Judgment Creditor Prop. Law
This week we wanted to highlight an interesting decision out of the Second Department which held that that a judgment creditor could not benefit from the from the protection of N.Y. Prop. Law § 290 et. seq.(New York’s Recording Statute). A summary of the relevant facts as well as a link to the case are set forth below.
A former husband executed, but failed to record, a quit claim deed in 1991 in which he gave up any right he may have had in real property that was part of his mother’s estate. The property was later purchased from the estate by a bona fide purchaser and that deed was recorded in August 1993. The former husband’s ex-wife had, prior to the recording of the August 1993 deed, obtained two judgments against the ex-husband for outstanding support payments. The judgments, which she had filed with the County Clerk in 1992, specified that the ex-husband’s share of the real property was owed to the ex-wife. Thereafter, a Sherriff’s sale was held, and a deed was issued to the ex-wife conveying the ex-husband’s interest in the property in accordance with the judgments. The Sherriff’s Deed was recorded in September 1993 (approximately one month after the recording of the August 1993 Deed to the bona fide purchaser). In an effort to quiet title, the ex-wife commenced an action seeking, among other relief, a declaration that she owned the ex-husband’s interest in the property, and the bona fide purchaser filed a summary judgment motion seeking to dismiss the complaint. The trial court held in favor of the ex-wife, but the Appellate Division reversed the lower court’s decision and dismissed the ex-wife’s complaint. The Appellate Court’s decision, in part, turned on the determination that the judgment creditor could not benefit from the from the protection of N.Y. Prop. Law § 290 et. seq. and the fact that the bona fide purchaser’s Deed was of record prior to the recording of the Sherriff’s deed; a fact which contradicted the ex-wife’s claim that she was a good faith “purchaser” without notice.
Heithaus v. Heithaus, et al.,229 A.D. 2d. 421https://cite.case.law/ad2d/229/421/
This case is an important reminder of the need to promptly record deeds, as opposed to filing judgments, to ensure that a parties ownership rights are recognized.
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