YVONNE LEWIS, J.
The plaintiff, Beltway Capital, LLC (Beltway or plaintiff), in essence, renews the deferred branch of its prior motion for an order (1) vacating the portion of the July 18, 2008 discharge order (discharge order) discharging the September 15, 2006 mortgage (2006 mortgage) on the real property located at 798 Greene Avenue in Brooklyn (subject property), and (2) restoring the 2006 mortgage as a lien against the subject property.
Defendant Deborah Hughes (Hughes) moves, pursuant to CPLR 6514 and 6516, for an order cancelling the plaintiff's notice of pendency filed with the Kings County Clerk on December 8, 2009. Defendant Andre Ramon Soleil (Soleil) cross-moves for an order, pursuant to CPLR 3211 (a) (7) and (8), dismissing the summons and complaint for (1) failure to state a cause of action, and (2) lack of in personamjurisdiction, or, alternatively, granting him additional time to serve an answer to the complaint. Defendant Sperry Associates Federal Credit Union (Sperry) separately cross-moves for an order, pursuant to CPLR 3212, granting it summary judgment declaring its existing, May 7, 2009 mortgage for $300,000 on the subject property (Sperry mortgage), superior in priority to the 2006 mortgage if the 2006 mortgage is reinstated as a lien against the subject property.
Background Facts and Procedural History
Asset Management Holdings, LLC (Asset) commenced this action on June 19, 2007 to foreclose the 2006 mortgage securing a $652,500 note executed by Soleil, the then-owner of the subject property. The defendants, including Soleil, failed to answer the complaint or otherwise appear in the action, and the court's December 19, 2007 order granted Asset's ex-parte application for an order of reference. Soleil subsequently sought to dismiss the action, Asset did not respond and the court's discharge order, dated July 18, 2008 and filed July 31, 2008 in the Kings County Clerk's court file, granted the motion, dismissed the action and discharged the 2006 mortgage. Automated City Register Information System records reflected the court's discharge order on August 5, 2008.
Asset, though, unbeknownst to the court, had assigned its 2006 mortgage to Beltway on February 19, 2008 and filing of the assignment occurred five months later on July 21, 2008. Soleil subsequently sold the subject property to Hughes for $248,000 as shown by the deed recorded October 14, 2008. Hughes thereafter obtained a $135,000 mortgage from HB Baron Family Associates (HB Baron) on February 5, 2009.
The court file shows that Beltway, which had acquired Asset's 2006 mortgage on February 19, 2008 as noted above, moved, about a year later by a February 23, 2009 show cause order: (1) for substitution as plaintiff; (2) to vacate Asset's default; and (3) to vacate the discharge order. Soleil cross-moved to dismiss the complaint in April 2009.
Hughes, apparently unaware of the legal proceedings, transferred title of the subject property to herself and Nicholas Haven, her husband, on May 7, 2009 and satisfied the HB Baron mortgage through the May 7, 2009. Sperry ran a title search before the May 7, 2009 closing to determine if there were any mortgages or liens on the subject property. The resulting title report revealed no encumbrances other than the HB Baron mortgage on February 5, 2009 as the court's July 18, 2008 discharge order had discharged the 2006 mortgage.
The June 19, 2009 and November 23, 2009 Orders
Scheduled argument on June 19, 2009 regarding Beltway's motion and Soleil's cross-motion resulted in an order on consent that day (consent order) which, among other items, substituted, by the parties' agreement, Beltway for Asset as the plaintiff in this action; acknowledged Hughes' and Haven's appearance; and prohibited them from transferring title or further encumbrancing the subject property during determination of the pending motions.
Hughes cross-moved to intervene in July 2009 and that cross motion, Soleil's dismissal cross motion and Beltway's then-pending motion resulted in the court's November 23, 2009 order. That order granted Beltway's motion to the extent of vacating the July 18, 2008 discharge order stemming from Asset's default in responding; denied Soliel's cross motion to dismiss the complaint without prejudice to re-notice it; granted Hughes' cross motion to intervene in its entirety; and sua sponte directed Beltway to join HB Baron as a necessary party. The court notes, however, a June 3, 2010 so-ordered stipulation rendered that portion of the November 23, 2009 order unnecessary by directing Sperry be made a party defendant in place and instead of HB Baron. Sperry, the current holder and owner of a mortgage recorded against the subject property, was, therefor, granted leave to intervene and made a party defendant. Beltway thereafter filed its December 7, 2009 notice of pendency against the subject property on December 8, 2009.
