Opinion
7576/09.
Decided March 30, 2011.
Peter S. Delman, P.C., Brooklyn, New York, Counsel for 1st party plaintiff Kevin Prince.
Andrew J. Spinnell, Law Offices of Andrew J. Spinnell, LLC, New York, New York, Counsel for Defendants/Third Party Plaintiffs ALLAN BROWN and SANDRA BROWN.
David Kravitz, Esq., Brooklyn, New York, Counsel for Third Party Defendants JOHN TURIS, JOHN TURIS ENTERPRISES, INC. a/k/a JOHN TURIS ENTERPRISES, KINGSVIEW REALTY, INC. a/k/a KINGS VIEW REALTY.
Mark H. Stofsky, Esq., Brooklyn, New York, Counsel for Third Party Defendants SUSAN MITTMAN REAL ESTATE, INC., SUSAN TURIS INSURANCE AND CAMELLA BASSUE.
Michael A. Cardozo, Esq., Corporation Counsel, City of New York, New York, New York, Counsel for Third Party Defendant CITY OF NEW YORK.
By notice of motion under motion sequence number one, third-party defendants Camella Bassue, Susan Mittman Real Estate, Inc., and Susan Turis Insurance, Inc. (collectively, the "Mittman Movants") move for an order pursuant to CPLR 3211 (a) (1), (3) and (7) dismissing the amended verified third-party complaint as against them.
By notice of motion under motion sequence number two, third-party defendants John Turis, John Turis Enterprises, Inc., Kingsview Realty, Inc. (collectively, the "Turis Movants") also move for an order pursuant to CPLR 3211 (a)(1), (3) and (7) dismissing the amended verified third-party complaint as against them. The court will hereafter refer to the amended verified third-party complaint as the complaint because the first party complaint is not involved in the instant motions. Defendants-third-party plaintiffs Allan Brown and Sandra Brown (the Browns) oppose both motions. Kevin Prince (Prince), the first party plaintiff, had no position on motions.
BACKGROUND
On March 27, 2009, Prince commenced the instant first-party action for damages due to personal injuries by filing a summons and verified complaint with the Kings County Clerk's office. Prince's complaint alleges that on December 31, 2008, he tripped and fell due to a dangerous condition on or near a sidewalk adjacent to the premises known as 9525 Avenue M, Brooklyn, County of Kings, City of New York (the subject premise). He further alleges that the Browns owned, maintained, or managed the subject premises, that he was their tenant and that they were negligent in allowing the unsafe condition to exist. Prince also claims that the Browns caused his injury.
On December 22, 2009, the Browns commenced the instant third-party action against John Turis, John Turis Enterprises, Inc., Susan Mittman Real Estate, Inc., Camella Bassue and the City of New York. As relevant to the instant applications, the complaint states that the third-party defendants (excluding the City of New York) are insurance brokers or their agents and that they procured a homeowners' liability insurance policy, that was meant to cover potential personal injury losses that occur on the subject premises. The complaint further states that John Turis Enterprises, Inc. and Camella Bassue, its agent, obtained a policy from Tower Insurance Company of New York that provided for the sought insurance coverage.
The complaint states that the Browns forwarded the first-party summons and verified complaint to Tower after they were served with process. Thereafter Tower disclaimed coverage asserting that the application for the subject policy incorrectly identified the premises as an owner-occupied two-family house. The Browns then commenced the instant third-party action.
Two of the four causes of action asserted in the verified third-party complaint are relevant to the instant applications. First, the Browns assert that John Turis, John Turis Enterprises, Inc., Susan Mittman Real Estate, Inc. and Camella Bassue are liable for negligence. Specifically, they claim that they informed Camella Bassue that they were applying for a homeowners' liability insurance policy to cover personal injuries sustained on the subject premises. The Browns informed Camella Bassue that the subject premises were a three-unit residential building in which they would not reside. Camella Bassue (and the third-party defendant brokers) allegedly obtained a policy limited to coverage for an owner-occupied two-family house. The Browns contend that Camella Bassue and her principals' failure to obtain the correct insurance policy constitutes negligence. The Browns conclude that, because of this negligence, they are entitled to common-law indemnity from the Turis Movants if they are found personally liable to Prince in the first-party action.
The second relevant cause of action in the third-party pleading is asserted against John Turis, John Turis Enterprises, Inc. and Susan Mittman Real Estate, Inc. The Browns allege that these parties owed them a fiduciary duty; specifically, to use correct information about the Browns and the subject premises to prepare an application for adequate insurance coverage. The Browns claimed that they failed to do so and that this breach caused them damages.
