Jiles v Archer
Annotate this CaseDecided on February 14, 2012
Supreme Court, Queens County
Tawanna N. Jiles, Plaintiff,
against
Alana Archer and U.S. BANK NATIONAL ASSOCIATION, Defendant.
30948/2007
Robert J. McDonald, J.
This is an action brought pursuant to RPAPL Article 15 to compel determination of claims to real property. Plaintiff contends that on July 2, 2002, she purchased the property located at 181-34 144th Avenue for the sum of $180,000. At that time a deed was conveyed to her from Jennifer Mitchell and Selwyn Dowridge. The deed was signed on behalf of Mitchell and Dowridge by one, Gregory Wynn, their "attorney-in-fact." Mitchell and Dowridge executed a general power of attorney on May 30, 2002 providing Wynn with the right to act as their attorney-in-fact with respect to real estate transactions concerning the property in question. At the time of this sale, Ms. Jiles obtained a mortgage in the amount of $180,000 from Homestar Mortgage Services, LLC to finance the purchase price.
Subsequently, on April 27, 2006, a deed was allegedly executed by plaintiff conveying her interest in said property to one, Alana Archer. That deed was recorded in Queens County on May 16, 2006. Plaintiff contends that she did not sign that deed, that her signature on the deed is a forgery and the deed should be declared null and void. In order to obtain financing for the purchase, Ms. Archer obtained a mortgage in the amount of $500,000 which mortgage was recorded on May 16, 2006. Plaintiff claims that as she was unaware of this sale and as her name was [*2]forged on the deed, said mortgage is an invalid lien.Ms. Archer subsequently defaulted on the mortgage and the property was purchased for $317,911.75 by the defendant U.S. Bank National Association in a foreclosure sale from the estate of Ms. Archer. The defendant Bank is now the purported owner having purchased the property pursuant to the judgment of foreclosure and sale. Plaintiff now requests that the court issue an order declaring that plaintiff, not the Bank, is the lawful owner of the subject property, that the deed transferring the property to Alana Archer in 2006 be set aside and that all subsequent deeds and mortgages made in reliance upon that deed be vacated and that possession of the property be awarded to the plaintiff. Plaintiff seeks to set aside the mortgage against the subject property by the defendant, U.S. Bank National Association, and declare that the referee's deed held by the Bank is void. Pursuant to the order of Justice Schulman dated September 21, 2011, the action was discontinued against defendant Alana Archer who is now deceased.
A non-jury trial was held before this Court on October 11 and 12, 2011. The parties requested additional time to submit post-trial memorandum.
Ms. Jiles testified that she became the owner of a residence located at 181-34 144th Avenue, Springfield Gardens, New York in 2002. The deed in evidence, dated July 2, 2002, indicates that the property was deeded to Ms. Jiles by Jennifer Mitchell and Selwyn Dowridge. That deed was signed by one Gregory Wynn as attorney-in-fact for the sellers. The plaintiff also identified the second deed dated April 27, 2006, whereby plaintiff, Tawanna Jiles purportedly deeded the same property to Alana Archer. Ms. Jiles testified that the signature on the deed which purports to be in her name is in fact not her signature. The plaintiff also identified the mortgage dated April 27, 2006 whereby the buyer, Alana Archer borrowed $500,00 through First Franklin for which a mortgage was recorded on May 16, 2006. The mortgage was assigned by MERS to National City Home Loan Services on November 10, 2006.
With regard to the 2006 deed, Ms. Jiles testified that she did not sign the deed, she was not present when the deed was signed, she does not know Alana Archer, she did not authorize anyone to sign the deed for her and she did not receive any of the $500,000 proceeds of the mortgage.
On cross-examination, the plaintiff testified that in 2002 she had never seen the property prior to taking ownership, she never visited the property site, never met the buyers and did not negotiate the purchase price. Ms. Jiles stated that she had no interest in seeing what she was buying and had no intention of [*3]ever moving into the property. She stated that she considered the property to be a business arrangement or investment with her cousin Gregory Wynn. She stated that she relied on Wynn and did no research of her own. Plaintiff testified that Wynn gave her a business opportunity to make money by investing and selling other properties so that she could use the profits to fix up her own personal residence. She stated that she invested no money of her own for the purchase of the property but she gave Wynn permission to use her name in order to obtain financing. In fact, as stated above, Wynn signed the deed as attorney-in-fact for each of the sellers Jennifer Mitchell and Selwyn Dowridge.
