Opinion
0834/08.
June 3, 2011.
Notice of Motion, Affs. Exs 1 Affidavit in Opposition 2 Memorandum of Law 3 Reply Affirmation 4
................................. ....................................... ............................................. .............................................Upon the foregoing papers, pursuant to CPLR § 3212, the defendants' motion for summary judgment is denied as against plaintiff T V Construction, Inc. and granted as against plaintiff Manuel Varveris.
The following facts are taken from pleadings and submitted papers and do not constitute findings of fact by this Court.
This is an action for legal malpractice. Plaintiff's claim that prior to September 1999, plaintiff Manuel Varveris's ex-wife, Sandra Garcia owned a home located at 44 Waldo Street in Copaigue, New York. On or about September 29, 1999, Sandra Garcia entered into a loan agreement with Greenpoint Mortgage Corp. (hereinafter "Greenpoint") which was secured by a mortgage on the subject property. Sandra Garcia defaulted on her payments and contacted Manuel Varveris regarding same. As a result, plaintiff Manuel Varveris had his company, plaintiff T V Construction, Inc. (hereinafter "T V"), purchase the Greenpoint mortgage, and an Assignment of Mortgage was filed with the Suffolk County Clerk on March 26, 2001. Defendant C. Lance Margolin, Esq. assisted plaintiff with same. Garcia and Varveris agreed that Varveris was authorized to make payments to T V in the amount Garcia would be obligated to pay T V and to deduct same from payments that Varveris would otherwise be obligated to make to Garcia for spousal maintenance. Plaintiff Varveris testified that Sandra Garcia never made any payments in repayment of the mortgage to T V and that he never paid any of Garcia's spousal maintenance to T V to repay the mortgage. In 2003, Garcia asked Varveris if he wished to purchase the property, and he agreed to do so. Varveris agreed to purchase the property for approximately $350,000. Mr. Varveris retained the defendants to pursue the purchase of the property from Garcia. Defendant Margolin suggested that the parties agree to a Deed in Lieu of Foreclosure to effectuate the transfer of the property to T V.
Plaintiff testified that defendant Margolin prepared the documents and sent them to Garcia to sign and have notarized. Plaintiff further testified that Garcia sent the documents back to defendant Margolin and that the purchase money was then sent to Garcia, consummating the deal. Plaintiff alleges that defendant Margolin never had the Deed in Lieu recorded. Defendant Margolin testified that Garcia returned only copies of the documents and never returned the original Deed in Lieu for recording. As such, defendant Margolin was unable to have the original documents recorded, and it is uncontested that the Deed in Lieu was never recorded.
Defendant Margolin claims that he inquired many times about the need for the original documents but they were never sent to him. Defendant Margolin also testified that checks for T V's purchase of the subject property were never exchanged in his presence or given to him and that there was no closing. Accordingly, defendants contend that this "Deed in Lieu" transaction did not close.
A few years later, around July 2007, Garcia learned that the property was still in her name, as the deed in lieu had not been recorded. As such, Garcia sold and conveyed the Property to a non-party buyer, Andrew Calapai, for $265,000. The attorney for Andrew Calapai presently holds $150,000 in escrow to satisfy T V's $102,000 mortgage on the property. Upon T V's discovery of same, T V brought suit in Suffolk County against Andrew Calapai in November 2007 to cancel the deed. Said action is still pending.
Defendants argue that they are entitled to summary judgment against both Plaintiff's as their representation was not the proximate cause of any damages claimed by Plaintiff's, as Plaintiff's' failure to pursue an action against Sandra Garcia is the proximate cause of Plaintiff's' claimed damages. Defendants argue that Sandra Garcia's fraudulent conveyance of the property to Andrew Calapai, and not the defendants' representation is the proximate cause of Plaintiff's damages. Defendants also argue that subsequent counsel had, and still has, an opportunity to protect Plaintiff's interests by pursuing an action against Garcia for the loss of their property, but have failed to do so.
Defendants further contend that plaintiff Manuel Varveris has no damages as it was T V, and not Varveris, that had the mortgage on the property, and it was T V to which Garcia was to transfer title to the property pursuant to the Deed in Lieu. Additionally, none of the payments allegedly made in furtherance of T V's purchase of the property from Garcia were made by Varveris.