Discovery and motion practice ensued. At some point, the Browns moved for leave to both amend the caption and serve and file an amended verified third-party complaint. By order of this court dated July 9, 2010, their motion was granted, Kingsview Realty, Inc. and Susan Turis Insurance, Inc. were added as third-party defendants and the amended third-party complaint was deemed served on all third-party defendants.
The amended first cause of action alleges insurance broker negligence against third-party defendants John Turis, John Turis Enterprises, Inc., Susan Mittman Real Estate, Inc., Camella Bassue, Kingsview Realty, Inc. and Susan Turis Insurance, Inc. The amended second cause of action alleges breach of fiduciary duty against third-party defendants John Turis, John Turis Enterprises, Inc., Susan Mittman Real Estate, Inc., Kingsview Realty, Inc. and Susan Turis Insurance, Inc. The various third-party defendants now move to dismiss the amended verified third-party complaint.
MOTION PAPERS
The Mittman movants motion papers consists of the affidavits of Camella Bassue and Susan Turis, their attorney's affirmation and ten annexed exhibits labeled A through J. Exhibit A is a copy of the mortgage loan application for the subject premise. Exhibit B is a smoke detector affidavit for the subject premise. Exhibit C is a copy of the certificate of occupancy for the subject premise included in a title search report. Exhibit D is a copy of the deed of the subject premise. Exhibit E is a copy of the mortgage of the subject premise. Exhibit F is a a copy of the recording and endorsement page for the subject premise. Exhibit G is a copy of the insurance renewal certificate for the subject premise. Exhibit H is a copy of the amended complaint dated December 31, 2008. Exhibit I is a copy of a credit report. Exhibit J is a a copy of the satisfaction of mortgage.
The Turis movants motion papers consists of the affidavit of John Turis, their attorney's affirmation and eight exhibits labeled A through H. Exhibit A is defendant third-party plaintiffs' verified complaint signed on December 18, 2009. Exhibit B is a copy of the mortgage loan application for the subject premise. Exhibit B purports to be a certificate of occupancy for the subject premise. Exhibit C purports to be a recording and endorsement page, a deed and other papers pertaining to the subject premise. Exhibit D is a copy of the residential loan application to purchase the subject premise. Exhibit E is a copy of the mortgage for the subject premise. Exhibit F is a copy of the recording and endorsement page for the subject premise. Exhibit G is a borrowers certification authorization. Exhibit H is a copy of a mortgage application.
Defendants-third party plaintiffs' opposition papers consists of their respective affidavits, and their attorney's affirmation. The affirmation of counsel references five exhibits labeled A through E. Exhibit A is defendants-third party plaintiffs' summons and verified complaint. Exhibit B is a copy of a letter signed by Turis on Kingsview's letterhead. Exhibit C purports to be documents from Kingsview's internet page. Exhibit D is an internet photograph. Exhibit E is a New York State Department of State, Division of Corporations' web page result for John Turis Enterprises, Inc.
LAW AND APPLICATION
The Turis Movants
In support of their motion to dismiss the amended verified third-party complaint, the Turis Movants first claim that the complaint inaccurately asserts that they are mortgage and/or insurance brokers. The Turis Movants state that they are not in the business of obtaining mortgages, loans or insurance on behalf of applicants, and that they provided no such service to the Browns. The Turis Movants claim that John Turis and John Turis Enterprises are a tax preparation organization, and that Kings View Realty is a real estate broker. The Turis Movants further claim that on this ground alone, they do not owe the duties asserted in the complaint and the complaint should be dismissed against them. The Turis Movants also assert that the subject application for insurance was accurate when written. The Turis Movants note that the subject certificate of occupancy and deed indicate that the subject premises are a two-family dwelling. Moreover, the loan and mortgage documents executed in connection with the purchase of the subject premises indicate that defendant Allan Brown intended to reside in one of the two residential units of the subject premises. Therefore, the Turis Movants claim that there was no negligent act or omission made in connection with the application for a liability insurance policy covering the subject premises. For all these reasons, the Turis Movants conclude that the amended verified third-party complaint must be dismissed.
A copy of which is attached as Exhibit B to the notice of motion of the Turis Movants.
A copy of which is attached as Exhibit C to the notice of motion of the Turis Movants.
A copy of which is attached as Exhibit D to the notice of motion of the Turis Movants.
A copy of which is attached as Exhibit E to the notice of motion of the Turis Movants.
The Mittman Movants
In support of their motion to dismiss the complaint, the Mittman Movants assert that documentary evidence in this action conclusively demonstrates that they made no error on the application for the liability insurance policy covering the subject premises. Specifically, the Mittman Movants maintain that the subject deed, loan and mortgage applications, as well as all other documents relating to the purchase of the subject premises, indicate that the building is a two-family house, and one in which defendant Allan Brown would reside. Since the subject application for a liability insurance policy covering the subject premises indicates the same, the Mittman Movants conclude that there was neither a negligent act or omission nor a breach of fiduciary duty to the Browns.
