In re Foreclosure of Tax Liens

Appeal from an order of the Supreme Court (Mc-Grath, J.), entered January 18, 2013 in Columbia County, which dismissed petitioner’s application, in a proceeding pursuant to RPTL article 11, to set aside a judgment of foreclosure and transfer of title concerning certain real property.

A 1985 deed purportedly conveyed a parcel of real property in the City of Hudson, Columbia County from petitioner, a religious corporation, to its then-minister, Godfrey Forbes. The next month, and again three months after that, Forbes and his wife obtained mortgages on the property.^[1] Forbes apparently paid the real property taxes until 2008. After the taxes were not paid for several years, respondent commenced a tax foreclosure proceeding listing Forbes as the owner. Upon Forbes’ default, County Court (Koweek, J.) issued a judgment of foreclosure against the property and transferred title to respondent (see RPTL 1136).

More than a month after County Court’s judgment was entered, petitioner commenced this proceeding to set aside the judgment of foreclosure and transfer title to the property to petitioner, on the grounds that the 1985 deed was invalid, petitioner remained the lawful owner and petitioner had not received proper notice of the foreclosure proceeding. Respondent moved to dismiss. Supreme Court (McGrath, J.) treated petitioner’s application as a motion to vacate a default judgment and denied the application as untimely, also noting that it would deny the application on the merits. Petitioner appeals.

Initially, Supreme Court erred in determining that petitioner’s application was untimely. Unlike a motion to vacate a default judgment in a tax foreclosure proceeding, which “may not be brought later than one month after entry of the judgment” (RPTL 1131; see Matter of County of Otsego [Opalecky], 103 AD3d 1020 , 1021 [2013]), a person or entity challenging the validity of a deed transferred in connection with a tax foreclosure

It is undisputed that Forbes was served with notice by ordinary and certified mail. Respondent’s treasurer, who is responsible for enforcing and collecting tax liens, averred that Forbes was listed on the tax rolls as the owner of the subject premises. The record does not indicate that any relevant information was available in the books of the Surrogate’s Court Clerk. A search of the County Clerk’s books would have revealed the 1985 deed from petitioner to Forbes, indicating that Forbes had been the owner of record for almost 27 years. Thus, as Forbes was the only owner pursuant to the public record, he was entitled to notice. Petitioner, which was not an owner according to the public record, was entitled to notice under the statute only if it had a “right, title, or interest [that] was a matter of public record” (RPTL 1125 [1] [a]).

Petitioner acknowledged in its petition that it attempted to convey the property to Forbes, and that the conveyance was invalid because the parties to that deed were unaware of the requirements under Religious Corporations Law § 12. Yet petitioner did not renounce its intent to transfer the property to Forbes, and did nothing to regain title during the ensuing 27 years, until it commenced this proceeding after Forbes was divested of title through the judgment of foreclosure. In 1985, Forbes and his wife obtained two mortgages on the property. Petitioner asserts that it was not until 2011, when Forbes attempted to secure another mortgage, that a title searcher discovered the problem with the 1985 deed. Petitioner’s counsel avers that, prior to commencement of the foreclosure proceeding, respondent was placed on notice that the conveyance to Forbes was invalid and petitioner was the true owner, but counsel’s assertion is insufficient because it is vague, devoid of facts — such as who provided the notice, to whom, and by what means — and unsupported by proof from anyone with first-hand knowledge (see Madison Mut. Ins. Co. v Expert Chimney Servs., Inc., 103 AD3d 995 , 996 [2013]).^[2]

While petitioner notes that no court order was filed with the

When determining the reasonableness of the taxing authority’s attempts to provide notice to interested parties, the court may take into account the conduct of such parties (see Matter of Hamer v County of Tioga, 5 NY3d 136 , 140 [2005]). Here, petitioner indicated that it intended to convey the property to Forbes — its then-minister^[3] —in 1985 and was only unsuccessful due to their lack of legal knowledge. Additionally, petitioner did not take any action against Forbes to regain title, despite the deed having been filed for nearly 27 years at the time the foreclosure proceeding was commenced. Under the circumstances, including respondent’s provision of proper statutory notice to the owner of record, respondent complied with due process and satisfied its obligation of searching for interested parties, and petitioner has not demonstrated that any additional steps or more exhaustive search was required here (see Mac Naughton v Warren County, 20 NY3d at 257-258 ; Kennedy v Mossafa, 100 NY2d at 10 ; Matter of County of Sullivan [Fay], 79 AD3d 1409 , 1411 [2010], lv dismissed 17 NY3d 787 [2011]). Therefore, respondent was not required to provide notice to petitioner of the tax foreclosure proceeding.