Artgage Co. v Papa

[*1] Artgage Co. v Papa 2006 NY Slip Op 51261(U) [12 Misc 3d 1177(A)] Decided on May 2, 2006 Supreme Court, Westchester County Lefkowitz, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 2, 2006
Supreme Court, Westchester County

Artgage Company, RGENT MO, Plaintiff,

against

Dennis Papa, SIMONE BROTHERS AUTO BODY, INC., RICHARDS HOME CENTER AND LUMBER, INC., TIMBER RIDGE CONDO ASSOCIATION and MRS. DENNIS PAPA, Defendants.



14168/04



David P. Case, Esq.

Fein Such & Crane

Attorneys for Plaintiff

1800 First Federal Plaza

Rochester, New York 14614

Marc Wohlgemuth, Esq.

Kunstlinger & Wohlgemuth

Attorneys for WBN

235 North Main Street, Ste. 2

Spring Valley, New York 10977

Joan B. Lefkowitz, J.

Prior to a sale of real property under judgment of foreclosure, the mortgagor and mortgagee made an agreement whereby the sale would be canceled if a payment was received by December 9, 2005 PST. The Terms of Sale read by the referee in foreclosure contains a provision that the "successful bid shall be subject to any arrangements prior to the sale ... for the ... workout of the delinquent note and mortgage. In such event, the sale shall be deemed null and void ..." (para. 12). The mortgagor wired the money to the mortgagee on December 12, 2005, the date of the putative sale, at 9:34 EST (6:34 A.M. PST). The referee was not notified until after the sale at 10:00 A.M. that the sale was canceled because the mortgagor accepted the payment.

Nonparty WBN was the high bidder at the sale. No deed has been executed. Plaintiff previously moved for an order nullifying the sale. The Court granted that motion as essentially unopposed on February 6, 2006. Unknown to the Court was the fact that WBN had also presented a motion to confirm the sale. The motion never reached Chambers and was not previously considered.

Under the procedural sequence of events here, it is clear that WBN as the purchaser has an interest in the subject matter which could be inequitably affected by a determination and is, therefore, entitled to intervention as of right or by permission. CPLR 1012(a), see, Citibank v. Grant, 21 AD3rd 924 (2d Dep't 2005). Consequently, that part of the motion for leave to [*2]intervene is granted. Similarly, in view of the prior absence of WBN's motion papers, that part of the motion for reargument is granted.

It is axiomatic that a mortgagor may redeem the property up until the moment of sale. Nutt v. Cuming, 155 NY 309 (1898). However, recent case law has engrafted upon that right the statutory requirement applicable to partial foreclosures that a stay of the sale be obtained or otherwise the right of redemption is lost to the successful bidder. Real Property Actions & Proceedings Law §1341(2); Am. Bus. Credit, Inc. v. Sanabria, 19 AD3rd 624 (2d Dep't 2005); NYCTL 1996-1 Trust v. LFI Realty Corp., 307 AD2d 957 (2d Dep't 2003), app. dism. 1 NY3rd 622 (2004), rearg. den. 2 NY3rd 794 (2004); EMC Mtg. Corp. v. Bobb, 296 AD2d 476 (2d Dep't 2002); Green Point Sav. Bk. v. Oppenheim, 237 AD2d 409 (2d Dep't 1997), app. den. 90 NY2d 806 (1997). One noted authority has criticized the application of RPAPL 1341 to regular foreclosures, as here. Bergman, Payoff on the Eve of Sale, NYS Bar Journal vol. 78, no. 4, pp. 34-35 (May 2006); 2 Bergman on New York Mortgage Foreclosures, §27.10 (2005 rev. ed.).

While this Court would be constrained to apply the above rule with respect to the application of RPAPL §1341 (2) to this case under appellate precedent (1 Carmody-Wait 2d, Courts & Their Jurisdiction, 2:275), it is clear that WBN's bid was subject to the agreement between the mortgagor and mortgagee. That agreement was modified to extend the time to make a payment until December 12, 2005. The payment was timely wired to California prior to the open of business there but was later acknowledged and ratified though the sale had occurred. See, Town of North Hempstead v. Winston & Strawn, AD3rd , NYLJ 5/1/06, p. 34, col. 4 (AD2d Dept.).

WBN has suffered no prejudice. The mortgagor resides in the mortgaged premises. The bid was subject to any arrangement that was made between the lender and mortgagor prior to the sale. The equities favor the mortgagor.

Accordingly, on reargument, WBN's motion to confirm the sale is denied and plaintiff's motion to nullify the sale is granted.

Submit order on notice.

DATED: May 2, 2006ENTERED: s/ JOAN B. LEFKOWITZ, J.S.C. [*3]