Plaintiff testified that she allowed the use of her name to obtain credit as the house was going to be used as an investment. At the time of the 2002 transfer, the plaintiff executed a mortgage in favor of Star Mortgage in the amount of $180,000 which was the full purchase price of the home. The plaintiff made no down payment towards the purchase of the property and paid no costs associated with the purchase of the property or obtaining a mortgage. Plaintiff testified that in order to pay the mortgage, Wynn leased the property to tenants, collected the rents and used the rental payments to pay the mortgage, insurance, maintenance costs and taxes. The plaintiff stated that she did not have a key to the premises and never personally made any payments on the mortgage. She testified that when the mortgage payment was late the bank would call her and she would then call Wynn to make the payment. Plaintiff stated that she did not know who the tenants were, if they had written leases or how much the tenants were paying for rent. The plaintiff identified a lease agreement between herself and one Lisa Williams for the premises in question. She stated that she did not know Lisa Williams and she did not sign the lease. She stated, however, that she had no objection to Wynn entering into such a lease agreement with respect to the property. She also stated that she permitted Wynn to manage the property until they were ready to sell it. He told her that he would manage the property and when the property was sold she would make a profit.
In addition, Ms. Jiles stated that she never made any payments towards repairs on the premises and Wynn took care of the maintenance. The only time she made a payment was for a $350.00 summons from the sanitation department. She never paid Wynn a commission for managing the property and had no objection to him earning a commission from the rents. Although rent was collected from tenants in her property, her tax returns for 2003 do not show that she received any rental income or filed a schedule E. However, the tax return indicates indicate that she took a deduction for the mortgage interest. She stated that [*4]although the mortgage was paid off in 2004 she had no idea how it was paid off and she made no contribution to paying it off. The defendant produced a power of attorney signed by Ms. Jiles dated January 20, 2003, appointing Wynn attorney-in-fact for real estate transactions regarding the specific property in question, however, she denied that she executed the power of attorney.
Ms. Jiles testified that in 2006, Wynn told her the property was sold but that she didn't believe him because she went on ACRIS and saw her name was still on the property. Therefore, she didn't follow up with him regarding the sale of the property and did not request any share of the sale proceeds. She testified that she did not find out the property was actually sold until two years later when she was being vetted for a new job with the Nassau County Corrections Department. The investigator told her that he had seen from her credit report that she sold a house for $500,000 and had a $200,000 gain which was not reported on her tax returns as a capital gain. It was then, in December 2007, that she commenced the instant action to quiet title. She stated that she never called Wynn about receiving her share of the profits although she testified that she filed a police report and filed charges and she went to the District Attorney's Office in 2006.
Plaintiff also called "forensic document examiner" Donald Lehew. He testified that based upon his examination of plaintiff's signature on the 2006 deed and other exemplars prepared by the plaintiff, that the 2006 signature did not match the examples of her known signature.
Defendant contends that notwithstanding whether Ms. Jiles' signature on the 2006 was a forgery, that Ms. Jiles was a "straw buyer" who did not invest any money in the property and had her cousin, Gregory Wynn, manage the property, make all payments on the mortgage, taxes, insurance and only allowed the use of her name to permit Wynn to obtain financing to purchase the property. Defendant claims that although the signature on the deed may not be hers, plaintiff executed a duly notarized General Power of Attorney that appointed her cousin Gregory Wynn as attorney in fact to handle real estate transactions concerning the subject property on her behalf. Thus, defendant alleges that plaintiff has no equity in the property, that she gave Wynn complete authority to purchase, maintain, manage and sell the property and that the only reason her name is on the deed was so that Wynn could obtain a mortgage using her name. In addition, defendant claims that the claim of forgery should be rejected because the plaintiff gave Wynn authority to sign her name and manage the property. Counsel also claims that although plaintiff testified [*5]that she was supposed to receive profits from the investment when the house was sold that she never asserted a claim against Wynn for a share of the sale proceeds arising out of their investment.
Defendant claims that the equities favor the bank who was a bona fide purchaser for value of the property having purchased the property pursuant to a Judgment of Foreclosure and Sale, whereas the plaintiff is seeking a windfall having had no equity in the property whatsoever and not having contributed any funds to the purchase or maintenance on the property.