Also, the Mittman Movants claim that only defendant Allan Brown applied for a loan and mortgage in connection with the purchase of the subject property. The Mittman Movants indicate that Allan Brown transferred ownership of the subject premises to himself and his wife, defendant Sandra Brown, well after closing of title. The Mittman Movants conclude that they thus did not owe defendant Sandra Brown either a fiduciary duty or a duty of care; therefore, defendant Sandra Brown lacks standing and capacity to sue in this action.
Lastly, the Mittman Movants assert that the Browns' claim that they breached a fiduciary duty to them is based on conclusory allegations of fact and lacks merit. The Mittman Movants further claim that the subject transaction was conducted at arm's length and that no fiduciary duty was owed to the Browns. The Mittman Movants also contend that even if a fiduciary duty was owed to the Browns, the copies of the closing documents for the subject premise demonstrate conclusively that there was no breach of that duty.
The Browns' Opposition
In opposition to the instant motions to dismiss, the Browns note that the instant applications are pre-answer motions to dismiss and as such, no discovery has been conducted. The Browns also claim that they engaged the services of the third-party defendants and their agents to finance and purchase the subject premises and argue that discovery is necessary to ascertain the relationships among the various third-party defendants.
The Browns further claim that third-party defendants and their agents were informed during relevant times that the subject premises were intended as investment (and therefore, not owner-occupied) property. Allan Brown avers that it was only after the closing of title that he learned that the basement had been illegally converted to a residential unit.
Lastly, Allan Brown states that only the third-party defendants and their agents played a role in preparing the application for a liability insurance policy and the mortgage loan covering the subject premises. The Browns contend that any inaccuracies and inconsistencies contained in the liability insurance application was due to the negligence of the third party defendants. In sum, the Browns argue that third-party defendants either knew or should have known that the subject premises were to be used as a three-unit investment vehicle in which defendants would not reside and should have prepared an accurate application for homeowners' liability insurance with this information in mind.
DISCUSSION
CPLR 3211 (a)(1)"On a motion to dismiss based upon documentary evidence, dismissal is only warranted if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" ( Klein v Gutman , 12 AD3d 417 , 418 [2nd Dept., 2004]; CPLR 3211 [a] [1]; see also Saxony Ice Co., Div. of Springfield Ice Co., Inc. v Ultimate Energy Rest. Corp. , 27 AD3d 445 [2nd Dept., 2006]). A complaint containing factual claims that are flatly contradicted by documentary evidence should be dismissed ( Well v Rambam, 300 AD2d 580, 581 [2nd Dept., 2002]; Kenneth R. v Roman Catholic Diocese of Brooklyn, 229 AD2d 159, 162 [2nd Dept., 1997]).
However, in considering a motion to dismiss, the pleadings must be given their most favorable intendment ( Arrington v New York Times Co., 55 NY2d 433, 442), and allegations which are contrary to the documentary evidence must be accepted ( Scheller v Martabano, 177 AD2d 690 [2nd Dept., 1991]).
Here, the movants note that several documents (e.g. the subject deed, loan application, mortgage application, smoke detector compliance certificate?copies of which are attached as exhibits to their motions to dismiss) that were generated, executed and/or filed in connection with the closing of title to the subject premises indicate that the building was an owner-occupied, two-family residence. The movants conclude, that the closing documents indicate that the information contained on the subject application for premises liability insurance covering the residence was accurate.
No party, however, provides this court with a copy of the subject application for insurance coverage. Since the parties' contentions depend on the accuracy of the information contained therein, a copy of the subject application is essential to determine the instant applications. Accordingly, since the documentary evidence submitted by movants did not conclusively establish a defense to the asserted claims as a matter of law, this court cannot grant either application pursuant to CPLR 3211 (a)(1) ( Klein, 12 AD3d at 418-419, see also Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314; Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder Steiner, 96 NY2d 300; Leon v Martinez, 84 NY2d 83; Teitler v Pollack Sons, 288 AD2d 302).
Exhibit G to the notice of motion of the Mittman Movants is a copy of a renewal certificate issued by the subject carrier. However, the court notes that the information transmitted to the carrier in the subject application is germane to the instant applications.
