M&T Real Estate Trust v. Doyle, 20 N.Y.3d 533 (2013)
For the purposes of determining the timeliness of a motion for a deficiency judgment under RPAPL 1371(2), “consummation of the sale by the delivery of the proper deed” occurs only when the grantee accepts the deed, not merely when the grantor presents it.
Summary
M&T Real Estate Trust sought a deficiency judgment after foreclosing on commercial mortgages. The defendants argued that M&T’s motion was untimely because it was filed more than 90 days after the referee initially mailed the deed to M&T’s attorney. M&T argued that the 90-day period started later, when the referee re-executed and delivered the deed which was then accepted. The New York Court of Appeals held that the 90-day period under RPAPL 1371(2) begins only upon acceptance of the deed by the grantee, reversing the Appellate Division’s decision and reinstating the County Court’s order and judgment.
Facts
M&T obtained a foreclosure judgment against James Doyle and Jim Doyle Ford, Inc. At auction, M&T purchased the property and planned to assign the bid to MAT Properties, Inc. The referee executed a deed naming MAT as the grantee and mailed it to M&T’s attorney. Before the deed arrived, M&T’s attorney, learning of a potential higher bidder, told the referee that MAT would not accept the deed and that the documents would be returned, which they were. Later, M&T instructed the referee to record the deed. The referee then re-executed a new deed, which was accepted and subsequently recorded.
Procedural History
County Court granted M&T’s motion for a deficiency judgment, holding that the motion was timely because it was filed within 90 days of the re-executed deed. The Appellate Division reversed, concluding that the 90-day period began with the initial delivery attempt. The Court of Appeals granted M&T leave to appeal.
Issue(s)
Whether, for purposes of RPAPL 1371(2), the “consummation of the sale by the delivery of the proper deed of conveyance to the purchaser” occurs when the referee (grantor) first executes and mails the deed, or only when the grantee (or its agent) accepts the deed?
Holding
No, the consummation of the sale occurs when the grantee accepts the deed, because acceptance is a necessary component of delivery under New York real property law.
Court’s Reasoning
The Court of Appeals relied on Real Property Law § 244, which states that a grant takes effect only from its delivery, and on common law principles requiring both presentment and acceptance for delivery. The court stated, “[t]he delivery of a deed without acceptance is nugatory…An intention to deliver on the one hand and to accept on the other, is necessary to give effect to the instrument.” The court emphasized that no statutory basis exists to treat a referee’s deed differently from other deeds. In this case, M&T’s attorney twice declined to accept the initially delivered deed. The court found this to be “opposing evidence” sufficient to rebut any presumption of delivery in May 2010. Only when the deed was re-executed and then accepted did the transfer occur, making M&T’s motion timely. The court distinguished this case from situations where the grantee accepts and retains the deed without objection, as in Crossland Sav. v Patton. The court emphasized that the key is not merely physical transfer, but the intention to accept the conveyance, quoting Ten Eyck v Whitbeck, “[t]he delivery of a deed is essential to the transfer of title, and there can be no delivery without an acceptance by the grantee”.