Opinion
101489/08.
Decided January 29, 2010.
This is a mortgage foreclosure action. The defendants judgment creditors Mason Tenders District Council Welfare and Steve Hammond as TTEE of Mason Tenders (hereinafter "Mason Tenders") move for an Order adjudicating their lien as superior to plaintiff's mortgage, as well as other relief. The issue in controversy and to be determined by this court is whether defendant judgment creditor Mason Tenders has a prior lien on the subject property and accordingly, should be adjudicated superior to plaintiff's mortgage.
Plaintiff's motion for Judgment of Foreclosure and Sale argued simultaneously with this motion was orally granted during argument at the calendar call.
There does not appear to be a dispute of the facts of this case. The defendant Mason Tenders obtained a judgment against defendant, Joseph Gonzalez and a non-party Diamond Construction and Maintenance Inc. in the amount of $869,504.86 in the U.S. District Court for the Southern District of New York on or about June 30, 1998. Said judgment was docketed on or about October 19, 1999 in the Office of the Clerk of Richmond County. On September 22, 1998, Staten Island Savings Bank recorded a first mortgage lien in the amount of $472,500.00 against the property. It is undisputed the Staten Island Savings Bank mortgage was recorded prior to defendant, Mason Tenders' judgment lien and, therefore, had priority. Argent Mortgage Company, LLC obtained a mortgage from defendants Joseph and Jennifer Gonzalez for $499,900.00 on or about September 24, 2003 which was recorded on January 27, 2004 and assigned to plaintiff Deutsche Bank National Trust Company (hereinafter "Deutsche Bank") on or about March 31, 2008. This $499,900.00 mortgage was used to satisfy the balance of the Staten Island Savings Bank's prior mortgage in the amount of $386,034.00 and $75,000.00 in other indebtedness. A title insurance policy was obtained by Argent Mortgage Company, LLC through Old Republic Title Insurance Company which retained Richmond Abstract Corp. to act as its agent. A judgment and lien search was made against defendant Joseph Gonzalez which revealed six (6) judgments. This objection was omitted from the policy. Plaintiff Deutsche Bank contends it was determined that the judgments against Joseph Gonzalez were not against this defendant Joseph Gonzalez. This was an error, in that one of the said judgments was obtained by defendant Mason Tenders in the amount of $869,504.086 against defendant Joseph Gonzalez. It is conceded the address used by defendant Mason Tenders against defendant Joseph Gonzalez was not the address of the subject property.
The plaintiff Deutsche Bank now moves for a Judgment of Foreclosure and Sale of the property and a declaration that its mortgage has priority over defendant Mason Tenders' judgment. It is plaintiff's contention defendant Mason Tenders' judgment on the subject property expired ten (10) years after it was docketed, i.e. on June 30, 2008 and said lien has not been renewed pursuant to CPLR 5203 and 5014.
Defendant Mason Tenders does not dispute its judgment lien has expired but contends it is entitled to obtain a renewal of its judgment for another ten (10) year period nunc pro tunc. Defendant Mason Tenders also argues that the plaintiff Deutsche Bank, through its predecessors, obtained a mortgage against the subject property while its original judgment was in full force and effect, and that plaintiff had notice of the judgment in the title report and now cannot claim prejudice. Further, this is not the situation where a mortgage was docketed after the expiration of the original judgment lien ( see Gletzer v Harris , 12 NY3d 468 ).
Defendant Mason Tenders has commenced a separate action entitled Mason Tenders District Council Welfare Fund, et al v Diamond Construction and Maintenance, Inc. and Joseph Gonzalez under Index No. 102394/09 for a renewal lien which was granted nunc pro tunc on January 11, 2010.
Plaintiff Deutsche Bank argues that once the Mason Tenders' judgment lien expired, its September 24, 2003 mortgage advanced and is now entitled to a priority status. Also, since plaintiff's mortgage was used to satisfy Staten Island Savings Bank's September 22, 1998 prior mortgage in the amount of $386,034.00, under the principle of equitable subrogation, the first $386,034.00 should at least be used to satisfy plaintiff Deutsche Bank's mortgage. The plaintiff also contends that defendant Mason Tenders' lien is only against defendant Joseph Gonzalez and not against his wife, defendant Jennifer Gonzalez.
Defendant Mason Tenders concedes its lien is only against defendant Joseph Gonzalez. This court also finds defendant Jennifer Gonzalez's transfer of her fee interest to defendant Joseph Gonzalez to be irrelevant to this mortgage foreclosure proceeding.
