Deed Validity

Author: LegalEase Solutions

QUESTIONS PRESENTED

  1. Whether the deeds issued to the bona fide purchasers after the foreclosure are valid, now that the foreclosure has been vacated for mistake?
  2. Possible causes of action related to the accusations of conspiracy?
  3. Possible causes of action related to the unethical behavior in pursuing illegal discovery?
  4. Whether equitable subrogation applies here?
  5. Whether a cause of action for fraud can be brought by Golfinopolous against Skarla?

 SHORT ANSWERS

  1. It appears that even if there was fraud in the deeds issued to the bona fide purchasers after a valid foreclosure, the subsequent bona fide purchasers title would not be affected.
  2. The possible causes of action related to the accusations of conspiracy are: legal malpractice, breach of fiduciary duty and fraud. None of these claims are likely to prevail.
  3. The possible causes of action related to the unethical behavior in pursuing illegal discovery is penalties for refusal to comply with order or to disclose under CPLR 3126.
  4. Equitable subrogation applies here, because, it appears that here, NPSFT LLC and NPSFT1 LLC are bona fide purchasers that took over the mortgage after a foreclosure, probably giving them a right to equitable subrogation.
  5. No, it appears that a fraud claim may not be brought by Golfinopolous against Skarla because here, Golfinopoulos neither relied on a false representation made by Skarla nor did he suffer any damages by the fraud arising out of the transactions between Skarla and Evangelos Gerasimou.

RESEARCH FINDINGS

  1. Whether the deeds issued to the bona fide purchasers after the foreclosure are valid, now that the foreclosure has been vacated for mistake?

Generally, in New York state, “the law favors stability of titles acquired at foreclosure sales.” Hammerman v Ferguson, 50 AD2d 853; 376 NYS2d 606, 608 (1975). Therefore,

A bona fide purchaser (other than the owner) on an unconditional sale of real property pursuant to a regular foreclosure acquires a clear and absolute title as against all parties to the suit and their privies which relates back to the date of the mortgage so as to cut off all intervening rights and equities.

Wells Fargo Bank, N.A. v Ahr, 46 Misc 3d 1201(A) (Sup Ct 2014).

It is found that, “[a]ll parties to the foreclosure sale are estopped from disputing the title acquired by the purchaser on the sale. Such a title so acquired is beyond attack directly or collaterally.” Id. “Thereby every interest of the owner has been divested, and his estate has been completely cut off with no outstanding right to redeem. All rights of subsequent mortgagees have been finally and conclusively cut off and a new estate in the new owner has been created.” Id.

Further, “[a]s to those whose interests in the property are cut off by the foreclosure, such a purchaser has no further obligation or duty after the actual delivery of the referee’s deed.” Id.  “He may do with the property as he sees fit. He may convey it back to the original owner without thereby revesting liens which were cut off by the sale and conveyance in the foreclosure proceedings.” Id.

However, “[i]f the foreclosure and sale were tainted with fraud as between the parties, the rule might be different, but, even then, account must be taken of intervening equities; as to any subsequent bona fide purchaser the title still would not be subject to attack.” Id. (emphasis added).

In present case, on May 3, 2013, in a public auction Eldridge Properties, Inc. (hereinafter “Eldridge”) bought Skarla’s premises for consideration of $1, 725,000.00. For which, the Referee issued a report (“Referee’s Report”) confirming the sale of the Premises to Eldridge, on May 24, 2013. Later, on June 5, 2013, Eldridge sold the Astoria Premises to NPSFT LLC for $1,250,000.00 and the Whitestone Premises to NPSFT1 LLC for $600,000.00.

Here, it is appears that both NPSFT LLC and NPSFT1 LLC are the subsequent bona fide purchasers of the premises bought by Eldrigde. Relying on the Wells Fargo Bank, N.A. case, even if the first foreclosure sale to Eldridge was tainted with fraud, it would likely not affect the title of the subsequent bona fide purchasers, NPSFT LLC and NPSFT1 LLC.

Therefore, it seems that the deeds issued to the bona fide purchasers after the foreclosure are valid, even if the foreclosure has been vacated for mistake.

