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Apple Bank For Sav. v. Prime Rok Real Estate, LLC

Supreme Court, New York County
Jan 12, 2024
2024 N.Y. Slip Op. 30171 (N.Y. Sup. Ct. 2024)

Opinion

Index No. 653140/2023 Motion Seq. No. 001

01-12-2024

APPLE BANK FOR SAVINGS, Plaintiff, v. PRIME ROK REAL ESTATE, LLC, 626 PELHAM OPERATING LLC, STERN TANNENBAUM & BELL LLP Defendant.


Unpublished Opinion

Motion Date 09/07/2023

PRESENT: HON. LYLE E. FRANK, Justice

DECISION + ORDER ON MOTION

HON. LYLE E. FRANK, JUSTICE

The following e-filed documents, listed by NYSCEF document number (Motion 001) 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41,42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74 were read on this motion to/for JUDGMENT - SUMMARY.

Background

On June 9, 2022, plaintiff Apple Bank For Savings ("plaintiff') and defendant Prime Rok Real Estate LLC ("defendant") entered into a Purchase and Sale Agreement for the sale of real estate located at 626-636 Pelham Parkway South, Bronx, New York. On April 26, 2023, plaintiff seller wrote to defendant buyer, stating that it was scheduling a "time is of the essence" closing date for May 30, 2023. In response, defendant sent a letter to plaintiffs attorney rejecting the closing date and on the basis that the closing letter was ineffective because it was unilaterally scheduled and further failed to include a specific time. On May 15, 2023, plaintiff sent another letter, again stating that the closing would occur on May 30, 2023. Defendant reiterated that it would not appear for the May 30, 2023, closing and as such did not appear on said date.

Plaintiff commenced this action seeking a declaratory judgment that it entitled to defendant's down payment as a result of defendant's breach of the purchase and sale agreement. Plaintiff alleges it was ready, willing and able to close on May 30, 2023, and was prepared to convey clear, insurable title to the subject property, and had prepared and tendered all documentation required pursuant to the Purchase and Sale Agreement. Plaintiff asserts because defendant did not appear and did not tender the balance of the purchase price, defendant failed to satisfy its obligations under the agreement and thus is in breach. Plaintiff now moves for summary judgment seeking release of defendant's down payment to plaintiff.

Defendant Prime Rok opposes plaintiff's summary judgment and cross moves for summary judgment that it is entitled to a return of its down payment. Defendant alleges that on the morning of the initial closing on May 30, 2023, the defendant's title insurer identified two alleged exceptions to coverage. Defendant asserts counsel for plaintiff was put on notice that, in order to clear title and to transfer insurable title to the purchaser, plaintiff was required to provide the title company with proof of authorization and consent to the transaction and transfer of title. Plaintiff alleges as a result of this title issue, plaintiff was in default and thus defendant buyer was not able to close.

Moreover, defendant alleges in addition to plaintiff s failure to clear title issues prior to closing, the closing was defective as plaintiff s attorney of record was suspended from practice. Defendant's attorney alleges he became aware that plaintiff s attorney Mr. Colin McNary had been suspended from the practice of law on January 30, 2017. Mr. McNary remained suspended at the time of the scheduled closing on May 30, 2023, and was the attorney of record at said closing. Mr. McNary's suspension is undisputed.

Standard of Review

It is a well-established principle that the "function of summary judgment is issue finding, not issue determination." Assaf v Ropog Cab Corp., 153 A.D.2d 520, 544 [1st Dept 1989], As such, the proponent of a motion for summary judgment must tender sufficient evidence to show the absence of any material issue of fact and the right to entitlement to judgment as a matter of law. Alvarez v Prospect Hospital, 68N.Y.2d 320, 501 [1986]; Winegrad v New York University Medical Center, 64 N.Y.2d 851 [1985].

Courts have also recognized that summary judgment is a drastic remedy that deprives a litigant of his or her day in court. Therefore, the party opposing a motion for summary judgment is entitled to all favorable inferences that can be drawn from the evidence submitted.

