Summary
This New York Appellate Division decision addresses whether a referee's deed conveyed at a judicial foreclosure sale is invalidated when the underlying judgment of foreclosure and sale is later reversed on appeal. The court held that a good faith purchaser for value acquires title insulated from such a reversal, provided no stay of enforcement was obtained during the appeal. Consequently, the original mortgagor is limited to monetary relief rather than restitution of the property, as the extant notice of pendency does not negate the purchaser's good faith status.
Topics
Practice areas
Questions Presented
- Whether an unexpired notice of pendency at the time of a judicial foreclosure sale defeats the title of a good‑faith purchaser for value when the judgment of foreclosure and sale is later reversed.
Holdings
- A notice of pendency that was unexpired at the time of the foreclosure sale has no effect on the title acquired by a good‑faith purchaser for value from a sale conducted pursuant to the judgment of foreclosure and sale.
Key quotations
“We hold that a notice of pendency that was unexpired at the time of the foreclosure sale has no effect on the title acquired by a good faith purchaser for value from a sale conducted pursuant to the judgment of foreclosure and sale.”
Factual background
Hasina Yesmin obtained title to a Queens residential property in 2006 and mortgaged it. Wells Fargo foreclosed, filing a notice of pendency that remained unexpired through the 2017 judicial foreclosure sale to Aliobaba, LLC. The foreclosure judgment was reversed in 2020, and Yesmin sought to cancel the referee's deed while Aliobaba asserted it was a good‑faith purchaser for value.
Procedural history
The Supreme Court (Queens County) entered a judgment of foreclosure and sale in 2017, which was later reversed on appeal in 2020. Yesmin then sued to cancel the referee's deed; the trial court granted Yesmin's motion and denied Aliobaba's cross‑motion. Aliobaba appealed.