Smith v Bank of America, NA

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Smith v Bank of America, NA 2011 NY Slip Op 33634(U) March 31, 2011 Sup Ct, Nassau County Docket Number: 003420/2010 Judge: Thomas P. Phelan Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. ........... ............ ................... [* 1] se SHORT FORM ORDER STATE OF NEW YORK SUPREME COURT Present: HON. THOMAS P. PHELAN. Justice. TRIAL/IAS PART 2 NASSAU COUNTY TERESA SMITH, ORIGINAL RETURN DATE: 12/21/10 Plaintiff 01/18/11 Index No. 003420/2010 SUBMISSION DATE: -against - BANK OF AMERICA, NA MOTION SEQUENCE #1 Defendant. The following papers read on this motion: Notice of Motion................................................... Notice of Cross Motion. Answering Papers.................................................. Memorandums of Law................ ........................................... Plaintiff moves for an order declarng that the mortgage on premises known as 20 Jefferson Street , Port Washington , New York , is null and void. Defendant opposes the motion and cross moves for sumar judgment dismissing plaintiff's complaint and confirming the validity of its mortgage. The standards for summar judgment are well settled. A court may grant summar judgment where there is no genuine issue of a material fact, and the moving pary is, therefore , entitled to judgment as a matter oflaw (Alvarez v Prospect Hosp. 68 NY2d 320 (1986)). Thus , when faced with a summar judgment motion , a court' s task is not to weigh the evidence or to make the ultimate determination as to the truth of the matter; its task is to determine whether or not there exists a genuine issue for trial (Miler v Journal-News 211 AD2d 626 (2d Dept. 1995)). The burden on the party moving for summar judgment is to demonstrate a prima facie entitlement to judgment as a matter of law by tendering suffcient evidence to demonstrate the absence of any material issue of fact (Ayotte v Gervasio, 81 NY2d 1062 (1993)). If this initial burden has not been met , the motion must be denied without regard to the suffciency of opposing papers (Id. ; Alvarez v. Prospect Hosp. , supra). If such a showing is made , the burden shifts to the pary opposing the sumar judgment motion to produce evidentiary proof in [* 2] RE: SMITH v. BANK OF AMERICA, NA Page 2 establish the existence of material issues of fact which require (Alvarez v. Prospect Hosp. 68 NY2d at 324). admissible form suffcient to resolution at tral It is alleged in the complaint that on or about Februar 24 , 1999 , plaintiff, by quitclaim deed conveyed her interest in the real property known as 20 Jefferson Street , Port Washington , New York , to herself and David Hassid, as joint tenants with right of survivorship. The record reveals that on or about July 3 , 2006 , David Hassid unilaterally encumbered the property with a credit line mortgage to defendant with a limit of $300, 000. , which mortgage was recorded in the Nassau County Clerk' s Office on November 27 2006. Mr. Hassid died on Januar 14 2009 (Grantz Aff. Ex. B). Plaintiff avers that she was not made aware of the mortgage until after the death of Mr. Hassid on Januar 14 , 2009 , and that she was not the recipient of any of the proceeds from the credit line mortgage. It is plaintiff's contention that she is the sole owner of the property by operation of law as a result ofMr. Hassid' s death free and clear ofthe credit line mortgage. In support of its cross-motion defendant submits the affidavit of Janet Hartman, an Assistant Vice President of defendant , an affrmation of counsel and a memorandum of law. It is submitted by defendant that the unilateral conveyance of a mortgage by a joint tenant destroys the unty of interest, thereby severing the joint tenancy with right of surivorship and creating a tenancy in common. Defendant contends the mortgage herein is a valid mortgage encumbrance against the half interest owned by decedent's estate. The issue before the court is whether the mortgage herein severed the joint tenancy thereby creating a tenancy in common or whether the mortgage evaporated upon the demise ofthe mortgagor when his interest passed by operation of law to the surviving tenant. Real Property Law 240-c governs the severance of joint tenancy and provides that a joint tenant may unilaterally sever a joint tenancy by: " (b) Execution of a wrtten instrument that evidences the intent to sever the joint tenancy, including a deed that names the severing tenant as the direct grantee of the severing tenant's interest." It is plaintiff's position that the mortgage herein did not convey an interest in the property but merely created a lien. If the mortgage is " merely a lien on the mortgagor s interest in property rather than a