JPMorgan Chase Bank v. Mule

216 N.Y.S.3d 730

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, respondent,

v.Linda MULE, etc., et al., defendants;

2018–79, LLC, etc., nonparty-appellant.

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

Argued—May 10, 2024

September 18, 2024

Law Offices of Charles R. Cuneo, P.C., Huntington, NY, for nonparty-appellant.

Reed Smith LLP, New York, NY (Yimell M. Suarez Abreu of counsel), for respondent.

FRANCESCA E. CONNOLLY, J.P., LARA J. GENOVESI, BARRY E. WARHIT, LILLIAN WAN, JJ.

DECISION & ORDER

In an action to foreclose a mortgage, nonparty 2018–79, LLC, appeals from an order of the Supreme Court, Queens County (Mojgan C. Lancman, J.), entered April 21, 2023. The order denied the motion of nonparty 2018–79, LLC, for leave to intervene in the action and, thereupon, inter alia, to vacate an order and judgment of foreclosure and sale (one paper) of the same court entered May 30, 2019.

ORDERED that the order is affirmed, with costs.

In 2013, the plaintiff commenced this action to foreclose a mortgage given by the borrower, Nelson P. Roane, and executed by the defendant Nelseta Roane Williams, as "AGENT IN FACT" for Nelson P. Roane, encumbering certain real property located in Queens. In 2015, Williams executed a deed purportedly transferring the property to nonparty 116 Ave Owners, Inc. (hereinafter 116 Ave Owners). On May 30, 2019, the Supreme Court entered an order and judgment of foreclosure and sale. In December 2019, the property was sold at a foreclosure sale to the Secretary of Veterans Affairs, and the deed was recorded on January 27, 2020. In September 2022, 116 Ave Owners allegedly executed a quitclaim deed purportedly transferring its interest in the property to nonparty 2018–79, LLC (hereinafter the appellant), an entity in which Williams allegedly owned a 50% membership interest. The deed between 116 Ave Owners and the appellant was not recorded.

In January 2023, the appellant moved for leave to intervene in the action and, thereupon, inter alia, to vacate the order and judgment of foreclosure and sale. In an order entered April 21, 2023, the Supreme Court denied the appellant’s motion, and this appeal ensued.

Upon a timely motion, a person is permitted to intervene in an action as of right when, among other things, "the representation of the person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment" (CPLR 1012[a][2]), or "the action involves the disposition of, or the title to, property and the person may be affected adversely by the judgment" (id. § 1012[a][3]; see U.S. Bank N.A. v. Carrington, 179 A.D.3d 743, 743, 113 N.Y.S.3d 558; US Bank N.A v. Vogel, 171 A.D.3d 1243, 99 N.Y.S.3d 47). In addition, the court may, in its discretion, permit a person to intervene when, among other circumstances, "the person’s claim or defense and the main action have a common question of law or fact" (CPLR 1013). "Whether intervention is sought as a matter of right under CPLR 1012(a), or as a matter of discretion under CPLR 1013, is of little practical significance, since intervention should be permitted where the intervenor has a real and substantial interest in the outcome of the proceedings" (Global Team Vernon, LLC v. Vernon Realty Holding, LLC, 93 A.D.3d 819, 820, 941 N.Y.S.2d 631 [internal quotation marks omitted]; see HSBC Bank USA, N.A v. Minogue, 202 A.D.3d 662, 663, 158 N.Y.S.3d 607). "In exercising its discretion, the court shall consider whether the intervention will unduly delay the determination of the action or prejudice the substantial rights of any party" (CPLR 1013; see Wells Fargo Bank, N.A v. McLean, 70 A.D.3d 676, 677, 894 N.Y.S.2d 487).

"Pursuant to CPLR 6501, the filing of a notice of pendency provides constructive notice of an action in which the judgment demanded may affect the title to real property" (Sharestates Invs., LLC v. Hercules, 178 A.D.3d 1112, 1114, 116 N.Y.S.3d 299; see HSBC Bank USA, N.A. v. Minogue, 202 A.D.3d at 663, 158 N.Y.S.3d 607). "The statute further provides that a person whose conveyance or encumbrance is recorded after the filing of a notice of pendency is bound by all proceedings taken in the action after such filing to the same extent as if he or she were a party" (Novastar Mtge., Inc. v. Mendoza, 26 A.D.3d 479, 479, 811 N.Y.S.2d 411; see CPLR 6501; HSBC Bank USA, N.A. v. Minogue, 202 A.D.3d at 663, 158 N.Y.S.3d 607; Sharestates Investments, LLC v. Hercules, 178 A.D.3d at 1114, 116 N.Y.S.3d 299). "A person holding an interest that accrued prior to the filing of a notice of pendency, but not recorded until after the filing of the notice, is still so bound" (DLJ Mtge. Capital, Inc. v. Windsor, 78 A.D.3d 645, 647, 910 N.Y.S.2d 160; see Sharestates Invs., LLC v. Hercules, 178 A.D.3d at 1115, 116 N.Y.S.3d 299). "Further, the status of a bona fide purchaser for value cannot be maintained by a purchaser with either notice or knowledge of a prior inter- est or equity in the property, or one with knowledge of facts that would lead a reasonably prudent purchaser to make...