Supreme Court, Appellate Division, Second Department, New York.
Francis ALEXIS, et al., Plaintiffs-Respondents,v.CITY OF NEW YORK, Defendant-Respondent,Security Title and Guaranty Company, et al., Appellants.
Jan. 30, 1995.
Property owners sought declaratory judgment that they were not indebted to city for management fees relating to certain real property or that title and guaranty company and land search company was liable to indemnify property owners for those management fees. The Supreme Court, Kings County, Jackson, J., entered summary judgment in favor of property owners' cross-motion against title companies and entered summary judgment in favor of city dismissing complaint insofar as it asserted claim against city. Title companies appealed. The Supreme Court, Appellate Division, held that: (1) city was authorized to create lien on property for management fees which accrued subsequent to those paid in order to obtain release of city's interest in property acquired by in rem tax foreclosure, and (2) title companies were liable to indemnify property owners for tax lien imposed by city for management fees.
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City was authorized to create lien on property for all taxes, deficiencies, management fees, and liens which accrued subsequent to those paid in order to obtain release of city's interest in property acquired by in rem tax foreclosure, or which were omitted from payment made to obtain release. New York City Administrative Code, § 11-424, subd. e.
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City's continuing possession of title to property was defect in title which existed when title insurance policy was written and, therefore, title insurer was required to indemnify tax sale purchasers pursuant to terms of policy, even though policy did not cover defects arising after date of policy and city placed lien on property for management fees after date of policy. **106 Kirschenbaum & Kirschenbaum, P.C., Garden City (Samuel Kirschenbaum, Robert G. Bauer, and Ira Levine, of counsel), for appellants.
Cuthbert J. Barry, Brooklyn, for plaintiffs-respondents.
Paul A. Crotty, Corp. Counsel, New York City (Pamela Seider Dolgow, Gary F. Marton, and John Hogrogian, of counsel), for defendant- respondent.
Before O'BRIEN, J.P., and HART, GOLDSTEIN and FLORIO, JJ.
MEMORANDUM BY THE COURT.
In an action, inter alia, for a judgment declaring that the plaintiffs are not indebted to the defendant City of New York for management fees relating to certain real property **107 or, that the defendants Security Title and Guaranty Company and Winters Land Search Corp. are liable to indemnify the plaintiffs for those management fees, the defendants Security Title and Guaranty Company and Winters Land Search Corp. appeal from an order of the Supreme Court, Kings County (Jackson, J.), dated January 28, 1993, which (1) denied their motion for summary judgment dismissing the complaint insofar as it is asserted against them, (2) granted that branch of the plaintiffs' cross motion which was for summary judgment against them, and (3) granted the cross motion of the defendant City of New York for summary judgment dismissing the complaint insofar as it is asserted against it.
ORDERED that the order is affirmed, with costs.
 The appellants claim, inter alia, that the City of New York (hereinafter the City) had no authority to impose a tax lien for management fees it was owed on property located at 974 St. Marks Avenue in Brooklyn. We disagree. The City was authorized under the Administrative Code of the City of New York § 11-424(e) to create a lien on the subject property for all taxes, deficiencies, management fees, and liens which accrued subsequent to those paid in order to obtain the release of the City's interest in the property acquired by in rem tax foreclosure, or which were, for whatever reason, omitted from the payment made to obtain the release (see, Administrative Code § 11-424[e] ).
 We also find no merit to the appellants' contention that they are not liable to indemnify the plaintiffs because the title insurance policy they issued to the plaintiffs did not cover "defects and incumbrances arising or becoming a lien after the date of this policy" (emphasis added). While it is true that the City placed the lien on the property after the date of the policy, it is also true that the City, in fact, possessed title to the property when the policy was issued. The fact that the City still owned the property was a defect in the title which existed when the policy was written and, therefore, the appellants are required to indemnify the plaintiffs pursuant to the terms of the title insurance policy (cf., Inavest Enters. v. TRW Tit. Ins. of N.Y., 189 A.D.2d 111, 595 N.Y.S.2d 837).
*740 The City's contention with respect to the Statute of Limitations need not be addressed. The parties' remaining contentions are without merit.
622 N.Y.S.2d 106, 211 A.D.2d 738
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