  1. Possible causes of action related to the accusations of conspiracy?

The possible causes of action related to the accusations of conspiracy in New York are: legal malpractice, breach of fiduciary duty or fraud.

  1. Legal malpractice

Under New York law, in order to sustain a claim for legal malpractice, a plaintiff must establish both that “the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff and that the plaintiff would have succeeded on the merits of the underlying action “but for” the attorney’s negligence ” AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434 (2007) (citing Davis v. Klein, 88 N.Y.2d 1008, 1009–1010, 648 N.Y.S.2d 871, 671 N.E.2d 1268 (1996) (internal citations omitted).

Further, it is found that, “[e]ven where a plaintiff establishes that his or her attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by members of the legal profession, the plaintiff must still demonstrate causation.” Dawson v Schoenberg, 129 AD3d 656, 657-58 (2d Dept 2015) (citing Di Giacomo v. Michael S. Langella, P.C., 119 A.D.3d 636, 638, 990 N.Y.S.2d 221 (2d Dept. 2014)). “‘To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence'” Id. (quoting Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442, 835 N.Y.S.2d 534, 867 N.E.2d 385 (2007)).

Here, Skarla alleged that Golfinopoulos had been unresponsive to many motions, legal requests, and inquiries from opposing counsel in the Foreclosure Action caused her damages. However, it appears that Skarla had a substantial financial obligation, as she promised the U.S. Department of Justice to provide for a foreign student named Eirini Aindili, when she obtained mortgage from to Paragon Federal Credit Union (“Paragon”) for· $900,000.00. This fact was unknown or undisclosed to Golfinopoulos.

As a result Skarla defaulted on the Paragon mortgage loan on December 1, 2004, just two months after Skarla purchased the Premises. Skarla continued to collect rent for the use of the Astoria Premises, $10,300.00 per month. Meanwhile, unaware of Skarla’s financial obligations, Golfinopoulos negotiated a number of loan extensions for Skarla including on February 7, 2006, and then again on January 9, 2007. However, Skarla again failed to disclose her obligation for the foreign exchange student Eirini Aindili to Paragon and Golfinopoulos. Additionally, Skarla had another fanatical obligation to pay a mortgage on a home in Greece, which was also not disclosed to Golfinopoulos.

These facts probably shows that Skaral would have lost her Premises anyway because she was already under the burden of two substantial financial obligations. From the facts, it appears that, Skarla failed to demonstrate causation that she would have prevailed in the Foreclosure action or would not have caused damages. Therefore, a claim under legal malpractice will likely not prevail against Golfinopoulos.

  1. Breach of fiduciary duty

“Under New York law, the elements of breach of fiduciary duty are: ‘the existence of a fiduciary relationship [between plaintiff and defendant], misconduct by the defendant, and damages that were directly caused by the defendant’s misconduct.'” Beeck v Costa, 39 Misc 3d 347, 360 (Sup Ct 2013) (quoting Kurtzman v. Bergstol, 40 A.D.3d 588, 590, 835 N.Y.S.2d 644 (2d Dept.2007)). Further, “[t]o establish a fiduciary relationship, plaintiff must show that the defendant was ‘under a duty to act for or to give advice for the benefit’ of the plaintiff ‘upon matters within the scope of the relation.'” Id. (quoting EBC I, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11, 19, 799 N.Y.S.2d 170, 832 N.E.2d 26 (2005)).

Further, “[a]s to the claim for breach of fiduciary duty, [the courts] have consistently held that such a claim, premised on the same facts and seeking the identical relief sought in the legal malpractice cause of action, is redundant and should be dismissed.” Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 A.D.3d 267, 271 (1st Dept. 2004) (emphasis added) (citing Estate of Nevelson v. Carro, Spanbock, Kaster & Cuiffo, 290 A.D.2d 399, 400, 736 N.Y.S.2d 668 (1st Dept 2002)).

Moreover, in New York, “[the courts] have never differentiated between the standard of causation requested for a claim of legal malpractice and one for breach of fiduciary duty in the context of attorney liability. The claims are co-extensive.” Id. Further,

Under New York law, to establish the elements of proximate cause and actual damages, where the injury is the value of the claim lost, the client must meet the “case within a case” requirement, demonstrating that “but for” the attorney’s conduct the client would have prevailed in the underlying matter or would not have sustained any ascertainable damages.

