Real Property Law

Supreme Ct., Queens Ct.

(Pineda-Kirwan, J.)

In an action to foreclose a mortgage, assignee of the mortgage sought summary judgment. The court denied the motion, finding questions of fact both about whether mortgagee had physical possession of the note, and about a counterclaim alleging that a deed in mortgagee's chain of title had been obtained fraudulently.

Dunkowski and Robinson, as record owners of the property, gave a mortgage to WMC to secure a $340,000 loan. Assignee contends that it obtained the mortgage and underlying obligation by assignment. Defendant Ravenells, however, contend that they occupy the property and had been record owners for 40 years before Dunkowski and Robinson approached them about refinancing the property. The Ravenells contend that Dunkowski and Robinson used the pretense of refinance to trick them into signing over a deed to the property. When the mortgage fell into default, assignee brought this foreclosure action, and sought summary judgment.

In denying the summary judgment motion, the court first found that questions of fact remain about assignee's standing to foreclose. Although assignee claimed an assignment from MERS, there was no evidence that MERS was actually in possession of the note at the time of the assignment, and although assignee submitted testimony that the note was physically transferred to assignee, there was no evidence that the transfer took place before mortgagee commenced the action. As a result, a question of fact remained about assignee's standing. The court then indicated that the Ravenells had raised a question of fact about whether the deed they executed had been procured by false pretenses. The court held that if the deed was procured by false pretenses, it was void ab initio, and the mortgage itself would then be void. As a result, assignee was not entitled to summary judgment on the Ravenells' counterclaim.

Offer to Purchase Does Not Defeat Hostility of Adverse Possession Claim

Tolake Corp. v. Altobello

NYLJ 8/31/12, p. 26, col. 3

AppDiv, Second Dept.

(memorandum opinion)

In an action for a declaration that true owner holds title to a disputed strip of land, true owner appealed from Supreme Court's grant of summary judgment to the adverse possessor. The Appellate Division affirmed, holding that the possession was hostile despite adverse possessor's service on true owner's board and adverse possessor's offer to purchase the strip.

The disputed strip is located in a lake community. Title to the strip is held by a corporate owner, but the owner of a lot adjacent to the strip has used it as a driveway and for other purposes. Adverse possessor has added gravel to the strip, built a shed on the strip, and installed wiring in the shed. Eventually, the corporate owner brought this action for a declaratory judgment, and adverse possessor counterclaimed for adverse possession. Supreme Court awarded summary judgment to adverse possessor on its counterclaim, and true owner appealed.

In affirming, the Appellate Division held that Supreme Court had properly determined that adverse possessor's possession was actual, open and notorious, exclusive, and continuous for the 10-year statutory period. As a result, a presumption of hostility arose. The court then held that adverse possessor's service on the corporation's board did not rebut the presumption because the service did not start until after the statutory period had run. Similarly, the court held that adverse possessor's offer to purchase the strip did not rebut the presumption because the offer was not made during the statutory period.

COMMENT

An offer by a possessor without title to purchase the land prior to the commencement of the statutory ten-year period is an “overt acknowledgement of another's title” and is sufficient to defeat the required element of hostility. For example, in Larsen v. Hanson, 58 A.D.3d 1003 , the court held that the possessor's offer to purchase the disputed property prior to the statutory period was an acknowledgement of the true owner's title to the property, and that therefore, the possessor had not given the true owner notice of hostility and his adverse possession claim failed.

Similarly, an offer by a possessor without title to purchase property in dispute during the statutory 10-year period is an acknowledgement of the record owner's title and prevents adverse possession from accruing. In Taillie v. Rochester Gas and Elec. Corp., 68 A.D.3d 1808, 1809 , for example, the court found the possessor's argument that he offered to purchase property “merely to avoid litigation” to be no exception to the rule. See also Sugarman v. Malone, 48 A.D.3d 281 (offer to purchase shares from the true owner during the statutory period by possessor of a Manhattan cooperative apartment precluded possessor from successfully claiming adverse possession). Although New York law is seemingly settled with respect to the effect of an offer to purchase on an adverse possession claim, an open question remains respecting an offer to settle. At least one New York court has suggested, albeit in dictum, that a possessor's offer to settle, made during the statutory period, can be an acknowledgement of the record owner's title so as to preclude summary judgment on a claim of adverse possession. Blanchard v. Blanchard, 4 Misc.3d 1027(A) (“Nor can there be any dispute that the offer to settle or compromise any claim plaintiff may have had against the subject property is relevant to the issue of hostility.”).

By contrast, an offer to purchase made after the expiration of the ten-year statutory period does not defeat a claim of adverse possession. For example, in 2 N. St. Corp. v. Getty Saugerties Corp., 68 A.D.3d 139, the court found that a possessor's offer to purchase, made after the 10-year statutory period had run, did not defeat a valid claim of adverse possession. In reaching its holding, the court cited Walling v. Przybylo, 24 A.D.3d 1, 3 (2005), aff'd, 7 N.Y.3d 228 (2006), where a true owner sought to eject the possessor of the property (who claimed adverse possession) on the ground that the possessor had acknowledged title in the true owner after the 10-year statutory period had run. The Walling court held that an acknowledgement of title in another, made after the statutory period, does not defeat an adverse possession claim because ” unlike acknowledgements made prior to or during the statutory period ” it is made after title has already vested in the possessor by operation of law. Id. (“This seminal holding rests upon the common-law ' bar that arises once the [10-year statutory period] has run on the title holder's cause of action for ejectment of a hostile possessor ' .
[T]he courts have found it reasonable to cut off the remedy of such a title holder who fails to timely assert his or her ownership rights.”)

