Opinion
2016–13252 Index No. 3066/16
05-08-2019
Leatrice HINNANT, et al., Respondents, v. CARRINGTON MORTGAGE SERVICES, LLC, et al., Defendants, Jeffrey Leavitt, etc., Appellant.
Traub Lieberman Straus & Shrewsberry, LLP, Hawthorne, N.Y. (J. Patrick Carley III of counsel), for appellant.
Traub Lieberman Straus & Shrewsberry, LLP, Hawthorne, N.Y. (J. Patrick Carley III of counsel), for appellant.
WILLIAM F. MASTRO, J.P., LEONARD B. AUSTIN, SHERI S. ROMAN, VALERIE BRATHWAITE NELSON, JJ.
DECISION & ORDER In an action, inter alia, to recover damages for fraud, the defendant Jeffrey Leavitt appeals from an order of the Supreme Court, Kings County (Francois A. Rivera, J.), dated October 28, 2016. The order, insofar as appealed from, denied that defendant's motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the motion of the defendant Jeffrey Leavitt pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him is granted.
In March 2015, the plaintiffs executed a consolidated note in favor of the defendant Carrington Mortgage Services, LLC (hereinafter Carrington), in the sum of $ 715,533, which was secured by a consolidated mortgage on the plaintiffs' property in Brooklyn. In March 2016, the plaintiffs commenced this action against, among others, the defendant Jeffrey Leavitt, the settlement agent for Carrington, seeking to recover damages for fraud and professional negligence. The plaintiffs alleged that while the consolidated note stated that their monthly mortgage payment would be $ 3,364.70, their monthly mortgage payment was, in fact, approximately $ 4,500. The plaintiffs alleged, among other things, that Leavitt ignored the fact that "the monthly mortgage payments expected from the Plaintiffs [were] not consistent with the principal as it appeared on the initial monthly mortgage obligation and the subsequent ... Consolidated Agreement," and that Leavitt failed to point out these inconsistencies to the plaintiffs. Leavitt moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him. The Supreme Court denied Leavitt's motion, and Leavitt appeals.
On a motion pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action, the court must accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Leon v. Martinez , 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ; Sokol v. Leader , 74 A.D.3d 1180, 1181, 904 N.Y.S.2d 153 ). "When evidentiary material is considered, the criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one, and, 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, again dismissal should not eventuate" ( Guggenheimer v. Ginzburg , 43 N.Y.2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17 ; see E & D Group, LLC v. Vialet , 134 A.D.3d 981, 982, 21 N.Y.S.3d 691 ). A motion to dismiss pursuant to CPLR 3211(a)(1) on the ground that the action is barred by documentary evidence "may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" ( Goshen v. Mutual Life Ins. Co. of N.Y. , 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 ; see Leon v. Martinez , 84 N.Y.2d at 88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ).
Absent fraud, collusion, malicious acts, or other special circumstances, an attorney is not liable to third parties not in privity, or near-privity, for harm caused by professional negligence (see AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co. , 5 N.Y.3d 582, 595, 808 N.Y.S.2d 573, 842 N.E.2d 471 ; Fredriksen v. Fredriksen , 30 A.D.3d 370, 372, 817 N.Y.S.2d 320 ; Rovello v. Klein , 304 A.D.2d 638, 757 N.Y.S.2d 496 ; Conti v. Polizzotto , 243 A.D.2d 672, 663 N.Y.S.2d 293 ). Here, even accepting the facts alleged in the complaint as true, the complaint fails to allege the existence of an attorney-client relationship, privity, or a relationship that otherwise closely resembles privity between the plaintiffs and Leavitt (see DeMartino v. Golden , 150 A.D.3d 1200, 1201, 52 N.Y.S.3d 892 ; Fredriksen v. Fredriksen , 30 A.D.3d at 371–372, 817 N.Y.S.2d 320 ; Goldfarb v. Schwartz , 26 A.D.3d 462, 463, 811 N.Y.S.2d 414 ; Rovello v. Klein , 304 A.D.2d at 638–639, 757 N.Y.S.2d 496 ). Furthermore, the complaint does not contain specific allegations that would place the plaintiffs within an exception to the privity requirement (see AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co. , 5 N.Y.3d at 595, 808 N.Y.S.2d 573, 842 N.E.2d 471 ; Fredriksen v. Fredriksen , 30 A.D.3d at 372, 817 N.Y.S.2d 320 ). The complaint fails to set forth evidentiary facts demonstrating that Leavitt was a participant with Carrington in a common scheme or plan to defraud the plaintiffs, or otherwise aided and abetted Carrington in the commission of fraud (see Fredriksen v. Fredriksen , 30 A.D.3d at 372, 817 N.Y.S.2d 320 ; Goldfarb v. Schwartz , 26 A.D.3d at 463–464, 811 N.Y.S.2d 414 ).
Furthermore, the documentary evidence submitted by Leavitt in support his motion utterly refuted the plaintiffs' factual allegations, and conclusively established a defense as a matter of law (see Goshen v. Mutual Life Ins. Co. of N.Y. , 98 N.Y.2d at 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190 ). Specifically, Leavitt submitted an acknowledgment dated March 14, 2015, signed by the plaintiffs in connection with the consolidated mortgage transaction, which stated: "The undersigned further acknowledge that Jeffrey H. Leavitt, Esq., P.C. represents the Lender in this transaction, that the parties have not been given nor are relying on any legal advice given by Jeffrey Leavitt, Esq. and that no attorney/client relationship exists between the Borrowers and Jeffrey H. Leavitt, Esq., P.C." Additionally, Leavitt submitted, among other things, the consolidated note and consolidated mortgage, which both stated that the monthly payment of principal and interest, in the amount of $ 3,364.70, would be just part of a larger monthly payment required by the security instrument, which would include taxes, insurance, and other charges.
Accordingly, the Supreme Court should have granted Leavitt's motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against him.
MASTRO, J.P., AUSTIN, ROMAN and BRATHWAITE NELSON, JJ., concur.