Gluck v First Equity Abstract Corp.

[*1] Gluck v First Equity Abstract Corp. 2007 NY Slip Op 52007(U) [17 Misc 3d 1114(A)] Decided on October 17, 2007 District Court Of Nassau County, First District Engel, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 17, 2007
District Court of Nassau County, First District

Seymour M. Gluck, Plaintiff,

against

First Equity Abstract Corp., KAREN PERREUX and MIKE CAVE, Defendant.



9662/07



Attorney for plaintiff: David A. Bythewood, Esq

Attorneys for defendant: Irwin & Streiner, LLC, Of Counsel to Ackerman & Felber, LLP

Andrew M. Engel, J.

This action was commenced on or about March 13, 2007. Issue was joined on or about May 28, 2007. The Plaintiff now moves for an order granting him a special preference, pursuant to CPLR § 3403, and for an order granting him summary judgment against the Defendants, setting the matter down for an immediate assessment of damages. The Defendants oppose the motion and cross-move for an order dismissing the Complaint pursuant to CPLR § 2311(a)(1) and (7).

Turning first to that branch of the Defendants' cross-motion which seeks to dismiss the Complaint for failing to state a cause of action, pursuant to CPLR § 3211(a)(7), the court's inquiry is limited to whether or not the Complaint states some recognizable form of action known in law, however imperfectly such cause of action is stated. Gruen v. County of Suffolk, 187 AD2d 560, 590 NYS2d 217 (2nd Dept. 1992); Foley v. D'Agostino, 21 AD2d 60, 248 NYS2d 141 (1st Dept. 1964) The Complaint must be construed in a light most favorable to the Plaintiff and all factual allegations must be accepted as true. Grand Realty Co. v. City of White Plains, 125 AD2d 639, 510 NYS2d 172 (2nd Dept. 1986); Barrows v. Rozansky, 111 AD2d 105, 489 NYS2d 481 (1st Dept. 1985) If the pleading contains factual allegations which taken together manifest any cause of action cognizable at law, the motion must be denied, Becker v. Schwartz, 46 NY2d 401, 413 NYS2d 895 (1978); Natural Organics, Inc. v. Smith, 38 AD3d 628, 832 NYS2d 76 (2nd Dept. 2007); Aranki v. Goldman & Associates, LLP, 34 AD3d 510, 825 NYS2d 97 (2nd Dept. 2006), regardless of whether the Plaintiff will ultimately prevail on the merits. Sanders v. Winship, 57 NY2d 391, 456 NYS2d 720 (1982); Guren v. County of Suffolk, supra .; Bovino v. Village of Wappingers Falls, 215 AD2d 619, 628 NYS2d 508 (2nd Dept. 1995)

The factual allegations contained in the Complaint set forth, in essence, that the Defendants Karen Perreux and Mike Cave, acting on behalf of the Defendant, First Equity [*2]Abstract Corp., ("Frist Equity") collected and controlled $5,872.64 in escrow funds, following the closing of a residential mortgage refinance by the Plaintiff, on or about October 3, 2006, to be used to pay the Plaintiff's school and village taxes, and that they failed to pay such taxes, causing damage to the Plaintiff. On its face, this Complaint sets forth a viable cause of action for breach of fiduciary duty and/or breach of contract against First Equity, but fails to set forth a cause of action against the Defendants, Karen Perreux and Mike Cave.

In the absence of any allegation that the Defendants, Karen Perreux and Mike Cave, acted other than in their capacity as an employee or corporate member of First Equity Abstract Corp., or committed an independent tort, they cannot be held personally liable for the obligations of the corporate defendant. Robbins v. Panitz, 61 NY2d 967, 475 NYS2d 274 (1984) rearg. den. 62 NY2d 803, 477 NYS2d 1026 (1984); Rodriguez v. 1414-1422 Ogden Avenue Realty Corp., 304 AD2d 400, 758 NYS2d 43 (1st Dept. 2003); Bonanni v. Straight Arrow Publishers, Inc., 133 AD2d 585, 520 NYS2d 7 (1st Dept.1987) Accordingly, that branch of the Defendants' motion which seeks to dismiss the Complaint for failing to state a cause of action is granted as to the Defendants, Karen Perreux and Mike Cave, only, and denied as to the Defendant, First Equity Abstract Corp.

The balance of the Defendants' motion, along with the Plaintiff's motion for summary judgment shall be addressed together.

