Citibank, N.A. v Burns

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Citibank, N.A. v Burns 2020 NY Slip Op 32508(U) July 29, 2020 Supreme Court, Kings County Docket Number: 503816/2019 Judge: Mark I. Partnow Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] KINGS COUNTY CLERK 07/29/2020 03:46 PM INDEX NO. 503816/2019 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 07/29/2020 At an IAS Term, Prut FRP2 of the Supreme Court of the State of New York, held in and for the County of Kings, at t11e Courthouse, at 360 Adams Street, Brooklyn, New York, on the 291h day of Jttly, 2020. PRESENT: HON. MARKPARTNOW, Justice - ----- - - --- -- - - - - - - - - - - -- - -- -- -- - - - -X CITIBANl<, N.A., A~ TRUSTEE FOR FEDERAL DEPOSIT INSUH.ANCE CORPORATION 2010R1 '[RUST, Plaintiff, Index No. 503816/2019 -against- STEPl-IANIE BURNS; LOUIS BURNS; HOME HEATING OIL CORP.; ABRAI-IAM REIN GOLD & JORDAN TUCKER, "JOHN DOE ii I" THROUGH "JOHN DOE# 12," the. last twelve na1nes being fictitious and unknown to plaintiff, the perso11s or parties i11tended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in tl1e complai11t, Defendants. - -- - -- -- --- - -- - - -- - - - -- - - - -- --- - -- -X The following e-filed papers read herein: _Notice of Motion/Order to Show Cause/ Petition/Cross Motio11 and Affidavits (Affirmations) Annexed, _ _ _ _ _ _ _ __ Opposing Affidavits (Affirmations)1_ _ _ _ _ _ __ Reply Affidavits (Affirmations), _ _ _ _ _ _ _ _ __ NYSEF# 114 113-114 118 120 122 84-85 Upon the foregoing papers, plaintiff Citibank, N.A., as Trustee for Federal Deposit Insurance Corporation 2010 Trust, moves for an order, pursuant to CPLR 3211 (a)(!) and (5), dismissing the counterclaim of defendant Louis Burns (Louis) or, alternatively, 1 of 5 [*FILED: 2] KINGS COUNTY CLERK 07/29/2020 03:46 PM NYSCEF DOC. NO. 130 INDEX NO. 503816/2019 RECEIVED NYSCEF: 07/29/2020 dis1nissing I,ouis' request for legal fees. Louis cross-moves for an order, pursuant to CPLR 3211 (a) (1), dismissing plaintiff's complaint. Plaintiff commenced this action to foreclose a consolidated 1nortgage encumbering the subject property at 256 Decatur Street in Brooklyn. The mortgage was executed by defendant Stephanie Burns (Stephanie) on November 13, 2008 to secure a consolidated note in favor of plaintiffs assignor, IndyMac Bank, F.S.B. (IndyMac), in the amount of $590,000.00. Stephanie took title to the subject property by deed dated February 4, 2002 from Louis, her father, who reserved a life estate therein. In conjunction with tl1e transfer, Louis and Stephanie entered into an agree1nent ("2002 agreement") providing, a1nong other covenants, that Stephanie "shall not mortgage, lease, sell, rent, encu1nbcr [or] transfer [the subject] property without the express written consent" of Louis. Previously, on October 22, 200 I, Louis granted Stephanie a durable power of attorney authorizing Stephanie to enter into real estate transactions on 11is behalf. On January 11, 2005, Stephanie, as attorney in fact for Louis, executed a deed effectively elitninating Louis' life estate and conveying a lOOo/o interest i11 the subject property to herself. The deed and power of attorney were both recorded on April 27, 2005. Stephanie thereafter proceeded to encumber the subject property with certain mortgages, including the subject consolidated mortgage. In 2007, based upon Stephanie's breach of the 2002 agreement prohibiting her from conveying and/or encu1nbering the subject property without consent, Louis commenced an action (Burns v Burns, et al., Kings County index No. 37327107) (the 2 2 of 5 [*FILED: 3] KINGS COUNTY CLERK 07/29/2020 03:46 PM NYSCEF DOC. NO. 130 INDEX NO. 503816/2019 RECEIVED NYSCEF: 07/29/2020 "constructive trust action") to impose a constructive trust over the subject property and for an acc-ounting of the income and loan proceeds received by Stephanie with respect to the subject property. A bench trial was conducted in the -constructive trust action before Justice Lawrence Knipel and Louis was awarded a judg1nent imposing a constructive trust