JP Morgan Chase Bank, N.A. v Barbara
Annotate this CaseDecided on January 28, 2016
Supreme Court, Suffolk County
JP Morgan Chase Bank, N.A., Plaintiff,
against
Dominic A. Barbara, Jason M. Barbara, Elyse Figueiredo and Leslie F. Barbara.
11261-2012
Solomon & Siris, PC
Attorneys for Plaintiff
Garden City Center - Suite 501
100 Quentin Roosevelt Boulevard
Garden City, New York 11530
Bonchonsky & Zaino, LLP
Attorneys for Plaintiff's counter claim only
226 Seventh Street
Garden City, New York 11530
Defendants. Dollinger Gonski & Grossman
Attorneys for Defendants
Dominic Barbara, Jason Barbara
and Elyse Figueiredo
One Old Country Road, Suite 102
PO Box 9010
Carla Place, New York 11514
Davidoff Hutcher & Citron, LLP
Attorneys for Defendant Leslie Barbara
200 Garden City Plaza, Suite 315
Garden City, New York 11530
W. Gerald Asher, J.
Upon the following papers numbered 1 to53read on this motion to dismiss ; Notice of Motion/ Order to Show Cause and supporting papers 1-29; Notice of Cross Motion and supporting papers30-38; Answering Affidavits and supporting papers 39-53; Replying Affidavits and supporting papers; Other exhibits A - R ; (and after hearing counsel in support and opposed to the motion) it is,
ORDEREDthat plaintiff's motion for an order of the Court pursuant to CPLR 3211(b) dismissing as a matter of law the "Second and "Sixth" affirmative defenses in defendants' answer is granted.
Plaintiff moves for an order of the Court pursuant to CPLR Rule 3211(b) striking, as a matter of law, (I) the "Second" and "Sixth" affirmative defense in the answer of defendants Dominic Barbara ("Dominic"), and his adult children, Jason Barbara ("Jason") and Elyse Figueiredo ("Elyse") and (ii) expunging and nullifying a February 14, 2002 Deed (the "2002 Deed"), as of record, from Dominic, as grantor, to himself, Jason and Elyse, as grantees with respect to 169 Rams Island Drive, Shelter Island, New York (the "Property").
On or about February 14, 2002 the defendant Dominic Barbara summoned his children, Jason and Elyse to his office for the purpose of signing "transfer documents" with respect to the aforementioned 169 Rams Island Drive property. In essence, Dominic Barbara, at that time, the sole owner on the deed, transferred the property to himself, his son Jason and his daughter Elyse. Allegedly this was done for the purpose of "protecting his children given the fact he was about to marry someone who was not their mother." At the time of the signing of this document, there was no consideration paid by the children, they never received or saw the deed nor was there a physical delivery of the deed to the children. Upon a reading of the examination before trial testimony of Marlene Esposito, Dominic Barbara's former office manager of thirty-five years, she testified she was instructed by Dominic Barbara not to record the deed.
In June of 2006, Dominic Barbara applied to Washington Mutual Bank for a $2.4 million dollar refinancing of the mortgage on the aforementioned property, representing in the loan application that he solely owned the property. Specifically, there existed a mortgage in the amount of $1,999,999.00 and in this Consolidation, Extension, and Modification Agreement (CEMA), JP Morgan Chase Bank, NA's predecessor Washington Mutual, loaned to Dominic Barbara $400,001.00 in "new" money consolidating it with the pre-existing debt of $1,999,999.00 bringing the total money loaned to $2,400,000.00. This 2006 loan remained unrecorded until a duplicate copy of the CEMA was recorded in 2014.
On or about August 23, 2007 Dominic Barbara and Leslie Barbara, just prior to their second marriage, entered into a pre-nuptial agreement in which Dominic Barbara represented yet [*2]once again he was the sole owner of the aforementioned property and pursuant to the agreement he would convey 16.67% of the interest in the property to Leslie. The agreement was silent as to any ownership rights of his children Jason and Elyse. This deed dated November 11, 2007 with just Dominic and Leslie named on it was recorded January 16, 2008.
Thereafter, on or about June 10, 2009, the 2002 deed containing Dominic, Jason and Elyse was filed. As such, defendants contend that the recording of the deed creates a presumption of delivery and acceptance.
The New York Recording Act (Real Property Law §290) protects a good faith purchaser for value from an unrecorded interest in a property, provided such a purchaser's interest is first to be recorded. Transland Assets, Inc. v Davis,29 AD3d 679, 813 NYS 2d 675; see also Sprint Equities [NY], Inc. v Sylvester 71, AD3d 664, 665, 896 NYA 2d 134; Wachovia Bank NA, etc, respondent v Katherine Swenton, etc, et al, defendants,133 AD3d 846; 2015 20 NYS 3d 405.
The status of good faith purchaser for value cannot be maintained by a purchaser with either notice or knowledge of a prior interest or equity in the property, or one with knowledge of facts that would lead a reasonable prudent purchaser to make inquiries concerning such (see Barrett v Littles,201 AD2d 444, United Mat Realty v Reode Indus., 155 AD2d 660; Morrocoy Marina v Alteragarten, 120 AD2d 500; Vitale v Pinto,118 AD2d 774).
NY Real Property Law §291, Recording of Conveyances in pertinent part reads " . . . Every such conveyance not so recorded is void as against any person who subsequently purchases . . . the same real property . . . in good faith and for valuable consideration . . . and whose conveyance, contract or assignment is first duly recorded . . ."
The term "purchaser" includes every person to whom any estate or interest in real property is conveyed for a valuable consideration (see NY CLS Real Property Law §290).
Viewing the evidence in a favorable light to the defendants, although there is a presumption of "delivery" of the deed at the time of the execution of the transfer documents on February 14, 2002, the inconsistent actions of the defendants would lead a prudent person to determine that a "physical delivery" of the deed did not occur. Wherefore, the deed is deemed delivered as of the date of its recording on June 10, 2009 (see Myers, et al v Key Bank NA, et al,68 NY2d 741 [1986]). As such, this deed would be "second in time" to the unrecorded June 29, 2006 CEMA. The Recording Act protects "second in time" conveyances if the following two conditions are met. The party claiming the protection must show they paid a valuable consideration for the property and they had no knowledge of the unrecorded prior interest.
Notwithstanding defendants Jason Barbara and Elyse Figueirdo's admission that they had no knowledge of the unrecorded 2006 CEMA executed solely by their father, they have not met their burden showing that they paid valuable consideration for the property. The record is replete with evidence that the Barbara children did not pay any consideration for their interest in the [*3]property. Furthermore, it has been revealed through depositions of both children that their personal records whether it be credit or loan applications or the preparation of tax returns during these years between the signing of the transfer documents and the recording of the deed are all silent as to any ownership rights of the property in question. Accordingly, the defendants are not to be afforded the protection under the Recording Act and the Sixth affirmative defense which relies upon the Recording Act is dismissed.
With respect to defendants' Second affirmation defense based upon documentary evidence, (the February 14, 2002 deed); plaintiff argues that this defense fails as a matter of law because the deed is void for lack of delivery. Even though the undersigned has determined that the deed was delivered at the time of its recording in 2009, making it "first in time", winning the race to record against the unrecorded 2006 CEMA, the defendants cannot claim protection under the Recording Act because they failed to prove that they are good faith purchasers for value and as such are not entitled to the protection of the Recording Act. Accordingly, defendants' second affirmation defense is denied in its entirety.
Dated:___January 28, 2016________________
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