Greenpoint Mtge. Funding, Inc. v Gletzer

[*1] Greenpoint Mtge. Funding, Inc. v Gletzer 2007 NY Slip Op 51416(U) [16 Misc 3d 1114(A)] Decided on June 21, 2007 Supreme Court, New York County Cahn, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 21, 2007
Supreme Court, New York County

Greenpoint Mortgage Funding, Inc. and Copplestone Finance Company Limited, Petitioners,

against

Morris I. Gletzer, a/k/a Morris I. Glecer, Amos Harris, the New County Sheriff, and J. Doe "1" Through J. Doe "25", fictitious names intended to be persons, if any, having or claiming an interest in or lien upon the real property constituting the subject matter of this proceeding, Respondents.



605036/01

Herman Cahn, J.

Petitioners Greenpoint Mortgage Funding, Inc. ("Greenpoint") and Copplestone Finance Company Ltd. ("Copplestone") move to vacate that portion of a March 1, 2005 judgment in a related action which granted Respondent Morris I. Gletzer's renewal judgment of his lien nunc pro tunc to October 23, 2001, or, in the alternative, for an order that Petitioners' liens are prior and superior to Gletzer's judgment lien on the subject premises, CPLR § 5239. Petitioners also seek injunctive relief prohibiting Gletzer from attempting to enforce his judgment against the subject premises until this proceeding is resolved, CPLR § 6301.

Critical to Petitioners' claims are, not only the CPLR requirements for seeking a renewal judgment, but also the system of docketing judgments and whether the current system adequately provides notice to the public, as it is intended to do.

BACKGROUND

In an earlier and separate action, Gletzer obtained a judgment against Amos Harris in the amount of $470,437.50. The judgment was docketed by the New York County Clerk on October 23, 1991. This judgment acted as a lien on real property owned by Harris, i.e. the Condominium Unit 15B (f/k/a 15B/C), Christodora House, One Tompkins Square Park, a/k/a 143 Avenue B, New York, New York (the "Premises").

On October 22, 2001, Gletzer commenced the action related to the instant matter, Gletzer v Harris, New York County Index No. 605036/2001. In that action, he sought to renew the judgment lien against Harris, including against the Premises, for an additional ten years, in [*2]accordance with CPLR § 5014.[FN1]

On February 8, 2005, the Court issued a Memorandum Decision in Gletzer v Harris, granting Gletzer's application for a renewal judgment lien, nunc pro tunc to October 23, 2001.

However, in 2003, Petitioners had made loans to Harris. Greenpoint loaned Harris $600,000, which loan was dated January 23, 2003, and Copplestone loaned Harris $545,000, secured by a mortgage dated January 28, 2003.

Petitioners contend that they first learned that the priority of their loans had been reduced, from primary liens to liens subject to Gletzer's judgment lien, after Gletzer obtained the renewal judgment. Petitioners further contend that, at no time prior to the docketing of the renewal judgment, did they have notice of the pendency of the action brought by Gletzer to renew his October 23, 1991 judgment.

Petitioners argue that from October 23, 2001 until March 1, 2005, Gletzer's judgment did not constitute a lien on the Premises, and that since the renewal judgment was not entered until March 1, 2005, Petitioners' January 2003 liens are prior and superior to the lien of Gletzer's judgment.

Petitioners seek an order determining the priority of their liens over Gletzer's judgment lien on the Premises.

At the time Petitioners' action was commenced, Gletzer was attempting to enforce the renewal judgment against the Premises, and asserted a priority over Petitioners' liens.

DISCUSSION

Gletzer's Entitlement to a Renewal Judgment Nunc Pro Tunc:

Petitioners contend that, from October 23, 2001, when Gletzer's original judgment lien expired, through March 1, 2005, when the renewal judgment was docketed, the judgment did not constitute a lien on the Premises. Consequently, they argue, the renewal judgment was improperly renewed nunc pro tunc and, thus, Petitioners' liens are prior and superior to Gletzer's judgment lien.

Petitioners argue that, although Gletzer commenced a renewal action prior to the expiration of the lien, the ten-year judgment lien on the Premises expired on October 23, 2001 because the renewal judgment had not been docketed by then and was not docketed until March 1, 2005. They assert that the language of CPLR § 5014 is solely meant to be applicable to renewal judgments obtained and docketed prior to the expiration of the original judgment lien. Petitioners argue that there is no authority to grant a renewal judgment, after the lien of judgment expires, nunc pro tunc. Therefore, they assert, the Court did not have the authority to enter a renewal judgment after the expiration of the first ten year lien period. [*3]

Gletzer contends that a plain reading of CPLR § 5014 demonstrates that the renewal lien is superior to Petitioners' liens and that, thus, the petition must be denied. In this, he is correct.

Pursuant to CPLR § 5014, a judgment creditor may renew the lien of the judgment for an additional ten years by simply commencing an action "during the year prior to the expiration of ten years since the first docketing of the judgment." Once the action has been timely commenced, the "lien of the renewal judgment shall take effect upon the expiration of ten years from the first docketing of the original judgment." CPLR § 5014. See also In re Buchardt, 114 BR 362, 364-65 (Bankr NDNY 1990); Matis v DeLasho, 191 Misc 2d 338, 339 (Sup Ct, Westchester County 2002).