Plaintiff contends that Ms. Giles is not a straw buyer having purchased he property for value. Further, plaintiff contends that the evidence established that the Alana Archer had no legal interest in the subject property having obtained unlawful title by way of a forged deed. Plaintiff asserts that she testified credibly at trial, that she did not attend the closing, that she never authorized any person to sell the property, that she never signed the deed and that the signature on the deed was clearly forged and the deed contains no signature, description or reference to any person who signed her name by way of power of attorney. Plaintiff claims that as title to Archer was based upon a forged deed, that all subsequent mortgages and all subsequent conveyances in reliance on a forged deed are legally void. Citing cases to the effect that a forged deed conveys no title, counsel contends that Archer was not a bona fide purchaser for value since the forger had no title to convey in the first instance. Therefore, plaintiff asserts that the contention that Ms. Jiles had no equity in the property is irrelevant with respect to the validity of the deed. Plaintiff contends that the Bank's remedy is against the perpetrator of the forgery of the Alana Archer deed. Further, plaintiff contends that as the Bank relied on a forged deed in the chain of title that it has no legal interest in the property and the referee lacks standing to challenge Jiles title to the subject property. Counsel also contends that defendant's failed to establish that the plaintiff executed a power of attorney granting Wynn authority to convey title to the property and that the deed conveying title to Wynne did not include any reference to a power of attorney.
This Court finds that on January 20, 2003, Ms. Jiles signed a power of attorney appointing her cousin Gregory Wynn as attorney in fact to act in her name with respect to real estate transactions for the subject property located at 181-34 144th Avenue, Springfield Gardens, NY This Court finds that Gregory Wynn initially obtained the property for $180,000 using Ms. Jiles name to obtain credit for a mortgage and placed her name on the [*6]deed. As such, Ms. Jiles was a "straw buyer" who had never seen the property prior to its purchase, did not make a down payment on the purchase, did not make any payments towards the mortgage, never had keys to the premises and permitted Wynn to use her name as the lessor on lease documents. In addition the plaintiff never declared the property on her tax returns as investment property, did not file a schedule E, never collected the rents and never paid any expenses with respect to the upkeep, maintenance and costs associated with home ownership. Ms. Jiles also was not aware of and did not know how the $180,000 mortgage in her name was satisfied in 2004. She did not utilize any of her own funds to pay off her mortgage and when the property was sold to Ms. Archer in 2006, she did not receive any of approximately $300,000 from the profit of the sale.
Accordingly, this court finds that although Ms. Jiles did not sign the deed transferring ownership to Ms. Archer, that the circumstances of the case indicate that she consented to allow the use of her name to obtain financing and then signed a power of attorney and relinquished her role in the property and gave Wynn unrestricted authority with respect to the subject property including the authority to sell the property(see Albin v. First Nationwide Network Mortg. Co., 248 AD2d 417 [2d Dept. 1998]). Thus, her role in this scheme or arrangement with Wynn was merely to lend her name and credit to Wynn so that he could obtain an interest in the property and maintain the beneficial ownership.
This court finds that plaintiff never had an intent to inhabit or to personally use the property as rental property. Plaintiff only understood that she would obtain a financial gain when Wynn sold the property. Therefore, this Court finds that under the equitable circumstances of this case the plaintiff has no equitable claim to the property and the deed transferring the property to Archer and the mortgage in the amount of $500,000 as well as the referee's deed dated February 15, 2008 transferring ownership to the defendant Bank, who was a bona fide purchaser for value, are valid. Plaintiff, as a straw buyer had no equitable interest in the property and no expectation to profit. Her failure to declare the rental income on her tax return is also an indication that she was not a legitimate owner of the property and did not have a legally cognizable interest or equity in the property. As such, this court finds that the plaintiff is seeking a windfall in this action in attempting to set aside the deed and have the deed to the property vacated. Although the plaintiff stated that she expected to derive a benefit from the property when it was sold by Mr. Wynn she failed to join Mr. Wynn as a party defendant or to call him as a witness although he failed to share any of the profits from the sale of the property [*7]with her. This Court finds that as the plaintiff was merely a straw buyer who obtained her mortgage and had her name placed on the deed merely as an accommodation to Mr. Wynn. Thus, because this court finds that plaintiff had unclean hands in connection with the purchase and sale of this house she is barred from legal and equitable relief (see Dolny v Borck, 61 AD3d 817 [2d Dept. 2009]; Festinger v Edrich, 32 AD3d 412 [2d Dept. 2006]; Vasquez v Zambrano, 196 AD2d 840 [2d Dept. 1993]; Ta Chun Wong v Chun Wong, 163 AD2d 300 [2d Dept. 1990].
For all the above stated reasons and based upon this courts' assessment of the record and the credibility of the witnesses the plaintiff's application is denied and the complaint is dismissed.
Dated: February 14, 2012
Long Island City, NY
______________________________
ROBERT J. MCDONALD
J.S.C.
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