89 Pine Hollow Rd. Realty Corp. v. Am. Tax Fund

• Decision Date: 27 June 2012
• Parties: 89 PINE HOLLOW ROAD REALTY CORP., et al., respondents, v. AMERICAN TAX FUND, Foothill, et al., defendants, Lehman Brothers Bank, FSB, as assignee of Greenport Mortgage Funding, Inc., appellant.
• Court: New York Supreme Court — Appellate Division

96 A.D.3d 995

948 N.Y.S.2d 617

2012 N.Y. Slip Op. 05136

89 PINE HOLLOW ROAD REALTY CORP., et al., respondents,

v. AMERICAN TAX FUND, Foothill, et al., defendants,Lehman Brothers Bank, FSB, as assignee of Greenport Mortgage Funding, Inc., appellant.

Supreme Court, Appellate Division, Second Department, New York.

June 27, 2012.

DelBello Donnellan Weingarten Wise & Wiederkehr, White Plains, N.Y. (Frank J. Haupel and Michael J. Schwarz of counsel), for appellant.

Robert L. Dougherty, Garden City, N.Y., for respondents.

DANIEL D. ANGIOLILLO, J.P., THOMAS A. DICKERSON, LEONARD B. AUSTIN, and JEFFREY A. COHEN, JJ.

In an action, inter alia, to set aside a tax deed, the defendant Lehman Brothers Bank, FSB, as assignee of Greenpoint Mortgage Funding, Inc., appeals, as limited by its brief, from (1) so much of an order of the Supreme Court, Nassau County (Woodard, J.), dated April 19, 2010, as, in effect, granted those branches of the plaintiffs' motion which were for summary judgment on the first, second, fifth, and sixth causes of action in the amended complaint, and denied its cross motion for summary judgment dismissing the amended complaint insofar as asserted against it and Greenpoint Mortgage Funding, Inc., and to cancel the notice of pendency, and (2) so much of a judgment of the same court dated September 28, 2010, as, upon the order, adjudged that the plaintiff 89 Pine Hollow Road Realty Corp. is the fair title owner of the subject premises, vacated the subject tax deed and subsequent conveyances, and vacated and extinguished its mortgage on the subject premises.

ORDERED that the appeal from the order is dismissed; and it is further,

ORDERED that the judgment is affirmed insofar as appealed from; and it is further,

ORDERED that one bill of costs is awarded to the respondents.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action ( see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment ( seeCPLR 5501[a][1] ).

In 2001, the Nassau County Treasurer sold a tax lien on certain real property owned by the plaintiff 89 Pine Hollow Realty Corp. (hereinafter the Corporation) to the defendant American Tax Fund, Foothill (hereinafter ATF). Pursuant to relevant provisions of the Nassau County Administrative Code, ATF sent a notice to the Corporation, stating that it had until a date certain to pay the tax lien and that the failure to act would result in the County commencing a foreclosure action or issuing a tax deed. The sole officer and shareholder of the Corporation had died 11 days earlier, and the notice was returned to ATF with the notation “refused” written on the return receipt. Additional relevant facts with respect to the notice to redeem are set forth in our decision and order on a previous appeal ( see 89 Pine Hollow Rd. Realty Corp. v. American Tax Fund, Foothill, 41 A.D.3d 771, 772–774, 840 N.Y.S.2d 85).

The Corporation failed to pay the tax lien and, in 2003, the County conveyed the property by tax deed to ATF which, in turn, transferred the property to its affiliated entity, ATFH Real Property, LLC (hereinafter ATFH). In February 2004, the Corporation and the plaintiff Yvonne Pettineo, as administrator of the estate of its sole shareholder (hereinafter together the plaintiffs), commenced this action to set aside the tax deed and filed a notice of pendency. A year later, in February 2005, ATFH conveyed the premises to the defendant AFAFB, Inc. (hereinafter AFAFB), by quitclaim deed for $150,000. AFAFB intervened in the action and moved for summary judgment dismissing the complaint. The Supreme Court granted the motion, dismissed the complaint, and cancelled the notice of pendency on March 30, 2006. Pending its appeal from that order, the Corporation unsuccessfully moved in this Court for a stay of enforcement of the order canceling the notice of pendency. On June 26, 2007, this Court reversed, holding that, in opposition to AFAFB's motion, the Corporation had raised a triable issue of fact as to whether the notice to redeem violated the Corporation's constitutional right to sufficient notice ( id.).

On November 9, 2006, while that appeal was pending, AFAFB gave a $400,000 mortgage on the premises to the defendant Greenpoint Mortgage Funding, Inc. (hereinafter Greenpoint), as security for a note in that amount. AFAFB's President, the defendant Andrew Wertz, signed a guarantee of the debt. In January 2007, Greenpoint assigned the mortgage to the defendant Lehman Brothers Bank, FSB (hereinafter Lehman Brothers). After the previous appeal was decided, the Supreme Court granted the plaintiffs' motion to extend the notice of pendency for three years and for leave to amend the complaint to add causes of action against Greenpoint and Wertz as party defendants.

The plaintiffs then moved for summary judgment on the amended complaint, in essence, seeking to vacate the tax deed and subsequent conveyances, place title of the premises back in the name of the Corporation, and to vacate and extinguish the November 9, 2006, mortgage. Lehman Brothers cross-moved for summary judgment dismissing the amended complaint insofar as asserted against it and Greenpoint and to cancel the notice of pendency. In the order appealed from, the Supreme Court, inter alia, granted the plaintiffs' motion and denied Lehman Brothers' cross motion. In the judgment appealed from, the Supreme Court adjudgedthat the Corporation is the fee title owner of the premises, vacated the tax deed and subsequent conveyances, and vacated and extinguished Lehman Brothers' mortgage. Lehman Brothers appeals, and we affirm the judgment insofar as appealed from.

The plaintiffs established their prima...