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GE CAPITAL MORTG. SERV., INC. v. PRIVETERA

788 A.2d 324 (2002)

GE CAPITAL MORTGAGE SERVICES, INC., successor in interest to State Street Bank & Trust Co., Plaintiff-Appellant, v. Joseph PRIVETERA, Conti Mortgage Corp., First American Title Insurance Co., and New Jersey Lawyers' Fund for Client Protection, Defendants, and New Jersey Title Insurance Co., Robert Nils Herdelin, New Jersey Mortgage and Investment Corp., Defendants-Respondents.

Superior Court of New Jersey, Appellate Division.

Decided January 14, 2002.

Attorney(s) appearing for the Case

Gregg P. Tabakin argued the cause for appellant (Fein, Such, Kahn & Shepard, attorneys; Mr. Tabakin, on the brief).

Richard A. Grossman, Brick, argued the cause for respondent Robert Nils Herdelin (Grossman, Kruttschnitt, Heavey & Jacob, attorneys; Mr. Grossman, of counsel; Thomas A. Morrone, on the brief).

Ben J. Slavitt, Newark, argued the cause for respondents New Jersey Title Insurance Co. and New Jersey Mortgage and Investment Corp. (Slavitt & Cowen, attorneys; Ronald G. Schecter, on the brief).

Before Judges SKILLMAN, CARCHMAN and WELLS.

The opinion of the court was delivered by CARCHMAN, J.A.D.

Following a real estate closing, the buyer's attorney absconded with the sale proceeds. The sale was conducted pursuant to an order of the bankruptcy court providing that the property was to be sold free and clear of all liens with the liens to attach to the proceeds. As a result of the attorney's defalcation, the existing first mortgage remained unpaid, and the first mortgagee then brought an action against...

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