Motion (seq. No. 1) by the attorney for the plaintiff for an order pursuant to CPLR 3212 on the issue of liability, and cross-motion (seq. No. 2) for an order pursuant to CPLR 3212 in favor of the defendant against the plaintiff are determined as hereinafter set forth.

In the within action the defendant failed to record a mortgage. In the interim, the real property was sold, without the subject mortgage appearing as a lien or an encumbrance.

Plaintiff, Alfred A. Lepore Insurance Trust, Nov. 5, 2001 (the Trust) is the owner of a note and mortgage secured by three parcels of real property located in Nassau County. The mortgage was issued in favor of plaintiff by Caliph Graham ("Graham"). On or before May 1, 2004, in connection with plaintiff' s loan to Caliph Graham in the amount of One Hundred Eighteen Thousand and 00/100 ($118,000.00) Dollars, defendant EAM Land Services, Inc. (EAM) issued a commitment for title insurance under Title Number EAM12219N to plaintiff to be underwritten by Fidelity National Title Insurance Company ("Fidelity"). The title insurance commitment issued by EAM examined the title for the three parcels located at 698 Newton Avenue, Uniondale, New York ("Parcel 1") at 1119 McKenna Place, Uniondale, New York ("Parcel 2") and at 1271 Walnut Street, Uniondale, New York ("Parcel 3") (Mortgage dated August 24, 2004, ¶ 17, Exhibit C Affirmation in Support). On or about August 24, 2004 EAM recertified its title commitment and issued an ALTA loan policy #5412-3531542, underwritten by Fidelity in the amount of $118,000.00 to the Trust, insuring the vesting of fee simple title to Graham and insuring the second mortgage lien of plaintiff on Parcels 1, 2 and 3. The [*2]mortgage policy certified, warranted and insured to plaintiff that plaintiff's mortgage was a superior lien and encumbrance to the exclusion of all other restrictions, liens and encumbrances affecting Parcels 1, 2 and 3, except those specifically set forth in the mortgage insurance policy. Fidelity through its agent EAM for valuable consideration, issued to plaintiff a policy of title insurance covering Parcels 1, 2 and 3 owned by Graham. As part of its insurance services, EAM provided a title closer to attend the loan closing, omit exceptions to title and issue a title insurance policy. Karalyn Karcher was the title closer present at the closing and received a check for $800.00 for her services. Furthermore, EAM's bill for title services, including applicable recording charges, was paid for at the closing in a check in the amount of $2,782.00. At the loan closing on August 24, 2004, Graham executed a note, mortgage and an assignment of leases and rents, together with other loan documents in favor of plaintiff. A copy of the executed mortgage and assignment of leases and rents marked to show that the originals were received by the defendant for recording on August 24, 2004 are annexed as Exhibit D to the summons and complaint which is annexed as Exhibit a to the motion in support. EAM by its agent, Karalyn Karcher, undertook to record the mortgage and assignment of leases rents in favor of plaintiff in the Nassau County Clerk's Office.

The mortgage was not recorded until November 30, 2005. In the interim, on September 2, 2005, two months before the mortgage was recorded, Graham sold the 698 Newton Avenue property (Parcel 1) for $330,000 and delivered a deed to Elena Moncayo, who purchased without knowledge of the mortgage in favor of plaintiff. Plaintiff had no knowledge that the subject mortgage was not recorded until November 30, 2005.

American Home Mortgage, who financed Moncayo's purchase, did so without any notice that plaintiff's mortgage had not been recorded until November 30, 2005. Plaintiff was not paid from the proceeds disbursed at closing by America Home Mortgage on September 2, 2005 for the sale of the premises known as 698 Newton Avenue.

Plaintiff provided an original executed mortgage to the agent of EAM at the closing. Plaintiff paid a premium due to EAM at the closing.

On a motion for summary judgment, the Court's function is to decide whether there is a material factual issue to be tried, not to resolve it. Sillman v Twentieth Century-Fox Films Corp., 3 NY2d 395, 404. A prima facie showing of a right to judgment is required before summary judgment can be granted to a movant. Alvarez v Prospect Hospital, 66 NY2d 320; Winegrad v New York University Medical Center, 64 NY2d 851; Fox v Wyeth Laboratories, Inc., 129 AD2d 611; Royal v Brooklyn Union Gas Co., 122 AD2d 133. The plaintiff has made an adequate showing of entitlement to summary judgment by showing that EAM breached its contract with plaintiff by failing to timely record the mortgage in favor of plaintiff, which would have created a valid mortgage lien of record and would have provided notice of the mortgage to Moncayo and American Home Mortgage prior to Graham' s delivery of a deed to 698 Newton Avenue to Ms. Moncayo.

Once a movant has shown a prima facie right to summary judgment, the burden shifts to the opposing party to show that a factual dispute exists requiring a trial, and such [*3]facts presented by the opposing party must be presented by evidentiary proof in admissible form. Friends of Animals, Inc. v Associated Fur Mfgrs., Inc., 46 NY2d 1065. Conclusory statements are insufficient. Sofsky v Rosenberg, 163 AD2d 240, aff'd. 76 NY2d 927; Zuckerman v City of New York, 59 NY2d 557; see Indig v Finkelstein, 23 NY2d 728; Werner v Nelkin, 206 AD2d 422; Fink, Weinberger, Fredman, Berman & Lowell, P.C. v Petrides, 80 AD2d 781, app dism. 53 NY2d 1028; Jim-Mar Corp. v Aquatic Construction, Ltd., 195 AD2d 868, lv app den. 82 NY2d 660. The defendant claims that it tried to procure additional documents such as the "Real Property § 255 affidavit" from the plaintiff and its purchases after the closing. Defendant gives not one iota of documentary evidence to substantiate the allegation that it attempted to get any additional affidavits prior to November 15, 2005. Nor was there a showing with any credible evidence of a lack of cooperation by the plaintiff, or any other person in the defendant's procurement of the "affidavit." In the within action, where the issues regarding the untimely recording of the mortgage are not genuine but feigned, the question of the defendant's liability may be summarily decided. See Assing v United Rubber Supply Co., Inc., 126 AD2d 590.

