Property Fraud Action Allowed To Proceed Peter Moulinos, Esq.

In a case where Peter Moulinos represents the Plaintiff, a Defendant sought to dismiss an action filed by the Plaintiff which alleged that, while the Plaintiff was incarcerated in federal prison, his real property was illegally transferred to the Defendants by way of a forged signature on a deed.

In its motion to dismiss, the Defendant argued that Plaintiff’s claims are barred by the Statue of Limitations and laches. It based its argument on the allegation that Plaintiffs’ ignorance of the fact that his signature may have been forged on the deed resulted from his incarceration due to his engaging in illegal offenses, with arrest and imprisonment a foreseeable consequence. Defendant therefore sought to assert blame upon the Plaintiff stating that Plaintiff chose the conduct which resulted in his felony conviction and prison sentence. The Defendant also argued that Plaintiffs’ wife was a joint owner and was at no time incapacitated or unable to protect their real property.

Plaintiff argued that the inherently unknowable injury doctrine tolls the three year statute of limitations that applies to his Complaint. The inherently unknowable injury doctrine provides that a statute of limitations is tolled where the injury is inherently unknowable and the claimant is blamelessly ignorant of the wrongful act and the injury complained of. Under such exception, the limitations period does not begin to run until the plaintiff has reason to know that a wrong has been committed.

The Court disagreed with the Defendant and denied its motion. The Court ruled that because the Plaintiff’s Complaint asserted a cause of action that on its face accrued outside of the three year statute of limitations, he has the burden of pleading facts leading to a reasonable inference that one of the tolling exception doctrines adopted by Delaware court applies. The Court also denied the motion on the basis that Plaintiff successfully argued that the inherently unknowable injury doctrine tolls the three year statute of limitations that applies to his Complaint.

This post was written by Nicholas Moneta. This case is cited as Luis Barbosa v. Bob’s Canine Academy, Inc., Dorothy Ball, and H. Cubbage Brown. C.A. No. 7834-ML filed in the Court of Chancery in the State of Delaware.

Cooperative Board Not Allowed To Reverse Prior Resolution Based on Self Interest

In 2005, the board president at the 7 East 35th Street Owners Corp., housing cooperative sought approval from the Board to remove a bulkhead structure on the roof, and create a master bedroom suite and bath by enclosing most of his rooftop terrace in his apartment. At a special board meeting held in June 2006, where the board president did not vote, the board approved this alteration. The board also determined at this meeting that “[n]o additional monthly charges such as maintenance and/or assessments would be charged to the apartment”.

Six years later, on June 8, 2012 with several new persons sitting on the board, and where the former the former board president no longer presided, an executive committee of the board passed a resolution allocating 400 additional shares to the former board president’s unit which effectively increased the maintenance payable on the unit on the basis that the alterations in 2006 justified this increase. The board contended they had been misled during the approval process in 2006 and that the board proceeded with that vote with the mistaken belief that the opinion of the board president’s attorney, regarding the alterations, also represented the position of the managing agent and the cooperative’s attorney. The former board president brought an action seeking to reverse the cooperative’s resolution.

The Court found that the cooperative’s resolution, to allocate more shares to the unit, was an improper attempt to rescind the earlier resolution and was not protected by the business judgment rule, which protects a board from actions taken in good faith and in the exercise of honest judgment in the lawful and legitimate furtherance of corporate purposes. The Court found that while the evidence before them demonstrated that the former board president had clearly acted in his own interest with respect to the alterations, the board was unable to prove that the former board president was acting as a fiduciary in connection with the alteration. Thus, the former board president had no duty to disclose the opinions of the board’s attorney and managing agent and his request for approval of the alterations was not misleading.

Peter Moulinos of Moulinos & Associates LLC stated that this decision was significant in that it negated the board president’s obligation to act in the best interests of the cooperative, and disclose the position of the cooperative’s attorney and managing agent to the board, while he was acting in his own self interest.

This post was written by Daniel Bateman. The case is cited as Goldman v. 7 East 35th Street Owners, (Sup.Ct. New York County 2013) Index No.: 104187/12

Bank of America to Pay Fees to Borrower by Peter Moulinos

US Bank and Bank of America have been ordered to pay a borrower in foreclosure her late fees, interest charges, attorney fees and costs which the borrower incurred as a result of the lenders’ failure to negotiate a settlement of the foreclosure action in good faith.

In U.S. Bank v. Shinaba, Judge Robert Torres lambasted the lenders for dragging settlement discussions throughout seventeen (17) settlement conference and for providing conflicting information to the borrower, missing deadlines to respond to modification applications and failing to appear at conferences with attorneys who were familiar with the case. The total interest charges alone which the lenders will have to pay amount to over $120,000.

The action was filed in the Supreme Court of the State of New York, County of Bronx.

Cooperative Can Make Changes to Apartment Over Owner Objections Peter Moulinos

A cooperative is allowed to make changes to an apartment over the objections of a cooperative shareholder even though the changes would violate the shareholder’s proprietary lease.

In Goldstone v. Gracie Terrace Apartment Corp., the Court found that the cooperative could make necessary changes to the unit in order to effectuate repairs which would insulate the unit and building from potential water damage. The repairs and renovations effectively reduced the unit’s size by 50 square feet. The appellate court reasoned that while the repairs were necessary, the cooperative would be required to compensate the unit owner with money damages for the reduction in the size of the unit. The Court also ruled that the repairs, and breach of the shareholder’s proprietary lease, was the best option open to the board in effectuating the repairs.

NY Times Article Outlining A Closing

Here is a great article which appeared in the New York Times outlining what happens at a closing.