over the subject property and ordering Stephanie to convey the subject property to Louis within twenty (20) days after service of the judgment with notice of entry. The judgment directed the Sheniff of Kings County to convey the subject property to Louis in the event Stephanie failed to timely comply. dc11ied. Louis' claims for an accounting were However, following appeal, the Appellate Division, Second Depart1nent 1nodified the judgment to grant Louis' claim for an accounting and remitted the tnatter for further proceedings (Burns v Burns, 174 AD3d 570 [2d Dept 2019]). On October 25, 2017, the Sheriff executed a deed conveying the subject property to Louis. The instant action to foreclose the subject mortgage was co1nmenced on February 21, 2019. 011 September 17, 2019, Louis filed a11 answer interposing various affir1native defenses along with a counterclai1n to void or invalidate the subject mortgage. Plaintiff seeks dismissal of the counterclai1n on grounds which include statute of litnitations and res judicata/collateral estoppel. As evidenced by an affirmation sub1nitted by Louis' counsel in the constructive trust action, Louis was aware of the subject co11solidated mortgage as early as February 2, 2009 (NYSCEF Doc No 109). Thus, to the extent Louis is claiming the consolidated ino11:gage tnust be invalidated as the product of fraud, his counterclaim is untimely as it 3 3 of 5 [*FILED: 4] KINGS COUNTY CLERK 07/29/2020 03:46 PM NYSCEF DOC. NO. 130 INDEX NO. 503816/2019 RECEIVED NYSCEF: 07/29/2020 was brought inore than six years after the consolidated mortgage was executed and more than two years after discovery of the consolidated mortgage (CPLR 213 [8]). Moreover, under New Yorlc's transactional analysis approach to res judicata, "once a clai1n is brought to a fi11al conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy" (O'Brien v City of Syracuse, 54 NY2d 353, 357 [1981]). Collateral estoppel, or issue preclusion, "precludes a party fro1n relitigating in a subsequent action or proceeding an isstte clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same" (Bank of NY. Mellon v Chamoula, 170 AD3d 788, 790 [2d Dept 2019], quoting Ryan v New York Tel. Co., 62 NY2d 494, 500 [1984]). In the constructive trust action, wl1ich proceeded to judgment, the issue of the validity o·f the consolidated mortgage was decided against Louis as Jtistice Knipe! expressly deter1nined that the property should be conveyed to Louis subject to the consolidated mortgage (Trial Transcript, NYSCEF Doc 55 at 240). Louis is thus precluded from relitigating the issue in this inattcr. Finally, any contention by Louis that the subject consolidated mortgage. is void ab initio is u11availing. It is well settled that a deed based on forgery or obtai11ed by false pretenses is void ab initio, and a mortgage based on such a deed is likewise invalid (see Cruz v Cruz, 37 AD3d 754, 754 [2d Dept 2007]; Crispino v Greenpoint Mtge. Corp., 304 AD2d 608, 608-609 [2d Dept 2003]; Yin Wu v Wu, 288 AD2d 104, 105 [1st Dept 2001]; 4 4 of 5 [*FILED: 5] KINGS COUNTY CLERK 07/29/2020 03:46 PM INDEX NO. 503816/2019 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 07/29/2020 Rosen v Rosen, 243 AD2d 618, 619 [2d Dept 1997]; Filowickv Long, 201 AD2d 893 [4th Dept 1994]). I-Iowever, there is no evidence presented establishing that l1is signature on the power of attorney authorizing Stephanie to execute the 2005 deed was forged or otherwise obtained under false pretenses. As a result, plaintiff's rnot!on to dis1niss the counterclai1n of Louis to void or invalidate the consolidated mortgage is granted and Louis' cross motion to dis1niss the complaint is denied. To the extent t11ere is an unresolved req11est set forth in Motion Sequence # I in this 1natter to consolidate this action with a separate action between Louis and Stephanie (Burns v Burns, Kings County index No. 518084/18), that part of said motion is denied. The foregoing cortstitutes the decision and order of the court. J. S. C. 5 5 of 5

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