Thus, the CPLR does not require that lien renewal actions must be conclusively adjudicated prior to the expiration of ten years in order to avoid a lien gap. Rather, it merely requires the timely commencement of suit to renew the lien. Even if the lien renewal action is commenced on the last day of the tenth year, although not fully adjudicated or a decision/judgment on the action entered after the ten year period expired, the renewal judgment takes effect upon the expiration of the prior lien, thereby avoiding a lien gap. In other words, CPLR § 5014 was designed "to avoid a lien gap between the validity of the judgment which is good for twenty years (CPLR 211 [b]) and the lien status of the judgment, good for ten years (CPLR 5014 [1])." Matis,191 Misc 2d at 339.

Here, the renewal action was commenced prior to the expiration of the original judgment lien. Therefore, granting the renewal judgment nunc pro tunc, as of October 23, 2001, was proper.

The cases cited by Petitioners are neither applicable nor persuasive. See, inter alia, Mansfield State Bank v Cohn, 58 NY2d 179 (1983) (which did not involve CPLR § 5014 and where the interim period was created by a foreign judgment that was vacated on appeal); Cornell v Cornell,7 NY2d 164 (1959) (which involved a divorce decree and actually supports the position that where an act has been performed within the required time, entry of final judgment can be nunc pro tunc); Matter of Estate of Sakow,97 NY2d 436 (2002) (where the time limit, for a notice of pendency, had expired without timely renewal and this action involves CPLR § 6513, a different section).

A comparison of the language of CPLR § 5014 and § 6513, is instructive. CPLR § 5014, the section involved herein, specifically states that the action (for the renewal judgment) "may be commenced . . . during the year prior to the expiration of ten years since the fist docketing of the judgment." It does not require that the action be concluded, or judgment thereon be entered, within that time period.

CPLR § 6513 specifically states that a court may grant an extension of the three year lien period, "Before expiration of a period . . .". Thus, the extension under this section must have been granted, before the expiration of the lien. Notwithstanding, this requirement, in a proper case, nunc pro tunc recording of an extension order was permitted. Thelma Senders & Assoc. v Hague De. Corp., 131 AD2d 462 (2d Dept 1987); see, RKO Properties, Ltd. v Boymelgreen, 31 AD3d 625 (2d Dept 2006).

The renewal judgment here was properly granted.

Notice to Other Lenders:

Petitioners further argue that the renewal judgment should not have been granted nunc pro tunc because Gletzer provided no notice to them that he was seeking to extend his judgment [*4]lien. They argue that a review of judgments docketed against Harris between October 23, 2001 and March 1, 2005 would have shown only that the October 23, 1991 judgment had expired. Petitioners contend that it is the recording of the name of the judgment debtor in the docket book, pursuant to CPLR § 5018, that provides notice to the world that a money judgment has been filed against a judgment debtor, and that it is the judgment creditor's duty to ensure that judgments are correctly filed. The judgment creditor should bear the consequences when the docket book does not properly show an outstanding judgment.

It is true that in this case petitioners are disadvantaged possibly through no fault of their own.

Although Petitioners are correct that between October 23, 2001 and March 1, 2005 the judgments docketed did not themselves provide notice of the pendency of Gletzer's action to renew the judgment, it would not be proper to penalize Gletzer for strictly adhering to the statute. Indeed, although Petitioners decry Gletzer's failure to provide them with notice of his action for a renewal judgment, Petitioners' loans to Harris had not been made when Gletzer began the action for a renewal judgment. As such, Gletzer had no notice that they would become parties with an interest in the action and, even if he had, he had no obligation to proceeded differently on the basis of that knowledge.

Although the Court notes the difficulty of Petitioners' position, the correction lies in amending either the CPLR and/or the mechanics of docketing renewal judgments by the county clerk's office.[FN2]

A Preliminary Injunction and the Temporary Restraining Order:

Petitioners also seek injunctive relief, prohibiting Gletzer from attempting to execute the judgment against the Premises until this proceeding is resolved. A preliminary injunction may be granted "when the party seeking such relief demonstrates: (1) a likelihood of ultimate success on the merits; (2) the prospect of irreparable injury if the provisional relief is withheld; and (3) a balance of equities tipping in the moving party's favor." Doe v Axelrod, 73 NY2d 748, 750 (1988). In the interest of justice, this branch of the motion will be granted, to the extent of granting a stay of execution for thirty days from the date of service of a copy of this decision on Petitioner's counsel, to afford them an opportunity to file a Notice of Appeal, if they be so advised.

The temporary restraining order, entered on January 6, 2006, is otherwise vacated, the petition denied, and the proceedings dismissed

For the foregoing reasons, it is hereby

ORDERED that petition is denied; and it is further

ORDERED that respondent is stayed from executing on the judgment against the premises which are the subject of this proceeding for a period of thirty days from service of a copy of this decision on Petitioner's counsel; and it is further [*5]

ORDERED that the clerk shall enter judgment accordingly.

Dated: June 21, 2007

ENTER:

____________/s/___________________

J.S.C. Footnotes

Footnote 1: The resolution of the action was delayed because Harris cross-moved to dismiss the action for lack of personal jurisdiction, contending that he was no longer subject to the Court's jurisdiction as he was a resident and domiciliary of Missouri, and had been since 1990. The issue was also raised in an action in Missouri, which had to properly be decided, before the issue could be resolved here. Thereafter, by decision and order dated August 28, 2002, the Court held the motion to renew the judgment lien in abeyance, and referred the issue of whether the Court had jurisdiction over Harris to a referee to hear and report.

Footnote 2: Indeed, although there are, no doubt, numerous ways of correcting this problem, the Court notes that changes as simple as filing a copy of Gletzer's application for a renewal judgment with the October 23, 1991 judgment, or placing a notation regarding the pendency of an action to renew the judgment on the original judgment, would be sufficient.