Author: LegalEase Solutions
Assuming that the husband has no interest in the subject house and does not have a future or contingent interest (joint tenancy, tenancy by the entirety, tenancy in common, etc…), the statutory and case law research conducted below indicates that the husband would be considered to have no interest in the subject house – present, future, vested or not vested. From the given facts, the husband appears to be only a co-signer on the financing documents (mortgage and note) of the subject house and lacks authority to assign or transfer the property. Given these facts, there doesn’t appear to be any legal basis for creditor to attach a lien on the subject property.
Subdivision (b) of N Y CPLR 5201 sets forth the CPLR’s general standard for property applicable to the judgment. It authorizes a judgment creditor to reach for any property interest the judgment debtor may have, whether tangible or intangible, “which could be assigned or transferred”. Under that standard, any property interest belonging to the judgment debtor that s/he can legally assign to another becomes fair for the judgment creditor to pursue.
N.Y.CPLR 5201 (b) provides that “A money judgment may be enforced against any property which could be assigned or transferred, whether it consists of a present or future right or interest and whether or not it is vested, unless it is exempt from application to the satisfaction of the judgment…”
No transfer of an interest of the judgment debtor in real property, against which property a money judgment may be enforced, is effective against the judgment creditor either from the time of the docketing of the judgment with the clerk of the county in which the property is located until ten years after filing of the judgment-roll, or from the time of the filing with such clerk of a notice of levy pursuant to an execution until the execution is returned, except: 1. a transfer or the payment of the proceeds of a judicial sale, which shall include an execution sale, in satisfaction either of a judgment previously so docketed or of a judgment where a notice of levy pursuant to an execution thereon was previously so filed; or 2. a transfer in satisfaction of a mortgage given to secure the payment of the purchase price of the judgment debtor’s interest in the property; or 3. a transfer to a purchaser for value at a judicial sale, which shall include an execution sale; or 4. when the judgment was entered after the death of the judgment debtor; N.Y. C.P.L.R. 5203 (McKinney).
While not necessarily applicable here but there are certain specific exemptions to this provision which is contained in CPLR 5205 and 5206. Under CPLR 5206(a), the real property exemption is reserved for only the debtors’ “principal residence”. Pursuant to § 5206(a), property of one of the following types, not exceeding one hundred fifty thousand dollars for the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam; one hundred twenty-five thousand dollars for the counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster; and seventy-five thousand dollars for the remaining counties of the state in value above liens and encumbrances, owned and occupied as a principal residence, is exempt from application to the satisfaction of a money judgment, unless the judgment was recovered wholly for the purchase price thereof: 1. a lot of land with a dwelling thereon, 2. shares of stock in a cooperative apartment corporation, 3. units of a condominium apartment, or 4. a mobile home. The value that counts in determining the debtor’s equity in the residence is the value “above liens and encumbrances”. If the debtor’s equity exceeds the applicable exemption, the balance may be reached by the creditor. However, a special proceeding under CPLR 5206(e) is still required to compel the sale of the property. N.Y. C.P.L.R. 5206 (McKinney).
Case Law Authority
A money judgment may be enforced against any property which could be assigned or transferred, whether it consists of a present or future right or interest and whether or not it is vested, unless it is exempt from application to the satisfaction of the judgment.” JPMorgan Chase Bank, N.A. v. Motorola, Inc., 47 A.D.3d 293, 301, 846 N.Y.S.2d 171, 177 (2007).
Generally, a mortgage must be signed by all owners, including non-owner spouses if the property is a homestead. In community property states, even if only one spouse is on title to property being mortgaged, then both husband and wife must sign documents involving mortgage, rescission and TIL. Usually, in the state of a common law jurisdiction, which New York is, both parties do not need to sign documents because each property belonging to each spouses are considered separate. However, these states may have specific requirements for property that is homestead. All non-owner spouses must sign unless the subject property is in a state that is a common law jurisdiction without applicable homestead exemptions. Here in this case, the husband may have been made to sign the note and mortgage because their family residence was involved and the lender wanted to have no obstructions in case of foreclosure on the house in the case of default by way of claims of community property or marital interest.
