First Cent. Savs. Bank v Meridian Residential Capital

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First Cent. Savs. Bank v Meridian Residential Capital 2012 NY Slip Op 30825(U) March 28, 2012 Supreme Court, Nassau County Docket Number: 14233/11 Judge: Anthony L. Parga Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. - - ------ ---- ----- --- -- - -- - --- - - -- -- -- -- - ----- -------- -- ---- --- - )( [* 1] SHORT FORM ORDER SUPREME COURT- NEW YORK STATE- NASSAU COUNTY PRESENT: HON. ANTHONY L. PARGA JUSTICE PART 6 FIRST CENTRAL SAVINGS BANK INDE)( NO. : 14233/11 Plaintiff MOTION DATE: 02/03/12 SEQUENCE NO. 01 , 02 , 03 , 04 , 05 -against- MERIDIAN RESIDENTIAL CAPITAL d//a TRUMP FINANCIAL , DAVID BRECHER MERIDIAN MORTGAGES SERVICES , INC. DBS SERVICING SOLUTIONS , INC. , DAVID S. FRANKEL , P. , LAW OFFICES OF SAM SHORE JEFFREY E. MEHL , ESQ. Defendants Notice of Motion, Affs& Exs (Seq. Ol)................................................................................ Memorand um of Law in Su p port. ................................................................. ...................... Notice of Motion , Affs & Exs (Seq. 02)................................................................................ Mem 0 rand um of Law in Su ppo rt.. ........... ......................................................... ................... Notice of Motion, Affs & Exs (Seq. 03)................................................................................ Memorandum of Law in Support ""''''''''''''''''''''''''''''''''''''''''''''''' Affidavi t of David Frankel...... ....... Order to Show Cause, Affs & Exs (Seq. 04)........................................................................ Mem 0 rand um of Law in Sup po rt. Notice of Motion, Affs & Exs (Seq. 05)............................................................................... Memorand um of Law in Support Affrmation in Opposition to Plaintiff's OSC (Def. Mehl)............................................ Memorandum of Law in Opp to Plaintiff's OSC (Def. Brecher/Meridian)................. Affrmation in Opposition of Jonathan R. Harwood to OSC (Def. Frankel)................ Mem 0 rand um of Law (Def. Frankel).................... ............ Affrmation in Opposition to Plaintiff's OSC (Def. Shore)........................................... Affrmation in Opposition of Joseph P. Cervini, Jr. (Plaintiff)........................................ Memorandum of Law in Opposition to Meridian (Plaintiff).......................................... Memorandum of Law in Opposition to Frankel, Shore and Mehl (plaintiff)................ Reply Memorandum of Law (Def. Mehl)............................................................................ Reply Memorandum of Law (Def. Brecher/Meridian)................................................ Reply Memorandum of Law (Def. Shore)........................................................................... Affrmation in Reply of Jonathan R. Hartwood (Def. Frankel)..................................... Reply Memorandum of Law (Def. Frankel)....................................................................... Affidavit of Hilary J. Raimondi (Def. Frankel)........................................................... [* 2] Upon the foregoing papers: 3211 (aJ(1), (5), (7) by the defendant Jeffrey E. Mehl , Esq. , for Motion pursuant to CPLR an order dismissing the complaint insofar as interposed as against him is granted. 3211 (aJ(I),5), (7) Motion pursuant to CPLR by the defendants Meridian Residential Capital , d/b/a , Trump Financial , Meridian Mortgage Services , Inc. , David Brecher , Meridian Mortgage Services , Inc. , and DBS Servicing Solutions , Inc. , for an order dismissing the complaint insofar as interposed as against them is granted in par and denied in part as directed below. 3211 by the defendant David S. Frankel , P . Motion pursuant to CPLR , for an order dismissing the complaint insofar as interposed as against him is granted. 