Justice David Schmidt
Defendants moved for leave to serve an amended answer to assert affirmative defenses and counterclaims of equitable subrogation and unjust enrichment. Sudit filed this action to foreclose an alleged “equitable mortgage,” which encumbered various parcels of property based on alleged breaches of settlement agreements and moved for summary judgment. The motion was referred to a Judicial Hearing Officer (JHO) by the court to hear and report. The JHO granted Sudit’s motion finding he possessed an equitable mortgage against the properties. The court found a problem with confirming the JHO’s report here, noting that despite the language in the referral order to hear and report, the JHO did not conduct a hearing, but made a determination based on review of the papers submitted by the parties on the summary judgment motion. Yet, it stated taking the parties’ submissions for confirmation or rejection of the JHO’s report into consideration, Sudit was entitled to summary judgment. The court found the arguments raised by defendants in opposition were insufficient to raise an issue of fact, yet it granted defendants’ leave to amend their answer to set forth affirmative defenses as money utilized in purchasing units were used to help pay off a mortgage senior to Sudit’s equitable lien.
