BANKERS TRUST COMPANY OF CALIFORNIA v. STEWART TITLE INSURANCE COMPANY (2004)

Judgment, Supreme Court, New York County (Edward Lehner, J.), entered on or about December 11, 2002, which issued a declaration that defendant owed no obligation to plaintiff, denied plaintiff's motion for summary judgment and, upon a search of the record, granted summary judgment to defendant, dismissing the action, unanimously affirmed, with costs.

Plaintiff bank is the assignee of a note and related mortgage in the amount of $127,500, evidencing a loan by FHB Funding Corp. to one Wendy Lovelace, secured by premises located in Jamaica, New York. However, the entire loan transaction was part of a criminal conspiracy involving the repeated sale of the same premises, and, once the mortgage proceeds were disbursed, the conspirators disappeared.   Although plaintiff has commenced this action to recover its losses from the title insurer, it has not produced a copy of the purported insurance policy.   Indeed, the record reveals that plaintiff purchased a mortgage replete with facial defects and irregularities.   Moreover, there is no evidence that the abstract company which the conspirators had asked to undertake a title search was at all aware that the preliminary certificate would, upon being forwarded to the conspirators, be fraudulently altered to show Lovelace as the title holder, or that a purported closing had occurred on April 29, 1998.   Thus, when the mortgage instrument and related documents were not submitted to the abstract company for filing, the Lovelace mortgage was not recorded, and no final mortgage title insurance policy was ever issued.   Accordingly, the motion court properly found plaintiff's action devoid of merit.