Id. at 272 (citing Reibman v. Senie, 302 A.D.2d 290, 756 N.Y.S.2d 164 (1st Dept. 2003)).

Here, Skarla failed to plead breach of fiduciary duty with particularity. Moreover, it seems that it would be difficult for Skarla to show misconduct by Golfinopoulos that directly caused her damages. Further, it appears that Skrala defaulted many mortgage payments, which would likely cause Skarla loss her Premises. Therefore, it would be difficult for Skarla to prove that she would have prevailed in the underlying foreclosure action, but for Golfinopoulo’s misconduct she sustained damages.  Therefore, a claim under breach of fiduciary duty will likely not prevail against Golfinopoulos.

  1. Fraud

In New York, “[t]he elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages.” Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559 (2009) (citing Ross v Louise Wise Servs., Inc., 8 NY3d 478, 488 (2007)). Further, “[a] claim rooted in fraud must be pleaded with the requisite particularity under CPLR 3016 (b).” Id. “CPLR 3016 (subd. [b]) requires that the circumstances constituting the alleged fraud be stated in detail . . . Bare allegations of fraud, which merely list the material elements of fraud without any supporting detail, are insufficient to satisfy the pleading requirements of CPLR 3016 (subd. [b]).” Gorman v Gorman, 88 A.D.2d 677, 678 (3d Dept. 19820 (citing Langford v. Cameron, 73 A.D.2d 1001, 1003, 424 N.Y.S.2d 41 (3d Dept. 1980)). Furthermore,

The plaintiff must allege factual allegations indicating that the defendant made a representation concerning a material fact which was false and known by the defendant to be false at the time it was made and that the defendant made the representation for the purpose of inducing the plaintiff to rely upon it

Wilson v Neighborhood Restore Hous., 129 A.D.3d 948, 949-50 (2d Dept. 2015) (citing Brualdi v. IBERIA, Lineas Aereas de España, S.A., 79 A.D.3d 959, 913 N.Y.S.2d 753 (2d Dept. 2010)).

However, “[i]n certain circumstances . . . it may be ‘almost impossible to state in detail the circumstances constituting a fraud where those circumstances are peculiarly within the knowledge of [an adverse] party'” JP Morgan Chase Bank, N.A. v. Hall, 122 A.D.3d 576, 579-80, 996 N.Y.S.2d 309, 314 (2d Dept. 2014) (quoting Jered Contr. Corp. v. New York City Tr. Auth., 22 N.Y.2d 187, 194, 292 N.Y.S.2d 98, 239 N.E.2d 197 (1968)). “‘Under such circumstances, the heightened pleading requirements of CPLR 3016(b) may be met when the material facts alleged in the complaint, in light of the surrounding circumstances, ‘are sufficient to permit a reasonable inference of the alleged conduct’ including the adverse party’s knowledge of, or participation in, the fraudulent scheme.'” Id. (quoting High Tides, LLC v. DeMichele, 88 A.D.3d 954, 957, 931 N.Y.S.2d 377 (2d Dept 2011)).

Moreover, “[a] fraud claim asserted within the context of a legal malpractice claim ‘is sustainable only to the extent that it is premised upon one or more affirmative, intentional misrepresentations—that is, something more egregious than mere ‘concealment or failure to disclose [one’s] own malpractice'” Kaiser v Van Houten, 12 AD3d 1012, 1014 (3d Dept 2004) (quoting White of Lake George v. Bell, 251 A.D.2d 777, 778, 674 N.Y.S.2d 162 (1998)). “In addition to establishing each element of fraud, plaintiff has the burden of proving that the alleged fraud ’caused additional damages, separate and distinct from those generated by the alleged malpractice.'” Id. (quoting White of Lake George, 251 A.D.2d at 778).

Skarla has failed to plead fraud with particularity and her claims are not supported with factual allegations containing the details constituting the wrong as required under CPLR 3016(b).

