Opinion
INDEX NO. 850329/2014
06-17-2019
THE BANK OF NEW YORK MELLON FKA THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF THE CWABS, INC.,ASSET-BACKED CERTIFICATES, SERIES 2007-1, Plaintiff, v. ROGER BENTLEY, JULIE YANG, 136 BEEKMAN, LLC,HSBC BANK NEVADA, N.A., SANITATION DEPARTMENT OF THE CITY OF NEW YORK, CAPITAL ONE BANK (USA) NA, LAW OFFICE OF MICHAEL C. RAKOWER PC,NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, NEW YORK CITY PARKING VIOLATIONS BUREAU, NEW YORK CITY TRANSIT ADJUDICATION BUREAU, STEADFAST FUNDING, LLC,JOHN DOE, MARY DOE Defendant.
NYSCEF DOC. NO. 209 PRESENT: HON. ARLENE P. BLUTH Justice MOTION DATE __________ MOTION SEQ. NO. 002 003
DECISION
The following e-filed documents, listed by NYSCEF document number (Motion 002) 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147 were read on this motion to/for SUMMARY JUDGMENT. The following e-filed documents, listed by NYSCEF document number (Motion 003) 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 172, 173, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207 were read on this motion to/for SUMMARY JUDGMENT.
Motion Sequence Numbers 002 and 003 are consolidated for disposition.
The motion (MS002) by defendant 136 Beekman LLC ("136 Beekman") for summary judgment dismissing the complaint and on its counterclaim for quiet title is granted. The motion (MS003) by plaintiff for summary judgment is denied.
Background
This foreclosure action concerns a residential property located at 136 Beekman Street in Manhattan. Plaintiff claims that it is seeking to recover on a consolidated note and mortgage executed by defendants Roger Bentley and Julie Yang in 2006. In its complaint, plaintiff admits that the title record with respect to this mortgage "contains gaps" and it "does not appear filed of record in the title chain for the subject matter property" (NYSCEF Doc. No. 113, ¶¶ 7, 8).
Defendant 136 Beekman claims that Bentley and Yang sold the property to Hudson West Home Buyers LLC ("Hudson") for $1.55 million in May 2010; Hudson seems to be affiliated with Bentley. The record also shows that Hudson sold the property to Allison Nelson for about $2.1 million in July 2013. Then Nelson conveyed the premises to 136 Beekman, a company associated with Nelson, who is a member of this entity. Nelson contends that she had no idea that the mortgage at issue here existed and that, as a subsequent bona fide purchaser for value, the complaint should be dismissed.
And so it is admitted that Bentley/Yang/Hudson are all affiliated and it is admitted that Nelson /136 Beekman are affiliated. But in order for Nelson to be aware of the unrecorded mortgage of Bentley/Yang/Hudson, Nelson/136 Beekman would somehow have to be connected to Bentley/Yang/Hudson.
Plaintiff claims that all the purchasers after Bentley and Yang were connected and concludes that "it is highly likely that Defendant had actual knowledge of the fact that it was not taking clear title" (NYSCEF Doc. No. 151, ¶ 26). Plaintiff points to a judgment against Mark Herbert (managing partner of Hudson) and other defendants including Bentley, and Nelson's husband James in an equitable mortgage case (Index No. 850076/12) —according to plaintiff, there is a Jersey City address listed for all of these defendants.
According to the complaint in that equitable mortgage action, James Nelson was named as a defendant because he had filed a lis pendens against Hudson on the claim that Hudson breached the contract to sell the property to James Nelson. And so Mr. Nelson was not affiliated with Hudson, he had filed a lis pendens against the property and was in a dispute with Hudson.
In addition, 136 Beekman contends that James Nelson never lived in Jersey City and, instead, had a residence in Old Greenwich, Connecticut.
Discussion
"The New York Recording Act (Real Property Law § 290 et seq.) protects a good faith purchaser for value from a prior unrecorded interest in real property provided, inter alia, that the subsequent purchaser's interest is the first to be duly recorded. The status of good faith purchaser for value cannot be maintained by a purchaser with either notice or knowledge of a prior interest or equity in the property, or one with knowledge of facts that would lead a reasonably prudent purchaser to make inquiries concerning such" (Sprint Equities (N.Y.), Inc. v Sylvester, 71 AD3d 664 NYS2d 134, 135-36, 896 NYS2d 134 [2d Dept 2010] [internal quotations and citations omitted]).
There is no question in this case that the Bentley/Yang mortgage plaintiff now seeks to foreclose was never recorded. The question, therefore, is whether Nelson was a good faith purchaser for value and whether she had actual or constructive knowledge about the prior mortgage. 136 Beekman established its prima facie burden to show that Nelson was a good faith purchaser by submitting evidence that the apartment was purchased from Hudson for over $2 million and Nelson's affidavit that she had no knowledge about plaintiff's interest (NYSCEF Doc. No. 112). The fact that Nelson later deeded the property to 136 Beekman (her LLC) does not eliminate 136 Beekman's right to assert the bona fide purchaser defense; 136 Beekman stepped in the shoes of Nelson when it acquired title to the property.
Plaintiff failed to raise an issue of fact. It did not raise a sufficient connection between Nelson and Bentley or Yang or Hudson to suggest that Nelson was not a bona fide purchaser for value. The fact that there was a Jersey City address for James Nelson listed on a judgment in a prior action relating to the premises is not evidence of anything. There is no proof that Mr. Nelson admitted that he lived in that Jersey City address; rather, a review of the complaint in that other action reveals an allegation that Mr. Nelson lived in Old Greenwich, Connecticut (NYSCEF Doc. No. 6, ¶ 5).
Plaintiff cannot show that Allison Nelson had actual or constructive knowledge about plaintiff's unrecorded mortgage with Bentley and Yang. The record on this motion indicates that Nelson bought the property without knowing about plaintiff's unrecorded interest. That compels only one conclusion: that 136 Beekman is entitled to summary judgment and quiet title for the property.
136's Beekman's motion is granted and plaintiff's motion is denied. 136 Beekman is directed to submit an order in accordance with this decision via e-filing and by mail directly to the courtroom on or before July 10, 2019. 6/17/19
DATE
/s/ _________
ARLENE P. BLUTH, J.S.C.