The court deferred deciding until now whether to reinstate the 2006 mortgage pending limited discovery regarding whether a payoff of the 2006 mortgage had in fact occurred.
The Parties' Contentions
The plaintiff seeks an order restoring the 2006 mortgage as a lien against the subject property. The plaintiff challenges the discharge as improper because: (1) Soleil indisputably never paid the underlying mortgage debt and (2) granting the discharge exceeded the scope of relief requested by Soleil.
Hughes argues, in opposition to the plaintiff's motion, that she merits protection as a bona fide purchaser for value without notice or knowledge of any claim by the plaintiff and because she holds title to the subject property free and clear of the plaintiff's alleged lien. Hughes moves to cancel Beltway's notice of pendency on the grounds that: (1) Beltway lacked standing to file the notice of pendency; (2) Beltway flouted statutory requirements by failing to file a complaint; and that (3) Beltway filed the notice of pendency in bad faith. Beltway argues in response that it properly filed the notice of pendency and is entitled to file a successive notice of pendency in this mortgage foreclosure action.
Sperry opposes Beltway's motion and seeks summary judgment declaring the Sperry mortgage superior to the 2006 mortgage if the discharged mortgage is reinstated. Sperry makes its mortgage superiority claim based on its purported status as a bona fide encumbrancer for value without notice or knowledge of the pending litigation and because it recorded its mortgage before recording of the notice of pendency. Beltway, in opposition, regards summary judgment as inappropriate at this juncture and requests the court refrain from considering Sperry's bona fide encumbrancer claim at this time. Beltway further contends that inquiry notice applies and that Sperry failed to inquiry about the status of this action.
Finally, Soleil's cross-motion seeks to dismiss the summons and complaint for failure to state a cause of action as he no longer owns the subject property. He additionally claims a lack of in personam jurisdiction as he was allegedly never properly served with the summons and complaint. He also cites the service issue in alternatively requesting an extension of time to serve his answer. Beltway responds that (1) Soleil's transfer of title does not either relieve him of his obligation to pay or relieve the subject property from the 2006 mortgage lien; (2) an affidavit of service filed with the Kings County Clerk's Office on June 27, 2007 established timely service of the summons and complaint on Soleil, and (3) Soleil's failure to demonstrate a meritorious defense negates his extension request.
Plaintiff's Motion to Reinstate the 2006 Mortgage
Determining whether to reinstate the 2006 mortgage represents a threshold matter. The plaintiff advocates reinstatement on the grounds that: (1) the 2006 mortgage and note remain unpaid and (2) the court lacked jurisdiction to discharge the 2006 mortgage. A well-established equity principle recognizes that "a mortgagee may have an erroneous discharge of mortgage, without concomitant satisfaction of the underlying mortgage debt, set aside, and have the mortgage reinstated where there has not been detrimental reliance on the erroneous recording" (NY Community Bank v Vermonty et al, 68 A.D.3d 1074, 1076 ; see Citibank, N.A., v Kennedy et al., 17 A.D.3d 305 ; Regions Bank v Campbell, 291 A.D.2d 437 ; Goldstein v Gold, 106 A.D.2d 100, 483 , affd 66 NY2d ; Matter of Barclays Bank of NY, 96 A.D.2d 594 ; Mtge. Elec. Registration Sys., Inc. v Holmes, 24 Misc.3d 1228[A], 2009 NY Slip Op 51656[U] [Sup Ct Suffolk County 2009]). Thus, a lien affecting real property, satisfied through mistake or fraudulent acts of inducement, may be restored to its original status and priority.
