Opinion
0109815/2006.
Dated: July 2, 2007.
DECISION ORDER
This is an action to foreclose a mortgage on real property located at 427 West 47th Street, New York, NY ("the premises"). Plaintiff won a default judgment of foreclosure and sale and the property was sold at auction on March 28, 2007. Defendant Denise Carney brought this Order to Show Cause on the same day, March 28, 2007, seeking to vacate the default judgment. The auction, however, took place prior to service of the Order to Show Cause. The third-party purchaser who bought the property at auction has moved to intervene. The matters are consolidated for decision.
I. Statement of Facts
The facts surrounding the mortgage itself are uncontested. Ms. Carney executed the mortgage to secure a $576,000 loan from CBSK Financial Group, Inc., d/b/a American Home Loans. The mortgage was recorded in the New York County Clerk's Office on September 16, 2003 in CRFN: 2003000360581. The mortgage and loan were then assigned to plaintiff and recorded on June 9, 2005 in CRFN: 2005000334814. Ms. Carney failed to make a payment due on April 1, 2006, with the default continuing for an excess of 15 days. Pursuant to the terms of the mortgage, plaintiff elected to declare the principal balance due.
Plaintiff submitted affidavits of service to prove all defendants were duly served with copies of the Summonses and Complaints. None of the defendants appeared, answered, or made any motion, and were held in default. The judgment of foreclosure and sale was signed on December 18, 2006 by this court and entered on January 29, 2007. All defendants were served with copies of the Notice of Sale on March 12, 2007. A foreclosure auction was scheduled and then held on March 28, 2007 at 1 p.m., and the premises were sold to third-party purchaser for $1,055,000. Ms. Carney brought an Order to Show Cause that same day, which was signed at 3:30 p.m., seeking to vacate the judgment of foreclosure and sale and to set aside the Terms of Sale.
Ms. Carney submitted a copy of a contract for sale of the premises dated December 28, 2006 between Aldencort Corp., of which Ms. Carney is president, and Vedautie Seepersad. The contract specifies a purchase price of $1,400,000 with a deposit of $3,500 already in escrow. Ms. Carney's attorney affirms that she is authorized to deliver two checks based on March 26, 2007 payoff letters, one in the amount of $654,194.53 to Country Wide Home Loan, and the other in the amount of $9,480 to plaintiff's attorneys, if the court grants this Order to Show Cause.
Gordon R. Hamilton, the third-party purchaser at auction of the premises, brought his Order to Show Cause, seeking intervention, denial of Ms. Carney's Order to Show Cause, and for leave to close title on the premises, on May 3, 2007.
II. Arguments
Ms. Carney argues that equity abhors forfeiture, and that given no prejudice to the plaintiff, default should be vacated and she should be permitted to pay off plaintiff. Plaintiff argues that Ms. Carney is merely delaying foreclosure, and that the $3,500 down payment is too small to provide incentive for the proposed purchaser to close in a timely fashion. Plaintiff also argues that, as a matter of law, a contract of sale alone is not a defense to foreclosure. Mr. Hamilton argues that Ms. Carney never acted to redeem pursuant to RPAPL § 1341, and that her equity of redemption was extinguished when the premises were sold at auction. He also argues that he should be allowed to intervene pursuant to CPLR § 1012(a)(3).
III. Conclusions of Law
A. Intervention
Mr. Hamilton has a legitimate right to intervene in this action under CPLR § 1012(a)(3). It is undisputed that he was the successful bidder at auction, and this action may adversely affect his interest in the property. Thus, his order to show cause seeking intervention is granted.
B. Default
"The owner of an equity of redemption has a right to redeem at any time before an actual sale under a judgment of foreclosure." Deutsche Bank Co. of California, N.A. v. DePalo, 38 A.D.3d 490 (2nd Dept. 2007). However, since Ms. Carney failed, prior to the actual sale, to make a payment in court and make a motion to stay the sale as required by RPAPL § 1341(2), her right of redemption was extinguished. See NYCTL 1996-1 Trust v. LFJ Realty Corp., 307 A.D.2d 957 (2nd Dept. 2003). Absent fraud, collusion, mistake, or misconduct, a court has no discretion to set aside a sale of foreclosure. See id. Ms. Carney's equity arguments alone, therefore, are insufficient for this court to grant her Order to Show Cause. Accordingly, it is so
ORDERED that Gordon R. Hamilton's Order to Show Cause seeking to intervene in this action is granted; and it is further
ORDERED that the Order to Show Cause of defendants Denise Carney and Aldencort Corp. seeking to vacate the judgment of foreclosure and sale is denied; and it is further
ORDERED that the referee proceed to execute the transfer of title in accordance with this decision and order.