United States v. Merrick Sponsor Corp., 421 F.2d 1076, 2d Cir. (1970)
United States v. Merrick Sponsor Corp., 421 F.2d 1076, 2d Cir. (1970)
United States v. Merrick Sponsor Corp., 421 F.2d 1076, 2d Cir. (1970)
2d 1076
Edward L. Schiff, New York City (Schiff, Friedman & Krauss, New York
City, on the brief), for defendant-appellant.
Norman G. Knopf, Atty., Dept. of Justice, Washington, D. C. (William D.
Ruckelshaus, Asst. Atty. Gen., Alan S. Rosenthal, Atty., Dept. of Justice,
Washington, D. C., Edward R. Neaher, U. S. Atty., for the Eastern
District of New York, on the brief), for plaintiff-appellee.
Before KAUFMAN and FEINBERG, Circuit Judges, and PALMIERI,
District Judge.*
FEINBERG, Circuit Judge:
Merrick Sponsor Corp. ("Merrick") appeals from an order of the United States
District Court for the Eastern District of New York, Anthony J. Travia, J.,
denying appellant's motion to vacate a deficiency judgment obtained by the
United States following a foreclosure and sale on a mortgage insured by the
Federal Housing Commissioner. For reasons indicated below, we affirm the
order of the district court.
I.
2
The facts, briefly stated, are as follows. Merrick was the mortgagor of certain
property located in Queens County, New York, which mortgage had been
insured by the Federal Housing Commissioner. On Merrick's default on its note
and mortgage, the mortgagee assigned its rights to the Federal Housing
Commissioner, and a foreclosure action was brought in the United States
District Court for the Eastern District of New York. On May 26, 1967, a
judgment was entered on behalf of the United States in the amount of
$2,173,164.87, which authorized a deficiency judgment in the event that the
proceeds from the foreclosure sale fell short of the amount due. This turned out
to be the case on July 20, 1967, the property was sold at public sale to the
highest bidder (the United States, acting through the Secretary of Housing and
Urban Development) for $1,019,915.00. The deed was delivered to the
purchaser on July 31, 1967. On December 11, the United States moved,
unopposed, for leave to enter a deficiency judgment. On January 8, 1968, the
district court ordered the entry of a deficiency judgment against Merrick in the
amount of $1,172,438.43, plus $30,256.05 interest.
3
In October 1968, Merrick moved in the district court before Judge Travia for an
order vacating the deficiency judgment; Merrick argued that the United States,
by moving more than 90 days after delivery of the deed following the
foreclosure sale, had failed to conform to the requirements of N.Y. Real
Property Actions and Proceedings Law 1371 (McKinney's, Consol.Laws, c.
81, 1963). That section provides in pertinent part:
2. Simultaneously with the making of a motion for an order confirming the sale,
provided such motion is made within ninety days after the date of the
consummation of the sale by the delivery of the proper deed of conveyance to
the purchaser, the party to whom such residue shall be owing may make a
motion in the action for leave to enter a deficiency judgment * * *.
Judge Travia held, 294 F.Supp. 1048 (E.D.N.Y.1968), that the Government's
right to enforce a deficiency judgment is controlled by federal law, and that
federal law does not require that this particular state procedure be permitted to
defeat the federal interest in uniformity in enforcing a national housing policy.
II.
7
That the United States, by moving 133 days after delivery of the deed, failed to
comply with section 1371 is undisputed. What is at issue is whether such
Appellant also argues that section 1371 must be applied under Fed.R. Civ.P. 69.
The short answer to this argument is that in this case we do not regard a motion
seeking a deficiency judgment on behalf of the United States as "process to
enforce a judgment" covered by that Rule. Cf. United States v. Walker Park,
Inc., supra; United States v. Wells, supra. To the extent that the Tenth Circuit
case cited above differs, we respectfully disagree.
Judgment affirmed.2
Notes:
*
We note, although this does not control our decision, that the judgment of
foreclosure and sale which was entered by the district court on May 26, 1967,
with Merrick's consent, conspicuously deleted reference to section 1371 and
substituted language concerning entry of a deficiency judgment with no time
limitation or reference to New York law. While this judgment of foreclosure
was not part of the original record filed by the parties in this court, we can take
judicial notice of it