The court notes that in determining a motion to dismiss pursuant to CPLR 3211 (a)(7), the court must determine, accepting as true the factual averments of the complaint and making all favorable inferences, whether any reasonable view of the pleaded facts support the causes of action ( Manfro v McGivney , 11 AD3d 662 , 663 [2nd Dept., 2004] [internal quotations omitted]). On a motion made pursuant to CPLR 3211(a)(7) to dismiss a complaint, the burden never shifts to the non-moving party to rebut a defense asserted by the moving party ( Sokol v. Leader , 74 AD3d 1180 [2nd Dept., 2010]). Unless the motion is converted into one for summary judgment pursuant to CPLR 3211[c] "affidavits may be received for a limited purpose only, serving normally to remedy defects in the complaint," and such affidavits "are not to be examined for the purpose of determining whether there is evidentiary support for the pleading" ( Sokol v. Leader, supra citing Rovello v Orofino Realty Co., 40 NY2d 633, 636-638). Thus, a plaintiff "will not be penalized because he has not made an evidentiary showing in support of his complaint" ( Id.; citing Rovello v Orofino Realty Co., 40 NY2d at 635).
A court is, of course, permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7) ( Id.). If the court considers evidentiary material, the criterion then becomes "whether the proponent of the pleading has a cause of action, not whether he has stated one" ( Id). Yet, affidavits submitted by a defendant "will almost never warrant dismissal under CPLR 3211 unless they establish conclusively that [the plaintiff] has no cause of action' "( Id). Indeed, a motion to dismiss pursuant to CPLR 3211 (a)(7) must be denied "unless it has been shown that a material fact as claimed by the pleader to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it" ( Id). Applying these principles to the instant applications, the court denies the motion of the Turis Movants. The Turis Movants note that the affidavit of third-party defendant John Turis states that he and the other Turis Movants are simply tax return preparers and real estate brokers; they are not mortgage or insurance brokers. Also, the court notes that the affidavit of third-party defendant Camella Basue (employee of third-party defendant Susan Mittman Real Estate, Inc.) states that Allan Brown "asked [Susan Mittman Real Estate, Inc.] if they could help him get a homeowners insurance policy". Moreover, the court notes that the affidavit of Susan Turis (the proprietor of third-party defendant Susan Turis Insurance, Inc.) states that "Susan Turis Insurance . . . accommodates clients of Susan Mittman Real Estate, Inc. who ask for homeowners insurance" and "after getting the information from the client about the house, we pass that information along to an insurance agent". Lastly, Susan Turis avers in her affidavit that these services were performed for defendant Allan Brown.
Affidavit of Camella Bassue in support of the notice of motion of the Mittman Movants, ¶ 14.
Affidavit of Susan Turis in support of the notice of motion of the Mittman Movants, ¶¶ 4, 5.
Id. at ¶¶ 6-10.
Defendants-third party plaintiffs were not required to dispute these alleged facts. Indeed, defendant-third party plaintiff Allan Brown states in his affidavit that "they are all sham entities operated by Mr. TURIS [ sic]". Defendants assert that they should be permitted to "pierce the corporate veil" and render third-party defendant John Turis subject to liability. The defendants-third party complaint and their respective affidavits adequately pleads causes of action against the Turis Movants.
Affidavit of defendant Allan Brown in opposition, ¶ 16.
The court declines to convert the motion to a summary judgment motion pursuant to CPLR 3211[c]. Although the affidavits of the Turis Movants allege that they were not involved in obtaining insurance coverage and never undertook to procure insurance coverage, this fact is disputed by the defendants-third party plaintiffs' complaint. The court finds that there are numerous issues of fact that cannot be not properly resolved in pre-answer motion to dismiss and the allegations of fact asserted in the defendants-third party complaint sets forth a cognizable claim against the Turis Movants.
The court denies the motion of the Mittman Movants. Since Susan Turis (on behalf of third-party defendant Susan Turis Insurance, Inc.) asserted that she assisted in procuring insurance coverage, and since the facts demonstrate that third-party defendants Camella Bassue and Susan Mittman Real Estate, Inc. are associates (and, therefore, subject to potential agency liability) of third-party defendant Susan Turis Insurance, Inc., defendants have adequately pleaded the elements of breach of duty of care and breach of fiduciary duty against these entities. Thus, the court rejects their motion insofar as it seeks dismissal pursuant to CPLR 3211 (a) (7).
In conclusion, the motion of the "Mittman Movants" for an order, pursuant to CPLR 3211 (a)(1), (3) and (7) dismissing the amended verified third-party complaint is denied. The "Mittman Movants" have thirty days to answer the complaint.
The motion of the "Turis Movants" for an order dismissing the amended verified third-party complaint as against them pursuant to CPLR 3211 (a)(1), (3) and (7) is denied. The "Turis Movants" have thirty days to answer the complaint.
The foregoing constitutes the decision and order of the court.