Wachovia Bank, N.A. v. Swenton

• Decision Date: 25 November 2015
• Citation: 133 A.D.3d 846,20 N.Y.S.3d 405
• Parties: WACHOVIA BANK, N.A., etc., respondent, v. Katherine SWENTON, etc., et al., defendants; Marie Christine Sotomayor, etc., intervenor-appellant.
• Court: New York Supreme Court — Appellate Division

133 A.D.3d 846

20 N.Y.S.3d 405

WACHOVIA BANK, N.A., etc., respondent,

v.Katherine SWENTON, etc., et al., defendants;

Marie Christine Sotomayor, etc., intervenor-appellant.

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

Nov. 25, 2015.

Dorf & Nelson LLP, Rye, N.Y. (Jonathan B. Nelson of counsel), for intervenor-appellant.

Berkman, Henoch, Peterson, Peddy & Fenchel, P.C., Garden City, N.Y. (Bruce J. Bergman, Alan J. Waintraub, and Nicole L. Milone of counsel), for respondent.

WILLIAM F. MASTRO, J.P., LEONARD B. AUSTIN, JOSEPH J. MALTESE, and BETSY BARROS, JJ.

In an action to foreclose a mortgage, the intervenor appeals, as limited by her brief, from so much of an order of the Supreme Court, Suffolk County (Asher, J.), dated March 28, 2013, as denied those branches of her motion which were to vacate the judgment of foreclosure and sale and compel the plaintiff to accept her proposed answer.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, those branches of the motion of the intervenor which were to vacate the judgment of foreclosure and sale and compel the plaintiff to accept her proposed answer are granted, and the judgment of foreclosure and sale is vacated.

The plaintiff commenced this action to foreclose a mortgage which was executed by the defendant mortgagor Katherine Swenton, also known as Katherine Gentile Swenton (hereinafter the mortgator), on January 23, 2004, but not recorded until September 1, 2006. Prior to the plaintiff recording the subject mortgage, the mortgagor conveyed the property to Joseph Rosati by deed recorded on February 24, 2006. Rosati then conveyed the property to Island Real Estate Development and Island Properties & Associates, LLC (hereinafter together Island Properties), by deed recorded on May 26, 2006. Island Properties then conveyed the property to the intervenor and another person by deed recorded on January 31, 2007, approximately four months after the plaintiff recorded its mortgage.

Although the intervenor was a record owner of the subject property at the time this action was commenced, she was not named as a defendant in this action or served with a copy of the summons and complaint. After a judgment of foreclosure and sale was issued, the intervenor moved, inter alia, for leave to intervene in the action, to vacate the judgment of foreclosure and sale, and to compel the plaintiff to accept her proposed answer. In an order dated March 28, 2013, the Supreme Court granted that branch of the intervenor's motion which was for leave to intervene in the action, but denied the remaining branches. The intervenor appeals from so much of the order as denied the remaining branches of her motion.

"[T]he lien of a mortgage is extinguished upon the sale of the real property affected thereby unless the purchaser has knowledge, either actual or constructive, of the existence of the mortgage" (Baccari v. DeSanti, 70 A.D.2d 198, 201, 431 N.Y.S.2d 829 ; see Real Property Law § 291 ; HSBC Mtge. Servs., Inc. v. Alphonso, 58 A.D.3d 598, 599–600, 874 N.Y.S.2d 131 ). "The New York Recording Act (Real Property Law § 290 et seq. ) protects a good faith purchaser for value from a prior unrecorded interest in real property provided, inter alia, that the subsequent purchaser's interest is the first to be duly recorded" (Transland Assets, Inc. v. Davis, 29 A.D.3d 679, 679, 813 N.Y.S.2d 675 ; see Sprint...