3012(d) by the plaintiff First Central Savings Order to show cause pursuant to CPLR Ban for an order compelling the defendants to accept late service of the complaint , and/or nunc pro tunc, alternatively, for an order deeming service upon the defendants to be timely, 205(a) is denied. pursuant to CPLR Motion pursuant to CPLR 3211(aJ(I), (5), (7) and CPLR 3016(b) by the defendant Law Offices of Sam Shore , for an order dismissing the complaint insofar as interposed as against him is granted. In March of2003 , the plaintiff First Central Savings Ban (" First Central" ) entered into a Loan Origination and Marketing Agreement" (the " Origination Agreement" ) with defendants Meridian Mortgage Services , Inc. (" Meridian ), and its principal , David Brecher (Cmplt. 18- 20). Pursuant to the agreement , Meridian agreed to originate and service residential loans for First Central (Cmplt. 20- 21). Specifically, First Central contends that Meridian agreed to make credit judgments and perform underwiting analyses of the information obtained from each prospective borrower , which included review of completed loan applications , credit reports . propert appraisals and other necessary verifications and documents (Cmplt. Agreement 1( 23- 26; aD. In exchange , Meridian collected certain fees and was also entitled to retain a stated percentage of the loans which they later sold on the secondar, residential loan market (Cmplt. 29- 31). During the loan origination and closing process , certain attorneys were retained by First Central , as contemplated by the Origination Agreement; namely, and among others , codefendants [* 3] David S. Franel , P. , Jeffrey E. Mehl , Esq. , and the Law Offces of Sam Shore. The Origination Agreement , Article 3 , refers to the role of counsel , providing, inter alia that " (t)he legal counsel selected by the Bank shall be responsible for ensuring that all closing documents are properly signed by the Borrower , the Bank or the appropriate third party, as applicable contain authentic signatures " (~ 3. 10). The Origination Agreement and other , separately executed " individual loan purchase agreements " both contained so-called " buy- back" requirements - an obligation also personally guaranteed under the Origination Agreement by codefendant Brecher (Cmplt. , ~~ 21- 23; 32- 33). In sum , the " buy- back" provision required Meridian to purchase from First Central , those loans which remained unsold in the " secondar loan market" for a period over 90 days , post- closing (Cmplt., ~~ 21- 23; 32- 33; 67- , 73; Agreement ~ 4.1 (cD. The complaint also avers that the individual loan purchase agreements required Meridian to ensure that no fraudulent information had been submitted to First Central with respect to any of the loans (Cmplt. , ~ 34). Thereafter , Meridian originated some 225 First Central loans (Cmplt. 39- 40). First Central , claims , however , that certain loans were purportedly made upon false , fraudulent and/or incomplete borrower loan information submitted by Meridian , including overstated borrower incomes and inaccurate , third- party property appraisals (Cmplt. , ~~ 47-48; 115- 116 , 121). Furher , First Central contends that the " attorney- defendants " previously referenced above represented First Central at certain closings , but allegedly breached duties of care to First Central and/or committed malpractice , negligence and fraud. The attorneys purortedly did so by, inter alia closing loans which contained terms different from those supposedly agreed to by First Central (Cmplt. , ~~ 48- 50). First Cental claims that the attorneys (and Meridian) " intentionally permitted adjustable rate loans to close without so-called interest rate " floor " provisions , which would have prevented rates from dipping below stated minimum percentages. These loan documents allegedly differed from corresponding, borrower commitment letters apparently drafted by First Central , which did include the rate floor provisions (Cmplt. , ~~ 3 , 50- 51; 64- 65; 115- 116 , 121). First Central asserts that as a consequence of Meridian s underwiting misconduct and alleged fraud, it made loans to customers who could not repay them , as reflected by the " large number of Meridian Loans which defaulted , many within a very short time after " the closings were concluded (Cmplt. , ~~ 28- , 42- 43). First Central further alleges that Meridian concealed g., [* 4] its misconduct by itself making payments on certain loans - which conduct allegedly prevented First Central from discovering, in a timely manner , that the actual borrowers had , in fact