It is amazing the lengths some borrowers will go to avoid paying their mortgages while living an a home for free. Mortgages are recorded in the normal course. In this case, however, after the closing where the borrower executed a note and mortgage for $600,00.00 the title closer never recorded the mortgage. To correct this error, the lender brought an action to compel the borrower to execute a duplicate mortgage or to have the city register accept a duplicate copy. While most borrowers would honor their obligations and not oppose the recording, this borrower saw an opportunity to live in the home without payment. This started a five year saga which Adam Leitman Bailey, P.C., was finally able to bring to a successful conclusion.

Initially the borrower opposed the action by claiming that the lender’s claim were barred by the statute of limitations and that the lender did not have standing to enforce the mortgage. The borrower argued that the Court should not allow the lender to record the duplicate mortgage as the lender failed to bring the claim within six years. The lender successfully argued that the action was not governed by the a six year statute of limitation but was rather governed by the 10 year statute of limitation under RPAPL Article 15. However, the Court found that standing was at issue and dismissed the action.

Within six months of dismissal, Adam Leitman Bailey, P.C., commenced a new action. Borrower argued again that the claim was barred by the statute of limitation, but Adam Leitman Bailey, P.C., was able to successfully argue that the action was commenced within the six month window under CPLR § 205(a). Adam Leitman Bailey, P.C., also supplemented the prior proof to establish the lender’s standing. The Court agreed with Adam Leitman Bailey, P.C., and granted the lender the right to file a duplicate mortgage with the city register.

Undeterred, the borrower brought an appeal to the Second Department making several hyper-technical arguments designed to avoid the filing of the duplicate mortgage. Adam Leitman Bailey, P.C., as it did in the second action before the lower court, successfully demonstrated to the Appellate Division that the lender was entitled to record the duplicate mortgage into the land records. The Second Department fully affirmed the lower court’s decision.

Jackie Weinstein and Danny Ramrattan represented the lender before the Supreme Court. Jeffrey R. Metz represented the lender on appeal.