| Deutsche Bank Trust Co., Ams. v Stathakis |
| 2011 NY Slip Op 09587 [90 AD3d 983] |
| December 27, 2011 |
| Appellate Division, Second Department |
| Deutsche Bank Trust Co., Americas, Respondent, v LarryStathakis, Appellant, et al., Defendants. Koren Dafni, NonpartyRespondent. |
—[*1] Steven J. Baum, P.C., Amherst, N.Y. (Jason B. Desiderio and Fincey John of counsel), forplaintiff-respondent.
In an action to foreclose a mortgage, the defendant Larry Stathakis appeals, as limited by hisbrief, from so much of an order of the Supreme Court, Queens County (Taylor, J.), datedNovember 15, 2010, as granted those branches of nonparty Koren Dafni's motion which were tocancel and expunge a satisfaction of mortgage filed March 1, 2007, and to amend the caption tosubstitute herself as the plaintiff in the place of Deutsche Bank Trust Co., Americas, and deniedthose branches of his cross motion which were to dismiss the complaint or, in the alternative, tocancel any accrued interest and penalties, and for leave to assert counterclaims against DeutscheBank Trust Co., Americas and/or Koren Dafni.
Ordered that the order is modified, on the law, by deleting the provision thereof denying thatbranch of the appellant's cross motion which was to cancel any interest and penalties that accruedto him on or after March 1, 2007, the date the satisfaction of mortgage was filed, and substitutingtherefor a provision granting that branch of the cross motion; as so modified, the order isaffirmed insofar as appealed from, without costs or disbursements.
The plaintiff, Deutsche Bank Trust Co., Americas (hereinafter Deutsche Bank), obtained ajudgment of foreclosure and sale against the appellant upon his default. Upon proof that themortgage and the underlying debt were assigned to nonparty Koren Dafni, the Supreme Courtprovidently exercised its discretion in granting that branch of Dafni's motion which was to amendthe caption to substitute her for Deutsche Bank (see CPLR 3025 [b]; Maspeth Fed. Sav. & Loan Assn. vSimon-Erdan, 67 AD3d 750, 751 [2009]).
Further, the Supreme Court providently exercised its discretion in granting that branch ofDafni's motion which was to cancel and expunge a satisfaction of mortgage filed by DeutscheBank on March 1, 2007, over two months after Deutsche Bank assigned the mortgage to Dafni onJanuary 21, 2007. "A mortgagee may have an erroneous discharge of mortgage, withoutconcomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgagereinstated where there has not been detrimental reliance on the erroneous recording" (New York Community Bank vVermonty, 68 AD3d 1074, 1076 [2009]; see DLJ Mtge. Capital, Inc. v Windsor, 78 AD3d 645, 647 [2010];Citibank, N.A. v Kenney, 17 AD3d305, 308 [2005]). Here, Dafni established, through the affirmation of Deutsche Bank'sattorney, that Deutsche Bank erroneously and inadvertently filed the satisfaction of mortgage,upon the receipt of the funds by Dafni, in consideration for the assignment. The appellant'scontention that he detrimentally relied upon the satisfaction when he contracted for [*2]renovations to the property in June 2008 is without merit, as therecord shows that Deutsche moved to vacate the satisfaction as early as November 19, 2007, thusputting the appellant on notice that the satisfaction should not reasonably be relied upon. For thesame reason, his contention that the motion to cancel the satisfaction should be denied basedupon the doctrine of laches is without merit (see Cohen v Krantz, 227 AD2d 581, 583[1996]).
Turning to the appellant's cross motion, since a judgment of foreclosure and sale had alreadybeen entered upon his default, and he had not moved for relief from that judgment (seeCPLR 5015 [a]), the Supreme Court properly denied those branches of his cross motionwhich were to dismiss the complaint and for leave to assert counterclaims against Deutsche Bank(see McGee v Dunn, 75 AD3d624, 625 [2010]).
However, equity requires that the appellant not be held responsible for any interest orpenalties that accrued to him under the mortgage loan on or after March 1, 2007, the date thesatisfaction of mortgage was erroneously filed by Deutche Bank. "In an action of an equitablenature, the recovery of interest is within the court's discretion" (Dayan v York, 51 AD3d 964, 965[2008]; see CPLR 5001 [a]; Bosco v Alicino, 37 AD2d 552, 552 [1971]). Here,Deutsche Bank admitted that it erred in filing the satisfaction, which has caused significant delayin this litigation. Under these circumstances, equity requires canceling any interest and penaltiesthat accrued under the loan beginning on the date the erroneous satisfaction was filed (seeDayan v York, 51 AD3d at 965; Golden City Commercial Bank v Hawk Props.Corp., 240 AD2d 218, 219 [1997]; see generally Gasco Corp. & Gordian Group of HongKong v Tosco Props., 236 AD2d 510, 512 [1997]). Accordingly, that branch of theappellant's cross motion which was to cancel any interest and penalties that accrued to him on orafter March 1, 2007, should have been granted.
The appellant's remaining contentions are either academic or without merit. Skelos, J.P.,Leventhal, Belen and Roman, JJ., concur.