Scott v Doyle
Annotate this CaseDecided on May 11, 2006
Supreme Court, Queens County
ENGLISH SCOTT, et al., Plaintiffs.
against
SEAN DOYLE, et al., Defendants.
15852 2005
Duane A. Hart, J.
The following papers numbered 1 to 12 read on this motion by plaintiff English Scott and plaintiff Georgia Scott deemed by the court to be for summary judgment declaring that a deed executed on December 15, 2004 transferring property known as 97-02 31st Avenue, East Elmhurst, New York from the plaintiffs to defendant Tricity Development and Management Corp. is void and that a second deed dated April 5, 2005 conveying the subject property from Tricity to defendant Sean Doyle is void, on this second motion by the plaintiffs dated February 6, 2006 deemed by the court to be for summary judgment, on this motion by defendant 200-590 Realty Corp. deemed by the court to be for summary judgment declaring that it has a first mortgage lien on 97-02 31st Avenue, East Elmhurst, New York and on this cross motion by the plaintiffs for an order, inter alia, staying this action from the date of the transfer of the property back to them to allow for refinancing.
Order to Show Cause - Affidavits - Exhibits ...... 1
Notice of Motion - Affidavits - Exhibits ......... 2-3
Notice of Cross Motion - Affidavits - Exhibits ... 4
Answering Affidavits - Exhibits .................. 5-8
Reply Affidavits ................................. 9-12
Upon the foregoing papers it is ordered that the motions and the cross motion are denied. The stay of Doyle v. Scott (Index No. O66463/05) and Doyle v. [*2]Travis (Index No. 066462/05) pending in the Civil Court of the City of New York is continued until the resolution of this action. (See the accompanying memorandum.)
By way of an order to show cause, plaintiff English Scott and plaintiff Georgia Scott have brought what the court deems to be a motion for summary judgment declaring that a deed executed on December 15, 2004 transferring property known as 97-02 31st Avenue, East Elmhurst, New York ("the subject property" or "the subject premises") from the plaintiffs to defendant Tricity Development and Management Corp. is void and that a second deed dated April 5, 2005 conveying the subject property from Tricity to defendant Sean Doyle is void. By notice of motion dated February 6, 2006, the plaintiffs have brought what the court deems to be a second motion for summary judgment. Defendant 200-590 Realty Corp. ("Realty Corp.") has brought what the court deems to be a motion for summary judgment declaring that it has a first mortgage lien on the subject property. The plaintiffs have cross-moved for an order, inter alia, staying this action from the date of the transfer of the property back to them to allow for refinancing.
The plaintiffs allege the following: Defendant Maryanne Smith-Jackson, known to the plaintiffs for approximately six years, owns defendant Tricity and defendant Sean Doyle, also known to the plaintiffs for approximately six years, is a mortgage broker and real estate entrepreneur. The subject property is improved by the plaintiff's house worth $600,000-$700,000. Approximately two years ago, the plaintiffs met with defendant Doyle for the purpose of refinancing their mortgage. Shortly thereafter, the plaintiffs were served with eviction papers. Doyle has commenced summary proceedings in the Civil Court of the City of New York seeking to evict the plaintiffs and their tenants (Doyle v. Scott, Index No. 066463/05 and Doyle v. Travis, Index No 066462/05). A forger had placed the plaintiffs' signatures on a deed dated December 15, 2004 transferring the subject property from them to defendant Tricity. The plaintiffs did not receive the proceeds of the purported sale. On or about April 5, 2004, defendant Tricity purportedly conveyed the property to defendant Doyle for $220,000. Doyle mortgaged the property to defendant 200-590 Realty Corp. for $200,000. He used $167,048.85 of that sum to pay off a mortgage given by the plaintiffs to IndyBank.
Defendant Jackson alleges the following: She has known the plaintiffs for approximately 10 years and has helped them to refinance their home on previous occasions. In or about November, 2004, plaintiff Georgia Scott contacted her about refinancing her home again, but Jackson and Doyle could not help her do so because she had ruined her credit rating by falling behind in mortgage payments. Jackson suggested that the plaintiffs convey the subject property to her, that she would obtain a new mortgage in her name, and that she would afterward transfer the property back to the plaintiffs. Jackson is engaged in a business whereby she saves homes from foreclosure by utilizing the same procedure that she suggested to the plaintiffs. On December 15, 2004, Jackson gave plaintiff Georgia Scott a deed to be signed. On or about February 5, 2005, plaintiff Georgia Scott gave Jackson an executed deed and tax documents for the subject property. The plaintiffs also gave Jackson a power of attorney concerning real estate transactions executed by them and appointing plaintiff Georgia Scott as her husband's attorney. Jackson then began to renovate the subject premises by, for example, replacing an old furnace and putting up new sheet [*3]rock. However, Jackson failed in her attempt to refinance the house in her name, and she suggested that the subject premises be transferred to defendant Doyle for refinancing purposes. The plaintiffs agreed. On April 4, 2005, Jackson deeded the subject premises to Doyle who then refinanced the premises. The plaintiffs failed to make payments to Doyle to cover the expenses of the subject premises, including sums due on the new mortgage. Jackson's handwriting expert, Dennis J. Ryan, has concluded that Georgia Scott signed the deed and that there is evidence that she also signed her husband's name to the deed. (The report of Dennis J. Ryan is attached to an affirmation from Leonard Gretah, Esq. dated February 14, 2006.)
