Smith v. Bank of America

Rule of Law:

In a lien-theory jurisdiction like New York, a mortgage granted by one joint tenant on their interest in the property, without the knowledge or consent of the other joint tenant, does not sever the joint tenancy. Upon the death of the mortgaging joint tenant, their interest is extinguished, and the surviving joint tenant takes the entire property free and clear of the mortgage lien.

Facts:

• In February 1999, the plaintiff conveyed real property to herself and her boyfriend, David Hassid, as joint tenants with the right of survivorship.
• The quitclaim deed creating the joint tenancy was properly recorded shortly after its execution.
• In July 2006, without the plaintiff's knowledge, David Hassid obtained a $300,000 loan from the defendant, Bank of America, N.A., and secured it with a mortgage on the subject property.
• The mortgage given by Hassid was recorded in November 2006.
• In January 2009, David Hassid died.
• Following Hassid's death, Bank of America declared the loan to be in default.

Procedural Posture:

• The plaintiff commenced an action against the defendant, Bank of America, in the Supreme Court of New York (the state's trial court of general jurisdiction).
• The plaintiff sought a judgment declaring the mortgage null and void.
• The plaintiff moved for summary judgment on her complaint.
• The defendant opposed the plaintiff's motion and cross-moved for summary judgment, seeking a declaration that the mortgage is valid.
• The Supreme Court (trial court) granted the plaintiff's motion for summary judgment and denied the defendant's cross-motion, declaring the mortgage null and void.
• The defendant, Bank of America, appealed the trial court's judgment to this court, the Appellate Division of the Supreme Court (an intermediate appellate court).