Questions of Fact Preclude Summary Judgment About Mortgagee's Right to
Foreclose

DLJ Mortgage Capital, Inc. v. Dunkowski

NYLJ 9/13/12, p. 21, col. 1

Supreme Ct., Queens Ct.

(Pineda-Kirwan, J.)

In an action to foreclose a mortgage, assignee of the mortgage sought summary judgment. The court denied the motion, finding questions of fact both about whether mortgagee had physical possession of the note, and about a counterclaim alleging that a deed in mortgagee's chain of title had been obtained fraudulently.

Dunkowski and Robinson, as record owners of the property, gave a mortgage to WMC to secure a $340,000 loan. Assignee contends that it obtained the mortgage and underlying obligation by assignment. Defendant Ravenells, however, contend that they occupy the property and had been record owners for 40 years before Dunkowski and Robinson approached them about refinancing the property. The Ravenells contend that Dunkowski and Robinson used the pretense of refinance to trick them into signing over a deed to the property. When the mortgage fell into default, assignee brought this foreclosure action, and sought summary judgment.

In denying the summary judgment motion, the court first found that questions of fact remain about assignee's standing to foreclose. Although assignee claimed an assignment from MERS, there was no evidence that MERS was actually in possession of the note at the time of the assignment, and although assignee submitted testimony that the note was physically transferred to assignee, there was no evidence that the transfer took place before mortgagee commenced the action. As a result, a question of fact remained about assignee's standing. The court then indicated that the Ravenells had raised a question of fact about whether the deed they executed had been procured by false pretenses. The court held that if the deed was procured by false pretenses, it was void ab initio, and the mortgage itself would then be void. As a result, assignee was not entitled to summary judgment on the Ravenells' counterclaim.

Offer to Purchase Does Not Defeat Hostility of Adverse Possession Claim

Tolake Corp. v. Altobello

NYLJ 8/31/12, p. 26, col. 3

AppDiv, Second Dept.

(memorandum opinion)

In an action for a declaration that true owner holds title to a disputed strip of land, true owner appealed from Supreme Court's grant of summary judgment to the adverse possessor. The Appellate Division affirmed, holding that the possession was hostile despite adverse possessor's service on true owner's board and adverse possessor's offer to purchase the strip.

The disputed strip is located in a lake community. Title to the strip is held by a corporate owner, but the owner of a lot adjacent to the strip has used it as a driveway and for other purposes. Adverse possessor has added gravel to the strip, built a shed on the strip, and installed wiring in the shed. Eventually, the corporate owner brought this action for a declaratory judgment, and adverse possessor counterclaimed for adverse possession. Supreme Court awarded summary judgment to adverse possessor on its counterclaim, and true owner appealed.

In affirming, the Appellate Division held that Supreme Court had properly determined that adverse possessor's possession was actual, open and notorious, exclusive, and continuous for the 10-year statutory period. As a result, a presumption of hostility arose. The court then held that adverse possessor's service on the corporation's board did not rebut the presumption because the service did not start until after the statutory period had run. Similarly, the court held that adverse possessor's offer to purchase the strip did not rebut the presumption because the offer was not made during the statutory period.

COMMENT

An offer by a possessor without title to purchase the land prior to the commencement of the statutory ten-year period is an “overt acknowledgement of another's title” and is sufficient to defeat the required element of hostility. For example, in Larsen v. Hanson, 5 8 A.D.3d 1003 , the court held that the possessor's offer to purchase the disputed property prior to the statutory period was an acknowledgement of the true owner's title to the property, and that therefore, the possessor had not given the true owner notice of hostility and his adverse possession claim failed.

Similarly, an offer by a possessor without title to purchase property in dispute during the statutory 10-year period is an acknowledgement of the record owner's title and prevents adverse possession from accruing. In Taillie v. Rochester Gas and Elec. Corp., 68 A.D.3d 1808, 1809 , for example, the court found the possessor's argument that he offered to purchase property “merely to avoid litigation” to be no exception to the rule. See also Sugarman v. Malone, 48 A.D.3d 281 (offer to purchase shares from the true owner during the statutory period by possessor of a Manhattan cooperative apartment precluded possessor from successfully claiming adverse possession). Although New York law is seemingly settled with respect to the effect of an offer to purchase on an adverse possession claim, an open question remains respecting an offer to settle. At least one New York court has suggested, albeit in dictum, that a possessor's offer to settle, made during the statutory period, can be an acknowledgement of the record owner's title so as to preclude summary judgment on a claim of adverse possession. Blanchard v. Blanchard, 4 Misc.3d 1027(A) (“Nor can there be any dispute that the offer to settle or compromise any claim plaintiff may have had against the subject property is relevant to the issue of hostility.”).

By contrast, an offer to purchase made after the expiration of the ten-year statutory period does not defeat a claim of adverse possession. For example, in 2 N. St. Corp. v. Getty Saugerties Corp., 68 A.D.3d 139, the court found that a possessor's offer to purchase, made after the 10-year statutory period had run, did not defeat a valid claim of adverse possession. In reaching its holding, the court cited Walling v. Przybylo, 24 A.D.3d 1, 3 (2005), aff'd, 7 N.Y.3d 228 (2006), where a true owner sought to eject the possessor of the property (who claimed adverse possession) on the ground that the possessor had acknowledged title in the true owner after the 10-year statutory period had run. The Walling court held that an acknowledgement of title in another, made after the statutory period, does not defeat an adverse possession claim because ” unlike acknowledgements made prior to or during the statutory period ” it is made after title has already vested in the possessor by operation of law. Id. (“This seminal holding rests upon the common-law ' bar that arises once the [10-year statutory period] has run on the title holder's cause of action for ejectment of a hostile possessor ' .
[T]he courts have found it reasonable to cut off the remedy of such a title holder who fails to timely assert his or her ownership rights.”)