However, such restoration only occurs if no injury or prejudice results to anyone who innocently relied upon the satisfaction and either purchased the property or made a loan on the property in reliance upon the validity of said satisfaction. Accordingly, the mortgagee seeking judicial restoration of a mortgage erroneously discharged must demonstrate that such restoration "does not interfere or affect the rights of others which may have accrued subsequent to the erroneous discharge" (Mtge. Elec., 2009 NY Slip Op 51656, *1, quoting Matter of Ditta, 221 N.Y.S.2d 34 [Sup Ct, Kings County 1961]). Here, the July 18, 2008 discharge order dismissed the action and discharged the 2006 mortgage on the mistaken belief that payment of the underlying mortgage debt had occurred. However, the parties' limited discovery shows and Soleil now concedes that he has not made any payments on the 2006 mortgage despite suggesting otherwise in earlier papers. Rather, Soleil testified that he was lead to believe that a prior mortgagee had discharged the mortgage through a deed in lieu of foreclosure. The relief currently sought is foreclosure of the 2006 mortgage and not collection of the underlying debt. The court finds the underlying mortgage debt has not been satisfied as Soleil admitted that he failed to make any payments on the mortgage. Real Property Law (RPL) § 1301 permits mortgage holders to bring a separate action to recover a mortgage debt. The Appellate Division, Second Department in McSorley v Spear (13 A.D.3d 495 ), held that dismissal of a mortgage foreclosure action does not preclude the holder of a promissory note and mortgage from commencing a separate action on the note. Thus, the plaintiff may commence such a separate action to collect the unpaid, underlying mortgage debt if the 2006 mortgage is not reinstated and this foreclosure action is dismissed.
However, the plaintiff errs in claiming that no jurisdiction exists to grant relief unspecified in the notice of motion. Courts typically lack jurisdiction to grant relief not requested in the moving papers (McGuire v McGuire, 29 A.D.3d 963 ; NYCTL 1998-1 Trust v Props. Props. Corp., 18 A.D.3d 525 ). General relief clauses, for "such other, further, or different relief," are often included in litigants' notices of motion to cover the possibility that the appropriate relief is not what the movant has specifically sought, "but is close enough to enable the court to grant it" (Tirado v Miller et al., 75 A.D.3d 153, 158 ). "The presence of a general relief clause enables the court to grant relief that is not too dramatically unlike that which is actually sought, as long as the relief is supported by proof in the papers and the court is satisfied that no party is prejudiced (id.; see Frankel v Stavsky, 40 A.D.3d 918 ; HCE Assoc. v 3000 Watermill Lane Realty Corp., 173 A.D.2d 774 ).
In the matter sub judice, Soleil's original motion to dismiss requested, in addition to dismissal, "such other and further relief as the court shall deem just and proper." This general relief clause permits granting such relief as supported by proof in the papers. Soleil's claim that the 2006 mortgage had been paid and thus satisfied and that Asset would suffer no prejudice enabled discharging the 2006 mortgage as a remedy appropriate under the circumstances. However, that underlying mortgage debt had not been satisfied, as the limited discovery revealed, and therefore, the 2006 mortgage had been improperly discharged.Notwithstanding, defendants Hughes and Sperry, who have accrued rights after the discharge order that reinstatement would now affect, were entitled to rely on the recorded discharge order (Baron Associates v Latorre, 74 A.D.3d 714 ; Regions Bank v Campbell, 291 AD2d at 438).
New York's "race-notice" statutory recording scheme enables a mortgagee or purchaser without notice of any other mortgages or conveyances who records first in the county where the real property is located to gain priority over other mortgages or conveyances (RPL§ 291, Alliance Fund Co. v Taboada, 39 A.D.3d 784 ). In other words, "in order to cut off a prior lien, such as a mortgage, the purchaser must have no knowledge of the outstanding lien and win the race to the recording office" (Goldstein v Gold, 106 AD2d at 102). A purchaser or encumbrancer is required, after examining the record, to inquire about any defect in title that may have been revealed (Andy Assocs., Inc. v Bankers Trust Co., 49 N.Y.2d 13, 22-23 ). If no inquiry is made, the purchaser or encumbrancer is charged with what a reasonable inquiry concerning the defect would have revealed (id. at 22; Williamson v Brown, 15 N.Y. 354, 362 ).
However, where the subsequent purchaser or mortgagee recorded first without notice of any prior interests, the Appellate Division, Second Department, has routinely held for that purchaser or mortgagee. For example, the recent decision in Baron Assoc. v Latorre (74 AD3d at 714-716) summarily dismissed the foreclosure action even though the plaintiff mortgagee alleged that the mortgage satisfaction was fraudulently executed and procured by fraud. The decision noted that not only had the subsequent purchaser relied on the erroneous satisfaction and purchased the property without notice of any prior interest in the property, but she also recorded the deed half a year before the mortgagee filed its notice of pendency (id. at 716). The court thus held that the subsequent purchaser of that subject property was entitled to rely on the recorded mortgage satisfaction without conducting any further inquiry when purchasing that subject property as nothing on the face of the mortgage satisfaction would have alerted the purchaser to the plaintiff's claims (id.).
