Opinion
453 Index No. 159735/17 Case No. 2023–01079
06-13-2023
Joseph Peleg BILLIG et al., Plaintiffs, v. Yisroel SCHWARTZ also known as Isroel Schwartz et al., Defendants. Yisroel Schwartz et al., Third–Party Plaintiffs–Appellants, v. Fink & Zelmanovitz PC, et al., Third–Party Defendants–Respondents.
Winget, Spadafora & Schwartzberg, LLP, New York (Matthew Tracy of counsel), for appellants. Abrams Garfinkel Margolis Bergson, LLP, New York (Robert J. Bergson of counsel), for respondents.
Winget, Spadafora & Schwartzberg, LLP, New York (Matthew Tracy of counsel), for appellants.
Abrams Garfinkel Margolis Bergson, LLP, New York (Robert J. Bergson of counsel), for respondents.
Kapnick, J.P., Friedman, Gesmer, Gonza´lez, Pitt–Burke, JJ.
Order, Supreme Court, New York County (Lynn R. Kotler, J.), entered on or about January 12, 2023, which granted third-party defendants' motion to dismiss the third-party complaint asserting common-law claims of indemnification and contribution, unanimously affirmed, with costs.
Initially, we note that the affirmation proffered by defendant Yisroel Schwartz in opposition to the motion to dismiss should have been disregarded since he is a party to this action (see CPLR 2106[a] ; John Harris P.C. v. Krauss, 87 A.D.3d 469, 469, 928 N.Y.S.2d 295 [1st Dept. 2011] ; Beltran v. Commercial Bldg. Maintenance Corp., 206 A.D.3d 549, 549, 169 N.Y.S.3d 512 [1st Dept. 2022] ).
In any event, even when considering Schwartz's affirmation, the third-party complaint was properly dismissed ( CPLR 3211[a][7] ). The contribution claim fails because no facts alleged, and none of the emails in the exhibits submitted in opposition to the motion, support the conclusion that third-party defendants were negligent in their representation of plaintiffs in the formation of the limited liability companies and funding of those entities for the purposes of real estate investments, merely by negotiating contracts, drafting or finalizing LLC operating agreements, or securing their clients' approval for defendants to release escrow funds (see Tower Bldg. Restoration, Inc. v. 20 E. 9th St. Apt. Corp., 295 A.D.2d 229, 229, 744 N.Y.S.2d 319 [1st Dept. 2002] ; Trustees of Columbia Univ. v. Mitchell/Giurgola Assoc., 109 A.D.2d 449, 454, 492 N.Y.S.2d 371 [1st Dept. 1985] ; see also Bua v. Purcell & Ingrao, P.C., 99 A.D.3d 843, 845, 952 N.Y.S.2d 592 [2d Dept. 2012], lv denied 20 N.Y.3d 857, 2013 WL 452171 [2013] ). Schwartz's alleged comment that "the investments at issue in this action bore substantial risk" because his clients "had issues with prior partners and [he] questioned their ability to ultimately close on these transactions," if true, would not give third-party defendants reason to believe that there was potential fraud to be investigated (see Schimenti v. Whitman & Ransom, 208 A.D.2d 470, 470, 617 N.Y.S.2d 742 [1st Dept. 1994] ).
The common-law indemnification claim fails because defendants did not allege a breach of any duty running from third-party defendants to them (see Raquet v. Braun, 90 N.Y.2d 177, 183, 659 N.Y.S.2d 237, 681 N.E.2d 404 [1997] ; Seldin v. Smith, 76 A.D.3d 623, 625, 907 N.Y.S.2d 36 [2d Dept. 2010] ). Indeed, defendants and third-party defendants were negotiating arm's-length transactions.