Having undertaken to record the mortgage, defendant was under a duty to perform with due care, and should be liable for any losses proximately caused by the failure to do so. Cruz v Commonwealth Land Title Insurance Company, 157 AD2d 333; Gem Servs. of NY, Inc. v United Gen. Title Ins. Co, 28 AD3d 516.

The issue that cannot be resolved in the within motion for summary judgment is the amount of damages (losses) caused by defendant's failure to record the mortgage. The mortgage is now recorded and is a lien against 1119 McKenna Place and 6271 Walnut Street. Plaintiff's allegation that it "is unable to enforce its mortgage as Graham defaulted by failing to timely make mortgage payments due plaintiff" (Lepore Affidavit of Merit, sworn to October 12, 2006,¶ 24) is not accurate at best, and at worst disingenuous, considering plaintiff's remedy of foreclosure against the remaining two (2) parcels. The nexus between pending foreclosures against the remaining parcels and plaintiff's negligence claim against EAM for its failure to timely record plaintiff's mortgage is crucial to the issue of damages.

A bond or other obligation, secured by a mortgage lien on realty, is a chose in action and constitutes personal property. The mortgage is an incident of the bond or collateral security for the debt. The bond or other evidence of indebtedness is the principal obligation. The mortgage is security for the personal indebtedness. Flyer v Sullivan, 284 AD 697, 698.

The mortgage note dated August 24, 2004 secured by the subject mortgage provides that Caliph Graham promises to pay:

"the principal sum of ONE HUNDRED EIGHTEEN THOUSAND and 00/100——($118,000.00) Dollars with interest thereon to be computed from the date hereof, at the rate of FIFTEEN per centum (15.00%) per annum and to be prepaid in full at the time of closing for the entire twelve month term of the loan in the amount of [*4]$17,700.00 with repayment of principal at $1,000.00 monthly commencing September 24, 2004 and ending July 24, 2005. The unpaid balance, including principal in the amount of $107,000.00, any interest, late charges and any other costs due and payable in full on August 24, 2005. A final payment, due on August 24, 2005, shall be made in an amount sufficient to satisfy the balance of the loan then due and owing including principal, interest, late charges and other costs due under this Notice."

The mortgage note dated August 24, 2004 provides further:

Any reduction of the principal amount in a single prepayment amount equal to or greater than the specific required amount indicated below will entitle the borrower to a release of a single mortgaged property where the principal prepayment required for release is equal to or less than the amount of prepayment:

The note and mortgage were executed on August 24, 2004. The note provides (see above) that as soon as $60,000 principal is paid, then the 698 Newton Avenue property would be released from the mortgage. Although most inartfully stated by the attorneys for the defendant, at the very least there must be a showing by the plaintiff regarding the reduction or set-off of damages, if any, as a result of principal payments already made, and monies due and payable to the plaintiff from the mortgage foreclosure proceedings on the remaining two parcels. For example, according to the balloon note, the beginning principal on August 15, 2004 was $118,000. The final principal payment of $107,000 was due on August 24, 2005, and the complaint seeks damages of $109,000 with interest at 15% from April 24, 2005 to May 24, 2005 and interest at 17% from May 25, 2005 to the present.

The attorney for the mortgagee's statement that since the plaintiff has commenced foreclosure actions regarding the two other parcels "those other (foreclosure) cases are irrelevant to the case at bar" is misplaced.

The title insurance policy provides that "if the company offers to purchase the indebtedness . . . , the owner of the indebtedness shall transfer, assign and convey the indebtedness and the insured mortgage, together with any collateral security, to the company upon payment therefor." The plaintiff has reserved its right to assert a direct claim against the title company. Neither counsel has addressed the right of EAM to be subrogated to the claims of the Alfred A. Lepore Insure Trust November 5, 2001 to foreclose the mortgage on the remaining two (2) parcels, should EAM eventually be required to pay damages to plaintiff for its negligence in failing to timely record the mortgage.

In order to prevail in an action sounding in negligence, the plaintiff must prove liability and damages. It is uncontroverted that defendant EAM was negligent in failing to timely record the subject mortgage. However, plaintiff failed to demonstrate the actual damage it has or may sustain in light of the pending foreclosure actions and its [*5]reservation of rights against the title company. Discovery is necessary on the issue of damages. The cross-motion (seq. No. 2) for an order pursuant to CPLR 3212 granting summary judgment in favor of the defendant against the plaintiff is denied.

A Preliminary Conference (see 22 NYCRR 202.12) shall be held at the Preliminary Conference part, located at the Nassau County Supreme Court on the 24th day of April, 2007, at 9:30 AM. This directive, with respect to the date of the Conference, is subject to the right of the Clerk to fix an alternate date should scheduling require. The attorneys for the plaintiff shall serve a copy of this order on the Preliminary Conference Clerk and the attorneys for the plaintiffs.

This decision is the order of the Court.

Dated:March 31, 2007ENTER:

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J.S.C.