defaulted (Cmplt. , ~~ 56- 57; 61- 62). Lastly, First Central contends that Meridian failed to repurchase or buy- back certain loans , thereby violating both the Origination Agreement and the individual loan agreements (Cmplt. , ~~ 33- 34; 49; 72- 78). In fact , First Central claims that from the inception , Meridian never intended to buy back any of the loans - although there is no allegation that First Central ever contemporaneously objected to Meridian s untimely failure to reacquire the loans immediately after the respective 90- day buy- back periods expired (Cmplt. , ~~ 106- 107). Based upon these factual averments and others , First Central commenced the within action against inter alia both the Meridian defendants and the attorney- defendants. The verified complaint contains ten causes of action , including claims sounding in breach of contract, specific performance , fraud , attorney malpractice/breach of fiduciar duty, negligent misrepresentation and unjust enrichment/conversion. Significantly, the subject , state court action is not the first proceeding arising out of the alleged loan misconduct identified by First Central. In August of 2009 , First Central commenced a virtually identical , Federal lawsuit as against all the same defendants (and several others) in the (First Central Savings Bank Eastern District of New York ai. F. Supp. 2d. , 2011 WL 838910 (E. action contained two RICO claims ~~ 121- 137), (e. v. Meridian Residential Capital, et. Y. 2011D. Although First Central' s Federal 18 U.S. C. ~~ 1961(1),(4), (5); 1962(c), (dD (Fed. Cmplt. it included essentially the same State law claims interposed in this action. However , by decision dated March 3 , 2011 , the District Cour (Irizarr, J. ), dismissed the Federal action " without prejudice " pursuant to F. P. 12(bJ(6) - albeit with leave to replead. While the Court did not reach the pendent State law claims in its March 3 order, it did consider and dismiss the RICO claims , holding in sum that First Central had not properly alleged damages or shown that its alleged injuries were proximately caused by the alleged misconduct relied on. More specifically, the District Court reasoned , in part , that: (1) a compensable RICO injury had not occurred with respect to those loans which had not yet been foreclosed upon; and (2) that as to the few loans which had been foreclosed upon , allegations of compensable injury were still lacking, since First Central relied on post- litigation appraisals to establish injury - which appraisals which were unreliable as to value , since they were performed after the recent real ," [* 5] estate market collapse. Lastly, the Cour ruled that the requisite but for" RICO causality with respect to the " rate floor " claims had not been demonstrated , since First Central had not alleged (First that the rates at issue had actually reset or dipped below the rate " floor " figures relied upon Central Savings Bank v. WL 838910 at 7- 8; 9- Meridian Residential Capital, et., ai. , supra , 2011 v. 10)(First Central Savings Bank at 4- see also, First Nationwide Bank Meridian Residential Capital, et., al. , supra 2011 WL 838910 v. Gelt Funding Corp. 27 F.3d 763 , 768 (2 Cir. 1994D. After dismissing First Central's RICO claims , the Court noted that " only Plaintiffs state law claims remain " but declined to consider those claims , noting that " where federal claims are dismissed at an early stage , courts decline supplemental jurisdiction and dismiss pendant state law claims without prejudice v. (First Central Savings Bank Meridian Residential Capital, et., al. , supra 2011 WL 838910 at 11). In light of these conclusions , the District Court dismissed the complaint " without prejudice " and at the same time , granted First Central leave to served an amended complaint , to be filed no later than April 4 , 2011 In the interim , the District Cour resolved a second motion made by the Merdian for sanctions pursuant to F. R. C. P. 11 (b) (3). That motion , which the Court granted in part and denied in part , was predicated on assertions that First Central had included allegations in its Federal complaint for which there was no proper , evidentiary support Bank v. Meridian Residential Capital, et. , al. (March 30 , 2011 E. F. Supp. 2d. (see , First Central Savings 