Plaintiff's contend that despite defendant Margolin's testimony, T V tendered the funds for the purchase through the defendants and that the defendants released the funds to Garcia. Plaintiff Varveris attests that he was not advised by Margolin that the original transfer documents were never received or that there were any "issues" with the filing of the Deed in Lieu of Foreclosure. Plaintiff's argue in their opposition that "but for" the defendants' failure to file the deed in lieu, or take other steps to protect Plaintiff's' rights, Garcia could not have committed fraud in transferring the property to another. Plaintiff's also contend that Garcia's intentional fraud in reselling the premises was a foreseeable possibility and that Garcia's actions do not break the causal nexus where the act could have been foreseen. ( See, Bell v. Board of Educations of City of New York, 90 N.Y.2d 944 (1997)). Plaintiff argues, contrary to the defendants, that this is not a circumstance where subsequent counsel had a sufficient opportunity to protect Plaintiff's' rights or correct the prior counsel's errors, as the harm was already done at the time new counsel was retained and the new counsel could not prevent the injury itself. Lastly, Plaintiff's submit that any judgment collected against Garcia would be uncollectible, as she has no viable assets that are free from liens and/or judgments. As such, Plaintiff's argues that they have sustained actual and ascertainable damages in the loss of their real property.
The alleged injury to plaintiff T V in the loss of its real property occurred prior to the Plaintiff's' retention of new counsel. As such, contrary to defendants' arguments, subsequent counsel did not have the opportunity to protect Plaintiff's rights or correct the prior counsel's error. ( See, Somma v. Dansker Aspromonte Assoc., 44 A.D.3d 376 (1st Dept. 2007); Katz v. Herzfeld Rubin, P. C., 48 A.D.3d 640 (2d Dept. 2008)).
Defendants' motion for summary judgment is granted only against plaintiff Manuel Varveris, and accordingly, Manuel Varveris's action is dismissed in its entirety as he has not sustained any damages and has no standing to bring the within lawsuit individually. Defendants' motion for summary judgment against T V is denied as there are several questions of fact regarding whether the defendants' negligence was a proximate cause of plaintiff T V's alleged damages. To state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney "failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession," and (2) that the attorney's breach of the duty proximately caused the plaintiff actual and ascertainable damages. ( Leder v. Spiegel, 9 NY3d 836, 837, cert denied sub nom. Spiegel v. Rowland, 552 US 1257; see, Rudolf v. Shayne, Dachs, Stanisci, Corker Sauer, 8 NY3d 438, 442). Considering the evidence in the light most favorable to the plaintiff, there are questions of fact as to whether or not the purchase funds were released to Garcia by defendants and whether the defendants were negligent in failing to record the deed or assure that it could be recorded to avoid a fraudulent transfer of same. Further, plaintiff T V has demonstrated its ascertainable damages in the loss of its real property by the transfer of same to non-party Andrew Calapai. If there is any doubt as to the existence of a triable issue of fact, or if a material issue of fact is arguable, summary judgment should be denied. With respect to summary judgment, issue finding, rather than issue determination, is the court's function. ( Celardo v. Bell, 222 A.D.2d 547, 635 N.Y.S.2d 85 (2d Dept. 1995); Museums at Stony Brook v. Village of Patchogue Fire Dept., 146 A.D.2d 572, 536 N.Y.S.2d 177 (2d Dept. 1989)).
Defendants' request for a stay of the within action, pursuant to CPLR § 2201, until there is a resolution in the related Suffolk County action against Andrew Calapai, is denied, however should the plaintiff T V obtain a judgment against the defendants herein, the enforcement of said judgment shall be stayed pending the resolution of the Suffolk County action, entitled T V Construction, Inc. v. Calapai, bearing index number 36421/07. ( See, Corrado v. Rubine, 25 A.D.3d 748, 807 N.Y.S.2d 878 (2d Dept. 2006); Settener v. Bendet, 227 A.D.3d 202, 642 N.Y.S.2d 253 (1st Dept. 1969)).
Cc: L'Abbate, Balkan, Colavita Contini, LLP William T. McCaffery, Esq. 1001 Franklin Avenue, 3rd Floor Garden City, NY 11530
Ruskin, Moscou, Faltischek, P.C.
1425 RXR Plaza East Tower, 15th Floor Uniondale, NY 11556-1425