Discussion

It is the opinion of this Court that the dispositive issue in this matter is plaintiff s representation at the scheduled closing by suspended attorney Colin McNary. The certified transcript from the Initial Closing on May 30, 2023, clearly indicates that the only attorney present on behalf of plaintiff was Mr. McNary. It is undisputed that Mr. McNary was suspended on this date and had been since on or before 2017. Plaintiff argues Mr. NcNary's suspension is irrelevant and urges this issue is a "red herring." The Court finds this position unavailing.

It is well established that activities like preparing memoranda and documents to be filed in court - even if subscribed to by an admitted attorney - or conducting interviews with clients are forbidden to a suspended or disbarred lawyer. Matter of Friedberg, 194 A.D.3d 126 (1st Dep't 2021). While neither party cites a case directly on point with the facts in the present matter, the Court finds it follows that if a suspended attorney cannot conduct a client interview or prepare memoranda for Court, it would be illogical to reason a suspended attorney could however appear as counsel on behalf of a client for a real estate closing.

Yet, plaintiff argues that regardless of whether plaintiffs attorney was suspended, defendant is bound by the attorney's actions anyway, under a theory of apparent authority. In support of this position, plaintiff cites to several cases where New York Courts have ruled that the actions of an attorney who was suspended or disbarred at the time, did not render the attorney's actions void per se. However, each case plaintiff cites is distinguishable from the present matter in that they all involve drastically different facts. For instance, while the Court of Appeals, in Arrowhead held that an attorney's violation of Judiciary Law § 470 does not render the actions taken by the attorney automatically null, and the party may cure the section 470 violation with the appearance of compliant counsel or an application for admission pro hac vice by appropriate counsel. Arrowhead Capital Fin., Ltd. v Cheyne Specialty Fin. Fund L.P., 2019 N.Y. LEXIS 105. That is not the case here. The lead and only counsel for plaintiff at the closing was the suspended attorney.

Moreover, whether Mr. McNary's representation of plaintiff would render the whole transaction void had the closing gone forward and both parties finalized the deal, is not the issue before this court. Here, the issue is whether defendant is excused from the closing as because of Mr. McNary's suspension. It is undisputed that McNary was suspended leading up to and on the date of the scheduled closing.

The Court finds that as plaintiff was solely represented at closing and prior by a suspended attorney, and where counsel raised this issue and other issues, defendant cannot be found to have defaulted by failing to appear. To find any other way would be illogical to this Court and would not serve as a deterrent to suspended counsel from performing acts that they should not have performed.. As such, the court finds defendant is entitled to return of the deposit tendered pursuant to the Purchase and Sale Agreement as the Curt deems the purported closing a nullity. As the court finds this issue dispositive, it need not address the issues regarding clear title. Accordingly it is hereby, ADJUDGED that plaintiffs motion for summary is judgment is denied; and it is further ADJUDGED that defendant's cross motion for summary judgment is granted; and it is further

ORDERED that defendant Stem Tannenbaum &Bell LLP release the subject down payment to defendant Prime Rok not more than 30 days following service of this Order with Notice of Entry; and it is further

ORDERED that the Clerk shall enter judgment of dismissal in this matter.


Summaries of

Apple Bank For Sav. v. Prime Rok Real Estate, LLC

Supreme Court, New York County
Jan 12, 2024
2024 N.Y. Slip Op. 30171 (N.Y. Sup. Ct. 2024)
Case details for

Apple Bank For Sav. v. Prime Rok Real Estate, LLC

Case Details

Full title:APPLE BANK FOR SAVINGS, Plaintiff, v. PRIME ROK REAL ESTATE, LLC, 626…

Court:Supreme Court, New York County

Date published: Jan 12, 2024

Citations

2024 N.Y. Slip Op. 30171 (N.Y. Sup. Ct. 2024)