2011 WL 838910 , at 2- Y.D. Although the District Court concluded that First Central' s factual claims , for the most par , did not warrant the imposition of sanctions , the Court nevertheless admonished First Central for including in its complaint , certain unsupported averments i. e. (1) the alleged " concealment" of the borrower defaults continued into 2008; and (2) that Meridian had fraudulently permitted loans to close despite the existence of encwnbrances affecting loan collateral (First Central Savings Bank supra 2011 WL 838910 , at 2- v. Meridian Residential Capital, et., al. 6). Notably, the same averment with respect the 2008 concealment claim has been reincorporated - at least generally - into First Central' s current complaint (Cmplt. , ~~ 15, 56). Finally, the District Court warned First Central with respect to the framing of any amended complaint , stating that " the court fully expects Plaintiff to consider carefully the arguments discussed in this Order and to provide a more thoughtful amended complaint if it chooses to fie one. " The Cour added that " (p)laintiffis well advised to consider carefully that: [* 6] whether it has valid claims when deciding whether to fie an amended complaint , and exercise care in crafting its pleadings in order to avoid any of the ambiguities that gave rise to this motion (for v. sanctionsJ"(First Central Savings Bank Meridian Residential Capital, et., al. , supra , 2011 WL 838910 , at 6). Ultimately, First Central elected not to serve an amended complaint and in response , the District Court issued an order dismissing the complaint in its entirety, " with prejudice " on April )(Cmplt. , ~ 16). First Central then noticed an appeal with the 2011 (Hardwood Aff. , Exh. Second Circuit , which it later withdrew. It later settled with several of the federal adjuster defendants (not named here) and commenced (fied) this action on October 5, 2011 - later serving the defendants on or shortly after October 13 , 2011 (Cervini (Dec. 21) Aff. , ~ 11). Both the Meridian and the attorney- defendants now move to dismiss the plaintiff s verified complaint pursuant to CPLR ~3211 (aJ(l), (5), (7). The defendants have argued inter alia that the complaint is dismissible on res judicata and/or collateral estoppel grounds based on the Federal dismissals; that various claims are time-bared since the plaintiff concededly did not serve its complaint within the six-month recommencement period conferred by CPLR ~205; and that , in any event , the causes of action as pleaded fail to state viable claims. First Central has opposed the motions and moved by order to show cause for relief compellng the defendants to accept its complaint as timely and/or deeming its service of process timely, nunc pro tunc 205 205(a). Notably, and with respect to the CPLR pursuant to CPLR claim , First Central does not dispute that it served its state law complaint on the defendants after CPLR ~205' s six-month tollng period had already expired on October 5 2011 , nor is it disputed that CPLR 205 (a) requires inter alia within such six-month period" (Quinones service that upon (a) defendant * * * (must be) effected Neighborhood Youth Family Servs., Inc. 71 AD3d 1106 , 1107)(Cmplt. ~~ 15- 16)(emphasis added). The defendants ' respective motions to dismiss are granted the extent indicated below. First Central' s order to show cause is denied. Preliminarily, the Court does not agree that the action is subject to the bar of res judicata. Although res judicata principles apply to decisions rendered by Federal Courts Governor for New York State 90 AD3d 716; Toscano (see , Lamb 4B' s Realty VlIi Southampton Brick & Tile, LLC 84 AD3d 780 , 781), " (t)he rule in New York is that a dismissal of a pendent State action by a Federal cour is presumed to be not on the merits absent a clear indication to the [* 7] contrar 62 NY2d 819 , 821 (1984); Caristo Constr. Corp., E.I du Pont de (1983); Dietrich of Old Field Co. Nemours York Tel. Co. 146 AD2d 312 Travelers Indem. Co. 316; Co. 60 NY2d 686 688 Cowen McLearn 38 AD3d 1335; Van Hofv Town of Warwick 23 AD3d 454; see , City of New York Rubin 207 AD2d 263 265- 266 (Browning Ave. Realty Corp. Incorporated Vil. Stylianou Capital Tel. Co. 249 AD2d 382; Sarkisian 139 AD2d 27 29 New cf, Choice Care Long Is. 229 