New York Law Review

Da Silva v. Musso, 76 N.Y.2d 436 (1990): Effect of Notice of Pendency After Judgment and Appeal

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Da Silva v. Musso, 76 N.Y.2d 436 (1990)

A purchaser of real property for value, with actual knowledge of a pending appeal by an unsuccessful claimant, may nonetheless take clear title if the claimant’s previously filed notice of pendency was canceled pursuant to CPLR 6514(a) and no stay was obtained.

Summary

This case clarifies the rights of parties and the operation of the notice of pendency procedures under CPLR Article 65. The central question is whether a purchaser for value, aware of a claimant’s appeal after the dismissal of their complaint and cancellation of the notice of pendency, can obtain clear title. The Court of Appeals held that actual knowledge of the appeal is irrelevant. Without a valid notice of pendency or a stay, the property owner’s right to transfer clear title remains unrestricted, balancing the claimant’s interest in preserving the status quo with the owner’s right to marketability.

Facts

Da Silva sued Musso and Partridge for specific performance of a real estate agreement and filed a notice of pendency. The trial court initially ruled in Da Silva’s favor, but the Appellate Division reversed and dismissed the complaint. Da Silva appealed to the Court of Appeals but did not obtain a CPLR 5519 stay. Consequently, the notice of pendency was canceled. Musso and Partridge then contracted to sell the property to Ross Howard Realty Corp., which assigned the contract to Uzi Realty Corp., acting for Sun Place Realty Corp. All parties involved had actual knowledge of Da Silva’s pending appeal, but the sale to Sun Place was completed before the appeal was argued.

Procedural History

1. Trial Court: Initially granted specific performance to Da Silva.

2. Appellate Division: Reversed the trial court and dismissed Da Silva’s complaint.

3. Court of Appeals (First Appeal): Da Silva appealed, but the Appellate Division’s order was upheld.

4. Trial Court (Present Action): Declared Sun Place’s deed invalid.

5. Appellate Division (Present Action): Affirmed the trial court’s decision, holding Sun Place took title subject to Da Silva’s appeal.

6. Court of Appeals (Present Appeal): Reversed the Appellate Division, validating Sun Place’s deed.

Issue(s)

1. Whether a purchaser for value with actual knowledge of a pending appeal affecting title to property qualifies as acting in “good faith” under CPLR 5523, allowing them to take clear title when a notice of pendency has been canceled and no stay is in place?

Holding

1. No, because under CPLR 5523 and related statutes, a purchaser’s actual knowledge of a pending appeal does not negate their

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