Click Here to read the article

Yellowstone Injunction Maintains Status Quo in Commercial Real Estate Litigation

This matter involved a commercial real estate litigation. Weinberg Holdings LLC is a commercial tenant on 68 Second Avenue, New York, operating two bars and a delicatessen in the building since the mid 1990’s pursuant to a written commercial lease. On October 4, 2011 the landlord, Bar None, sold the building to Ruru & Associates, and transferred the lease to them as well. Upon inspecting the building Ruru found Weinberg had its belongings in the basement. Ruru’s counsel sent Weinberg a letter demanding they move their belongings as their lease did not extend to the basement. Weinberg replied they’d been using the basement for years, and there was nothing in the lease excluding them from the basement.

Seven months went by with no communication between either party in regard to the basement.
On July 20, 2011 Ruru, served Weinberg with a “Fifteen Day Notice of Default”, stating that Weinberg was using the basement contrary to the lease. It was at this time Weinberg sought a Yellowstone injunction. A Yellowstone injunction, “maintains the status quo so that the commercial tenant, when confronted by a threat of termination of its lease, may protect its investment in the leasehold…” In addition Weinberg also stated that it “is willing to cure any purported lease defaults by ceasing its occupancy of the Basement Space if the Court finds that the Basement Space is not part of the Lease Agreement.”

The Court found that the lease did not explicitly conclude whether or not Weinberg was authorized to use the basement space. Due to Weinberg’s willingness to cure the alleged default and “in light of conflicting allegations” the Court granted Weinberg Holdings LLC’s motion for a Yellowstone injunction. This injunction is necessary to maintain the status quo until a trial can be conducted and this issue may be resolved.

This case is cited as Weinberg Holdings LLC v. Ruru & Associ. LLC, (Sup.Ct. NY 2013) Index #103430/2012.

Purchaser of Mortgage Cannot Foreclose Peter Moulinos

A recent decision by the Supreme Court of the State of New York, New York County, has ruled that a purchaser of a mortgage, which is already in default, cannot foreclose on that mortgage without personal knowledge of the default.

In this decision, Judge Paul Wooten ruled that the Plaintiff, who acquired the mortgage after the default of the borrower, did not have personal knowledge of the default and could therefore not provide testimony or evidence to the Court regarding the circumstances surrounding the default. The Court did rule however that an affidavit from the original mortgagee, JP Morgan Chase, setting forth the circumstances surrounding the default would allow the foreclosure to proceed.

According to Peter Moulinos, this decision is significant as purchasers of defaulted mortgage notes often do not obtain a covenant for the future cooperation of a mortgagee upon the sale of a mortgage. Without the cooperation of an original mortgagee, a purchaser of a mortgage will not be able to close. Original mortgagees are often hesitant to provide their cooperation after the sale of the mortgage as their main goal is to sell the mortgage and disengage themselves from any further liability or ties to the mortgage.

Please contact Peter Moulinos at with any questions regarding this decision.

Attorney General Will Not Decide Escrow Disputes Peter Moulinos

Here is an article which appeared in The Real Deal discussing the decision by the New York State Attorney General not to adjudicate or determine disputes over the right to retain escrow deposits in real estate transactions between buyers and sellers. Peter Moulinos, Esq., is also quoted in the article.

Click here to read the article.

Mortgage Declared Void After Joint Tenant Dies

When one joint tenant passes away his interest goes to the other joint tenant, and extinguishes a mortgage Bank of America held on the property.

In 1999 Ms. Teresa Smith was the sole owner of a piece of property in Port Washington, New York. That February she conveyed, by quitclaim deed, her entire ownership in equal shares to herself and David Hassid, as joint tenants with the right of survivorship. Seven years later, in 2006, Bank of America, N.A., provided Mr. Hassid a $300,000 loan that was secured by a mortgage on the property. Ms. Smith was completely unaware of this mortgage on the property until 2009 when Mr. Hassid passed away.

It was then that Bank of America, N.A., declared the loan to be in default for non-payment. Ms. Smith commenced an action for a declaratory judgment arguing that after Mr. Hassid’s death the mortgage was extinguished. She felt she was the sole owner of the property by right of survivorship. When Mr. Hassid acquired the loan Bank of America accepted the mortgage on the property without first seeing that the joint tenancy was severed or that all joint tenants had signed. Regardless, Bank of America contended that not all the unities had been maintained in the joint tenancy.

In creating and maintaining a joint tenancy there are four unities that must always exist; time, title, interest and possession. Bank of America contended that Mr. Hassid’s mortgage destroyed the unity of interest, therefore the joint tenancy too. They argued that this mortgage served as written evidence that he intended to sever the joint tenancy. Furthermore, by destroying this joint tenancy the two owners became merely tenants-in-common. Ultimately meaning that Mr. David Hassid’s ownership would be passed to his estate and the mortgage would be valid.

The Appellate Division, Second Department, brought to light that a mortgage is only a lien on a property and not a transfer of title. The court found that Mr. Hassid’s mortgage on the property did not act to sever the joint tenancy. Upon his death his interest in the property went to Ms. Smith and Bank of America’s mortgage became null and void.

This case is cited as Smith v. Bank of America, N.A., (2nd Dept. 2012) Index #04463/2011. If you have any questions regarding this article, please contact Peter Moulinos at

New Ability to Repay Mortgage Rules

Here is a summary of the new rules which were released today by the Consumer Financial Protection Bureau (CFPB) which are intended to protect borrowers from obtaining loans that they cannot afford to repay. The rules eliminate “no doc” loans, preclude banks from using “teaser rates” and eases the requirements for borrowers refinancing loans which are deemed risky to more conventional loans.