Opinion
Index No. 31371/2018E
08-08-2022
Unlimited Assets, Inc., Plaintiff, v. PennyMac Corp., JAHANA MOMTAJ, 21ST VILLAGE CORP., and JOHN DOE No.1 through JOHN DOE #10 the last ten names being fictitious and unknown To the plaintiff intended as persons or entities having claim Or interest in the premises described in the Complaint, Defendants.
Fadullon Dizon Krul, LLP Attorneys for Plaintiff Unlimited Assets Frankel, Lambert, Weiss, Weissman & Gordon, LLP Attorneys for Defendant PennyMac Corp. Friedman Vartolo LLP Attorneys for Defendant PennyMac Corp and PennyMac Loan Services LLC Zafar A. Siddiqi, Esq. Attorneys for Defendant Jahana Momtaj Attorneys for Defendant 21st Village Corp. Attorneys for 21st Village Corp.
Unpublished Opinion
Fadullon Dizon Krul, LLP
Attorneys for Plaintiff Unlimited Assets
Frankel, Lambert, Weiss, Weissman & Gordon, LLP
Attorneys for Defendant PennyMac Corp.
Friedman Vartolo LLP
Attorneys for Defendant PennyMac Corp and
PennyMac Loan Services LLC
Zafar A. Siddiqi, Esq.
Attorneys for Defendant Jahana Momtaj
Attorneys for Defendant 21st Village Corp.
Attorneys for 21st Village Corp.
MARISSA SOTO, J.
The following e-filed papers read herein:
Papers NYSCEF Doc. #'s/ Numbered
Notice of Motion and Affidavits/Affirmations Annexed: 101- 114
Opposition Affirmation/ Cross Motions"115-126
Reply Affirmation:127- 130
Other: Prior conferences and Oral Argument Defendant PennyMac Corp. and PennyMac Loan Services (hereinafter "Defendant") move pursuant to CPLR §3211(a)(1) and §3211(a)(7) to dismiss the quiet title action filed on or about October 18, 2018, by Unlimited Assets, Inc. (hereinafter "Plaintiff").
Plaintiff alleges that it is entitled to a declaratory judgment that a notice of pendency and the related judgment of foreclosure and sale do not apply to it because the notice of pendency against the property located at 1249 Leland Avenue, Bronx NY under Block number 03766 and Lot number 0059 (hereinafter "Subject Premises") expired prior to the execution of a deed for the Subject Premises to the Plaintiff. It is undisputed that the Defendant's notice of pendency expired in 2011 and was not refiled until 2016. Plaintiff claims that it took title to the Subject Premises as a bonafide purchaser for value without notice of any pending foreclosure action. Plaintiff relies on a deed between Defendant Jahana Momtaj (hereinafter "Defendant Momtaj") attorney in fact and the Plaintiff, dated May 19, 2014 (hereinafter the "2014 Deed"), which was not recorded by the New York City Register and according to public records remains unrecorded by the New York City Register as of May 20, 2022. Plaintiff disputes this fact and argues that the 2014 Deed was mailed to the Office of the City Register on or about September 30, 2014 and even though not recorded, is deemed recorded.
Defendant argues that the quiet title claim is not meritorious as to Pennymac Corp. In support of its motion to dismiss, Defendant submits (i) the affirmation of Richard O'Brian, Esq.; (ii) the recorded mortgage between Defendant Montaj and JP Morgan Chase Bank, NA, dated June 4, 2007; (iii) the Note between the borrower Defendant Montaj and the Lender JP Morgan Chase, NA; (iv) the assignment of mortgage from JP Morgan Chase, NA to Defendant; (v) a copy of the Judgment of Foreclosure and Sale;(vi) NYC records form the Automated City Register Information System (hereinafter "ACRIS") search results; (vii) NYC Property Class Information Sheet; and (viii) all prior pleadings and proceedings.