The court will not “compel the judgment debtor to deliver property that has not clearly been shown to be in the judgment debtor’s possession or control.” Erin Capital Mgmt., LLC v. Celis, 19 Misc. 3d 390, 392, 854 N.Y.S.2d 640, 642 (Dist. Ct. 2008).
A spouse has such a property right in real estate held by entirety that his interest may be conveyed to a third party, and may be subject to a lien of a judgment creditor and salable upon levy of execution, and upon such transfer, third party and non-participating spouse become tenants in common, subject to rights of survivorship of that spouse. Stewart v. Stewart, 208 Misc. 795, 144 N.Y.S.2d 637 (Sup. Ct. 1955). It is well established in this state that a surviving tenant in a tenancy by the entirety receives the fee interest in its entirety, free and clear of any debts, claims, liens or other encumbrances as against the deceased spouse. Matter of Estate of Jones, 137 Misc. 2d 1001, 1003, 523 N.Y.S.2d 396, 398 (Sur. 1987).
It seems clear that the lien acquired by a judgment creditor of the husband is precisely commensurate with the lien acquired by a mortgagee of the husband. Certainly neither lien can cover any interest not possessed by the husband. Lopez v. McQuade, 151 Misc. 390, 392, 273 N.Y.S. 34, 37 (Sup. Ct. 1934). The interest possessed and owned by the latter necessarily determines the scope of the lien and measures the interest acquired by the purchaser at an execution sale. Id. 37-38.
In the event there is an interest of spouse by tenancy by the entirety or otherwise, there is still grounds for opposing enforcement of judgment, as Caddle Co. and Gilchrist evidence.
In Cadle Co. v. Satrap, 302 A.D.2d 381, 754 N.Y.S.2d 354 (2003), the petitioner commenced proceeding against the appellants seeking to compel them to turn over an automobile to partially satisfy a judgment of the Superior Court of DeKalb County of the State of Georgia entered solely against the husband. In opposition to the petition, the appellant wife averred that she paid for the vehicle herself, and included her husband’s name on the title as a matter of convenience to avoid complications upon the death of either party. The court held that the appellant husband is presumptively an owner of the automobile because his name is listed on the title and because it was acquired during the marriage. However, the affidavit which the wife submitted in opposition to the petition raised issues of fact as to whether joint ownership was intended, and whether there was an agreement that the vehicle be the wife’s separate property. Furthermore, even if the wife fails to prove her claim of sole ownership, she still retains a one-half interest in the vehicle, which is a form of personal property. The court held the situation akin to that of the joint bank account, requiring that the nondebtor spouse be given an opportunity to show that she (he) paid for the chattel and that the debtor spouse did not. Cadle Co. v. Satrap, 302 A.D.2d 381, 754 N.Y.S.2d 354 (2003).
In Gilchrist v. Commercial Credit Corp., 66 Misc. 2d 791, 322 N.Y.S.2d 200 (Sup. Ct. 1971), it was held that; 1) where judgment against petitioner’s estranged husband had been entered six years before proposed sheriff’s sale of his interest in residence owned by petitioner and husband as tenants by entirety; 2) that there was no showing of other efforts of judgment creditor to compel husband to satisfy judgment and; 3) that petitioner had invested more than amount of judgment, even though sale of husband’s interest would not deprive petitioner of her right to continue to reside upon property, and; 4) that in view of the potential consequences if husband’s interest were transferred to third party and the risk that children’s home would be lost entirely if petitioner did not survive husband; 5) the court cancelled the enforcement of a sheriff sale and the attempt to enforce judgment of the sale of husband’s interest until a later time contingent on judgment creditor showing diligent and unsuccessful attempts to enforce payment of judgment by other means.
In this case, since the judgment creditor husband does not appear to have any interest in the property whatsoever and lacks authority to assign or transfer the property, attaching a lien for the judgment against him personally to his wife’s property is an approach without legal support. Further, any action against the property should be taken only with notice to the wife who is the owner and affording her a hearing, else the action would be void.
When a judgment is recorded against one’s real estate property, it will cloud the title of the property. When a judgment lien exists, the lien will have to be paid off as part of the proceeds, if one intends to sell the property. Since this case involves a claim that the lien is invalid, the judgment debtor or his wife may sue the creditor in court to receive a court order to vacate, or remove, the judgment from the county records.