| Lucia v Goldman |
| 2009 NY Slip Op 09623 [68 AD3d 1064] |
| December 22, 2009 |
| Appellate Division, Second Department |
| Tracy Lucia, Appellant, v Geoffrey S. Goldman et al.,Defendants, and Washington Mutual Bank FA, Now Known as J.P. Morgan Chase Bank, N.A.,Respondent. |
—[*1] Randall V. Coffill, Port Jervis, N.Y. (Drake Loeb Heller Kennedy Gogerty Gaba & RoddPLLC [Stephen J. Gaba and Stuart L. Kossar], of counsel), for respondent.
In an action, inter alia, to set aside a fraudulent conveyance, the plaintiff appeals from somuch of an order of the Supreme Court, Dutchess County (Dolan, J.), dated July 16, 2008, asgranted that branch of the motion of the defendant Washington Mutual Bank FA, now known asJ.P. Morgan Chase Bank, N.A., which was, in effect, pursuant to CPLR 3211 (a) (1) and (7) todismiss the amended complaint insofar as asserted against it.
Ordered that the order is reversed insofar as appealed from, on the law, with costs, and thatbranch of the motion of the defendant Washington Mutual Bank FA which was, in effect,pursuant to CPLR 3211 (a) (1) and (7) to dismiss the amended complaint insofar as assertedagainst it is denied.
The plaintiff alleges that the defendant Geoffrey S. Goldman fraudulently induced her toconvey her property in foreclosure to him by promising to pay off her mortgage and apply theremainder of the purchase price to the purchase of another home for her, or toward herrepurchase of the original property. To finance the transaction, Goldman obtained a mortgageloan from the defendant Washington Mutual Bank FA, now known as J.P. Morgan Chase Bank,N.A. (hereinafter Washington Mutual). The plaintiff commenced this action, assertingcommon-law claims and alleging violations of Real Property Law § 265-a (the HomeEquity Theft Prevention Act). The relief sought by the plaintiff included injunctive relief againstWashington Mutual for cancellation of Goldman's mortgage. Washington Mutual moved, interalia, pursuant to CPLR 3211 (a) (1) and (7) to dismiss the amended complaint insofar as assertedagainst it based upon documentary evidence and for failure to state a cause of action. TheSupreme Court granted that branch of the motion, finding that the mortgage documentssubmitted to it by Goldman established that Washington Mutual was a bona fide encumbrancerfor value as defined by Real Property Law § 265-a (2) (a). We reverse.
On a motion to dismiss a complaint, the pleading is to be afforded a liberal construction. Thecourt is to determine only whether the facts as alleged fit within any cognizable [*2]legal theory. The facts pleaded are presumed to be true and are tobe accorded every favorable inference (see Arnav Indus., Inc. Retirement Trust v Brown,Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303 [2001]; Salvatore vKumar, 45 AD3d 560, 563 [2007]; Mayer v Sanders, 264 AD2d 827, 828 [1999]).Further, "a court may freely consider affidavits submitted by the plaintiff to remedy any defectsin the complaint" (McGuire v Sterling Doubleday Enters., L.P., 19 AD3d 660, 661[2005], quoting Leon v Martinez, 84 NY2d 83, 88 [1994]; see Rovello v OrofinoRealty Co., 40 NY2d 633, 635 [1976]). "[W]here evidentiary material is adduced in supportof the motion, the court must determine whether the proponent of the pleading has a cause ofaction, not whether the proponent has stated one" (Peter F. Gaito Architecture, LLC vSimone Dev. Corp., 46 AD3d 530, 530 [2007]; see Meyer v Guinta, 262 AD2d 463,464 [1999]).
A motion to dismiss based on documentary evidence may appropriately be granted "onlywhere the documentary evidence utterly refutes plaintiff's factual allegations, conclusivelyestablishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of N.Y., 98NY2d 314, 326 [2002]; see Leon v Martinez, 84 NY2d at 88; Mazur Bros. Realty,LLC v State of New York, 59 AD3d 401, 402 [2009]).
The amended complaint alleges that Washington Mutual was not a bona fide encumbrancerfor value. We agree with the plaintiff that this allegation was not disproven by the documentaryevidence, and that the amended complaint sufficiently states a cause of action againstWashington Mutual for cancellation of the mortgage. While the mortgage documents did notreveal the nature of the transaction, the plaintiff, in an affidavit, alleges that a WashingtonMutual representative was present at the closing when the details of the transaction wereextensively discussed. Presuming this allegation to be true, as we must on a motion to dismiss,Washington Mutual may be chargeable with notice of the alleged fraud or of the allegedviolations of Real Property Law § 265-a (see Real Property Law § 265-a [2][a]; LaSalle Bank Natl. Assn. v Ally, 39 AD3d 597, 600 [2007]; Fischer v SadovRealty Corp., 34 AD3d 630, 631 [2006]; Miner v Edwards, 221 AD2d 934 [1995]).Accordingly, the documentary evidence did not conclusively refute the plaintiff's allegation thatWashington Mutual was not a bona fide encumbrancer for value (see Real Property Law§ 265-a [2] [a]; § 266; Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d at326; Fischer v Sadov Realty Corp., 34 AD3d at 631; Miner v Edwards, 221AD2d 934 [1995]).
Further, Washington Mutual's contention that the plaintiff failed to satisfy a conditionprecedent to commencement of the action is without merit. Statutory rescission pursuant to RealProperty Law § 265-a (8) is not a condition precedent to the commencement of an actionpursuant to Real Property Law § 265-a (9). These subdivisions provide separate remedies,and subdivision (9) does not state that the cause of action created by that subdivision iscontingent upon complying with the rescission procedures outlined in subdivision (8). "A courtcannot amend a statute by adding words that are not there" (American Tr. Ins. Co. vSartor, 3 NY3d 71, 76 [2004]). Moreover, the Home Equity Theft Prevention Act is aremedial statute, designed to stem an anticipated rise in so-called "mortgage rescue" schemes,and its provisions should be liberally construed in favor of equity sellers (see Matter ofDaimlerChrysler Corp. v Spitzer, 7 NY3d 653, 660 [2006]; Wells Fargo Bank, NA vEdsall, 22 Misc 3d 1113[A], 2009 NY Slip Op 50112[U], *4 [2009]). Mastro, J.P., Florio,Balkin and Leventhal, JJ., concur.