Silver Co. v Acifra, Inc.
Annotate this CaseDecided on March 30, 2005
Supreme Court, Kings County
The Silver Company, Plaintiff,
against
Acifra, Inc., Defendant.
1242/01
Yvonne Lewis, J.
Atchuda Barkr, a non-party, has moved this court to "intervene and upon intervention have this court declare that plaintiff's lien has been cutoff by a prior foreclosure action. . ." vis-a-vis the premises commonly known as 461 Washington Avenue, Brooklyn, NY. Mr. Barkr notes that he obtained the subject premises at a HUD foreclosure sale on December 2, 1999 as a result of the defendant's (Acifra's) default on a mortgage that it had given to the United States of America on or about April 22, 1983. Mr. Barkr adds that "at the time of the said foreclosure sale, the record title revealed a judgment held by Nevmar Construction Corp. (the plaintiff's predecessor in interest) against Acirfa, Inc., recorded in the Office of the Clerk of the County of Kings on January 16, 1991," and that notice had been served via certified mail, return receipt requested upon both entities [Nevmar and Acifra, pursuant to 12 USC 3707]. Furthermore, the notice of default and foreclosure sale had been recorded in the Kings County Clerk's Office on October 22, 1999, and published in the Brooklyn Daily Eagle and Daily Bulletin newspapers [pursuant to 12
USC 3708]. Mr. Barkr also points out a series of judgment assignments; to wit, Nevmar to Neville Pinnock, dated July 14, 1993, Pinnock to The Silver Company, dated July 14, 1993 [recorded July 26, 1993], and The Silver Company to David Lefkowitz, dated November 18, 2003. Mr. Barkr's deed from HUD was recorded on March 6, 2000. Finally, Mr. Barkr asserts that "it is well settled law that the recordation of the Notice is constructive notice sufficient to bar the interests of a bona fide purchaser." (Citing In re Davidson Assoc. v. Housing and Urban Dev., 103 BR 440, and In re Euro-Swiss Int'l; Corp., 33 BR 882). Lastly, Mr. Barkr asserts that any failure to have served The Silver Company is of no consequence since Mr. Lefkowitz ". . .lacks standing to assert defenses on behalf of other defendants or non-appearing parties."(Citing, Spiegel v. Ferraro, 142 AD2d 573, 529 NYS2d 908 [2d Dept. 1988]), and in any event ". . .even if Mr. Lefkowitz' interest were not cut off by said foreclosure sale, the current owner may commence a strict foreclosure action to cut off any interest Mr. Lefkowitz may have in the premises." (Citing, NYCTL-1996-1 Trust v. Guthartz, 293 AD2d 455, 739 NYS2d 646 [2d Dept. 2002]).
Mr. Lefkowitz, the plaintiff's assignee (successor in interest), acknowledges the [*2]assignment history afore detailed by Mr. Barkr. He also points out, however, that his predecessor had on May 1, 2001 obtained an Order and Renewal Judgment to renew the judgement (of January 16, 1991) as a lien against the premises for another ten year period, and that the judgment was thereafter assigned to him on November 18, 2003. Mr. Lefkowitz additionally notes that the HUD ". . .non-judicial foreclosure proceeding was sent to only Nevmar, the original Plaintiff/Judgment Creditor. . . .[and] the letter and notices were served by certified mail and
returned by the US Postal Service as undeliverable." Furthermore, Mr. Lefkowitz maintains that
12 USC §3758 (2) requires that the foreclosure commissioner shall serve the notice of default and foreclosure sale by certified mail postage prepaid and return receipt requested, on all persons holding liens of record upon the security, property as the record existed 45 days before the date originally set for the foreclosure sale. Therefore the plaintiff should have been served as a record lien holder for six years prior to the sale.
Insofar as the judgment being inviolate to a bona fide purchaser, Mr. Lefkowitz argues that
12 USC §3765 only bars claims from 1. any person who was sent notice as per statutory requirements; 2. any person claiming any interest in the property subordinate to that of the mortgage, if such person had actual knowledge of the foreclosure sale; and 3. any person claiming an interest in the property whose judgment was not duly docketed or filed in the proper place for docketing or filing, before the date on which the notice of foreclosure sale was first served by publication, none of which criteria apply to The Silver Company. Lastly, Mr. Lefkowitz's attorney, Mr. Lee asserts that not only has Mr. Barkr not yet commenced a strict foreclosure action, but the applicable statute, RPAPL §1352, specifically provides that a judgment pursuant thereto shall fix the right of any person having a right of redemption therein or the right to foreclose a subordinate mortgage or other lien and shall provide that a failure to redeem or commence an action for the foreclosure of such mortgage or other lien within such time shall preclude such person having a right of redemption or the holder of such mortgage or other lien from redeeming such property or foreclosing such mortgage or other lien, and thereafter such person having a right of redemption or the holder of such mortgage or other lien shall be excluded from claiming any title or interest in such property and all title or interest of such person having a right of redemption in, or the right to foreclose a subordinate mortgage or other lien against such property shall thereby be extinguished and terminated.
In reply to the foregoing, Mr. Barkr argues that ". . .David Lefkowitz, the current holder of the judgment, had constructive notice of HUD's foreclosure at the time that he took assignment of the judgment."
It is clear from the parties' submissions that Mr. Pinnock and The Silver Company, whose assignments were received pre-foreclosure, never received direct notice pursuant to statutory requirements. However, it is to be noted that since Mr. Pinnock is the president of Nevmar he did receive constructive notice. It is also a matter of record that Mr. Barkr obtained the property in 2000, that Mr. Lefkowitz was assigned the judgment in 2003, and that the judgment was a lien against the property at the time of the HUD foreclosure. Hence, on the one hand, this court is being asked to determine if Mr. Barkr, the would be intervener, obtained the subject property at [*3]foreclosure sale free and clear of any claims from a subsequent assignee of the unnoticed then judgment lien holder. On the other hand, the court must consider if Mr. Lefkowitz, the lien holder's post-foreclosure successor, can enforce the lien against the subject property given that the plaintiff lien holder had not been given notice of the foreclosure action.
The case law as cited by Mr. Barkr is correct. An action in strict foreclosure is maintainable against a party not joined as a defendant in the original foreclosure action (See NYCTL-1196-1 Trust v. Guthartz, supra, and 6820 Ridge Realty LLC. v. Goldman, 263 AD2d 22).
It is therefore incumbent upon Mr. Barkr to initiate such an action in order to counter Mr. Lefkowitz' attempt to enforce his lien. In other words, Mr. Lefkowitz cannot circumvent the
primary mortgage by simply purchasing the subordinate judgment lien post-foreclosure. Accordingly, Mr. Atchuda Barkr's motion to "intervene and upon intervention have this court declare that plaintiff's lien has been cut off by a prior foreclosure action" is denied as premature. This constitutes the decision and order of this court.
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