Here, Skarla simply alleges that Golfinopoulos, in order to defraud Skarla and take the Premises from her, planned a scheme enabling Eldridge, NPSFT LLC and NPSFT1 LLC to purchase Skarla’s premises at a discounted value as a result of foreclosure on the premises under the mortgage. Though Skarla alleges that Golfinopoulos’ scheme was jointly and knowingly executed by himself and aiding and abetting defendants Eldridge; NPSFT; NPSFT 1.

Further, Skarla alleges that Golfinopoulos masked and hid his tactics and strategies by manipulating and abusing his relationships with other attorneys. She further claims that in 2011, Golfinopoulos to sustain her Note Obligations advised her to leave her new home, the Residential Premises, and rent the Residential Premises out to tenants recommended by Golfinopoulos.

Again, failure to serve Skarla or Skrala’s new counsel with a notice of sale is a mistake on behalf the Referee Office/ the principal insterst holder of the Mortgage. This mistake does not likely give rise to a reasonable inference that it was Golfinopoulos’s scheme to procure ownership of Skrala’s property at a discounted price.

Further, Skarla bases her accusation of fraud on Visions Federal Credit Union (“Vision”) for aiding and abetting Golfinopoulos in his scheme. The presence of Golfinopoulos’ email address and cash payment for the publication of the notice of sale in person, does not give rise to a reasonable inference that Golfinopoulos abused his status as an attorney to mask his tactics behind the name of Ms. Skeete, Visions’ attorney.

Additionally, Referee’s mistake of selling both Permises as one parcel, does not give rise to a reasonable inference that Golfinopoulos conspired with Referee with an intention to defraud Skarla. Furthermore, Skarla bases her accusation of fraud on Eldridge’s failure to amend a caption to show Eldridge’s interest. This mistake on behalf of Eldridge does not likely give rise to a reasonable inference that Golfinopoulos made a misrepresentation of fact in order to gain from the misrepresentation. Moreover, Stephen Louros, Esq. representing Eldridge, does not give rise to a reasonable inference that Golfinopoulos represented Eldridge, though Stephen Louros has acted as of Counsel to Golfinopoulos in some Foreclosure Action.

Further, Golfinopoulos as a per diem attorney to represent NPSFT in a the Foreclosure Action on December 10, 2013, also, does not give rise to a reasonable inference against Golfinopoulos fraud.

Skarla failed to detail the circumstances in her compliant to show a reasonable inference of the alleged conduct by Golfinopoulos. This likely causes Skarla’s failure to comply with the heightened pleading requirements of CPLR 3016(b). Instead, it appears that Golfinopoulos did his best efforts on behalf of Skarla. It is evident that Golfinopoulos acted diligently and was able to obtain multiple loan extension agreements and prevent foreclosure for more than five years.

Therefore, a claim under fraud will likely not prevail against Golfinopoulos.

  1. Possible causes of action related to the unethical behavior in pursuing illegal discovery?

Generally, “CPLR 3126 authorizes a court to fashion an appropriate remedy when a party refuses to obey an order of disclosure or willfully fails to disclose information.” Cavanaugh v Russell Sage Coll., 4 AD3d 660 (3d Dept 2004). However, “[t]he nature and degree of the penalty to be imposed pursuant to CPLR 3126 against a party who ‘refuses to obey an order for disclosure or wilfully fails to disclose information which the court finds ought to have been disclosed’ is a matter within the discretion of the court.” DeJulio v Wulf, 260 A.D.2d 425, 425 (2d Dept. 1999) (quoting Kubacka v. Town of N. Hempstead, 240 A.D.2d 374, 657 N.Y.S.2d 770 (2d Dept 1997)).

According to CPLR 3126, which deals with penalties for refusal to comply with order or to disclose, if any party, or a person who at the time a deposition, refuses to obey an order for disclosure or wilfully fails to disclose information which the court finds ought to have been disclosed pursuant to this article, the court may make:

  1. an order that the issues to which the information is relevant shall be deemed resolved for purposes of the action in accordance with the claims of the party obtaining the order; or
  2. an order prohibiting the disobedient party from supporting or opposing designated claims or defenses, from producing in evidence designated things or items of testimony, or from introducing any evidence of the physical, mental or blood condition sought to be determined, or from using certain witnesses; or
  1. an order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or any part thereof, or rendering a judgment by default against the disobedient party.

