In a December 2, 2011 decision by Justice Schmidt, the court denied the defendant/third-party defendant, Chan’s, motion for summary judgment pursuant to CPLR 3212 which sought to dismiss the complaints of both the plaintiff, Tomlinson, and the intervening defendant/third-party plaintiff, BNC Mortgage, Inc. The case stemmed from a sale of real property in which Tomlinson was the seller and Chan was the settlement agent representing BNC, who was the lender. After the closing, Tomlinson commenced the action for recision of the contract of sale and for damages resulting from an alleged “mortgage rescue scheme.”
In the instant motion, Chan asserted that: 1) with respect to Tomlinson’s complaint, he was not a party to the transaction and, notwithstanding, there were no irregularities in the disbursements of the loan proceeds because "simple arithmetic" and the HUD-1 statement verified that the loan proceeds were accounted for; and 2) with respect to BNC’s complaint, the claims were unsupported by the record and BNC failed to properly plead their causes of action. The court found that material questions of fact existed related to Tomlinson’s allegations about irregularities in the disbursements at the closing, precluding summary judgment as to Tomlinson’s complaint. The court then dismissed without prejudice the branch of Chan’s motion seeking summary judgment against BNC because BNC was under Chapter 11 bankruptcy protection and subject to the automatic stay. The court noted that Chan could renew that part of the motion when BNC emerged from bankruptcy or when the automatic stay was lifted.
Tomlinson v. Degannes, et al, Sup Ct, Kings County, December 2, 2011, Schmidt, J., Index No. 41418/2007