The doctrine of equitable subrogation provides that a mortgagee who pays off a prior mortgage without knowledge of the existence of an intervening lien may have its rights subrogated to the rights of the senior mortgage and thus gain priority over the intervening lien holder. See Roth v. Porush, 722 N.Y.S.2d 566, 568 (App.Div. 2001). The doctrine does not apply, where the party seeking subrogation has notice of the intervening lien. R.C.P.S. Assoc. v. Karam Developers, 656 N.Y.S.2d 666, 667 (App.Div. 1997).
In that case, the plaintiff who filed the notice of pendency already had a recorded interest in the property, having recorded his mortgage, and the notice simply preserved an existing property right. Other cases cited by plaintiff are similarly distinguishable because, like Goldstein, they involved a plaintiff who already had an established interest in the property, or a defendant who was not a good faith purchaser for value ( Novastar Mtge., Inc. v Mendoza, 26 AD3d 479; Roth v Porush, 281 AD2d 612; Green Point Sav. Bank v St. Hilaire, 267 AD2d 203, lv denied 95 NY2d 778; Morrocoy Mar. v Altengarten, 120 AD2d 500 [specific performance available because defendant was not a good faith purchaser for value]; Stephens v Snitow, 95 AD2d 806, lv denied 60 NY2d 557 ; United States v McCombs, 30 F3d 310 [2d Cir 1994]; In re 19 Ct, St. Assoc., LLC, 190 BR 983 [SD NY 1996]; Nitchie Barrett Realty Corp. v Biderman, 704 F Supp 369 [SD NY 1988]). In the case at bar, specific performance was an impossible remedy since M-P-M did not have title to the subject property at the time the action was commenced, and, under New York law as stated above, a contract vendee such as plaintiff does not, by virtue of the filing of a notice of pendency, create an interest in real property superior to a subsequent good faith purchaser from the same vendor who records a contract or conveyance.
Here, although Susan Lopez sold the Westbury residence to third parties, the record establishes that the sale took place after the plaintiff had filed a notice of pendency against the property. Accordingly, the third-party purchasers are bound by the judgment in this action which voids Frank Lopez' transfer of his interest in the property to his wife ( see CPLR 6405), and the sale does not cut off the plaintiff's lien against Frank Lopez' interest in the property ( see Roth v. Porush, 281 A.D.2d 612). Under these circumstances, the plaintiff is not entitled to a substitute remedy.
"a. Have the conveyance set aside or obligation annulled to the extent necessary to satisfy his claim, or"b. Disregard the conveyance and attach or levy execution upon the property conveyed" (seeSkiff-Murray v Murray, 17 AD3d 807 [2005]; Roth v Porush, 281 AD2d 612 [2001]). Defendant Mei has submitted evidence purporting to show that: (1) I. Saleh and Y.Y. Saleh are two different people; (2) Y.Y. Saleh, not I. Saleh, owned the subject property and conveyed it to her; (3) I. Saleh did not have an equitable interest in the subject property; (4) a buyer's market, the lack of a certificate of occupancy, and the possibility of foreclosure caused a reduction in the selling price; and (5) she paid fair consideration for the subject property and had no knowledge of fraud at the time of the purchase.
In this case, the complete lack of supporting evidence regarding the defendants' explanation of the transfer in June of 2007 does not rebut the initial showing that the transfer was made with actual intent "to hinder, delay or defraud" the plaintiff creditor. See, Kreisler Borg Florman Gen. Const. Co., Inc. v Tower 56 LLC, 58 AD3d 694 (2d Dept 2009); Roth v Porush, 281 AD2d 612 (2d Dept. 2001); Dillon v Dean, 236 AD2d 360 (2d Dept. 1997); Spielvogel v Welborne, 175 AD2d 830 (2d Dept. 1991); see also, Joslinv Lopez, 309 AD2d 837 (2d Dept. 2003).
In this case, the complete lack of supporting evidence regarding the defendants' explanation of the transfer in June of 2007 does not rebut the initial showing that the transfer was made with actual intent "to hinder, delay or defraud" the plaintiff creditor. See, Kreisler Borg Florman Gen. Const. Co., Inc. v Tower 56 LLC, 58 AD3d 694 (2d Dept 2009); Roth v Porush, 281 AD2d 612 (2d Dept. 2001); Dillon v Dean, 236 AD2d 360 (2d Dept. 1997); Spielvogel v Welborne, 175 AD2d 830 (2d Dept. 1991); see also, Joslin v Lopez, 309 AD2d 837 (2d Dept. 2003).
Equitable subrogation, thus, does not apply in this case (see Bank One v Mon Leang Mui , 38 AD3d 809, 812). Moreover, plaintiff did not become the assignee of Mortgage Two until August 18, 2008, the date of the assignment from Accredited, and, thus, was on notice of Mortgage Three, which had been recorded in 2004, and which should have led plaintiff to conduct further inquiry ( see Roth v Porush, 281 AD2d 612, 615).
Moreover, a judgment creditor seeking to set aside a conveyance as fraudulent under Debtor and Creditor Law § 273-a need not show that he has futilely resorted to other proceedings to enforce the judgment. ( See, Roth v Porush, 281 AD2d 612; Republic Ins. Co. v. Levy, supra; Carmody-Wait 2d, NY Prac with Forms § 85:43.) Debtor and Creditor Law § 278, "Rights of creditors whose claims have matured," provides in relevant part: "Where a conveyance or obligation is fraudulent as to a creditor, such creditor, when his claim has matured, may, as against any person except a purchaser for fair consideration without knowledge of the fraud at the time of the purchase, or one who has derived title immediately or mediately from such a purchaser, a. Have the conveyance set aside or obligation annulled to the extent necessary to satisfy his claim, or b. Disregard the conveyance and attach or levy execution upon the property conveyed."
Additionally, defendants Ramirez and First Continental were aware that a mortgage existed on the property which was in the name of plaintiff, as opposed to defendant Bisono, and that although the GST and Bisono deeds were dated on the same date, the Bisono deed was not recorded until over six years later. Again, a question of fact exists as to whether this unusual circumstance, regarding the recording of the GST and Bisono deeds, should have put defendants Ramirez and First Continental on notice that there might be a cloud on the record title (see Roth v Porush, 281 AD2d 612; R.C.P.S. Associates v Karam Developers, 238 AD2d 492). Summary judgment dismissing the amended complaint as against defendants Ramirez and First Continental therefore is unwarranted (see Zuckerman v City of New York, 49 NY2d 557,supra).