New Falls Corporation v. Board of Managers of Parkchester North Condominium, Inc.

• Decision Date: 30 September 2004
• Docket Number: 3267.,3268.
• Citation: 10 A.D.3d 574,2004 NY Slip Op 06825,782 N.Y.S.2d 425
• Parties: NEW FALLS CORPORATION, Respondent, v. BOARD OF MANAGERS OF PARKCHESTER NORTH CONDOMINIUM, INC., Appellant, et al., Defendants. RONALD MAGRO, Nonparty Respondent.
• Court: New York Supreme Court — Appellate Division

10 A.D.3d 574

782 N.Y.S.2d 425

2004 NY Slip Op 06825

NEW FALLS CORPORATION, Respondent, v. BOARD OF MANAGERS OF PARKCHESTER NORTH CONDOMINIUM, INC., Appellant, et al., Defendants RONALD MAGRO, Nonparty Respondent.

3267.

3268.

Appellate Division of the Supreme Court of the State of New York, First Department.

September 30, 2004.

Order, Supreme Court, Bronx County (Paul A. Victor, J.), entered October 2, 2002, denying the motion of defendant Board of Managers of the Parkchester North Condominium, Inc. to vacate the judgment of foreclosure and sale of unit 2D at 2200 East Tremont Avenue, in the Bronx, including the referee's deed, and to dismiss the action, unanimously reversed, on the law and the facts, without costs or disbursements, the denial of the motion vacated, the matter remanded for a hearing on the issue of whether plaintiff New Falls Corporation had actual notice, at the time it commenced this action, of Parkchester's ownership interest in said unit, and for further proceedings consistent with the determination reached after said hearing. Order, same court and Justice, entered on or about April 2, 2003, denying defendant Parkchester's motion, denominated as one to "renew, reargue and reconsider" the aforesaid order, unanimously dismissed, without costs or disbursements, as taken from a nonappealable order.

Plaintiff, the assignee since December 23, 1995 of a mortgage, recorded on January 3, 1974, on a condominium unit, 2D, at 2200 East Tremont Avenue, Bronx, which assignment was not recorded until January 13, 1999, commenced this action on July 20, 2000 to foreclose the mortgage, alleging, upon information and belief, that the defendants Clarence Simmons and Mae S. Simmons are "individuals residing at 2200 East Tremont Avenue, Unit 2D" and that defendant Board of Managers of the Parkchester North Condominium, Inc. (PNC) is "the owner of the premises located at 2200 East Tremont Avenue, Unit 2D." No other allegation as to anyone or any other entity owning the premises appears in the summons and complaint.

It is undisputed that PNC, which, on March 13, 1996, had filed a common charges lien on the unit, thereafter, on January 21, 1998, obtained a judgment of foreclosure and purchased the unit at a foreclosure sale. The deed, dated December 8, 1998 which it subsequently recorded, however, was defective, reciting the address as 1970, not 2200, East Tremont Avenue and identifying the unit as apartment TH, not 2D. The deed also referred to "Tax Lot No. 1806 in Block No. 3944" when, in fact, the premises are located on Lot No. 3197. By deed dated December 18, 1998, PNC attempted to correct the earlier deed by inserting the correct address and correct tax lot number, 3197. The "corrected" deed was never recorded. PNC did not answer the complaint and plaintiff obtained a judgment of foreclosure and sale. Thereafter, in July 2001, a referee's deed was given to Ronald Magro, the purchaser at the sale. By order to show cause dated September 5, 2001, PNC, claiming that it was never properly served, moved to vacate the judgment of foreclosure and sale and referee's deed and to dismiss the complaint. Supreme Court ordered a traverse, which was rendered impossible when the process server suffered debilitating medical emergencies. In any event, plaintiff argued that a traverse was unnecessary because, given PNC's improperly recorded deed, it had no recorded ownership interest in the premises at the time plaintiff commenced its foreclosure action. Even if service had been improper, plaintiff argued, its judgment of foreclosure and the referee's deed would be unaffected; the only result would be the survival of PNC's lien.

In the first order on appeal (October 2, 2002), Supreme Court refused to reconsider its earlier order directing a traverse, holding, in light of plaintiff's failure to prove service, that PNC was never properly served. It further ruled, however, that such failure of service did not render the judgment of foreclosure jurisdictionally defective because PNC failed to establish that it had a properly recorded "lien" on the subject condominium unit.^* The court accorded no significance, as argued, to plaintiff's allegation in the complaint that PNC was the owner of the unit, since that assertion was made upon information and belief and incapable of affording PNC any rights. Noting that a notice of pendency was filed on July 21, 2002 and citing CPLR 6501, the court held that if PNC recorded a lien subsequent to the date, it was bound by all proceedings taken since the filing to the same extent as if it were a party. PNC subsequently moved to "renew, reargue and reconsider." The order denying that motion is also on appeal.

The motion to vacate the judgment of foreclosure and sale should not have been denied without a resolution of the...