Preview:

[*1]


Decided on October 6, 2008
Supreme Court, Queens County

383/07
Orin R. Kitzes, J.
Defendant Greenpoint Mortgage Funding, Inc. and defendant Mortgage Electronic Registration Systems, Inc. (MERS) s/h/a Mortgage Registration System have moved for, inter alia, (1) summary judgment dismissing the fourth, fifth, eighth, ninth, and tenth causes of action asserted against them,
(2) summary judgment dismissing the complaint against defendant MERS based on its sixth and seventh affirmative defenses, and (3) summary judgment in favor of defendant Greenpoint on its first and second counterclaims. Defendant Chandrawattie Dudnauth and defendant Chetram Lalchand have cross-moved for, inter alia, (1) summary judgment dismissing the third and ninth causes of action asserted in the complaint and (2) summary judgment on their first counterclaim.
Plaintiff Pasquale Rosamilia and plaintiff Dolores Sverko have cross-moved for (1) an order permitting them to amend their complaint and (2) summary judgment on their causes of action seeking to set aside allegedly fraudulent conveyances.
On or about November 20, 2002, defendant DLE South Ozone Park Corp. conveyed premises (a two-family home) known as 119-18 144th Street, South Ozone Park, New York (the subject premises) to defendant Desmond S. Lynch, allegedly the sole owner of the defendant corporation. Defendant Lynch gave a mortgage covering the subject premises to defendant Greenpoint in the principal sum of $184,200 dated November 20, 2002 and recorded on November 17, 2003. Defendant Lynch also gave a mortgage covering the subject premises to Baron Associates in the [*2]principal sum of $50,000 dated June 11, 2003 and recorded on September 22, 2003. On or about November 12, 2003, defendant Lynch, at a time that the plaintiffs had brought an action against him, transferred the subject property back to defendant DLE allegedly for no consideration. Defendant DLE gave a mortgage covering the subject premises to Baron Associates in the principal sum of $33,000 dated November 12, 2003 and recorded on March 19, 2004.
While the plaintiffs allege that the November 12, 2003 conveyance to DLE rendered Lynch insolvent, the defendants allege that Lynch owns premises known as 970 Hillman Street, West Hempstead, New York for which he paid $165,000 and which has allegedly increased in value to $470,000. The plaintiffs reply that defendant Lynch had placed several mortgages against the West Hempstead property and that MERS had filed a notice of pendency against the West Hempstead property.
On or about June 18, 2003, the plaintiffs began an action against Lynch in the Supreme Court of the State of New York, County of Nassau (Rosamilia v Lynch, Index No. 9458/03). On or about July 28, 2004, the plaintiffs obtained a judgment in Nassau County against defendant Lynch in the amount of $125,885.42. On or about September 7, 2004, the plaintiffs docketed their judgment against defendant Lynch in Queens County.
On or about October 10, 2004, defendant Chandrawattie Dudnauth and defendant Chetram Lalchand (the defendant purchasers) entered into a contract with defendant DLE for the sale of the subject premises, and the attorney for the defendant purchasers ordered a title search. The plaintiffs allege that the title report mentions the judgment they obtained against defendant Lynch and the no consideration transfer from him to DLE. Paragraph 30 of Schedule B of the title reports reads: "The following (one) judgments(s) against Desmond Lynch, a prior owner, to be satisfied and/or discharged prior to closing or same will be excepted***." The title report lists the judgment obtained by the plaintiffs for $125,885.42. Paragraph 39 of Schedule B of the title report reads: "Deed into the certified owner herein shows no consideration. Judgments and liens against the prior owner and any outstanding title exceptions set forth herein must be disposed of prior to closing."
The defendant purchasers applied to defendant Greenpoint for a mortgage, and they allegedly supplied the prospective mortgagee with a copy of the title report. The plaintiffs allege that defendant Greenpoint thereby received actual notice of the judgment filed against defendant Lynch and actual notice of the no consideration transfer of the subject premises to defendant DLE. The judgment was allegedly not made an exception to title insurance at the closing because it was not against DLE, the party transferring title.
On or about January 11, 2005, defendant DLE conveyed the subject premises to defendant Chandrawattie Dudnauth and defendant Chetram Lalchand for $440,000 by deed recorded on January 27, 2005. The defendant purchasers obtained a mortgage from defendant Greenpoint in the amount of $374,000 on January 11, 2005. The defendant purchasers used part of the proceeds from this mortgage (at least $291,111.08) obtained from defendant Greenpoint to satisfy the three prior mortgages placed on the subject premises by defendant Lynch and defendant DLE. On June 21, 2005, the defendant purchasers obtained a home equity line of credit mortgage from Greenpoint in the amount of $50,000 which was recorded on November 22, 2005.
On or about November 3, 2006, the plaintiffs began this action in the Supreme Court of the State of New York, County of Nassau (Index No. 18129/06), but venue was transferred to Queens County pursuant to a decision and order (one paper) dated February 14, 2007. The fourth [*3]and fifth causes of action allege that defendant Greenpoint and defendant MERS, an assignee, conspired with other defendants to defraud the plaintiffs in their collection of the judgment against defendant Lynch. The eighth and ninth causes of action seek to set aside conveyances from defendant Lynch to defendant DLE and from defendant DLE to the defendant purchasers as fraudulent, and the tenth cause of action seeks to set aside the assignment of the mortgage from defendant Greenpoint to defendant MERS.
Debtor and Creditor Law

Download 2008_52168.pdf

New York Law