The cases relied upon by the Neglias are factually distinguishable from the facts herein. In Roth v Porush (281 AD2d 612. 722 NYS2d 566 [2d Dept 2001]), a judgment creditor filed a notice of pendency and commenced the action to set aside a fraudulent conveyance of real property from the judgment debtor to his wife, who in turn sold the real property to third parties. The court found that there were facts which should have led the third-parties and their title insurance company to conduct further inquiry before purchasing the property, and found that the doctrine of equitable subrogation was inapplicable.
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).
Based upon the Court of Appeals' decision in King v Pelkofski ( 20 NY2d at 333-334), the presence of constructive notice does not render the doctrine of equitable subrogation inapplicable where, as here, the notice of pendency, was "unbeknown" to Delta at the time ( see United States v Baran, 996 F2d at 28). We decline to follow those cases holding otherwise inasmuch as they depart from the Court of Appeals' decision in King v Pelkofski (supra; see e.g. Bank One vMon Leang Mui, 38 AD3d 809; Roth v Porush, 281 AD2d 612; R.C.P.S. Assoc., v Karam Devs., 238 AD2d 492). Notably, plaintiff would be unjustly enriched if the doctrine of equitable subrogation were not applied in the case at hand.
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.
The defense of waiver was also barred by the terms of the mortgages ( see Excel Graphics Tech. v CFG/AGSCB 75 Ninth Ave., 1 AD3d 65, lv dismissed 2 NY3d 794). Atlantic Bank's counterclaim for equitable subrogation and priority of lien, based on its payment of tax liens, was properly dismissed in light of its knowledge of plaintiff's mortgages ( see Roth v Porush, 281 AD2d 612, 614) and its failure to inquire in the face of the borrower's assertion that the mortgage was unenforceable. After due consideration, I also find appellants' other contentions meritless.
Green Point Sav. Bank v. St. Hilaire, supra (emphasis added) ; American Auto. Ins. Co. of St. Louis v. Sansone, 206 A.D.2d 445. Thus, in order to cut off an unrecorded prior lien such as a mortgage, "the purchaser must have no knowledge of the outstanding lien and win the race to the recording office" Goldstein v. Gold, supra at 101-102; see Matter of Jenkins v. Stephenson, 293 A.D.2d 612, 745 N.Y.S.2d 30; Roth v. Porush, 281 A.D.2d 612. Defendant argues that in the case at bar, it is uncontested that the 2014 Deed conveying an interest in the Subject Premises to the nonparty was never recorded and certainly was not recorded when (i) the foreclosure action was commenced, (ii) the judgment of foreclosure and sale was obtained, or (iii) the Defendant's second notice of pendency was filed.
"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.
The beneficiary of equitable subrogation obtains a lien superior to that of an undisclosed mortgage (12 Warren's Weed NY Real Property, §128.16). The doctrine does not apply where the mortgagee had knowledge of the intervening lienor (R.C.P.S. Assoc. v Karam Developers, 238 AD2d 492, 493 [2d Dept. 1997]; and see Roth v Porush, 281 A.D.2d 612, 614 [2d Dept 2001]). US Bank presents no evidence that EquiCredit paid the senior encumbrance without knowledge of GMAC's intervening mortgage.
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).