Opinion
No. 29577/2009.
2012-11-26
ONE WEST BANK FSB, Plaintiff, v. Mohibul ISLAM et al., Defendants. (And a Third–Party Action).
CHARLES J. MARKEY, J.
The following papers numbered 1 to 5 read on this motion by defendant First American Title Insurance Company as successor in interest to United General Title Insurance Company for an order, pursuant to CPLR 3211(a)(1) and (7), dismissing the third party complaint against it.
+-----------------------------------------------+ ¦Papers ¦Numbered ¦ +------------------------------------+----------¦ ¦Notice of Motion—Affidavits—Exhibits¦1 ¦ +------------------------------------+----------¦ ¦Answering Affidavits—Exhibits ¦2–3 ¦ +-----------------------------------------------+
Third party plaintiff Mohibul Islam, according to the third-party complaint, received title to two properties located at 87–09 150th Street and 87–11 150th Street, both in Jamaica, Queens County, New York by means of deeds executed by defendant Mohammed N. Chowdhury, dated November 30, 2007 and recorded on September 25, 2009.
Before October, 2007, the two properties were included within a single parcel of realty known as Block 9707, Lot 86 on the Land and Tax Map of Queens County. When Chowdhury first showed Islam Lot 86 in July, 2007, there were two separate two family houses on the lot. Islam offered to buy the entire lot with both dwellings for the price of $750,000, and Chowdhury accepted the offer. Chowdhury then sent Islam to defendant Nicolo Mangiaracina, a principal of Financial Source Funding, Inc., for the purpose of obtaining a purchase money mortgage. Chowdhury and Mangiaracina forged Islam's signatures on contracts and loan documents and produced false tax returns and employment records.
Chowdhury secretly intended to subdivide Lot 86 on a line between the two existing structures so as to create a new Lot 86 (50 feet by 67 feet) and a new Lot 90 (50 feet by 33 feet). Unknown to Islam, in October, 2007, Chowdhury and Mangiaracina filed papers with the City of New York for the purpose of subdividing Lot 86 into the two new lots. They also concealed from Islam the fact that the Department of Buildings had issued a vacate order for the two structures. Chowdhury and Mangiaracina caused AAN Services, Inc., a licensed real estate appraiser, to create inflated appraisals for the dwellings for the purpose of inducing Chase Bank and IndyMac Bank to issue mortgages.
The closing of title occurred on November 30,2007, and Bertram Brown, a disbarred attorney procured by Chowdhury and Mangiaracina, represented Islam. At the closing, Islam executed loan and transfer documents based on the false representation of Chowdhury, Mangiaracina, and Brown that he was purchasing the whole original Lot 86 at a price of $750,000 and mortgaging the whole original Lot 86 to Chase for $680,000.
Actually, Islam took title to two separate lots through the execution of two separate notes and two separate mortgages totaling nearly $1,200,000. Antonietta Russo, an attorney and the niece of Mangiaracina, represented Chase Bank and IndyMac Bank at the closing. Unknown to Islam, Chowdhury, Mangiaracina, Russo, and Brown had reached an agreement to hold in escrow nearly $220,000 until after the subdivision of original Lot 86 was approved by the Department of Finance. After the closing, Russo disbursed most of the proceeds of the mortgages, including approximately $100,000 to Chowdhury.
Subsequently, Chowdhury, Mangiaracina, and Brown deceived Islam into believing that the transaction had been cancelled because of problems with the Department of Buildings. Chowdhury deceived Islam into believing that he was attempting to resolve the problems with the Department of Buildings and that the transaction would eventually be completed. Actually, there was no cancellation, and, without Islam's knowledge, Mangiaracina and Russo made mortgage payments to the banks for several months, hoping to keep the property out of foreclosure until they could complete the subdivision and obtain the release of escrowed funds. In July, 2008, Islam learned that he had actually bought the property because of calls made to him by Chase and IndyMac concerning delinquent payments on the mortgages.
On or about April 1, 2009, Chowdhury succeeded in obtaining the approval of the Department of Finance for the subdivision of original Lot 86, and Russo, without Islam's knowledge, disbursed the $220,000 held in escrow to Chowdhury, Mangiaracina, and others.
Gladiator Abstract Inc., the closing agent for United General Title Insurance Company, withheld the deeds and mortgages from recording for more than twenty-one months until September, 2009, pending instructions from Mangiaracina and Russo that the subdivision had been completed.
The plaintiff further alleges in an affidavit submitted in opposition to the instant motion that Gladiator Abstract, Inc. delayed the recording of the deeds in furtherance of a conspiracy with Chowdhury, Mangiaracina, and Russo to hide his ownership until the subdivision of Lot 86 was completed.
First American alleges that, if Gladiator Abstract participated in the alleged conspiracy, the latter acted outside the scope of its agency. Pursuant to an agency agreement entered into by United General (First American's predecessor) and Gladiator Abstract on July 6, 2006, the latter received an appointment as an agent “for the limited purpose of originating and soliciting applications for and to sign, counter-sign, collect premiums for and issue on behalf of Company title insurance products. ....“ Paragraph 2.3 of the agency agreement expressly provided: “This appointment is strictly limited to the purposes stated in this Section and Agent is prohibited from acting or holding itself as an agent of the Company for any other purpose including but not limited to acting as representative for the conduct of or provision of any closing, settlement trust or escrow service or activity....”
The agency relationship between First American and Gladiator Abstract was limited to the solicitation, production, and issuance of title insurance policies underwritten by First American, and the alleged failure of Gladiator Abstract to record timely the deeds and mortgages cannot be attributed to the principal ( see, Nechadim Corp. v. C.J.P. Abstract, LLC, 67 AD3d 656 [2nd Dept.2009]; Chase Home Finance LLC v. Islam, 37 Misc.3d 1206[A], 2012 WL 4801108, 2012 N.Y. Slip Op. 51916(U) [Sup Ct Queens County 2012] [McDonald, J.] ).
The motion to dismiss the third-party complaint as to defendant First American Title Insurance Company only is thus granted.
The foregoing constitutes the decision, opinion, and order of the Court.