Case Name: State of New York, Respondent, v. Castle Garage Corporation et al., Defendants, and Greenwich House Holding Corporation, Appellant. (And a Third-Party Action.)
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1990-07-26
Citations: 163 A.D.2d 796
Docket Number: 
Parties: State of New York, Respondent, v Castle Garage Corporation et al., Defendants, and Greenwich House Holding Corporation, Appellant. (And a Third-Party Action.)
Judges: 
Reporter: Appellate Division Reports
Volume: 163
Pages: 796–800

Head Matter:
(July 26, 1990)
State of New York, Respondent, v Castle Garage Corporation et al., Defendants, and Greenwich House Holding Corporation, Appellant. (And a Third-Party Action.)

Opinion:
Mikoll, J.
Appeals (1) from an order of the Supreme Court (Prior, Jr., J.), entered October 17, 1989 in Albany County, which, inter alia, denied defendant Greenwich House Holding Corporation's motion for summary judgment dismissing the complaint against it, and (2) from the judgment entered thereon.
The question presented on this appeal is whether Supreme Court properly held that defendant Greenwich House Holding Corporation (hereinafter Greenwich House) is liable to defendant Castle Associates for any sums actually paid by Castle Associates to defendant Castle Garage Corporation (hereinafter Castle Garage) pursuant to a judgment against Castle Garage relating to the payment of a disputed 1982 unpaid retroactive increase of the mortgage recording tax. The answer is in the negative. The order and judgment of Supreme Court should be modified by reversing so much thereof as granted judgment in favor of Castle Associates over against Greenwich House.
On February 2, 1981, Castle Garage entered into a contract for the purchase and sale of certain property in New York City with Jane Holding Company (hereinafter Jane Holding), a New York partnership, for $475,000 in cash to be paid at the time of execution of the agreement and for a note and purchase-money mortgage in the sum of $2,080,000. On February 3, 1982, Jane Holding assigned its rights in this contract of sale to Castle Associates, also a New York partnership. Castle Associates assumed all obligations of Jane Holding under the contract of sale.
Also on February 3, 1982, Castle Garage deeded the property to Castle Associates and Castle Associates gave a first money mortgage to Castle Garage to secure the balance of the $2,080,000 mortgage due under the contract of sale. A mortgage recording tax of $31,200 then due was paid by Castle Associates on February 9, 1982. Subsequently, on April 12, 1982, the mortgage recording tax was increased by law retroactive to February 1, 1982 (see, L 1982, ch 57, § 2) making an additional $13,000 mortgage recording tax due. On March 8, 1983, plaintiif filed an estoppel notice giving notice that the mortgage could not be released, discharged of record, assigned, extended or received in evidence in any action or proceeding until the proper tax and any applicable penalty and interest had been paid.
On June 14, 1982, Castle Garage assigned the mortgage dated February 3, 1982 (hereinafter the underlying mortgage) to Kenneth Wellner and Michael Wellner. Thereafter, on December 15, 1982, Castle Associates deeded the property to Greenwich House. The Wellners later assigned the underlying mortgage to National Consumer Cooperative Bank (hereinafter the Bank) on September 15, 1986. Greenwich House obtained an additional loan of $200,000 from the Bank and the Bank and Greenwich House executed a "Multifamily Mortgage Consolidation, Extension, Modification, Assignment of Rents and Security Agreement". It provided that the liens of the September 15, 1986 and the prior existing mortgage assigned to the Bank were consolidated so that the same constituted a valid single first mortgage on the property. This agreement also provided that if a mortgage recording tax were imposed on the instrument at any time, it would be the obligation of the borrower (Greenwich House) to pay.
The additional mortgage recording tax due as a result of the retroactive legislation was not paid and this action was originally commenced by plaintiff against Castle Garage. Plaintiff alleged in its complaint that pursuant to Tax Law § 266, Castle Garage, as mortgagee, was liable for the mortgage recording tax in the amount of $13,000, plus interest and penalties, which had not been paid on the mortgage dated February 3, 1982. Castle Garage, in a third-party complaint, alleged that Castle Associates was liable for the unpaid mortgage recording tax and that Greenwich House, as a mortgagor of the property, was liable for the recording tax. Apparently, plaintiff also commenced a separate action against Castle Associates and Greenwich House. After answers were served, the actions were consolidated.
Greenwich House then moved for summary judgment dismissing the complaint and third-party complaint against it alleging that there were no triable issues of fact. Plaintiff also moved for summary judgment against Castle Garage on the ground that Castle Garage, as the original mortgagee, was liable for the recording tax and that there were no issues of fact to be tried in its action. Castle Garage opposed these motions. Castle Associates cross-moved for summary judgment dismissing plaintiff's complaint and the third-party complaint of Castle Garage.
Supreme Court held that Castle Garage, from plaintiff's perspective, was primarily responsible for the tax and found that plaintiff was entitled to summary judgment. Supreme Court therefore granted judgment in favor of plaintiff against Castle Garage in the amount of $13,000 plus interest and penalties, totaling $25,116. The court also granted judgment to Castle Garage over and against Castle Associates in the amount Castle Garage actually paid to plaintiff and in favor of Castle Associates over and against Greenwich House for any amounts Castle Associates actually paid to Castle Garage pursuant to the judgment. This appeal by Greenwich House ensued.
Supreme Court erred in directing that judgment be granted and entered in favor of Castle Associates against Greenwich House. Third-party defendant Castle Associates never cross-claimed over against third-party defendant Greenwich House. Consequently, Castle Associates is not entitled to any affirmative relief in the form of summary judgment over against Greenwich House (see, Privensal v Privensal, 295 NY 357). In light of the lack of any appeal on behalf of the other parties and in light of our reversal of the order and judgment entered in favor of Castle Associates against Greenwich House, the other issues raised herein have become academic and it is unnecessary to reach and determine them.
Order and judgment modified, on the law, without costs, by reversing so much thereof as granted judgment in favor of Castle Associates against Greenwich House Holding Corporation, and, as so modified, affirmed. Kane, Mikoll and Yesawich, Jr., JJ., concur.