89 Pine Hollow Road Realty Corp. v. American Tax Fund89 Pine Hollow Road Realty Corp. v. American Tax Fund
Ordered that the appeal from the order is dismissed; and it is further,
Ordered that the judgment is affirmed insofar as appealed from; and it is further,
Ordered that one bill of costs is awarded to the respondents.
The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248 [1976]). The issues raised on the aрpeal from the order are brought up for review and have been considered on the appeal from the judgment (see
In 2001, the Nassau County Treasurer sold a tax lien on certаin real property owned by the plaintiff 89 Pine Hollow Realty Corp. (hereinafter the Corporation) to the defendant American Tax Fund, Foothill (hereinafter ATF). Pursuant to relevant provisions of the Nassau County Administrative Code, ATF sent a notice to the Corporation, stating that it had until a date certain to pay the tax lien and that the failure to act would result in the County commencing a foreclosure action or issuing a tax deed. The sole officer and shareholder of the Corporation had died 11 days earlier, and the notice was returned tо ATF with the notation “refused” written on the return receipt. Additional relevant facts with respect to the notice to redeem are set forth in our decision and order on a previоus appeal (see 89 Pine Hollow Rd. Realty Corp. v American Tax Fund, Foothill, 41 AD3d 771, 772-774 [2007]).
The Corporation failed to pay the tax lien and, in 2003, the County conveyed the property by tax deed tо ATF which, in turn, transferred the property to its affiliated entity, ATFH Real Property, LLC (hereinafter ATFH). In February 2004, the Corporation and the plaintiff Yvonne Pettineo, as administrator of the estate of its sole shareholder (hereinafter together the plaintiffs), commenced this action to set aside the tax deed and
On November 9, 2006, while that appeal was pending, AFAFB gave a $400,000 mortgage on the premises to the defendant Greenpoint Mortgage Funding, Inc. (hereinafter Greenpoint), as security for a note in that amount. AFAFB’s President, the defendant Andrew Wertz, signed a guarantee of the debt. In January 2007, Greenpoint assigned the mortgage to the defendant Lehman Brothers Bank, FSB (hereinafter Lehman Brothers). After the previous appeal was decided, the Supreme Court granted the plaintiffs’ motion to extend the notice of pendency for three years and for leave to amend the complaint to add causes of aсtion against Greenpoint and Wertz as party defendants.
The plaintiffs then moved for summary judgment on the amended complaint, in essence, seeking to vacate the tax deed and subsеquent conveyances, place title of the premises back in the name of the Corporation, and to vacate and extinguish the November 9, 2006, mortgage. Lehman Brothers crоss-moved for summary judgment dismissing the amended complaint insofar as asserted against it and Greenpoint and to cancel the notice of pendency. In the order appealed from, the Supreme Court, inter alia, granted the plaintiffs’ motion and denied Lehman Brothers’ cross motion. In the judgment appealed from, the Supreme Court adjudged that the Corporation is the fee title owner of the premises, vacated the tax deed and subsequent conveyances, and vacated and extinguished Lehman Brothers’ mortgage. Lehman Brothers appeals, and we affirm the judgment insofar as appealed from.
The plaintiffs established their prima facie entitlement to judgment as a matter of law on their causes of action to vacate the tax deed to ATF and the subsequent conveyance by ATF’s affiliate, ATFH, to AFAFB. In opposition, Lehman Brothers failed to raise a triable issue of fact. Contrary to Lehman Brоth-
Further, the Supreme Court properly vacatеd and extinguished the mortgage interest held by Lehman Brothers. An encumbrancer which “knows facts that would excite the suspicion of an ordinarily prudent person and fails to investigate [is] . . . chargеable with that knowledge which a reasonable inquiry, as suggested by the facts, would have revealed,” and a “mortgagee who fails to make such an inquiry is not a bona fide encumbrancer fоr value” (Booth v Ameriquest Mtge. Co., 63 AD3d 769, 769 [2009] [internal quotation marks omitted]). Here, the plaintiffs submitted evidence establishing prima facie that Greenpoint was not a bona fide encumbrancer for value, as it failed to make proper inquiry upon becoming aware of facts regarding a cloud on AFAFB’s title and its inability to convey a mortgage interest. For example, Greenpoint was aware thаt AFAFB acquired the property by quitclaim deed at a price less than a quarter of its appraised value and that Greenpoint’s title insurer initially expressed objections to AFAFB’s title, inсluding questions as to the transfer from ATF to ATFH and the propriety of the notice to redeem sent to the plaintiffs prior to the tax sale. In opposition to the plaintiffs’ showing, Lehman Brothers, as assignee of Greenpoint, did not address this evidence and failed to raise a triable issue of fact as to its alleged status as a bona fide encumbrancer for value.
Accordingly, the Supreme Court propеrly, in effect, granted those branches of the plaintiffs’ motion which were for summary judgment on the first, second, fifth, and sixth causes of action in the amended complaint and properly entered judgment in accordance therewith.
Lehman Brothers’ remaining contention is without merit.
Angiolillo, J.P., Dickerson, Austin and Cohen, JJ., concur.