On April 5, 2005, a $360,000 loan made by Steven Surace to Andrew Stewart was secured by a piece of property. (For some reason, Surace didn't record that mortgage until January 30, 2006.)
On July 14, 2005, another person -- Rudolph Kats -- gave Stewart a $200,000 mortgage which was recorded against the property on August 1, 2005.
When Stewart ended up defaulting on both mortgages, Surace sued in Kings County Supreme Court for an order declaring him the first lien-holder. When that court agreed, Kats appealed to the Appellate Division, Second Department, which found Surace had an "equitable first mortgage lien" in the amount of $265,377.65 -- the amount used to satisfy a prior mortgage.
Was this Kats out of the bag?
To download a copy of the Appellate Divisions decision, please use this link: Surace v. Stewart