The Appellate Division, Second Department similarly held in Regions Bank v Campbell (291 AD2d at 438), that respondents were entitled to rely on the mistakenly recorded satisfaction without conducting further inquiry. There, respondents, relying on the title report, closed and subsequently mortgaged the property (id.). The decision reasoned that, under such circumstances, equity precluded plaintiff mortgagee from cancelling the satisfaction since respondents properly relied on it to their detriment (id.).
The defendants, in the instant matter, like the subsequent purchasers and mortgagees in Baron Assocs. and Regions Bank, were entitled to rely on the discharged mortgage and had no duty to conduct further inquiry into the status of the foreclosure action. A reasonable examination of the record would not have uncovered any facts triggering suspicions requiring further inquiry. Nothing on the face of the discharge order against Asset would have alerted Hughes or Sperry to the plaintiff's claims. The defendants were only chargeable with knowledge to make a diligent search "if reasonable facts excite suspicion and one fails to make some investigation" (City of New York v Brooklyn LLC, 26 Misc.3d 1215[A], 2009 NY Slip Op 52722[U], *7 [Sup Ct, Kings County 2009] quoting Fisher v Sadov Realty Corp., 34 A.D.3d 630, 631 ). The mere recitation in the discharge order of "upon non-appearance/non-opposition" and "for cause of payment" provided little indica that further inquiry was required. Nothing in the record would have provided the defendants any insight whether the 2006 mortgage had in fact been satisfied even if they had reviewed the filed documents in the then disposed action. The recorded discharge order suggested nothing to arouse the suspicion of a person of ordinary care. Hughes and Sperry thus reasonably relied on the recorded instrument in respectively purchasing the property and accepting a mortgage on it, thereby materially altering their positions to their detriment.The plaintiff also attempts to assert that Hughes had "actual knowledge" of the pending litigation prior to obtaining the Sperry mortgage and thus did not innocently alter her position. However, examining the court file reveals no indication that Hughes knew about the plaintiff's February 23, 2009 motion until after May 7, 2009. Moreover, the plaintiff's contention that Hughes appeared and requested adjournments before obtaining the Sperry mortgage fails to specify the date of this appearance. The first and only appearance on the plaintiff's motion before May 7, 2009, according to the court file, occurred on April 17, 2009 and nothing suggests that Hughes appeared on that date. Therefore, contrary to the plaintiff's contention, no proof substantiates that appearances or adjournment requests were made by Hughes before the Sperry mortgage to thus indicate her "actual knowledge" of the litigation.
The plaintiff further contends that the $248,000 purchase price paid by Hughes in 2008 constituted "suspicious circumstances" so that further inquiry was required (see Ochenkowsky v Dunaj, 137 Misc. 674 [Sup Ct, Montgomery County 1930]). However, the seemingly low purchase price reflected the 2008 property value considering the property's state of disrepair. Indeed, Hughes, with the aid of her husband Haven, fortunately, a general contractor, made substantial renovations and improvements incurring over $100,000.00 in costs. The plaintiff, on the other hand, provides nothing substantive regarding the value of the property before Hughes' renovations. Therefore, the price Hughes paid did not trigger sufficient suspicion in even the exceptionally wary investor considering the massive fluctuations in the real estate market and the condition of the property during the time period in question.
Defendants Hughes and Sperry, besides lacking notice of the plaintiff's claims, were first to record thereby putting the world on notice of their interest in the subject property (see RPL § 291). Recording of Hughes' deed and Sperry's mortgage occurred `on October 14, 2008 and on June 15, 2009, respectively. Sperry, before accepting the mortgage, had conducted a thorough title search which showed no liens or encumbrances on the property other than the HB Baron mortgage. The plaintiff attempted to rectify the allegedly erroneous discharge by bringing a motion to vacate Asset's default in February, 2009, but it did not file a notice of pendency until December 8, 2009. Thus, the plaintiff failed to provide constructive notice to the world of its interest by the time Hughes purchased the subject property in 2008 and Sperry took its 2009 mortgage. Hence, neither defendant received notice of any prior interest in that property which would lead a reasonably prudent purchaser to make inquiry (Goldstein, 106 AD2d at 103 ["when through (a mortgagee's) negligence the record is permitted to give notice to the world that his claim is satisfied, he cannot, in the face of his own negligence, have his mortgage enforced against a bona fide purchaser, taking his title on the faith that the registry is discharged" quoting Heyden v Excelsior Bldg Loan Assn., 42 NJ Eq 403, 408 (1987)]).
