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Court must consider the nature of the prior forum


Intervenor moves pursuant to CPLR § 3212 for summary judgment dismissing Plaintiff’s complaint seeking foreclosure of a mortgage against her home which was fraudulently given by movant’s son, Defendant, and declaring that such fraudulently obtained mortgage and the fraudulent deed upon which it was based are null and void and that the prior deed of Intervenor is valid and in full force and effect together with all real property tax exemptions appurtenant thereto. The property at issue was purchased on February 5, 1975 by Intervenor and her husband, who took title as tenants by the entirety. On February 23, 1994, the husband died, leaving Intervenor as the sole owner.

A Kings Criminal Lawyer said that, plaintiff’s company obtained the rights to a mortgage upon Intervenor’s premises at 2246 East 12th Street, Brooklyn, New York, executed by defendant on November 22, 1999, to a mortgage corporation of Woodland Hills, California, by assignment to Plaintiff on November 29, 1999. The deed upon which defendant premised his mortgage was also executed on November 22, 1999, purportedly by his mother, conveying title to said premises to her son. Intervenor first became aware of the fraudulent mortgage sometime in 2000 when mail from Plaintiff to her son defendant herein began accumulating at her home unopened by defendant. Upon further investigation, Intervenor learned that title to her home had been transferred to her eldest son, defendant, without her knowledge or consent, whereupon she took her complaint to the Kings County District Attorney. The instant mortgage foreclosure action was commenced by complaint dated June 24, 2002.

A Kings Grand Larceny Lawyer said that, defendant was indicted on July 30, 2002 on charges of Grand Larceny in the Second Degree, Forgery in the Second Degree and Offering a False Instrument for Filing in the First Degree, all related to Defendant’s forging of a false deed and mortgage upon his mother’s home and the resultant theft of that home and the mortgage proceeds. Complainants named in the indictment were Intervenor and the Mortgage Corporation, Plaintiff’s predecessor in interest. Prior to indictment, by letter dated July 12, 2002, Assistant District Attorney counsel to Plaintiff herein, advising of the “ongoing criminal action affecting defendant and the subject real property” and relating the entire substance of confession to the crime, including that someone posing as Intervenor had actually appeared at the closing on the mortgage to said corporation. The Assistant District Attorney enclosed a copy of the criminal complaint dated May 13, 2002, and closed by soliciting cooperation in “a resolution of the entire situation.” In addition to the District Attorney’s efforts to engage Plaintiff, and even prior to his letter, Intervenor’s counsel asserts that he left a telephone message for Plaintiff’s counsel alerting him to Defendant’s arrest.

A Kings Criminal Lawyer said that, the criminal prosecution first came before this Court on August 21, 2002. Prior to trial, at my direction, my Law Clerk communicated with Plaintiff’s counsel and directed them to appear before the Court on the criminal prosecution, since Plaintiff, as successor in interest to the mortgage corporation, was effectively the actual complainant or victim of the crimes. Plaintiff failed to appear or ever communicate with the Court, despite the direct order of the Court to appear, until May 21, 2003.

A Kings Grand Larceny Lawyer said that, on October 25, 2002, the jury returned a verdict of guilty of Grand Larceny in the Second Degree and Forgery in the Second Degree and the case was adjourned for sentence. After many adjournments of the sentence, finally, upon service of the Intervenor’s application to intervene in the pending foreclosure matter which had also been referred to me. There has never been a courtroom appearance in either case by the firm which originally commenced this action on behalf of Plaintiff.

Intervenor’s motion is premised on the adjudication before this Court at Criminal Term that Defendant, who has not appeared in the foreclosure action, forged the documents that are the basis of Plaintiff’s rights to bring this action and that title to the property was therefore never transferred from Intervenor and the mortgage is void ab initio. Intervenor argues that the doctrine of collateral estoppel precludes re-litigation of the validity of the mortgage and that dismissal of the instant action is, therefore, warranted.

A Kings Robbery Lawyer said that, plaintiff opposes the motion for summary judgment arguing that Intervenor’s motion is premature in that her answer interposes a counterclaim to which, at the time the motion was made, no reply had been made. Plaintiff has since interposed its reply on June 17, 2003, long before this Court heard the argument on the merits on January 7, 2004. Such reply is contained in Plaintiff’s opposition papers served July 9, 2003. The minimal procedural irregularity of which Plaintiff complains is not sufficient to defeat Intervenor’s motion. Plaintiff further opposes Intervenor’s motion arguing that the doctrine of collateral estoppel is inapplicable because Plaintiff is not in privity with the parties to the criminal prosecution, it did not have a fair and full opportunity to contest the controlling decision and the issue at Criminal Term was not identical to the issue herein. Finally, Plaintiff insists that issues of fact remain regarding the validity of the mortgage that require further discovery. Plaintiff argues that the presumption contained in CPLR § 4538, that the certification of the acknowledgment of a writing is prima facie evidence that the document was executed by the person who purported to do so, has not been overcome by sufficient evidence.

The issue in this case is whether defendant’s motion for summary judgment dismissing Plaintiff’s complaint seeking foreclosure of a mortgage against her home should be granted.

