Hart 230, Inc. v. PennyMac Corp.

194 A.D.3d 789

149 N.Y.S.3d 134

HART 230, INC., plaintiff,

v.PENNYMAC CORP., respondent,Joel Rolnitzky, et al., appellants, et al., defendants.

2018-03202

Index No. 512092/14

Supreme Court, Appellate Division, Second Department, New York.

Argued—February 23, 2021

May 12, 2021

Rosenberg, Fortuna & Laitman, LLP, Garden City, N.Y. (Anthony R. Filosa of counsel), for appellants.

Blank Rome LLP, New York, N.Y. (Diana M. Eng and Andrea M. Roberts of counsel), for respondent.

MARK C. DILLON, J.P., LEONARD B. AUSTIN, BETSY BARROS, PAUL WOOTEN, JJ.

DECISION & ORDER

In an action, inter alia, to quiet title to certain real property, the defendants Joel Rolnitzky, OKBM, Inc., and 230 Hart Street, Inc., appeal from an order of the Supreme Court, Kings County (Mark I. Partnow, J.), dated January 2, 2018. The order, insofar as appealed from, granted the motion of the defendant PennyMac Corp. pursuant to CPLR 3211(a) to dismiss the cross claim of the defendants Joel Rolnitzky, OKBM, Inc., and 230 Hart Street, Inc., asserted against it.

ORDERED that the order is affirmed insofar as appealed from, with costs.

On June 15, 2007, the defendant Uddin Khan borrowed $544,000 from nonparty Knightsbridge Mortgage Bankers (hereinafter Knightsbridge) and executed a note in favor of Knightsbridge. As security, Khan gave Knightsbridge a mortgage on real property located in Brooklyn (hereinafter the subject property). In June 2007, Knightsbridge assigned the note and mortgage to nonparty Citimortgage, Inc. (hereinafter Citimortgage). After Khan defaulted in his payment obligations under the terms of the note and mortgage, in May 2008, Citimortgage commenced an action against Khan, among others, to foreclose the mortgage (hereinafter the foreclosure action).

On October 15, 2012, without first satisfying the subject mortgage, Khan transferred title to the subject property to the defendant OKBM, Inc. (hereinafter OKBM). Subsequently, on or about October 18, 2012, Citimortgage assigned the note and mortgage to the defendant PennyMac Corp. (hereinafter PennyMac). In March 2014, Citimortgage moved, inter alia, to discontinue the foreclosure action. By order dated May 27, 2014, the foreclosure action was discontinued and the notice of pendency filed against the subject property cancelled.

On August 6, 2014, OKBM transferred title to the subject property to the plaintiff. On December 3, 2014, OKBM transferred title to the subject property to the defendant 230 Hart Street, Inc. (hereinafter 230 Hart). On December 21, 2014, the plaintiff commenced this action, inter alia, to quiet title to the subject property against, among others, OKBM, 230 Hart, the defendant Joel Rolnitzky (hereinafter collectively the appellants), and PennyMac. In their answer, the appellants asserted a cross claim against PennyMac, alleging, inter alia, that 230 Hart held title to the subject property free and clear of any encumbrances, since Citimortgage failed to properly de-accelerate the debt so that any subsequent action to foreclose the subject mortgage would be time-barred.

Thereafter, PennyMac moved pursuant to CPLR 3211(a) to dismiss the cross claim. In an order dated January 2, 2018, the Supreme Court, inter alia, granted PennyMac's motion to dismiss the cross claim. This appeal ensued.

A motion pursuant to CPLR 3211(a)(1) to dismiss a claim based on documentary evidence may be appropriately granted "only where the documentary evidence utterly refutes [the claimant]’s factual allegations, conclusively establishing a defense as a matter of law" ( Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 ; see Carbone v. Deutsche Bank Natl. Trust Co., 145 A.D.3d 848, 849, 44 N.Y.S.3d 147 ; Jahan v. U.S. Bank N.A., 127 A.D.3d 926, 927, 9 N.Y.S.3d 65 ). For the purpose of CPLR 3211(a)(1), "judicial records, as well as documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable, would qualify as documentary evidence" ( Fontanetta v. John Doe 1, 73 A.D.3d 78, 84–85, 898 N.Y.S.2d 569 [internal quotation marks omitted]).

"To maintain an equitable quiet title claim, a [claimant] must allege actual or constructive possession of the property and the existence of a removable cloud on the property, which is an apparent title, such as a deed or other instrument, that is actually invalid or inoperative" ( Carbone v. Deutsche Bank Natl. Trust Co., 145 A.D.3d at 849, 44 N.Y.S.3d 147 ; see RPAPL 1515 ; Acocella v. Wells Fargo Bank, N.A., 139 A.D.3d 647, 649, 32 N.Y.S.3d 187 ; Acocella v. Bank of N.Y. Mellon, 127 A.D.3d 891, 892–893, 9 N.Y.S.3d 67 ). " RPAPL 1501(4) provides that ‘[w]here the period allowed by the applicable statute of limitations for the commencement...