| Jiles v Archer |
| 2014 NY Slip Op 02262 [116 AD3d 664] |
| April 2, 2014 |
| Appellate Division, Second Department |
| Tawanna N. Jiles, Appellant, v Alana Archer et al.,Respondents. |
—[*1] Fidelity National Law Group, New York, N.Y. (Don Davis of counsel and AnthonyPrisco, former of counsel, on the brief), for respondent U.S. Bank NationalAssociation.
In an action pursuant to RPAPL article 15 to compel the determination of claims toreal property, and for a judgment declaring that the plaintiff is the owner of the subjectproperty and that the defendant U.S. Bank National Association has no interest in thesubject property, the plaintiff appeals from a judgment of the Supreme Court, QueensCounty (McDonald, J.), entered January 2, 2014, which, upon a decision of the samecourt dated February 14, 2012, made after a nonjury trial, dismissed the complaint.
Ordered that on the Court's own motion, the notice of appeal from the decision isdeemed to be a premature notice of appeal from the judgment (see CPLR 5520[c]); and it is further,
Ordered that the judgment is reversed, on the facts, with costs, the complaint isreinstated, and the matter is remitted to the Supreme Court, Queens County, for the entryof an appropriate amended judgment, inter alia, declaring that the plaintiff is the ownerof the subject property and the defendant U.S. Bank National Association has no interestin the subject property.
The plaintiff entered into an arrangement with her cousin, Gregory Wynn, topurchase certain residential property in Queens County. In July 2002, the property waspurchased in the plaintiff's name. To finance the purchase, the plaintiff obtained a$180,000 loan from a mortgage lender. She did not contribute any money to thepurchase, did not intend to reside there, had never visited the property, and did not speakto the tenants who occupied the property. She authorized Wynn to manage the propertyand pay the mortgage and other property costs with rental income, and Wynn retainedany remaining rental income as a commission. The mortgage was satisfied in February2004, without any contribution from the plaintiff.
In April 2006, a deed purportedly was executed by the plaintiff conveying herinterest in the property to the defendant Alana Archer. To finance the purchase, Archerobtained a $500,000 mortgage loan from First Franklin. In November 2006, themortgage was assigned to the defendant U.S. Bank National Association (hereinafterU.S. Bank). Archer subsequently defaulted in paying the mortgage, and U.S. Bankcommenced a mortgage foreclosure action against her.[*2]
The plaintiff commenced this action pursuant toRPAPL article 15 to compel the determination of claims to the property and for ajudgment declaring that she is the lawful owner of the property. She alleged that the 2006deed was a forgery and was, therefore, void, and the mortgage held by U.S. Bank wasinvalid. After this action was commenced, pursuant to a judgment of foreclosure in theaction by U.S. Bank against Archer, U.S. Bank purchased the property at a foreclosuresale and obtained a referee's deed purporting to convey the property to it.
Following a nonjury trial, the Supreme Court found that the 2006 deed was aforgery, but the plaintiff was barred from seeking equitable relief because she hadunclean hands in the purchase and sale of the property. The court dismissed thecomplaint, and the plaintiff appeals.
In reviewing a determination made after a nonjury trial, the power of this Court is asbroad as that of the trial court, and it may render the judgment it finds warranted by thefacts, bearing in mind that in a close case, the trial judge had the advantage of seeing thewitnesses (see Northern Westchester Professional Park Assoc. v Town ofBedford, 60 NY2d 492, 499 [1983] Parr v Ronkonkoma Realty Venture I, LLC, 65 AD3d1199, 1201 [2009]).
"A deed based on forgery or obtained by false pretenses is void ab initio, and amortgage based on such a deed is likewise invalid" (Cruz v Cruz, 37 AD3d 754, 754 [2007] see ABN AMRO Mtge. Group,Inc. v Stephens, 91 AD3d 801, 803 [2012] First Natl. Bank of Nev. v Williams, 74 AD3d 740, 742[2010] GMAC Mtge. Corp. vChan, 56 AD3d 521, 522 [2008]). "If a document purportedly conveying aproperty interest is void, it conveys nothing, and a subsequent bona fide purchaser orbona fide encumbrancer for value receives nothing" (ABN AMRO Mtge. Group, Inc.v Stephens, 91 AD3d at 803; see Marden v Dorthy, 160 NY 39, 48 [1899]Solar Line, Universal GreatBhd., Inc. v Prado, 100 AD3d 862, 863-864 [2012] First Natl. Bank of Nev.v Williams, 74 AD3d at 741). Here, as the Supreme Court found, the plaintiffestablished that the 2006 deed was a forgery.
The doctrine of unclean hands may bar a party from seeking equitable relief "whenthe complaining party shows that the offending party is guilty of immoral,unconscionable conduct and even then only when the conduct relied on is directly relatedto the subject matter in litigation and the party seeking to invoke the doctrine was injuredby such conduct" (Jara v StrongSteel Door, Inc., 58 AD3d 600, 602 [2009] [internal quotation marks omitted]see National Distillers & Chem. Corp. v Seyopp Corp., 17 NY2d 12, 15-16[1966] Wells Fargo Bank vHodge, 92 AD3d 775, 776 [2012]). Contrary to the Supreme Court'sdetermination, U.S. Bank failed to show that the plaintiff was guilty of immoral orunconscionable conduct. There is no evidence that she was a willing participant in amortgage fraud scheme. Indeed, there is no evidence of any fraud involved in thetransaction—the mortgage was satisfied within two years. In addition, there is noevidence that the plaintiff intended to defraud when she used her name and credit topurchase the property. Moreover, U.S. Bank was not injured by her conduct inpurchasing the property (seeMalaty v Malaty, 95 AD3d 961, 962 [2012] Jara v Strong Steel Door,Inc., 58 AD3d at 602; Columbo v Columbo, 50 AD3d 617, 619 [2008]Kopsidas v Krokos, 294 AD2d 406, 407 [2002]).
Furthermore, there is no evidence that the plaintiff or Wynn was involved, in anyway, in the fraudulent 2006 transaction. Assuming that a power of attorney executed bythe plaintiff in 2003, which granted Wynn the authority to act on her behalf in real estatetransactions involving the property, was properly admitted into evidence, that documentdoes not prove that Wynn played a role in the forgery.
Accordingly, since the plaintiff established that the 2006 deed was a forgery, andU.S. Bank failed to establish its defense of unclean hands, that deed is void, the mortgagebased on the deed and assigned to U.S. Bank is invalid, the referee's deed in U.S. Bank'sname is void, and the plaintiff is entitled to judgment on the complaint.
The plaintiff's remaining contentions have been rendered academic by ourdetermination.
Since this is, in part, a declaratory judgment action, we remit the matter to the [*3]Supreme Court, Queens County, for the entry of anappropriate amended judgment, inter alia, declaring that the plaintiff is the owner of thesubject property and U.S. Bank has no interest in the subject property (see Lanza vWagner, 11 NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962],cert denied 371 US 901 [1962]). Balkin, J.P., Sgroi, Cohen and LaSalle, JJ.,concur.