Defendant argues that its interest was recorded with the New York City Register and that Plaintiff is chargeable with knowledge of the debt and took subject to it. Further, Defendant argues that Plaintiff is bound by the results of its foreclosure action as a party who took its interest subsequent to the commencement of the action. Defendant argues that Plaintiff took its interest in the Subject Premises with notice of the foreclosure action and did not purchase its interest until after the action was commenced. Defendant argues that pursuant to CPLR 6501, the filing of a notice of pendency provides constructive notice of an action in which the judgment demanded may affect the title to real property. Green Point Sav. Bank v. St. Hilaire, 267 A.D.2d 203, 699 N.Y.S.2d 458; Goldstein v. Gold, 106 A.D.2d 100, 101-102. The statute further provides that a person whose conveyance is recorded after the filing of a notice of pendency is bound by all proceedings taken in the action after such filing to the same extent as if he or she were a party. Green Point Sav. Bank v. St. Hilaire, supra (emphasis added) ; American Auto. Ins. Co. of St. Louis v. Sansone, 206 A.D.2d 445. Thus, in order to cut off an unrecorded prior lien such as a mortgage, "the purchaser must have no knowledge of the outstanding lien and win the race to the recording office" Goldstein v. Gold, supra at 101-102; see Matter of Jenkins v. Stephenson, 293 A.D.2d 612, 745 N.Y.S.2d 30; Roth v. Porush, 281 A.D.2d 612. Defendant argues that in the case at bar, it is uncontested that the 2014 Deed conveying an interest in the Subject Premises to the nonparty was never recorded and certainly was not recorded when (i) the foreclosure action was commenced, (ii) the judgment of foreclosure and sale was obtained, or (iii) the Defendant's second notice of pendency was filed. Defendant argues that because the 2014 Deed has not been recorded, Plaintiff will have constructive notice of the foreclosure action on whatever future date its conveyance is recorded, and its interest will be subject to the foreclosure action as if they were a party. See Green Point Sav. Bank v. St. Hilaire, supra; Westchester Fed. Sav. & Loan Assoc. v. H.E.W. Constr. Corp., 29 A.D.2d 670, 286 N.Y.S.2d 382.
Pursuant to CPLR §3211(a)(1) a party may move for judgment dismissing one or more causes of action asserted against him on the ground that a defense is founded upon documentary evidence. The documentary evidence proffered "must be unambiguous, authentic, and undeniable" and specifically includes documents reflecting out of court transactions such as "mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable." Magee-Boyle v. Reliastar Life Ins. Co. of NY, 173 A.D.3d 1157, 1159 (2d Dep't 2019). "A dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law." Alden Global Value Recovery Master Fund LP v. Keybank National Assocs., 74 N.Y.S.3d 559, 563 (1st Dept 2018) quoting Leon v. Martinez, 84 N.Y.2d 83, 88 (1994) see also Charles Swab Corp. V. Goldman Sachs Group Inc., 186 A.D.3d 431, 435 (1st Dept 2020). A motion to dismiss pursuant to CPLR §3211(a)(1) should be granted, where the documentary evidence resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claims. See Greenberg v. Spitzer, 155 A.D.3d 27, 44 (2nd Dept 2017) citing Fontanette v. John Doe 1, 73 A.D.3d 78, 83-84 (2nd Dept 2010).
Pursuant to CPLR §3211(a)(7) a party may move for judgment dismissing one or more causes of action asserted against him on the ground that the pleading fails to state a cause of action. Maroutian v. Fuchs, 124 A.D.3d 541, 541 (1st Dept 2015). On a motion to dismiss pursuant to CPLR §3211(a)(7) the complaint is afforded liberal construction. Landmark Ventures, Inc., v. InSightec, Ltd., 179 A.D.3d 493, 494-495 (1st Dept 2020). In its review, the Court must accept the facts alleged as true and accord the plaintiff every possible favorable inference in trying to determine whether the facts as alleged fit within any cognizable legal theory. 684 East 222nd Realty Co., LLC v. Sheehan, 185 A.D.3d 879, 879 (2d Dept 2020) quoting Mendelovitz v. Cohen, 37 A.D.3d 670, 671 (2d Dept 2007).
New York is a race-notice state for recording statutory scheme. 2386 Creston Ave. Realty, LLC v. M-P-M Management, 58 A.D.3d 158, 160 (1st Dept 2008). The New York Recording Act of the Real Property Law ("RPL") §294 "was enacted to accomplish a twofold: protect rights of innocent purchasers who acquire an interest in property without knowledge of prior encumbrances, and to establish public record which will furnish potential purchasers with actual or at least constructive notice of previous conveyances and encumbrances that might affect their interests and uses." Witter v. Taggart, 78 N.Y.2d 234, 238 (1991). Real Property Law §294(3) provides that "every executory contract for the sale of real property not recorded shall be void as against any person who subsequently purchases or contracts to purchase the same real property." 2386 Creston Ave. Realty, LLC v. M-P-M Management, 58 A.D.3d at 160. "Where two or more prospective buyers' contract for a certain property, pursuant to RPL §§ 291 and 294, priority is given to the buyer whose conveyance or contract is first duly recorded." Avila v. Arsada Corp., 34 A.D.3d 609, 610 (2006). Recording is evidence of the passing of title, which serves as constructive notice to future purchasers of another's interest in the property. Bank of NY v. Resles, 78 A.D.3d 469, 471 (1st Dept 2010). A notice of pendency may be filed in any action, in which the judgment demanded would affect the title or possession of the real property. CPLR § 6501. "A person whose conveyance or incumbrance is recorded after the filing of the notice is bound by all proceedings taken in the action after such filing to the same extent as a party. Id. (emphasis added).
