Real Property Law

Common Law Does Not Protect Building Against Excavation That Withdraws Lateral or Subjacent Support

Canarick v. Cicarelli

NYLJ 3/10/10, p. 27, col. 1

Supreme Ct., Nassau Cty.

(Lally, J.)

In an action by landowner against a neighbor and various contractors for deprivation of lateral and subjacent support, all parties sought summary judgment. The court awarded summary judgment to the neighbors and their contractors, holding that common law does not protect a landowner's building against excavation that withdraws lateral or subjacent support.

Landowner's parcel, improved by a single-family house, is situated on a cliff above neighbor's parcel which, until recently, has been vacant. Neighbors obtained a building permit for a single family home on their parcel. When construction started, landowner expressed concern to the buildings department, which ordered neighbor to stabilize the hill with a retaining wall. Neighbor hired contractors to design and build the retaining wall, but landowner brought this action contending that the excavation and construction work interfered with landowner's lateral and subjacent support.

In awarding summary judgment to neighbor and neighbor's contractors, the court acknowledged that at common law, a neighbor may not excavate its land in a way that interferes with another landowner's lateral and subjacent support, but noted that the rule protects only land in its natural state, not land improved with a building. As a result, the common-law rule does not protect the landowner's home. Moreover, to the extent landowner contends that the excavation interferes with support of his land, as opposed to his home, he offered no data to suggest that construction of his own home was not a contributing factor to any loss of stability of the land on which the home sits. Finally, the court emphasized that even when a landowner's parcel is improved with a home, a neighbor is liable for any loss in support that results from negligent excavation and construction. In this case, however, landowner had not alleged any facts that would suggest negligence by neighbor.

Title Insurer's Dismissal Motion Denied in Claim Arising from Lack of Access

Uzzle v. Nunzie Court Homeowners Association

NYLJ 2/23/10, p. 40, col. 3

AppDiv, Second Dept.

(memorandum opinion)

In an action by home purchaser, purchaser appealed from Supreme Court's dismissal of the complaint against purchaser's lawyer and title insurance company. The Appellate Division modified to deny the dismissal motion with respect to the title insurance company, and to deny the motion with respect to purchaser's legal malpractice claim against the lawyer. The court held that the breach of contract claim against the lawyer was properly dismissed as duplicative of the malpractice claim.

Purchaser, represented by his lawyer, bought a parcel located on a private road. The sale contract specified that he would take title subject to a declaration of covenants, restrictions, easements, charges and liens. The title insurance company issued a policy insuring against unmarketability of title and lack of a right
of access to the land. The policy included an exception for loss or damage arising from the declaration. After closing, purchaser brought this action, asserting that he had no legal means of access to his property. The title insurer and the lawyer moved to dismiss, and Supreme Court granted the motion.

In modifying, the Appellate Division relied on the language in the title insurance policy covering losses arising from a lack of legal access. The court acknowledged the insurer's reliance on the exception for matters included in the declaration, but the court noted that the insurer had not provided documentary evidence resolving all questions of fact about the scope of the exception. The court also held that the complaint stated a cause of action for legal malpractice.

Transferee with Actual Knowledge Not Protected By Recording Act

Sprint Equities Inc. v. Sylvester

NYLJ 3/9/10, p. 43, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In an action for a declaration that transferee is the sole owner of a disputed parcel, transferee appealed from a Supreme Court order denying transferee's summary judgment motion and declaring transferee's deed null and void. The Appellate Division affirmed, holding that because transferee had actual knowledge of a prior mortgage, and failed to record its deed before the mortgage was recorded, transferee could not assert superior title to the parcel.

Sylvester conveyed a mortgage on the property to HSBC. Subsequently, Sylvester transferred the property to transferee in consideration for payment of $1,000. At the time of the transfer, transferee knew of the HSBC mortgage, and knew that HSBC had commenced foreclosure proceedings. In fact, transferee's representative, at a deposition, contended that transferee had assumed the mortgage, although it never took an assignment and never made any mortgage payments. Subsequent to the transfer to transferee, HSBC recorded its mortgage. later, transferee recorded its deed. Transferee then brought this declaratory judgment action, naming as defendants Sylvester, HSBC, and parties who acquired title from HSBC. Supreme Court declared the deed null and void, and transferee appealed.

In affirming, the Appellate Division emphasized that transferee was not a good faith purchaser for value, and could not therefore assert the protection of the recording act. In addition, the court noted that because HSBC recorded before transferee did, there would have been no basis for recording act protection even if transferee had been a good faith purchaser. As a result, Supreme Court correctly held that transferee's deed was void as against HSBC and any transferees from HSBC.