The Court held that, “Collateral estoppel, together with its related principles, merger and bar, is but a component of the broader doctrine of res judicata which holds that, as to the parties in a litigation and those in privity with them, a judgment on the merits by a court of competent jurisdiction is conclusive of the issues of fact and questions of law necessarily decided therein in any subsequent action.” It is in the interest of conserving judicial resources, as well as avoiding inconsistent results that may have the effect of undermining a prior adjudication, that collateral estoppel should be applied where the legal elements of the doctrine have been established.

Initially, it is the burden of the proponent of collateral estoppel to demonstrate the identity and decisiveness of the issue. Such identity of issue and the materiality of such issue to the pending litigation is controlling. Here, the issue necessarily decided in the criminal prosecution was that Defendant had stolen the subject real property from Intervenor. The jury was specifically instructed that in order to find Defendant guilty of Grand Larceny in the Second Degree, as charged in Indictment No. 2350/02, it was required to find ,beyond reasonable doubt, that Defendant “wrongfully took title to 2246 East 12th Street, Brooklyn from its owne “. In rendering a verdict of guilty on this charge, the jury necessarily and conclusively did so find. In the instant mortgage foreclosure, it is Plaintiff’s burden to establish that the mortgage sought to be foreclosed is based upon lawful title in the Defendant mortagagor. Clearly, there is an identity of material issue between the instant action and the prior criminal adjudication.

Moreover, in finding Defendant guilty of Forgery in the Second Degree, the jury necessarily found that the People had proved, beyond a reasonable doubt, as an element of that offense, that Defendant, with intent to defraud, deceive or injure “falsely made, completed or altered a written instrument which was, or purported to be, or which was calculated to become, or to represent if completed, a deed.” Again the identity of issue and its materiality to the instant foreclosure action is clear. It has unequivocally been determined by a court of competent jurisdiction, beyond a reasonable doubt, that the deed and mortgage based thereon, upon which Plaintiff’s action relies, were forged. In such circumstances, the mortgage to Plaintiff was ineffective to convey an interest in the subject property and the instant foreclosure action must be dismissed.

Plaintiff’s reliance on the presumption of legitimacy from a certificate of acknowledgment of a deed pursuant to CPLR §4538 is to no avail since a finding of illegitimacy beyond a reasonable doubt is more than sufficient to meet the burden to rebut such presumption by clear and convincing evidence to a moral certainty as required by law. Plaintiff relies upon the affidavit of an “independent real estate title closer” that, as previously noted, testified at the criminal trial and did not identify Intervenor as the person who, on November 22, 1999 in his presence executed the deed and mortgage prepared by him.

Plaintiff has failed to demonstrate that a serious issue of fact requires the denial of the motion for summary judgment. Plaintiff’s fanciful speculation that Intervenor collaborated with her son to defraud the mortgagee of funds and then engaged the Office of the District Attorney to advance the fraud is without any evidentiary support. All of the facts and issues recited by Plaintiff were brought out as part of the criminal prosecution and are not “newly discovered”. Moreover, as heretofore noted, as an identified complainant in the criminal prosecution, Plaintiff’s participation was actually solicited both by the District Attorney and Intervenor. Plaintiff had a duty to come forward with any evidence of such alleged fraud at that time, so as to prevent a fraud upon the Court. It chose not to do so.

Finally, Plaintiff insists that it should not be estopped by the prior adjudication of the validity of its mortgage because it is not in privity with any party thereto and was not afforded a full and fair opportunity to contest the decision.

In determining whether a party sought to be estopped was afforded a full and fair opportunity to contest an issue in a prior litigation, the Court must consider the nature of the prior forum and the importance of the claim in the prior litigation, the incentive and initiative to litigate, the extent of actual litigation, the competence and expertise of counsel, the availability of new evidence, the differences in the applicable law and the foreseeability of future litigation.

Collateral estoppel is an equitable doctrine intended to avoid multiple litigation of the same issue between the same parties or those in privity with those parties. As a matter of public policy, it is meant to conserve the resources of the courts and the litigants and assure finality and consistency with respect to a particular material issue. It is apparent to this Court that Plaintiff made a deliberate choice not to participate in the criminal prosecution of Defendant though afforded several opportunities to do so. Clearly, Plaintiff’s interest was not in obtaining a conviction against the Defendant from whom Plaintiff derived its only rights to foreclose upon 2246 E. 12th Street. However, knowing that the validity of its contractual rights would necessarily be determined in the criminal case and the “potential serious adverse consequences of the litigation”, Plaintiff “cannot be rewarded for its conscious, tactical decision not to take a more active role in that litigation by now allowing the very same issues and facts to be re-litigated”.

Accordingly, the court held that the Intervenor’s motion for summary judgment dismissing the complaint is granted.

Collateral estoppel is an equitable doctrine intended to avoid multiple litigation of the same issue between the same parties or those in privity with those parties. There is a need for the expertise of a Kings Grand Larceny Attorney and Kings Criminal Attorney at Stephen Bilkis and Associates in order to understand the above-mentioned rule. Call us.

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