Equicredit Corp. of NY v Brown
Annotate this CaseDecided on December 19, 2005
Supreme Court, Kings County
Equicredit Corporation of NY, Plaintiff,
against
Sandra Brown, New York City Environmental Control Board, New York City Parking Violations, People of the State of New York, New York State Department of Taxation and Finance, Child Support Enforcement Section, Sears, Roebuck and Company, New York City Criminal Court-Brooklyn, Brooklyn Mason Supply Co., Inc., KHR Holding Corp., Paramount Home Sales, Inc., Brooklyn Union Gas/ Keyspan, Energy Del., United States of America, New York City Transit Adjudication Bureau, and "John Doe" and "Jane Doe," the last two names being fictitious, said parties intended being tenants or occupants, if any, having or claiming an interest in, or lien upon the premises described in the complaint, Defendants.
5871/04
YVONNE LEWIS, J.
Mr. Nixon Charles and Mrs. Michelle English Charles (hereinafter, Mr. & Mrs. Charles) have moved this court ". . .for summary judgment , pursuant to CPLR §3212, to dismiss the complaint and notice of pendency of plaintiff, Equicredit Corporation of NY (hereinafter, Equicredit), with prejudice and for summary judgment on [their] first counterclaim to quiet title pursuant to RPAPL, Article 15." The underlying action is asserted by Equicredit to foreclose a mortgage on the premises currently known as 718 East 89th Street, Brooklyn, NY, (Block 8009, Lot 49) which Mr. & Mrs. Charles purchased from Ms. Sandra Brown on August 26, 1999. This lot was a subdivision of a larger plot purchased by Ms. Brown on April 30, 1998, then known as 718-724 East 89th Street, Brooklyn, NY, which she had mortgaged to Equicredit on December 2, 1998 in a mortgage document that described the premises as tax lot "49 f/k/a p/o 46, which means lot 49 formerly known as part of lot 46." Mr. & Mrs. Charles assert that Equicredit recorded this mortgage on March 22, 1999 against lot 49. "However, lot 49' did not exist as such on March 22, 1999 and did not have a separate identity. On March 22, 1999, what was to become "lot 49" was still merely a part of 46. Lot 49' did not come into existence as such until July 21, 2000." Hence, it is the position of Mr. and Mrs. Charles that since New York City has been held by the Court of Appeals to have a "block and lot recording system" (citing, Andy Associates, Inc. v. Bankers Trust Company, 49 NY2d 13, 424 NYS 139 [1979]), they as [*2]prospective purchasers were not
". . .chargeable with notice of something not recorded in the correct block and lot since that is how New York city indexes instruments and thus provides record notice." Mr. & Mrs. Charles additionally argue that since Equicredit did not comply with a discovery schedule established by this court for it to respond to interrogatories and notice for discovery and inspection, as well as appear for an examination before trial, Equicredit is precluded from offering any evidence at trial, and therefore has no means by which to prove its case or contest their counterclaim. Finally, Mr. & Mrs. Charles assert that they ". . .learned that Equicredit merged into another entity on November 30, 1999." They therefore argue that ". . .Equicredit has no authority to institute this action as a matter of law since it did not exist and therefore did not own any assets (including the mortgage) at the time this action was commenced in 2004."
Equicredit, by its attorney, opposes the foregoing requests for dismissal and summary judgment by noting the following salient facts: 1. "on June 22, 1999, the Kings County Department of buildings issued a Certificate of Occupancy for Lot 49. It was this survey that [Mr.] CHARLES used in his title search prior to purchasing the subject property from defendant, Sandra Brown." 2. Equicredit's title company duly recorded Ms. Brown's mortgage on the subject property on March 22, 1999 as Lot 49 f/k/a p/o 46, which the Kings County Clerk properly accepted for recording. 3. "When a lienholder's interest is recorded in the Office of the Clerk of the County, subsequent purchasers are charged with constructive knowledge of the lienholder's interest and, accordingly, they could not be bona fide purchasers (citing, Loika v. Howard, 77 NYS2d 919 [3d Dept., 1984]). 4. Equicredit did not respond to discovery requests appertaining to the creation of lot 49 since it possesses no knowledge thereof and played no role therein. Quite simply, Equicredit's ". . .mortgage was recorded against Lot 49 and insured Lot 49
. . . .The only party able to properly testify and offer evidence as to the creation date of said lot is the Kings County municipal agency with jurisdiction over tax lot subdivisions. The crux of Equicredit's argument herein is that Mr. & Mrs. Charles ". . .failed to conduct a thorough and reasonable title search of Lot 49, and never discovered and/or discharged Plaintiff of its lien upon the Premises. . . .[they] are not entitled to be equitably subrogated to Plaintiff's superior lien upon the Premises because they were on constructive and actual knowledge of Plaintiff's lien." Equitable subrogation allows for a mortgagee who pays off a prior mortgage without knowledge of an existing intervening lien to have its rights substituted to the rights of the senior mortgage and thereby gain priority over the intervening mortgage.
Mr. & Mrs. Charles submitted a reply to the foregoing wherein they assert that Equiciredit's opposition is untimely as per its attorney's signed stipulation, and of no probative value since it is merely an attorney's affirmation [and not by someone with personal knowledge of the facts] (citing Zuckerman v. City of New York, 49 NY2d 557, 427 NYS2d 595 [1980]). Mr. & Mrs. Charles also take note of the fact that Equicredit has neither offered any response to the fact that its failure to accede to their discovery demands has precluded it from offering any evidence at trial (citing CPLR §3123), nor has it explained its lack of corporate existence, and, a fortiori, the fact is that ". . .lot 49 did not exist as such on March 22, 1999, the date when Equicredit's mortgage was recorded." Finally, Mr. & Mrs. Charles reiterate that they simply ". . .are not chargeable with notice of something not recorded in the correct block and lot since that is how New York City indexes instruments and thus provides record notice (citing, Witter v. [*3]Taggart, 78 NY2d 234, 573 NYS2d 146; Andy Associates, Inc. v. Bankers Trust Company, 49 NY2d 13, 424 NYS2d 139 [1979]; and, Farrell v. Sitaras, WL 2542897, 2005 NY Slip Op. 07486 [2d Dept. 2005]).