CPLR 3126.

It is found that where, an objectant has “consistently and wilfully failed to make disclosure. The court is expressly empowered in these circumstances to resolve the issues against the objectant (CPLR 3126(1)) or to preclude him from adducing any evidence in regard to all of the issues as to which he has failed to make disclosure (CPLR 3126(2)).” In re Porter’s Estate, 64 Misc 2d 1016, 1017 (Sur Ct 1970). Ultimately, “[t]he determination whether to strike a pleading lies within the sound discretion of the trial court CPLR 3126(3).” Holand v Cascino, 122 A.D.3d 575, 575-76 (2d Dept. 2014) (citing JPMorgan Chase Bank, N.A. v. New York State Dept. of Motor Vehs., 119 A.D.3d 903, 903–904, 990 N.Y.S.2d 577 (2d Dept. 2014)).

“However, the drastic remedy of striking a pleading is not appropriate absent a clear showing that the failure to comply with discovery demands was willful or contumacious.” Id. (citing JPMorgan Chase Bank, N.A., 119 A.D.3d at 903).

In the present case, if it is assumed that there was discovery misconduct, then the court is empowered under CPLR 3126 to impose penalties by an order to resolve the issues against the objectant as per CPLR 3126(1); or to preclude him/her from adducing any evidence in regard to all of the issues as to which he/she has failed to make disclosure as per CPLR 3126(2); or an order striking out pleadings, or rendering a judgment by default against the disobedient party as per CPLR 3126(3). However, it appears that the extreme sanction of striking a pleading is inappropriate absent a clear showing that the failure to comply with discovery demands was willful and contumacious.

Therefore, it seems that, here, only if it is shown that the failure to comply with the court-ordered-disclosure is “willful and contumacious”, the extreme sanction of striking a pleading under CPLR 3126(3) is appropriate. Otherwise, a lesser penalty may be imposed under CPLR 3126.

  1. Whether equitable subrogation applies here?

Generally, “New York courts have applied the doctrine of equitable subrogation in the context of a mortgage foreclosure to prevent unknown, intervening mortgage holders from obtaining a windfall at the expense of a subsequent mortgagor that did not have notice of the earlier mortgage.” Green Tree Credit LLC v Hopkins, 9 Misc 3d 1122(A) (Sup Ct 2005) (citing Wagner v. Maenza, 223 A.D.2d 640, 636 N.Y.S.2d 857 (2nd Dept.1997) (applying equitable subrogation where a mortgage was recorded after the closing of a subsequent mortgage but before subsequent mortgage was recorded)).

It is found that, “[t]he doctrine of equitable subrogation applies “where the funds of a mortgagee are used to satisfy the lien of an existing, known incumbrance when, unbeknown to the mortgagee, another lien on the property exists which is senior to his but junior to the one satisfied with his funds.” Wagner v Maenza, 223 A.D.2d 640, 641 (2d Dept. 1996).

Pursuant to the doctrine of equitable subrogation, “ ‘[w]here property of one person is used in discharging an obligation owed by another or a lien upon the property of another, under such circumstances that the other would be unjustly enriched by the retention of the benefit thus conferred, the former is entitled to be subrogated to the position of the obligee or lienholder’ ”

*          *          *

However, equitable subrogation is unavailable if payments are made voluntarily. (see, Cohn v. Rothman–Goodman Mgt. Corp., supra; In re Wingspread Corp., 116 B.R. 915, 928; Restatement, Restitution, § 162, comment b; 23 N.Y. Jur. 2d, Contribution, Indemnity and Subrogation, §§ 31, 32).

Bermuda Trust Co. Ltd. v Ameropan Oil Corp., 266 A.D.2d 251, 251 (2d Dept. 1999).

Furthermore,

The doctrine of equitable subrogation has also not been applied in favor of third parties who purchased property that was subject to a judgment creditor’s lien where there were facts which should have led the third parties and their title insurance company to conduct further inquiry regarding an alleged fraudulent conveyance of the property . . . .

Rosamilia v Lynch, 21 Misc 3d 1124(A) (Sup Ct 2008) (citingRoth v Porush, 281 A.D.2d 612 (2d Dept. 2001)).