AD2d 527 , 528). Indeed , even "the language ' with Tomasello prejudice ' is narrowly interpreted when the interests of justice , or the paricular equities involved see also (Van Hofv Town of Warwick, supra 249 AD2d 382 warant such an approach" Greiner 72 AD3d 665 , 667). Pawling Lake Prop. Owners Assn., Inc. Here , while the District' s Cour' s March 30 , 2011 order dismissed the action in its entirety, " with prejudice " the record confirms that the Court did not consider First Central' pendent , State law claim on the merits. Rather , as evidenced by the underlying, March 3 2011 order - and the language contained therein - the District Court limited its analysis to the Federal RICO claims interposed and declined to exercise jurisdiction over First Central's pendent state v. Meridian Residential Capital, et. , al. , supra 2011 WL (First Central Savings Bank law claims 838910 , at 11 D. Since it is clear that " (t)he Federal Cour made no determination as to the merits of the plaintiffs pendent State law * * * causes of action and presumably never exercised (Van Hofv Town of jurisdiction thereover " those claims are not subject to the bar of res judicata Warwick, supra 249 AD2d 382; Rubin, supra). Ave. Realty Corp. lWPIForest Elec. Corp. v. Whitfeld Browning 223 AD2d 423; The claims are also not bared as matter of law pursuant to the doctrine of collateral estoppel , inasmuch as the damage and proximate cause concepts relied upon by the District Court were predicated upon federal , RICO pleading criteria, not Leucadia Natl. Corp. 94 NY2d 426 , 432- 433; (cf, Pinnacle Consultants determinative here Combs 25 AD3d 370 , 371). Burrowes Turning to the movants ' alternative dismissal theories , and in particular , their statute of prima facie limitations claims, the Cour finds that the movants have established that First Central did not timely serve the defendants within six months of the final dismissal order issued by the District Court on April 7 , 2Ql1 Neighborhood Youth Francis Hosp. e., prior to October 5 , 2011 (Cmplt. Family Servs. , Inc. , supra 71 AD3d 1106 , 1107; 37 AD3d 690 , 691; Burns While First Central may have fied 17)(Quinones Pi Ju Tang St. Pace Univ. 25 AD3d 334 , 335). or commenced the action prior to the termination of [* 8] the six-month period - albeit only days before , on October 5 , 2011 - it did not effectuate (cf, Gazes until after the six month period had already expired service Bennett 70 AD3d 579). It also did not make its current motion until over two months after that period had terminated - and then (cf, Bahadur only after certain defendants first moved to dismiss New York State Dept. of 88 AD3d 629). Accordingly, those claims whose applicable limitations Correctional Servs., periods expired prior to First Central's commencement of the subject action on October 5 , 2011 are time- bared of Lynbrook (Pyne 85 AD3d 847; 20 E. Owners Corp. 267 AD2d 168 , 169 35 Henriquez see, De Verna v. Inc. Vilage Inserra Supermarkets, Inc. 68 AD3d 927 , 928). The Court notes in this respect that the various attorney- defendants (Frankel , Shore and Mehl), have shown that the closings in they were involved , including those most recently identified in First Central' s opposition papers , all occurred more than three years before the institution of the subject action in October of2011 (CPLR ~214(6); Condon Resnick, DeStaso LLP 90 AD3d 809 812). Nor in this pre-answer context , did the attorney- defendants waive the right to interpose the subject , limitations defenses (CPLR S3211 (e); 801 v. Hutton l82 AD2d Westchester County Health Care Corp. 16 NY3d 323 327 802 see generally, Goldenberg (2011); Matter of Augenblick Hickey Town ofCortlandt 66 NY2d 775 (1985)). Additionally, attorney Mehl has demonstrated that First Central did not serve " Jeffery E. Mehl" individually - the party actually named in the complaint , but rather , served the distinct entity, " Jeffery E. Mehl , P. " by delivering process to the secretar of state under to BCL ~ 306 (Mehl Main Brief at 8- 9). The complaint is therefore alternatively dismissable as against Mehl individually on the ground that personal service was never properly effectuated on him (see, Somer Wand Rotondi , 219 AD2d 340 , 343- 344). However , those branches of Meridian s motion which are