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Cedeno v. Cedeno

February 6, 2009

CEDENO, PLAINTIFF
v.
SANDRA CEDENO, EFRAIN JIMINEZ, HORIZON FIBERGLASS POOLS, JP MORGAN CHASE, DEFENDANTS.



The opinion of the court was delivered by: William J. Giacomo, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Based on the foregoing the motion is DENIED.

Factual and Procedural Background

Movants Joseph Tomlinson ("Tomlinson") and Michael Gemei (Tomlinson and Gemei hereinafter collectively the "Movants") where the successful bidders on the premises known as 52 Regents Road, Warwick, New York (the "Premises") bidding $410,000 at a foreclosure sale conducted on May 13, 2008 (the "Auction") under the auspices of the Court appointed referee, Douglas Michael Jones, Esq. Movants, in compliance with the terms of sale read by Referee Jones at the Auction (the "Terms of Sale") tendered a deposit of $41,000 to the Referee after the Auction was completed.

Tomlinson avers that prior to the Auction he had thoroughly investigated the records of the building department , as well as the real estate listing developed by the real estate agent retained by the mortgagors, prior to bidding at the Auction. He also avers that he had "driven by" the Premises, but had not entered it.

Just after the Auction, Tomlinson was invited into the Premises by the former owner, Efrain Jiminez ("Jiminez"), and observed that the Premises were in good, if not better condition than the real estate listings indicated and included many luxury upgrades. During this "tour" Tomlinson alleges that Jiminez demanded that Tomlinson pay him "$60,000 in cash under the table' or [Tomlinson] would not recognize the [house] when he received the deed". (Tomlinson Affidavit at paragraph 13.) On May 26, 2008, during a drive-by Tomlinson noticed "what appeared to be construction material and other fixtures in the driveway and on the front lawn". (Tomlinson Affidavit at paragraph 23.) Upon being confronted by Mr. Tomlinson accompanied by a Police Officer, Jiminez admitted to removing fixtures, countertops and anything else of value, including the downstairs walls.

An order to show cause to address the issue was prepared by the Court appointed referee and presented to the Court returnable on June 12, 2008. Jiminez appeared on the return date and was ordered to stop causing damage to the Premises. Thereafter, on June 16, 2008, an inspection of the Premises ordered by the Court revealed among other destruction that: interior walls in the basement had been removed; a sauna was stripped and the electrical outlets removed; granite countertops had been removed; kitchen appliances were removed; lighting fixtures were removed; gas lines to the house were capped and electrical lines to the upper level removed; all exterior lines, piping, machinery and electrical fixtures for the in ground pool were removed; the hot tub was destroyed; and there was general destruction of the landscaping.

The parties, sans Mr. Jiminez, then returned to Court. A warrant of eviction was presented to the Court, signed and thereafter executed by the Orange County Sheriff*fn1. On August 8, 2008, Mr. Tomlinson again drove-by the Premises and alleges that he noticed "additional damage had been done" to the Premises. Mr. Tomlinson estimates that the total damage to the Premises, post-Auction was $150,000 (Tomlinson Affidavit at paragraph 52.)

On account of the damage to the Premises, Movants' now move pursuant to GOL § 5-1311 to either void the foreclosure sale, or for an abatement of the purchase price. In the alternative, Movant's seek an order voiding the foreclosure sale on the inability of the plaintiff to provide marketable title*fn2.

Discussion

In New York, foreclosure sales are public auctions conducted under the auspices of a Referee appointed by the Court. RPAPL § 1351(1). When conducting the sale, the Referee is acting as an extension of the Court and hence is an impartial third party. The purchaser at a judicial sale is actually contracting with the Court and not with the foreclosing mortgagee, therefore, the sale must be conducted in a fair and equitable manner. Lane v. Chantilly Corporation, 251 NY 435 (1929).

GOL § 5-1311, commonly known as the Uniform Vendor and Purchaser Risk Act, governs the rights and remedies between a buyer and seller of real property with regard to the risk of loss between the time of the contract and the conveyance of the real property. The statute provides in pertinent part:

1. Any contract for the purchase and sale or exchange of realty shall be interpreted, unless the contract expressly provides otherwise, as including an agreement that the ...


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