Plaintiff claims that the 2014 Deed was provided to the Office of the City Register on or about September 30, 2014. In support of its claim, Plaintiff submits the affidavit of Constantine Giannakos ("Mr. Giannakos") a previously licensed attorney in New York state (the "Affidavit"). The Affidavit relies on a copy of an unsigned template cover letter that the Affidavit states was sent to the City Register Office. The Affidavit does not address the fact that the cover letter does not contain any attribute on its face that it was related to the Subject Premises other than through its conclusory statement that it was. The affiant does not provide any details as to the standard mailing practice to add credibility to the assertion that the alleged mailing took place. Further, the Affidavit states, again as a conclusion, that $217 was paid for the recording fee for the Subject Premises. However, the Affidavit is silent on how that specific amount was reached and why. The Affidavit also included copies of redacted bank statements but they reflect nothing but a check number and an amount. The bank statements have five (5) entries for the amount of $217 on two separate dates, 10/8/2014 and 10/14/2014. On 10/8/2014, there are the following three entries: (i) check number 857 for the amount of $217, (ii) check number 858 in the amount of $217, and (iii) check number 859 in the amount of $217. On 10/14/2014, there are the following two entries: check number 860 in the amount of $217 and check number 863 in the amount of $217. The affiant does not provide a copy of the cancelled check nor an indication of which check relates to the Subject Premises. In addition, there was no reference to the filing of the Real Property Transfer Return, NYS TP-584 Form nor the NYC RP-5217 Form and their associated costs, which are all required for the recording of a deed. Lastly, the Affidavit does not provide any receipt from the Office of the City or Register. The Affidavit alleges that all of this took place in 2014 but does not address why there was no verification of the filing of the 2014 Deed after its alleged mailing. As a result of the above, the Court finds the Affidavit conclusory and lacking in probative value. Accordingly, it is facially insufficient to raise questions of fact to contradict the documentary evidence of the New York City Register submitted by Defendant. See DRMAK Realty LLC, v. Progressive Credit Union, 133 A.D.3d 401, 404 (1st Dept 2015); Sadler v. J & J Bar & Grill, Inc. 21 A.D.2d 781, 781 (1st Dept 1964).
Further, to be properly and duly recorded, RPL §317 states that Every instrument, entitled to be recorded, must be recorded by the recording officer in the order and as of the time of its delivery to him or her therefor, during business hours maintained by the recording officer, and is considered recorded from the time of such delivery; provided, however, that a digitized paper document or an electronic record shall be considered delivered for purposes of this section at the date and time of receipt indicated on an electronic or other written notification which shall be provided by the recording officer immediately upon receipt of a digitized paper document or electronic record.
Both mailing and hand-delivery are not deemed received until delivered and entered, and even an electronically filed document is deemed recorded upon issuance of a receipt. These conditions are logical on their face to protect the chain of title to only those filings in compliance with the legal requirements. Here, as set forth above, there was no such proof of the finalization of the recordation as required.
Defendant filed an extension of the notice of pendency for the Subject Premises for an additional three years until October 3, 2024, nun pro tunc from October 3, 2021, pursuant to a previous Court Decision and Order from Hon. Dawn Jimenez-Salta, dated October 28, 2021 (NYSCEF Doc No. 98). The Court takes judicial notice of ACRIS and the 2014 Deed remains unrecorded. A purchaser is charged with constructive notice of any and all litigation if he fails to record the deed prior to the filing of the notice of pendency. CPLR §6501. Defendant, who filed the notice of pendency already had a recorded interest in the property, having recorded its mortgage and assignment of mortgage, and the notice simply preserved an existing property right. 2386 Creston Ave. Realty, LLC v. M-P-M Management, 58 A.D.3d at 161. Therefore, the Defendant's motion to dismiss based on the documentary evidence is granted.
Accordingly, after consideration of the foregoing, it is hereby:
ORDERED that the Defendants motion to dismiss the complaint against Defendants PennyMac Corp. and PennyMac Loan Services is granted; and it is further
ORDERED that the Defendants are directed to serve a copy of this Order/Decision with Notice of Entry within thirty (30) days of the date hereof to the Parties.
This constitutes the decision and order of the Court.