Opinion
2016–1969 S C
04-05-2018
Vincent PIEMONTE, Respondent, v. GRUENBERG, KELLY AND DELLA, Appellant.
Gruenberg, Kelly & Della (Michael Della of counsel), for appellant. Somer, Heller & Corwin, LLP (Stanley J. Somer of counsel), for respondent.
Gruenberg, Kelly & Della (Michael Della of counsel), for appellant.
Somer, Heller & Corwin, LLP (Stanley J. Somer of counsel), for respondent.
PRESENT: JERRY GARGUILO, J.P., ANTHONY MARANO, TERRY JANE RUDERMAN, JJ.
ORDERED that the judgment is affirmed, without costs.
Plaintiff, a landlord, was owed rental arrears totaling $6,470 for an apartment leased by Alfred Cresci. Kathleen Waite also occupied the apartment. Defendant, a law firm, represented Waite in a personal injury action. In January 2015, plaintiff, defendant, Cresci and Waite executed an agreement which provided, among other things, that Waite assigned to plaintiff, on or before June 30, 2015, the sum of $6,470 from the proceeds of any settlement or judgment which defendant would obtain on Waite's behalf in the personal injury action, that she directed defendant to issue an escrow check to pay $6,470 to plaintiff and that defendant agreed to do so. Notwithstanding the terms of the agreement, defendant did not pay the $6,470 to plaintiff. Rather, defendant released the money to Waite. As a result, plaintiff commenced this action against defendant due to defendant's breach of the agreement. Defendant appeals from an order of the District Court dated July 18, 2016 denying defendant's motion for summary judgment dismissing the complaint and granting plaintiff's cross motion for summary judgment. The appeal is deemed from a judgment of that court entered August 1, 2016 which awarded plaintiff the principal sum of $6,470 (see CPLR 5501 [c] ).
"Where a lawyer is acting as an escrow agent, he owes the parties to the transaction a fiduciary duty (see Talansky v. Schulman , 2 AD3d 355 [2003] ). The requisites of an escrow agreement—i.e., an agreement pursuant to which funds are delivered to a third-party depository, the grantor relinquishes control over the funds, and the funds are to be delivered to a third party conditioned upon the performance of some act (see Great Am. Ins. Co. v. Canandaigua Natl. Bank & Trust Co. , 23 AD3d 1025 [2005] )—need not be formalized in writing, and an inquiry into whether such an obligation exists is fact specific to the particular case (see Webster v. Total Identity Corp. , 22 Misc 3d 1120[A], 2007 NY Slip Op 52587[U] [Sup Ct, Monroe County 2007], affd for reasons stated below 59 AD3d 967 [2009] ). An escrow agent, as a fiduciary, has a strict obligation to protect the rights of the parties for whom he or she acts and a duty not to deliver the monies in escrow except upon strict compliance with the conditions imposed by the agreement (see Farago v. Burke , 262 NY 229 [1933] ; Grinblat v. Taubenblat , 107 AD2d 735 [1985] )" ( Frankel v. Spinnell , 54 Misc 3d 131[A], 2017 NY Slip Op 50030[U], *1–2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017] ).
Here, the written agreement signed by the parties, as well as by Waite and Cresci, demonstrates a clear intent for defendant to act as an escrow agent with respect to the $6,470 and, as a result, defendant owed a fiduciary duty to plaintiff (see Baquerizo v. Monasterio , 90 AD3d 587 [2011] ; Takayama v. Schaefer , 240 AD2d 21 [1998] ). Defendant's distribution of the money to Waite was a breach of the fiduciary duty defendant owed to plaintiff and, as such, the District Court properly held that defendant is liable for the damages suffered by plaintiff, to wit, the $6,470 which defendant was supposed to distribute to plaintiff upon settlement of Waite's personal injury action (see Direct Door Corp. v. Marchese & Sallah, P.C. , 127 AD2d 735 [1987] ; see also Takayama v. Schaeffer , 240 AD2d at 26 ).
Defendant's contention that it did not owe a fiduciary duty to plaintiff because the written agreement did not compensate defendant for serving as an escrow agent lacks merit. Defendant's further contention that the action should be dismissed because Waite and Cresci were necessary parties which plaintiff failed to join is also devoid of merit (see Grinblat v. Taubenblat , 107 AD2d 735 ).
Accordingly, the judgment is affirmed.
GARGUILO, J.P., MARANO and RUDERMAN, JJ., concur.