Equity precludes cancelling the discharge of the 2006 mortgage sub judice since the defendants properly relied on the discharge of the 2006 mortgage to their detriment (Regions Bank, 291 AD2d at 438; see Goldstein, 106 AD2d at 103). Accordingly, the plaintiff's motion to reinstate the 2006 mortgage as a lien on the subject property merits denial.
Sperry's Summary Judgment Motion
Denying the plaintiff's motion for reinstatement moots Sperry's summary judgment motion to declare its mortgage superior in priority to the 2006 mortgage and no need exists to address Sperry's arguments for such relief.
Soleil's Cross-Motion to Dismiss
Evaluating Soleil's cross-motion to dismiss the complaint for failure to state a cause of action, the same relief requested in his prior motion, requires determining whether any cognizable cause of action exists within the four corners of the pleading (see Nonnon v City of NY, 9 N.Y.3d 825, 827 ; Leon v Martinez, 84 N.Y.2d 83, 87 ; Morales v AMS Mtge. Servs. Inc., 69 A.D.3d 691 ; Breytman v Olinville Realty, LLC, 54 A.D.3d 703  lv dismissed 12 N.Y.3d 873 ; Weiss v Cuddy & Feder, 200 A.D.2d 665 ). Such determination may involve considering additional facts contained in affidavits submitted by the plaintiff to remedy any defects in the complaint (Fitzgerald v Federal Signal Corp., 63 A.D.3d 994 ).
This action primarily sought to foreclose the 2006 mortgage which the plaintiff allegedly held upon the subject property. Establishing a prima facie case in a mortgage foreclosure action necessarily means that, "the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and defendant's default in payment" (Flushing Savings Bank, FSB v Cancay et al, 27 Misc.3d 1212[A], 2010 NY Slip Op 50687[U], *2 [Sup Ct, Kings County 2010] quoting Campaign v Barba, 23 A.D.3d 327, 327 ; see Household Fin. Realty Corp. of NY v Winn, 19 A.D.3d 545 ; Sears Mtge. Corp. v Yaghobi, 19 A.D.3d 402 ; Ocwen Fed. Bank., FSB v Miller, 18 A.D.3d 527  lv dismissed 5 N.Y.3d 824 ).
Here, the discharged 2006 mortgage no longer exists, especially in view of the decision now to deny its reinstatement, which, in turn, preempts any action to foreclose the 2006 mortgage. The discharge, in other words, completely destroyed the plaintiff's cause of action to foreclose such mortgage. Accordingly, this action warrants dismissal pursuant to CPLR 3211 (a) (7) and no need exists to address Soleil's remaining contentions.
Hughes's Motion to Cancel the Notice of Pendency
CPLR 6514 (a) provides for cancelling a notice of pendency if the action has been settled, discontinued or abated. The plain meaning of the word "abated," as used in CPLR 6514 (a) is "the ending of an action" (477 Clinton Avenue LLC v Clinton Rising, LLC et al., 22 Misc.3d 1104[A], 2009 NY Slip Op 50014[U], *10 [Sup Ct, Kings County 2009]; Schechter v Rosen, 8 Misc.2d 635, 637 [Sup Ct, Kings County 1957] [motion by plaintiff to cancel notice of pendency granted because action to foreclose a mortgage abated when the mortgage was satisfied]).
In this case, the plaintiff's cause of action ended and abated upon discharge of the 2006 mortgage and denial of its reinstatement. Consequently, granting Hughes' motion and cancelling the notice of pendency necessarily follows (CPLR 6514(a); Schechter, 8 Misc 2d at 637; see Jarvis v Am. Forcite Powder Mfg. Co., 93 App Div 234 ).
Accordingly, it is:
ORDERED that the plaintiff's motion to reinstate the discharged mortgage is denied; and it is further
ORDERED that Soleil's motion to dismiss is granted; and it is further
ORDERED that Hughes' CPLR 6514 motion to cancel the notice of pendency is granted.
This constitutes the decision and order of the court.