Expiration and Subsequent Renewal of Judgment Lien Does Not Affect Lien's
Priority

Deutsche Bank National Trust Co. v. Gonzalez

NYLJ 2/17/10, p. 28, col. 3

Supreme Ct. Richmond Cty.

(Minardo, J.)

In a mortgage foreclosure action, judgment creditor moved for an order adjudicating its lien superior to that of plaintiff mortgagee. The court granted the motion, holding that expiration of the judgment lien, followed by renewal of the lien nunc pro tunc, did not affect the lien's priority.

The Staten Island Savings Bank recorded a mortgage lien against the subject property in 1998 to secure a first mortgage lien in the amount of $472,500. The same year, the judgment creditor obtained a judgment in the amount of $869,504 against mortgagor Gonzales and a non-party to this proceeding. Judgment creditor did not docket that lien until 1999. All parties concede that the Staten Island Savings Bank mortgage is superior to the judgment lien. In 2003, however, another bank took a $499,000 mortgage on the property. Most of the mortgage proceeds were used to satisfy the Staten Island Savings Bank mortgage. The 2003 mortgage was recorded in 2004, and assigned to Deutsche Bank in 2008. Judgment creditor's lien expired ten years after the date of the original 1998 judgment, but judgment creditor subsequently In this action, Deutsche Bank foreclosed on the mortgage. Judgment creditor moved for a declaration that its lien enjoyed priority over the Deutsche Bank mortgage.

In holding that the judgment creditor enjoyed priority over the mortgage, the court rejected Deutsche Bank's argument that the judgment lien's expiration ten years after the lien was docketed deprived judgment creditor of priority. The court indicated that judgment creditor's renewal of the lien restored the lien's priority, especially because Deutsche Bank's mortgage was created at a time the original lien was still in effect, and Deutsche Bank and its predecessors were on notice of that lien. The court conceded that the situation would be different if a mortgagee took a mortgage after expiration of the original judgment lien and before the lien was renewed. On the facts of this case, however, the court concluded that if Deutsche Bank sells the property at a foreclosure sale, the purchaser will take subject to the judgment lien. The court mentioned, although it did not address, mortgagee's argument that its lien should assume the priority of the original Staten Island Savings Bank loan to the extent the funds advanced were used to satisfy that loan.

Common Law Does Not Protect Building Against Excavation That Withdraws Lateral or Subjacent Support

Canarick v. Cicarelli

NYLJ 3/10/10, p. 27, col. 1

Supreme Ct., Nassau Cty.

(Lally, J.)

In an action by landowner against a neighbor and various contractors for deprivation of lateral and subjacent support, all parties sought summary judgment. The court awarded summary judgment to the neighbors and their contractors, holding that common law does not protect a landowner's building against excavation that withdraws lateral or subjacent support.

Landowner's parcel, improved by a single-family house, is situated on a cliff above neighbor's parcel which, until recently, has been vacant. Neighbors obtained a building permit for a single family home on their parcel. When construction started, landowner expressed concern to the buildings department, which ordered neighbor to stabilize the hill with a retaining wall. Neighbor hired contractors to design and build the retaining wall, but landowner brought this action contending that the excavation and construction work interfered with landowner's lateral and subjacent support.

In awarding summary judgment to neighbor and neighbor's contractors, the court acknowledged that at common law, a neighbor may not excavate its land in a way that interferes with another landowner's lateral and subjacent support, but noted that the rule protects only land in its natural state, not land improved with a building. As a result, the common-law rule does not protect the landowner's home. Moreover, to the extent landowner contends that the excavation interferes with support of his land, as opposed to his home, he offered no data to suggest that construction of his own home was not a contributing factor to any loss of stability of the land on which the home sits. Finally, the court emphasized that even when a landowner's parcel is improved with a home, a neighbor is liable for any loss in support that results from negligent excavation and construction. In this case, however, landowner had not alleged any facts that would suggest negligence by neighbor.

Title Insurer's Dismissal Motion Denied in Claim Arising from Lack of Access

Uzzle v. Nunzie Court Homeowners Association

NYLJ 2/23/10, p. 40, col. 3

AppDiv, Second Dept.

(memorandum opinion)

In an action by home purchaser, purchaser appealed from Supreme Court's dismissal of the complaint against purchaser's lawyer and title insurance company. The Appellate Division modified to deny the dismissal motion with respect to the title insurance company, and to deny the motion with respect to purchaser's legal malpractice claim against the lawyer. The court held that the breach of contract claim against the lawyer was properly dismissed as duplicative of the malpractice claim.