to dismiss the plaintiffs remaining non- time- bared , contract claims (first through third causes of action), including the Brecher guarantee (third) cause of action , should be denied. The Cour disagrees that these claims are dissmissable as a matter of law on the theory that the Origination Agreement is merely an agreement to agree and/or that the requisite detail is absent to the extent that the contract claims are fatally deficient at this pre-answer juncture of the action (Meridian Brief at 12- 13). The particulars relating those loans which are stil timely can be further amplified during the course of pre- trial discovery. With respect to the related specific performance (fourth) cause of action (arising out of the " buy back" requirement), Meridian s laches defense does not mandate ," [* 9] Meridian s claim that First Central slept on its rights and made no dismissal at this point specific performance claims until after the real estate market collapsed years later , in 2008 (Meridian , Main Brief at ll; Cmplt. ~ 47). Upon the inconclusive factual record developed to date , this largely fact- intensive claim canot be resolved as a matter of law at this early stage in Galea 48 AD3d 791 , 792). (Trahan the litigation With respect to the fifth and sixth , fraud- based claims , a plaintiff must allege " a material misrepresentation of an existing fact , made withiknowledge of the falsity, an intent to induce reliance thereon , justifiable reliance upon the misrepresentation , and damages DeMichele 88 AD3d 954 v. 553 559 (2009); 957 Louise Wise Servs. , Ross v. see, Eurycleia Partners, LP (High Tides, LLC Kissel, LLP 12 NY3d Seward Inc. 8 NY3d 478 488 (2007)). Moreover CPLR ~3016(b) requires that the circumstances of the fraud must be " stated in detail " including specific dates and (other) items Scott v. AMS Mtge. Servs. , Inc. 69 AD3d 691 (Morales see, 92 AD3d 666). Conclusory assertions and/or " (s)weeping references to acts by all Fields, or some of the defendants " wil not suffce 2007 WL 1062519 at 5 (E.D. Shimiaie v. Y. 2007); 91 AD3d , 739 , 740- 741; (Quinones v. Schaap, Const. Corp. v. Gottbetter 89 AD3d 708 , 710; AD2d 736; 692 Henry v. Aetna Cas. Shadan - Misc. City of New York Sur. Co. v. Orchid Supp. 2d. Merchants Mut. Ins. Co. , 84 , 2011 WL 5295209 (Supreme Court , Nassau County 2011)). Preliminarily, those fraud claims which rely on Meridian s alleged failure to buy- back stated loans , are duplicative of the first and second breach of contract causes of action , which arise out of the same . operative facts (Cmplt. , ~~ 66- 88). It is settled that " a cause of action alleging breach of contract may not be converted to one for fraud merely with an allegation that the contracting party did not intend to meet its contractual obligations (Refreshment Management Services, Corp. see, New York Univ. v. Complete Offce Supply Warehouse Corp. Continental Ins. Co. 87 NY2d 308 318 (1995); 89 AD3d 913 , 914 Clark- Fitzpatrick, Inc. Long Island R. Co. 70 NY2d 382 389 (1987)). Similarly, the fraud claims alleging that the attorney- defendants " intentionally " omitted the rate floor provisions are duplicative of attorney malpractice (seventh) cause of action (Cmplt. , 'r~115- 116; 121- 122)(Daniels Turco 84 AD3d 858 , 859). In any event , the verified complaint (as to the " rate floor " fraud issue) merely lumps the Meridian and attorney- defendants together and then , in bare- boned fashion , avers that the , ~ [* 10] defendants (as an undifferentiated group), " intentionally" and thereby fraudulently, closed loans (Daly without the rate floors Kochanowicz 67 AD3d 78 , 90; v. Shimiaie Shadan , supra). The complaint , however , is vague in describing the manner in which the purorted rate floor fraud was supposedly perpetrated. Among other things , it: (1) never clearly links a particular attorneydefendant to a given closing or identifies the dates when the offending closings occurred; (2) does not allege that the attorneys drafted or prepared the improper documents or define precisely what closing duties the attorneys had agreed to undertake as part oftheir retainer; (3) omits facts detailing precisely how - or even if - the attorney- defendants (or the Meridian defendants) were ever apprised by First Central that the rate floors