April Title Tidbit by Lisa Zeppieri – WFG National Title Insurance Company

Myrtle 684, LLC v. Tauber 2020, NY Slip Op 07901

This recent decision has brought attention to a clerical error of a docketed judgment, which has changed the way of examining and underwriting.  This matter involves a discrepancy between the amount awarded in a judgment and the amount docketed on the record.  Myrtle 684, LLC (Myrtle) brought an action pursuant to RPAPL Article 15 to declare a judgment lien, from a prior action, be deemed in the amount docketed. 

In a prior action, Tauber obtained a judgment for $200,000 for personal injuries sustained at the subject property in Brooklyn, NY.  The judgment was entered on May 21, 2009, and Tauber was awarded interest of $16,050, plus costs and disbursement in the amount of $1,195.  The judgment was incorrectly docketed for $16,050, the amount of the interest, rather than the amount of the judgment. 

The property was then conveyed several times, and in January 2016, Myrtle acquired title to the property.  Myrtle then entered into a mortgage consolidation agreement with Investors Bank, which created a lien in the consolidated amount of $2,925,000.  In March 2016, Tauber notified Myrtle that the outstanding amount due on the judgment was $351,043.87 and commenced an action to execute the judgment and a sheriff’s sale of the property.  Myrtle and Investor’s bank unsuccessfully argued that Tauber’s lien was limited to $16,050, the amount docketed and filed separate appeals.

Myrtle and Investor’s Bank contended that Tauber, as the judgment lienholder, had the burden to ensure that the judgment was docketed correctly and contained the accurate information, as when a judgment is docketed under an incorrectly spelled surname, no valid lien exists.

Tauber established that he was entitled to summary judgment as the lien was docketed under the correct surname, the amount due was listed in the judgment, and the parties had notice of the judgment and had a duty to further inquire as to the status of the judgment.

Based on this decision, we must be cautious when reviewing a judgment.  If there is a discrepancy and we fail to review the actual judgment and rely solely on the transcript, we expose ourselves to liability.