conveyance of title from mortgagor to mortgagee, the execution of a mortgage by a joint tenant , on his interest in the property, would not destroy the unity of title and sever the joint tenancy (Harms v. Sprague, 105 Il1.2d 215 222 (Il. 1984)). Plaintiff submits that New York like the State of Ilinois , is a lien state. It is plaintiff's contention that the granting of a mortgage to a third pary is insuffcient to sever a joint tenancy. Defendant argues that the " conveyance " of a mortgage by a joint tenant destroys the unity of interest thereby severing the joint tenancy. Defendant submits that the unilateral act of mortgaging by one joint tenant destroys the unity of interest and that the joint tenant essentially [* 3] RE: SMITH v. BANK OF AMERICA, NA Page 3 alienates his interest. It is defendant's contention that the continuance of a joint tenancy requires the maintenance of the four unities: interest, title , time and possession , and that the unity of interest requires each joint tenant to have an equal interest in the property. Defendant argues that alienation of a joint tenant' s share terminates the joint tenancy. It is defendant' s position that the execution of a mortgage qualifies as a wrtten instrument evidencing intent to sever the joint tenancy (RPL ~240- d). Plaintiff counters that there is evidence that it was Hassid' s intention to sever the joint tenancy. In re Hoffman s Estate, 175 Misc. 2d 607 (Sur. Ct , Queens Co. 1940) for the proposition that a joint tenant may dispose of his undivided interest by mortgage or pledge. In Hoffman s Estate a joint tenant borrowed funds from his ban depositing his joint Counsel for defendant cites to ban account book as collateral. The court determined that his actions indicated an intention to reduce the funds pledged to his separate possession and thereby destroyed the joint tenancy. Defendant' s counsel posits that although Hoffman s Estate addressed a joint tenancy in personal propert, the cour' s analysis would have been the same had the collateral interest been real property and submits that other jurisdictions have held similarly. Other jurisdictions have also taken an opposing view. When posed with this question the court in New Mexico stated: 'New Mexico has never addressed whether one joint tenant may encumber the property interest of another cotenant without consent. The jursdictions which have decided this question , however, have uniformly agreed that one cotenant may not encumber the other cotenant' s interest without consent. See, e. , First National Bank of South glenn v. Energy Fuels Corp., 200 Colo. 540 618 P. 1115 (1980); Harms v. Sprague, 119 Il. App. 3d 503 , 75 Il. Dec. 155, 456 N. E.2d 976 (1983), affd, 105 Il. 2d 215 85 Il. Dec. 331, 473 N. E.2d 930 (1984); American National Bank and Trust Co. v. McGinnis, 571 P.2d 1198 (Okl.I977); Glenn v. Webb 565 S. 2d 876 (Tenn. App. 1977). (Texas American Bank/Level/and v. Morgan 105 N. M. 416 , 417733 P. 2d 864 (1987)). Recently, the Appellate Cour of Ilinois followed Harms v. Sprague, 105 IlI.Dec. 331 , 473 NE2d 930 (2010) regarding ajudgment lien quoting: Il. 2d at 224 , 85 A surviving joint tenant succeeds to the share of the deceased joint tenant by virtue of the conveyance which created the joint tenancy, not as the successor the deceased. (Citation. ) The property right of the mortgaging joint tenant is extinguished at the moment of his death. While John Hars was alive, the mortgage existed as a lien on his interest in the joint tenancy. Upon his death , his interest ceased to exist and along with it the lien of the mortgage. , ..--.. .-... "" --" -"'-- .. - . -. . ._-, ....",",._-,. ) _.,- .._-- " ... ) - .." [* 4] RE: SMITH v. BANK OF AMERICA, NA (Maniez v. Citbank, F. 404 Il. App. 3d 941, Page 4 952 937 NE2d 237 (1 Dist. 2010. This cour agrees that the interest of the joint tenant passes to the suriving tenant by operation of law upon his death thereby extinguishing the mortgage. Accordingly, plaintiff's motion is grted and defendant' s cross motion for summary judgment is denied. Submit declaratory judgment , including section , block and lot. This decision constitutes the order of the court. " " _n._. \S P. Dated: r"" 3 - '01- tfMAS P. PHELAN, J. Attornevs of Record Robert A. Brady, Esq. ENT Attorney for Plaintiff 31 South Bayles Avenue Port Washington, NY 11050 Meyner & Ladis LLP - New York APR 04 201\ Address Attention: David B. Grantz , Esq. Attorneys for Defendant The Custom Executive Office Complex The Mil in Nyack 15 Nort Mil Street Nyack , NY 10960 Meyner & Landis LLP - New Jersey Attention: David B. Grantz , Esq. Attorneys for Defendant One Gateway Center , Suite 2500 Newark, NJ 07102 Address t-fS FICE

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