were required components of the loan agreements; and (4) does not attribute to specific defendants , any particularly described , false statements relating to the closings or rate floors Schaap, supra 91 AD3d 739 , 741). (Quinones Rather , the complaint's rate floor fraud theory appears to founded in large part , on presumption that because the documents relied on by First Central contained the rate floors - customer loan documents did not - and certain both Meridian and the attorney defendants must therefore have " intentionally" omitted the floor provisions , with the requisite scienter and thereby committed fraud (Cmplt. , ~~ 115 , 121). However , absent further explanatory or contextual background , attaching the term " intentional" to a series of otherwise inconclusive averments does not establish a present intent to deceive or otherwise spell out a properly detailed cause of v. (High Tides, LLC action sounding in fraud DeMichele, supra 88 AD3d 954 958- 959; CPLR ~3016(b)). It also bears noting that the Origination Agreement itself refers to the duties to be assumed at the closings by retained counsel , and at least insofar as therein described , depicts those duties in a decidedly narrow fashion i. e. it provides that " (t)he legal counsel selected by the Bank shall be responsible for ensuring that all closing documents are properly signed by the Borrower , the Bank or the appropriate third party, as applicable and contain authentic signatures (Origination Agreement 10)(see, Turner 849 850). While the attorney- defendants v. Meirowitz, LLP 61 AD3d Irving Finkelstein were not formal paries to the Origination Agreement, inter alia that First Cental plainly was. Lastly, First Central has not alleged facts establishing, but for " the attorney- defendants ' purported negligence , it would not have incurred damages & R Ginsburg, LLC v. Segal, Goldman, Mazzotta Allen 89 AD3d 804 , 806 see, Leder Siegel, P. 90 AD3d 1208 1209; Humbert Spiegel 9 NY3d 836 , 837 (2007D. Contrar to First , ~~ [* 11] Central' s contentions , the complaint does not specifically allege that the rates ever reset below the floor figure which allegedly should have been in the customer loan documents (Pltff's Brief at 4 15; Cmplt. , ~~ 54 , 65 118 123 133). It is settled that a " failure to demonstrate proximate cause requires dismissal of a legal malpractice action regardless of whether the Clare 81 AD3d 923 925). (Snolis attorney was negligent" Those branches of the motions which are to dismiss the negligent misrepresentation and action are also granted. Firstly, to the extent that the fiduciar duty (eighth and ninth) causes of Meridian- based , fiduciar duty claims accrued more than three years prior to the October 5 , 2011 commencement date , they are time- barred. In any event , to succeed on a cause of action to recover damages for breach of fiduciar duty '" a plaintiff ' must prove the existence of a fiduciar relationship, misconduct by the defendant , and damages that were directly caused by the defendant' s misconduct'" Robert I Gluck, MD. , LLC Goldman, Sachs v. (Guarino v. North Country Mortg. Banking Corp. 79 AD3d 805 , 807; Kenneth M Kamler, MD. , LLC Co. 5 NY3d 11 , 19 (2005); see, EBC L Inc. 74 AD3d 1167 v. Northeast Gen. Corp. Wellngton Adv. NY2d 158 , 162 (1993)). " A cause of action sounding in breach of fiduciary duty must be pleaded with the paricularity required by CPLR ~3016" (Armentano v. Paraco Gas Corp. 90 AD3d 683 684), and a plaintiff must also " do more than make allegations of unscrupulous acts Gluck, MD. , LLC v. Kenneth M Kamler, MD. , LLC, supra). (Robert I Similarly, with respect to negligent misrepresentation , a plaintiff must allege: (1) the existence of special or privity- like relationship imposing duty on defendant to impar correct information to plaintiff; (2) that information was incorrect or withheld; and (3) reasonable reliance on information or omission (High Tides, LLC DeMichele, supra 88 AD3d at 957- 958). " Liability for negligent misrepresentation has been imposed only on those persons who possess unique or specialized expertise , or who are in a special position of confidence and trust with the injured part misrepresentation is justified" v. such that Schaefer 89 NY2d 257 (Kimmell reliance on the negligent High Tides, LLC 263 (1996); A special relationship does not arise out of an ordinar DeMichele, supra). business transaction between two paries (US Express Leasing, Inc. v. arm s length Elite Tech. (NY), Inc. , 87 AD3d 494 , 497). At bar , the complaint contains only circular averments as to Meridian with respect to the requisite , special relationship oftrust (Cmplt. 