Mortgage Elec. Registration Sys., Inc. v Holmes
Annotate this CaseDecided on July 28, 2009
Supreme Court, Suffolk County
Mortgage Electronic Registration Systems, Inc., Plaintiff,
against
Theodore G. Holmes, Suffolk County Clerk, Defendants.
08-43815
ROSICKI, ROSICKI & ASSOC.
Attys. For Plaintiff
26 Harvester Ave.
Batavia, NY 14020
THEODORE G. HOLMES
Defendant Pro Se 214 Huntington Dr.
Mastic Beach, NY 11951
CHRISTINE MALAFI, ESQ.
Atty. For Def., County Clerk
100 Veterans Mem. Hwy.
Hauppauge, NY 11788
Thomas F. Whelan, J.
It is, ORDERED that this motion (#001) by the plaintiff for entry of a default judgment on the complaint served in this action for declaratory relief is considered under RPAPL Article 15 and CPLR 3215 and is denied.
The plaintiff commenced this action for a judgment setting aside the March 11, 2008 mortgage satisfaction it purportedly issued by mistake, which was recorded in the Office of the County Clerk on April 7, 2008. The plaintiff also demands a judgment declaring the mortgage to be a valid and subsisting lien as of its April 7, 2008 recording date. By the instant motion, the plaintiff seeks a default judgment against the defendants named in the caption, neither of whom appeared by answer in response the plaintiff's service of its summons and complaint. For the reasons set forth below, the motion is denied.
It is a well established principle of equity that a lien affecting real property, satisfied through mistake or fraudulent acts of inducement, may be restored to its original status and priority provided that no injury or prejudice is inflicted upon anyone who innocently relied upon the discharge and either purchased the property or made a loan thereon in reliance upon the validity of said satisfaction (see Regions Bank v Campbell, 291 AD2d 437, 737 NYS2d 636 [2d Dept 2002] [satisfaction piece issued by mistake]; Matter of Barclays Bank of New York, 96 AD2d 594, 464 NYS2d 1016 [2d Dept 1983]; Matter of Ditta, 221 NYS2d 34 [Sup.Ct. Kings County 1961]; see also Merritt v Merritt, 47 AD3d 689, 849 NYS2d 888 [2d Dept 2008] [issuance of satisfaction piece fraudulently induced]; Emerson Hills Realty, Inc .v Mirabella, 220 AD2d 717, 633 NYS2d 196 [2d Dept 1995]; Goldstein v Gold, 106 AD2d 100, 483 NYS2d 375 [2d Dept 1984]; aff'd 66 NY2d 624, 495 NYS2d 32 [1985]). A mortgage lien discharged of record by the recording of a satisfaction piece issued by mistake or inadvertence is thus voidable. Accordingly, a mortgagee seeking judicial restoration of a satisfaction piece issued by mistake and/or inadvertence must demonstrate that such restoration "does not interfere or affect the rights of others which may have accrued subsequent to the erroneous discharge" (Matter of Ditta, 221 NYS2d 34, supra ).
It is equally well established that to be entitled to a default judgment, the movant must establish the existence of facts which constitute cognizable claims for the relief demanded (see CPLR 3215[f]; Resnick v Lebovitz, 28 AD3d 533, 813 NYS2d 480 [2d Dept 2006]; Beaton v Transit Fac. Corp., 14 AD3d 637, 789 NYS2d 314 [2d Dept 2005]). While the proof required [*2]on an application for a default judgment is not as exacting as that required for a successful summary judgment motion, some first hand confirmation of the facts constituting the plaintiff's claims against one or more defaulting defendants is required to be set forth in a verified complaint or in an affidavit by the plaintiff or other person possessed of personal knowledge of said facts (see Woodson v Mendon Leasing Corp., 100 NY2d 62, 760 NYS2d 727 [2003]; Cohen v Schupler 51 AD3d 706, 856 NYS2d 870 [2d Dept 2008]).
A review of the plaintiff's moving papers, including the complaint attached thereto, reveals that the plaintiff failed to meet this standard. The complaint is verified by plaintiff's counsel and the affidavit of merits attached to the moving papers does not include factual assertions from which this court might ascertain that the plaintiff possesses cognizable claims for the judicial expungement of the subject mortgage satisfaction piece by reason of mistake (see CPLR 3215[f]). In this regard, the court notes that the record reflects that the mortgage satisfied by the subject satisfaction piece was consolidated with a subsequent mortgage and that said consolidated mortgage was recorded prior to the issuance of the subject satisfaction piece. These facts cast substantial doubt upon the plaintiff's unsubstantiated claim that the satisfaction piece at issue was issued by mistake and/or inadvertence.
More importantly, however, it is apparent that the plaintiff failed to demonstrate that it has joined, as party defendants to this action, all persons who acquired rights or interests in the subject premises subsequent to the recording of the subject satisfaction piece and prior to the plaintiff's filing of its notice of pendency. The complaint served and filed herein contains no allegations that all persons possessing rights or interests which may be adversely affected by the granting of the relief demanded, be they known or unknown to the plaintiff, have been joined as party defendants. In addition, there are no allegations that there are no such persons in being. In the absence of such allegations and some first hand confirmation thereof, this court is unable to ascertain whether jurisdiction over all persons whose rights and interests may be adversely affected has been acquired.
A judgment rendered without personal jurisdiction over all necessary parties affords incomplete relief and may be subject to direct and/or collateral attacks by those not joined whose rights and interests were adversely affected thereby (see Royal Zenith Corporation v Continental Insurance Company, 63 NY2d 975, 483 NYS2d 993[1984]; ("A court is without power to render a judgment against a party as to whom there is no jurisdiction"); Riverside Capital Advisors, Inc., v First Secured Capital Corp., 28 AD3d 457, 814 NYS2d 646 [2d Dept 2006]; ("A court has no power to grant relief against an entity not named as a party and not properly summoned before the court"); see also Hirsch v Syrota's Auto Wreckers, Inc, 211 AD2d 62, 621 NYS2d 892 [2d Dept 1995]; Berlin v Sordillo, 179 AD2d 717, 578 NYS2d 617 [2d Dept 1992]). This court is disinclined to issue any such judgment particularly, where as here, the property rights and interests of persons not joined as party defendants are protected, not only by traditional notions of due process, but also by our "race-notice" recording acts and such rights and interests are at risk of being adversely affected by said judgment (see RPL Article 9: §290 et. seq.). Under [*3]these circumstances, the court will not confer upon the plaintiff the relief demanded in its complaint as it has not demonstrated that such relief will not adversely affect the statutory rights and interests afforded to bona fide purchasers or encumbrancers that accrued subsequent to the plaintiff's mistaken issuance of the subject mortgage satisfaction piece and prior to the filing of the notice pendency (see RPL §291 et. seq.).
In view of the foregoing, this motion is denied. The proposed order submitted by the
plaintiff has been marked "Not Signed".
DATED: _______________________________________________
Thomas F. Whelan, J.S.C.
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