Purchaser, represented by his lawyer, bought a parcel located on a private road. The sale contract specified that he would take title subject to a declaration of covenants, restrictions, easements, charges and liens. The title insurance company issued a policy insuring against unmarketability of title and lack of a right
of access to the land. The policy included an exception for loss or damage arising from the declaration. After closing, purchaser brought this action, asserting that he had no legal means of access to his property. The title insurer and the lawyer moved to dismiss, and Supreme Court granted the motion.

In modifying, the Appellate Division relied on the language in the title insurance policy covering losses arising from a lack of legal access. The court acknowledged the insurer's reliance on the exception for matters included in the declaration, but the court noted that the insurer had not provided documentary evidence resolving all questions of fact about the scope of the exception. The court also held that the complaint stated a cause of action for legal malpractice.

Transferee with Actual Knowledge Not Protected By Recording Act

Sprint Equities Inc. v. Sylvester

NYLJ 3/9/10, p. 43, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In an action for a declaration that transferee is the sole owner of a disputed parcel, transferee appealed from a Supreme Court order denying transferee's summary judgment motion and declaring transferee's deed null and void. The Appellate Division affirmed, holding that because transferee had actual knowledge of a prior mortgage, and failed to record its deed before the mortgage was recorded, transferee could not assert superior title to the parcel.

Sylvester conveyed a mortgage on the property to HSBC. Subsequently, Sylvester transferred the property to transferee in consideration for payment of $1,000. At the time of the transfer, transferee knew of the HSBC mortgage, and knew that HSBC had commenced foreclosure proceedings. In fact, transferee's representative, at a deposition, contended that transferee had assumed the mortgage, although it never took an assignment and never made any mortgage payments. Subsequent to the transfer to transferee, HSBC recorded its mortgage. later, transferee recorded its deed. Transferee then brought this declaratory judgment action, naming as defendants Sylvester, HSBC, and parties who acquired title from HSBC. Supreme Court declared the deed null and void, and transferee appealed.

In affirming, the Appellate Division emphasized that transferee was not a good faith purchaser for value, and could not therefore assert the protection of the recording act. In addition, the court noted that because HSBC recorded before transferee did, there would have been no basis for recording act protection even if transferee had been a good faith purchaser. As a result, Supreme Court correctly held that transferee's deed was void as against HSBC and any transferees from HSBC.

Expiration and Subsequent Renewal of Judgment Lien Does Not Affect Lien's
Priority

Deutsche Bank National Trust Co. v. Gonzalez

NYLJ 2/17/10, p. 28, col. 3

Supreme Ct. Richmond Cty.

(Minardo, J.)

In a mortgage foreclosure action, judgment creditor moved for an order adjudicating its lien superior to that of plaintiff mortgagee. The court granted the motion, holding that expiration of the judgment lien, followed by renewal of the lien nunc pro tunc, did not affect the lien's priority.

The Staten Island Savings Bank recorded a mortgage lien against the subject property in 1998 to secure a first mortgage lien in the amount of $472,500. The same year, the judgment creditor obtained a judgment in the amount of $869,504 against mortgagor Gonzales and a non-party to this proceeding. Judgment creditor did not docket that lien until 1999. All parties concede that the Staten Island Savings Bank mortgage is superior to the judgment lien. In 2003, however, another bank took a $499,000 mortgage on the property. Most of the mortgage proceeds were used to satisfy the Staten Island Savings Bank mortgage. The 2003 mortgage was recorded in 2004, and assigned to Deutsche Bank in 2008. Judgment creditor's lien expired ten years after the date of the original 1998 judgment, but judgment creditor subsequently In this action, Deutsche Bank foreclosed on the mortgage. Judgment creditor moved for a declaration that its lien enjoyed priority over the Deutsche Bank mortgage.

In holding that the judgment creditor enjoyed priority over the mortgage, the court rejected Deutsche Bank's argument that the judgment lien's expiration ten years after the lien was docketed deprived judgment creditor of priority. The court indicated that judgment creditor's renewal of the lien restored the lien's priority, especially because Deutsche Bank's mortgage was created at a time the original lien was still in effect, and Deutsche Bank and its predecessors were on notice of that lien. The court conceded that the situation would be different if a mortgagee took a mortgage after expiration of the original judgment lien and before the lien was renewed. On the facts of this case, however, the court concluded that if Deutsche Bank sells the property at a foreclosure sale, the purchaser will take subject to the judgment lien. The court mentioned, although it did not address, mortgagee's argument that its lien should assume the priority of the original Staten Island Savings Bank loan to the extent the funds advanced were used to satisfy that loan.