| Mortgage Elec. Registration Sys., Inc. v Rambaran |
| 2012 NY Slip Op 05731 [97 AD3d 802] |
| July 25, 2012 |
| Appellate Division, Second Department |
| Mortgage Electronic Registration Systems, Inc., as Nominee forFremont Investment & Loan, Respondent, v Sushma Rambaran et al., Defendants, andHSBC Bank USA, NA, as Indenture Trustee for the Registered Noteholders of RenaissanceHome Equity Loan Trust 2007-2, Appellant. |
—[*1] Hogan Lovells US, LLP, New York, N.Y. (Chava Brandriss of counsel), forrespondent.
In an action, inter alia, pursuant to RPAPL article 15 to determine claims to real property, thedefendant HSBC Bank USA, NA, as Indenture Trustee for the Registered Noteholders ofRenaissance Home Equity Loan Trust 2007-2, appeals from an order of the Supreme Court,Kings County (Kramer, J.), dated May 23, 2011, which denied that branch of its motion whichwas for summary judgment dismissing the complaint insofar as asserted against it.
Ordered that the order is affirmed insofar as appealed from, with costs.
On August 10, 2005, the defendants Philip Baldeo and Hemant K. Rambaran executed anote, secured by a mortgage (hereinafter the Fremont mortgage) on the subject real property infavor of the plaintiff, Mortgage Electronic Registration Systems, Inc., as Nominee for FremontInvestment & Loan. The Fremont mortgage was not recorded. On March 30, 2007, Hemantexecuted a deed conveying his interest in the subject real property to his daughters, thedefendants Seema Rambaran and Sushma Rambaran. That same day, Seema and Sushmaexecuted a note, secured by a mortgage (hereinafter the Delta mortgage) on the subject property,in favor of Mortgage Electronic Registrations Systems, Inc., as Nominee for Delta FundingCorporation (hereinafter Delta). The Delta mortgage was recorded, and later assigned to thedefendant HSBC Bank USA, NA, as Indenture Trustee for the Registered Noteholders ofRenaissance Home Equity Loan Trust 2007-2 (hereinafter HSBC).
In September 2009, the plaintiff commenced this action, inter alia, to set aside the March2007 conveyance as fraudulent and alleging that its mortgage lien on the subject propertypursuant to the Fremont mortgage was superior in priority to the Delta mortgage, now held byHSBC. Thereafter, the Supreme Court denied that branch of HSBC's motion which was forsummary judgment dismissing the complaint insofar as asserted against it.
" 'Under New York's Recording Act (Real Property Law § 291), a mortgage loses itspriority to a subsequent mortgage where the subsequent mortgagee is a good-faith lender forvalue, and records its mortgage first without actual or constructive knowledge of the priormortgage' " (2 Lisa Ct. Corp. vLicalzi, 89 AD3d 721, 722 [2011], quoting Washington Mut. Bank, FA v Peak Health Club, Inc., 48 AD3d793, 797 [2008]). "A mortgagee's interest in the property is protected unless it has notice[*2]of a previous fraud affecting the title of its grantor" (Thomas v LaSalle Bank N.A., 79AD3d 1015, 1017 [2010]; see Real Property Law § 266; JP Morgan Chase Bank v Munoz, 85AD3d 1124, 1126 [2011]). "[A] mortgagee is under a duty to make an inquiry where it isaware of facts 'that would lead a reasonable, prudent lender to make inquiries of thecircumstances of the transaction at issue' " (Stracham v Bresnick, 76 AD3d 1009, 1010 [2010], quoting LaSalle Bank Natl. Assn. v Ally, 39AD3d 597, 600 [2007]; see JP Morgan Chase Bank v Munoz, 85 AD3d at 1126). "Amortgagee who fails to make such an inquiry is not a bona fide encumbrancer for value" (Booth v Ameriquest Mtge. Co., 63AD3d 769, 769 [2009]; see JP Morgan Chase Bank v Munoz, 85 AD3d at 1126;Thomas v LaSalle Bank N.A., 79 AD3d at 1017). Further, "[a]n assignee stands in theshoes of the assignor and takes the assignment subject to any preexisting liabilities" (ArenaConstr. Co. v Sackaris & Sons, 282 AD2d 489, 489 [2001]; see TPZ Corp. v Dabbs, 25 AD3d787, 789 [2006]).
Here, HSBC failed to establish, prima facie, that its assignor, Delta, was a bona fideencumbrancer. In support of its motion, HSBC submitted, inter alia, checks issued at the closingof the subject transaction which did not correspond with the disbursements listed on the HUD-1settlement statement. Moreover, while the HUD-1 settlement statement reflected that $296,000was paid as consideration to Hemant, other documentation submitted by HSBC indicated that noconsideration was paid for the conveyance. Under the circumstances, HSBC failed to show thatDelta "had no knowledge of the alleged fraud or of facts that would have led a reasonablemortgagee to make inquiry of the possible fraud at the time the mortgage was entered into with[Seema and Sushma]" (JP Morgan Chase Bank v Munoz, 85 AD3d at 1126).
HSBC's remaining contention is without merit.
Since HSBC failed to establish its prima facie entitlement to judgment as a matter of law,that branch of its motion which was for summary judgment dismissing the complaint insofar asasserted against it was properly denied, regardless of the sufficiency of the opposing papers(see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Skelos, J.P.,Florio, Eng and Roman, JJ., concur. [Prior Case History: 31 Misc 3d 1232(A), 2011 NY SlipOp 50966(U).]