A lien on real property is only effective for ten (10) years and a money judgment is viable for twenty (20) years ( see CPLR 211(b); § 5203(a); Gletzer v Harris, supra at 473). As a result, the legislature enacted CPLR 5014 to allow a judgment creditor to commence an action to renew its judgment lien for another ten (10) years. An action for a renewal lien may be commenced in the ninth (9th) year of the original lien or after the expiration of the ten (10) year lien ( Id). "As long as the new judgment is rendered within the 10-year lien period, the lien that the new judgment carries takes effect not immediately, but only upon the expiration of the first 10-year lien period" ( Id. at 474 citing Siegel Practice Commentaries, McKinney's Cons. Laws of NY, Book 7B, CPLR (5014:2). Thus, the procedure where the creditor moves within the ninth (9th) year would prevent any lien gaps. Where a judgment creditor chooses instead to move for a renewal lien after the expiration of the ten (10) year judgment, he does so with the risk that judgments, liens, mortgages, etc may be recorded during this gap and will be entitled to priority over the expired judgment lien. The Court of Appeals has specifically stated a mortgagee "should not be penalized for failing to unearth an expired lien or not investigating the prospect that it might be subject to a pending renewal request" Gletzer v Harris, supra at 477). Under these circumstances where a mortgage is docketed during a judgment lien gap, a court lacks the inherent power to render nunc pro tunc treatment which would prejudice the priority of liens of intervening third parties ( Id. at 476).
Defendant Mason Tenders' $869,504.00 judgment became a lien on defendant Joseph Gonzalez's property as of October 19, 1999 upon the judgment being docketed in the Office of the County Clerk. However, the 10-year realty lien, although realized when the judgment was duly docketed, is measured not from the time of docketing, but from the filing of the judgment roll (CPLR 5303(a); Levine v Bornstein, 4 NY2d 241), which is essentially the moment the judgment was entered i.e. June 30, 1998 ( see CPLR 5017(a); Quarant v Ferrara, 111 Misc 2d 1042 (Sup Ct. Queens County 1981). This judgment attached to all of the defendant Joseph Gonzalez's real property, including after acquired real property which included the subject property ( see Quarant v Ferrara, supra). Plaintiff Deutsche Bank assumed the subject mortgage which was originally recorded on or about September 27, 2004, well within defendant Mason Tenders' original 10-year realty lien period which expired on September 30, 2008. It is undisputed that when defendants Gonzalez gave the subject mortgage, a title policy was obtained by the mortgagee, plaintiff's predecessor. Said policy gave notice to the plaintiff's predecessor that defendant Joseph Gonzalez had six (6) judgments; one of which was the judgment entered by defendant Mason Tenders. This judgment lien was subsequently extended nunc pro tunc as of September 30, 2008 for another ten (10) year term. The extension of a judgment lien on real property after the ten (10) year period has elapsed is clearly permitted ( see CPLR 5014(1), Gletzer v Harris, supra; Pangborn v Klug, 244 AD2d 394, 395 [2nd Dept. 1997]; Anchor Savings Bank v Parker, 10 Misc 3d 1074(a) [Sup Ct. Nassau County 2006]).This court finds plaintiff's contention that when defendant Mason Tenders' lien expired on June 30, 2008, it lost its priority and the subject mortgage automatically obtained a priority over it, to be of no merit in either law or equity. The plaintiff has not shown any change in its position to its detriment as a result of defendant Mason Tenders' failure to timely move for a renewal lien.
The plaintiff had prior notice of defendant Mason Tenders' superior lien in their title policy which the title company for one reason or another omitted at their own peril. What investigation, if any, was performed by the title company is unknown to this court. Under these circumstances, the plaintiff cannot claim good faith under equity to undermine defendant Mason Tenders' superior lien ( see Kazmeroff v Ehlinger, 43 Misc 2d 942 (Supreme Court, Nassau County 1964). In fact, it would be defendant Mason Tenders who would be entitled to equitable relief, such as granting of their renewal judgment lien on the real property nunc pro tunc ( see Gletzer v Harris, supra).
Further, it is this court's determination that whether or not defendant Mason Tenders' renewal judgment is granted nunc pro tunc relief, is of no effect on its priority standing. A renewal lien relates back to its initial docketing, and is a continuation of the original lien which in this case was docketed on June 30, 1998 ( see Matter of Buchardt, 114 B.R. 362, 365 [NDNY 1990] discussed approvingly in Gletzer v Harris, 51 AD3d 196, 203 [First Dept. 2008]). In Gletzer v Harris the mortgagees recorded their mortgages after the expiration of the judgment lien during the lien gap, and therefore the renewal lien was not entitled to nunc pro tunc relief resulting in a lost of priority. In the instant mortgage foreclosure proceeding, the plaintiff's mortgage was undeniably recorded while defendant Mason Tenders' judgment lien was in full force and effect and not during the lien gap.
Accordingly, this court finds that defendant Mason Tenders' judgment lien retains its priority and is, therefore, superior over plaintiff Deutsche Bank's mortgage. Therefore, if plaintiff eventually sells the subject property in a foreclosure sale, the subject property can only be sold subject to any prior encumbrances, one of which being defendant Mason Tenders' judgment ( see Department of Housing Preservation and Development of the City of New York v Ferranti, 212 AD2d 438 [1st Dept. 1995]).
This shall constitute the decision and order of the court.