Defendant Sean Doyle alleges the following: He had no knowledge concerning the purported forgery of the deed from the plaintiffs to defendant Tricity and only learned that Tricity held the deed when defendant Jackson spoke to him in or about February, 2005. In reliance on the validity of the deed, he purchased the property for $220,000. He financed the property with a $200,000 mortgage from defendant Realty Corp., and $167,048.85 of that sum was used to pay off an existing mortgage given by the plaintiffs to IndyBank, together with the mortgagee's attorney's fees. At the closing, he paid defendant Tricity $50,000 in cash.
Defendant Realty Corp. alleges the following: On February 2, 2004, IndyBank began an action to foreclose on the plaintiffs' mortgage in the New York State Supreme Court, County of Queens, by the filing of a summons, complaint, and lis pendens. (Deutsche Bank National Trust Company v. Scott, Index No 2368/04.) On or about December 6, 2004, the bank obtained a judgment of foreclosure and sale. When title from Tricity to Doyle closed, Realty Corp. paid off the IndyBank mortgage in the sum of $167,048.85.
On December 21, 2005, after a hearing, this court found that the notary's signature on the acknowledgment to the deed from the plaintiffs to Tricity had been forged.
The plaintiffs' motions for summary judgment are denied. The stay of the Civil Court proceedings is continued until the resolution of this action. "[T]he proponent of a summary judgment motion 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 ***." (Alvarez v. Prospect Hospital, 68 NY2d 320, 324.) The plaintiffs carried this burden by submitting an affidavit from plaintiff Georgia Scott and an affirmation from her attorney alleging, inter alia, that (1) the plaintiffs' signatures on the deed to Tricity had been forged, (2) that this court has already found that the notary's signature on the acknowledgment was forged, and (3) that the plaintiffs received nothing from the proceeds of sale for the considerable equity in their home. Insofar as defendant Jackson is concerned, the plaintiff's have shown prima facie that the deed to her company was forged. A forged deed is void. (See, Marden v. Dorthy, 160 NY 39; Public Adm'r of Kings County v. Samerson, 298 AD2d 512; Kraker v. Roll, 100 AD2d 424.) Insofar as defendant Boyle and defendant Realty Corp. are concerned, "a person cannot be a bona fide purchaser or encumbrancer for value through a forged deed, as such a deed is void and conveys no title ***." (Karan v. Hoskins, 22 AD3d 638; see, Marden v Dorthy, 160 NY 39; Public Adm'r of Kings County v. Samerson, supra; Yin Wu v Wu, 288 AD2d 104.) The court notes that its finding that the acknowledgment to the deed to Tricity bears the forged signature of the notary is not dispositive of this action. "A conveyance of realty is effective to pass title as between the parties thereto, even though the deed be unacknowledged or improperly acknowledged ***." (Son Fong Lum v. Antonelli, 102 AD2d 258, 262, affd 64 NY2d 1158; see, Matter of Offerman, 172 AD2d 838; James [*4]v. Lewis, 135 AD2d 785; 43 NY Jur 2d, "Deeds," § 19.) An acknowledgment to a deed affects its ability to be recorded. The burden on this motion shifted to the defendants to produce evidence sufficient to show that there is an issue of fact which must be tried. The defendants successfully carried this burden. Defendant Jackson has sworn that she is in the business of saving homes from foreclosure by utilizing a procedure whereby the property is transferred to her and that the plaintiffs, agreeing to the procedure, executed a deed for the subject property to her company. The defendants have also submitted the report of Dennis J. Ryan, a handwriting expert, which concludes that plaintiff Georgia Scott signed her signature to the deed and that she, having a power of attorney the court notes, may have also signed her husband's name. Defendant Doyle and defendant Realty Corp. deny that they had any knowledge of the forgery and allege that they relied on the validity of the deed. In view of the conflicting allegations of the parties, the court finds that there are issues of fact and credibility in this case which preclude summary judgment. (See, Dayan v. Yurkowski, 238 AD2d 541; T&L Redemption Center Corp. v. Phoenix Beverages, Inc., 238 AD2d 504; First New York Realty Co., Inc. v. DeSetto, 237 AD2d 219.)
The motion by defendant Realty Corp. for summary judgment declaring that it has a first mortgage lien on the subject property is denied as premature. Defendant Realty Corp. argues that "[i]f the deed from the Scotts to Tricity is declared void and they remain as the owner of the premises, the Scotts would have been greatly enriched by the payment made by Realty Corp. which prevented the foreclosure." Pursuant to the doctrine of equitable subrogation, "[w]here property of one person is used in discharging an obligation owed by another or a lien upon the property of another, under such circumstances that the other would be unjustly enriched by the retention of the benefit thus conferred, the former is entitled to be subrogated to the position of the obligee or lienholder." (King v. Pelkofski, 20 NY2d 326, 333, quoting Restatement, Restitution, § 162; Bermuda Trust Co. Ltd. v. Ameropan Oil Corp., 266 AD2d 251.) However, defendant Realty Corp.'s invocation of the doctrine of equitable subrogation is premature before the resolution of the underlying dispute concerning title and before discovery into whether Realty Corp. is actually a good faith purchaser for value.
The cross motion by the plaintiffs is denied.
Short form order signed herewith.
Dated: May 11, 2006
J.S.C.
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