In the present case, it appears that Skarla failed to plead fraud with requisite particularity. Therefore, her fraud claim against Golfinopoulos would likely fail. Hence, equitable subrogation applies to this situation.

  1. Whether a cause of action for fraud can be brought by Golfinopolous against Skarla?

In New York, “[t]o demonstrate fraud, a plaintiff must show, inter alia, that a defendant’s misrepresentations were the direct and proximate cause of the claimed losses.” MBIA Ins. Corp. v Countrywide Home Loans, Inc., 87 AD3d 287, 295 (1st Dept 2011) (citing Laub v. Faessel, 297 A.D.2d 28, 30, 745 N.Y.S.2d 534 (2002)). Further, “[a] fraudulent misrepresentation is a legal cause of a pecuniary loss resulting from action or inaction in reliance upon it if, but only if, the loss might reasonably be expected to result from the reliance'” Id. (quoting Stutman v. Chemical Bank, 95 N.Y.2d 24, 30, 709 N.Y.S.2d 892, 731 N.E.2d 608 (2000)).

In the present case, the relationship and transactions between Skarla and Evangelos Gerasimou will not form the basis of a fraud claim which could be brought by Golfinopoulos because here, Golfinopoulos neither relied on a false representation nor did he suffer any damages by the fraud. The actions between Skarla and Gerasimou would only harm a person who had some interest in the property, and Golfinopoulos lacked such an interest. Therefore, Golfinopoulos cannot claim fraud against Skarla.

CONCLUSIONS

From the foregoing it appears that:

  1. It appears that both NPSFT LLC and NPSFT1 LLC are the subsequent bona fide purchasers of the premises bought by Eldrigde in the public auction. It seems that, even if the first foreclosure sale to Eldridge was tainted with fraud, it would likely not affect the title of the subsequent bona fide purchasers, NPSFT LLC and NPSFT1 LLC. Therefore, even if there was fraud in the deeds issued to the bona fide purchasers after a valid foreclosure, the subsequent bona fide purchasers has a valid title over the Permises.
  2. The possible cause of action related to the accusations of conspiracy are: legal malpractice, breach of fiduciary duty or fraud.
  3. Legal malpractice: A claim under legal malpractice would likely not prevail against Golfinopolous because it appears form the facts that Skaral would have lost her Premises anyway because she was already under the burden of two substantial financial obligations. Moreover, Skarla failed to demonstrate causation that she would have prevailed in the Foreclosure action or would not have caused damages.
  4. Breach of fiduciary duty: A claim under breach of fiduciary duty would likely not prevail against Golfinopolous because Skarla failed to show that Golfinopoulos’s misconduct directly caused her damages. Moreover, it appears that Skarla failed to prove that she would have prevailed in the underlying foreclosure action, but for Golfinopoulo’s misconduct she sustained damages.
  5. Fraud: A claim under fraud would likely not prevail against Golfinopolous because Skarla failed to comply with the heightened pleading requirements of CPLR 3016(b). It appears form her compliant that Skarla failed to detail the circumstances showing a reasonable inference of the fradulent conduct by Golfinopoulos.
  6. The possible causes of action related to the unethical behavior in pursuing illegal discovery is penalties for refusal to comply with order or to disclose under CPLR 3126, which includes: an order resolving the issues against the objectant under CPLR 3126(1); an order to preclude him from adducing any evidence in regard to all of the issues as to which he has failed to make disclosure under CPLR 3126(2); and the extreme penalty by an order striking out pleadings, or staying further proceedings, or dismissing the action or any part thereof, or rendering a judgment by default against the disobedient party under CPLR 3126(3).

However, it appears that the extreme sanction of striking a pleading under CPLR 3126(3) is granted only if there is a willful and contumacious conduct on the aprt of the objectant.

  1. It appears that equitable subrogation applies here, because, NPSFT LLC and NPSFT1 LLC as a bona fide purchasers that took over the mortgage after a foreclosure; this probably would give them a right to equitable subrogation.
  2. It appears that Golfinopolous may not claim fraud against Skarla because, from the facts it appears that Golfinopoulos neither relied on a false representation nor did he suffer any damages by the fraud from the transactions between Skarla and Evangelos Gerasimou.