaintiffs that they are not charged with notice of the discrepancies that their attorney failed to disclose to them . . . We therefore grant the motion of Edelman and dismiss the complaint and cross claims against it."

FORECLOSING FIRST MORTGAGEE ORDERED TO ASSIGN ITS MORTGAGE TO JUNIOR MORTGAGEE ~

In a recent mortgage foreclosure the lower court issued a decision directing the foreclosing first mortgagee to assign its mortgage to a second subordinate mortgagee upon payment of the amount due on the mortgage with interest and all litigation costs. When the first mortgagee appealed the lower court decision the Appellate Court upheld the lower court decision with the following decision and order (Venture I, Inc. v. Voutsinas, Appellate Division, 2nd Department, decided June 14, 2004):

"DECISION & ORDER

ORDERED that the orders are affirmed insofar as appealed from, with one bill of costs to the respondents.

The Supreme Court providently exercised its discretion in granting the motion of the defendant Daniel Perla Associates, LP, to direct the plaintiff to assign the subject mortgage to it upon payment of the amount due on the mortgage. Where, as here, 'the owner of a senior mortgage is seeking to enforce collection by foreclosure, the holder of a junior mortgage is entitled to redeem and to be subrogated to the rights of the senior mortgage, and may, upon tender of the amount due, with interest and costs, compel an assignment of the mortgage' . . .

The Supreme Court also providently exercised its discretion in denying the plaintiff's subsequent motion to voluntarily discontinue the action . . . The record supports the finding that the plaintiff was merely attempting to circumvent the order directing it to assign the subject mortgage . . .

The plaintiff's remaining contention is without merit."


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