135- 138)(High Tides, LLC v. DeMichele, supra, [* 12] see , Baer 88 AD3d at 960 Complete Off Supply Warehouse Corp. 89 AD3d 877 , 878; Complete Off Supply Warehouse Corp. , Refreshment Mgt. Servs., Corp. v. 914; US Express Leasing, Inc. Elite Tech. (NY), Inc. , supra 89 AD3d 9l3 supra 87 AD3d 494 , 497). The parties contracts also belie the inference that there arose anything other than a conventional business arrangement between two sophisticated , commercial entities - Meridian and First Central (Northeast Gen. CO/po DiSanto Realty, LLC, v. Wellngton Adv. , supra 82 NY2d 158 , 162; Lunal Realty, LLC 88 AD3d 661 663). As to the negligent misrepresentation claim , while the complaint avers , in conclusory terms , that the defendants - as an undifferentiated repeated factual misrepresentations " (Cmplt. , ~ 128), it does not paricularly describe any (High Tides, LLC v. DeMichele, specific or affirmative misstatements made by these defendants The record further establishes that the negligent misrepresentation claim is also supra). Owen 72 AD3d 1006 , 1007; v. (Conklin dismissable as duplicative of the legal malpractice claim Sitar group - made Sitar 50 AD3d 667 670). v. The tenth cause of action , styled as a combined unjust enrichment and conversion claim , is also dismissed since: (1) as to Meridian , an unjust enrichment is not viable because there is a (EBC contractual agreement governing the involved subject matter 1, Inc. v. Goldman Sachs & Co. 5 NY3d 11 , 23 (2005D; and (2) First Central has not meaningfully opposed dismissal of its conversion claim. In addition , the conversion claim is miscast since it does not properly allege that First Central had " ownership, possession , or control of the proceeds " involved Corp. Castaldi v. Gottbetter , supra v 39 89AD3dat710; Winfeld Assoc. duplicative of the legal malpractice claim (Orchid Const. Quinonesv. Schaap, supra 91 AD3dat741; 30 AD3d 458 , 459). Lastly, the unjust emichment claim is also (Town ofWaUkil Rosenstein 40 AD3d 972 , 974). The Court has considered First Central' s remaining contentions and concludes that they are insuffic ient to defeat the movants ' respective motions to the extent granted above. Accordingly, it is ORDERED that the motions pursuant to CPLR ~3211 (a)(l), (S), (7), CPLR ~3016 , by the attorney- defendants Jeffrey E. Mehl , Esq. , David S. Frankel , P. , and the Law Offices of Sam [* 13] Shore , for an order dismissing the complaint insofar as interposed as against them , are granted and the plaintiffs action , together with all cross- claims , are hereby dismissed against said defendants , and it is further ORDERED that the motion pursuant to CPLR ~3211 (aHl), (5), (7) by the defendants Meridian Residential Capital , d/b/a , Trump Financial, Meridian Mortgage Services , Inc. , David Brecher , Meridian Mortgage Services , Inc. , and DBS Servicing Solutions , Inc. , for an order dismissing the complaint insofar as interposed as against them , is granted with respect to plaintiffs fifth through tenth causes of action , but denied with respect to the stated portions of the first through fourth causes of action , which shall survive in accordance herewith , and it is fUliher ORDERED that the order to show cause by the plaintiff First Central Savings Ban , is hereby denied. The foregoing constitutes the decision and order of the Court. Dated: March 27 , 2012 Cc: Furman , Kornfeld & Brennan , LLP 61 Broadway, 26 Floor New York, NY 10006 Abrams , Garfinkel , Margolis & Bergson , LLP 237 West 35 Street , 4th Floor New York , NY 10001 Traub , Lieberman , Straus & Shrewsberry, LLP Mid- Westchester Executive Park Seven Skyline Drive Hawthorne , NY 10532 Todtman , Nachamie , Spizz & Johns , P. 425 Park Avenue , 5 Floor New York , NY 10022 Proskauer Rose , LLP Eleven Times Square New York, NY 10036- 8299 eNTERED MAR 2 8 2012 NASSAU COUN T'1 COUTY Clllt' OFFICE

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