"A party seeking summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact" (Ayotte v. Grevasioi, 81 NY2d 1062, 601 NYS2d 463; Alvarez v. Prospect Hosp., 68 NY2d 320, 508 NYS2d 923). A prima facie showing shifts the burden to the opposing party to produce evidentiary proof in admissible form sufficient to establish the existence of material questions of fact (see Alvarez v. Prospect Hosp., supra ).
In the matter sub judice, it is clear that Mr. & Mrs. Charles have not met their initial burden of making a prima facie showing that they are entitled to dismissal of the plaintiff's complaint and notice of pendency. Their contention that Ms. Sandra Brown's mortgage to Equicredit, wherein the premises are described as tax lot "49 f/k/a p/o 46, which means lot 49 formerly known as part of lot 46," does not constitute a recording in the correct block and lot; i.e., in the manner that New York City indexes instruments and thus provides record notice, is not persuasive. In fact, it would seem foolhardy to dismiss Equicredit's countervailing position that the just mentioned description (evidenced in the mentioned mortgage and the subject property's survey which bear notations of the larger and subdivided lots) constitutes sufficient evidentiary proof to establish material questions of fact as to the issue of notice.
In any event, it is to be noted that in both instances the parties have raised concerns based not on personal knowledge but on public records and their imputed legal implications which neither has convincingly established should be the prevailing interpretation, thereby creating issues of fact.
The issue of lack of corporate existence raises an additional issue of fact inasmuch as Mr. & Mrs. Charles have based that representation solely on information and belief of Equicredit's merger into another entity with no documentary proof and/or dispositive facts to substantiate the assertion. Equicredit, in turn, has not irrefutably controverted their contention.
Compliance with an order to disclose requires both a timely response and a good faith effort to address the request meaningfully (see Kihl v. Pfeffer, 94 NY2d 118, 700 NYS2d 87 [1999]). CPLR §3126 provides that when a party refuses to obey an order for disclosure, the court may make an order "prohibiting the disobedient party from supporting or opposing designated claims or defenses, from producing in evidence designated things or items of testimony." The Appellate Division, Second Department, aptly observed in the matter of Sowerby and Okonji v. Camarda, et. al., 20 AD3d 411, 798 NYS2d 125, 2005 NY Slip Op. 05779, that "[t]he nature and degree of the penalty to be imposed pursuant to CPLR 3126 against a party who has refused to obey court orders, or willfully fails to disclose information which should be disclosed, is a matter within the discretion of the court (see Conch Assoc. v. PMCC Mortg. Corp., 303 AD2d 538, 756 NYS2d 456; Jaffe v. Hubbard, 299 AD2d 719, 730 NYS2d 165). Although dismissing a compliant pursuant to CPLR 3126 is a drastic remedy, it is warranted when a party's conduct is shown to be willful and contumacious (see Rowell v. Joyce, 10 AD3d 601, 781 NYS2d 682; Beneficial Mtge. Corp. v. Lawrence, 5 AD3d 339, 772 NYS2d 713; Frias v. Fortini, 240 AD2d 467, 658 NYS2d 435)." The court went on to note that ". . .the willfull and contumacious character of the appellant's failure to respond to discovery demands can be inferred from his repeated failures to comply with the court's orders, as well as the absence of [*4]any explanation offered to excuse his failures to comply (see Rowell v. Joyce, supra ; Montgomery v. City of New York, 296 AD2d 386, 745 NYS2d 464; Espinal v. City of New York, 264 AD2d 806, 695 NYS2d 610)." In Frost Line Refrigeration, Inc., et al. v. Frunzi, 18 AD3d 701, 795 NYS2d 741, 2005 NY Slip Op. 04183, the Appellate Division, Second Department, also concluded that a ". . .plaintiffs' failure to respond to discovery could be inferred from their refusal to comply with the defendant's discovery request for over three years after the date set forth in a preliminary conference order, as well as the inadequate explanation offered to excuse their failure to comply (see Kihl v. Pfeffer, supra ; Ali v. Kring, 272 AD2d 422, 707 NYS2d 913; Brady v. County of Nassau, 234 AD2d 408, 650 NYS2d 802).
Hence, to the extent that Equicredit is the custodian of documents and/or information that
is responsive to plaintiff's interrogatories and/or notice for discovery and inspection, and it can be demonstrated that its failure to abide therewith or with the request for an Examination Before Trial was willful and contumacious, then it will be barred from offering any evidence thereof at trial. However, that would seem a drastic remedy in this instance in light of the fact that the underlying controversy herein appears to be, as advanced by Equicredit's attorney, a matter of public record (a recorded mortgage) and the inner workings of the agency (the Registry of Deeds) charged with recoding mortgages.
Accordingly, Mr. & Mrs. Charles' motion for summary judgment, pursuant to CPLR §3212, to dismiss the complaint and notice of pendency of plaintiff, Equicredit Corporation of NY, with prejudice and for summary judgment on their first counterclaim to quiet title pursuant to RPAPL, Article 15 is denied as issues of fact exist.
This constitutes the decision and order of this court.
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