Summary judgment is a drastic remedy, Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395, 165 NYS2d 498 (1957), which should not be granted where there is any doubt as to the existence of a triable issue of fact. Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 413 NYS2d 141 (1978) To prevail, the movant must first make a showing of entitlement to judgment, as a matter of law, Bank of New York v. Granat, 197 AD2d 653, 602 NYS2d 942 (2nd Dept. 1993), tendering evidentiary proof in admissible form. Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065, 416 NYS2d 790 (1979). The evidence presented is to be viewed in a light most favorable to the party opposing the motion, here the Defendant. Corvino v. Mount Pleasant Central School District, 305 AD2d 364, 757 NYS2d 896 (2nd Dept. 2003); Tassone v. Johannemann, 232 AD2d 627, 648 NYS2d 708 (2nd Dept.,1996) It is only thereafter incumbent upon the party opposing summary judgment to "demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action or tender an acceptable excuse for his failure so to do." Zuckerman v. City of New York, 49 NY2d 557, 427 NYS2d 595 (1980). The movant's failure to make such a showing, regardless of the sufficiency of opposing papers, mandates the denial of a summary judgment motion. Winegrad v. New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985)

In support of his motion, the Plaintiff submits his own affidavit, as well as that of the attorney who handled his mortgage refinance and closing, Gerald Zisholtz, Esq. These affidavits alleged, in sum and substance, that on October 3, 2006 the Plaintiff refinanced his mortgage; and, at the closing thereof First Equity, which was the title company, "picked up $5,145 to pay the first half of school taxes which were $4,676.64[,]" (Zisholtz Affidavit 6/20/07, ¶ 4) and "made payment of the first half school taxes some time in December, 2006, long after the default date, which was November 10, 2006." (Zisholtz Affidavit 6/20/07, ¶ 9) The Plaintiff further alleges that First Equity also escrowed $727.64 at the closing for the payment of village taxes due on December 1, 2006, which were not timely paid.

The Plaintiff alleges that as a result of First Equity's failure to timely pay the subject taxes he was charged interest and penalties in the total sum of $140.29. The Plaintiff [*3]further alleges that he received default notices and threatening communications from the mortgagee, which also paid the taxes after receiving delinquency notices from the County of Nassau. While the Plaintiff's Complaint makes no such allegation, Mr. Zisholtz, on behalf of his friend and client, alleges that the Defendants' conduct "caused the plaintiff enormous grief." (Zisholtz Affidavit 6/20/07, ¶ 18)

In opposition to the Plaintiff's motion, and in support of their cross-motion based upon documentary evidence, pursuant to CPLR § 3211(a)(1), the Defendants submit, inter alia, the affidavits of the Defendants, Karen Perreux and Mike Cave, each of whom has personal knowledge of the facts and circumstances surrounding this matter. The Defendant, Karen Perreux, does not dispute that at the time of closing she picked up, on behalf First Equity, $5,145.00 for the payment of school taxes, which were due on October 1, 2006, and $727.64 for the payment of village taxes, which were due on December 1, 2006. The Defendant, Mike Cave, acknowledges that, despite a default date of November 10, 2006, First Equity did not pay the school taxes until December 20, 2006. In support thereof, the Defendants submit a copy of a cancelled check made payable to the Receiver of Taxes in the sum of $4,816.93, which includes $140.29 in interest and penalties. Mr. Cave further alleges, and documents, that the balance of the school tax escrow, $328.07, was sent to the Plaintiff on December 20, 2006. Mr. Cave also alleges and documents that on December 20, 2006 First Equity also tendered the $727.64 village tax to the Receiver of Taxes, who returned same, due to the fact that the village tax had already been paid. First Equity documents that it then sent the Plaintiff a refund check of $727.64.

In reply, the Plaintiff alleges that as a result of the tardy tax payments made by First Equity his escrow account with the mortgagee became overdrawn, due to the mortgagee having received delinquency notices from the municipal authorities and then paying the school taxes twice. In support of this allegation, the Plaintiff submits correspondence received from the mortgagee wherein the mortgagee acknowledges its error and advises the Plaintiff that it requested a refund from the Town of Hempstead and will return these monies to the Plaintiff's escrow account when received.

Based upon all of the foregoing, there is no question that First Equity failed to timely pay the first half of school taxes, which were $4,676.64, by the grace period of November 10, 2006. First Equity does not dispute this fact. The only defense offered by First Equity, in this regard, is the conclusory statement of Mr. Cave that "The issuance of the checks to pay the taxes was timely and in conformity with the accepted practices of the title insurance industry." (Cave Affidavit 7/18/07, p. 1) First Equity does not offer any evidence, in admissible form or otherwise, to support this claim that the "accepted practices of the title insurance industry" would countenance a fiduciary delaying the payment of taxes beyond the grace period causing the homeowner to incur interest and penalties through no fault of his own. Neither party disputes that the interest and penalties charged to the Plaintiff, in the sum of $140.29, were a direct result of the failure of First Equity to pay the first half school taxes during the grace period.

Accordingly, that branch of the Plaintiff's motion which seeks an order granting him summary judgment on the issue of liability is granted; and, that branch of the Defendants' motion which seeks to dismiss the Complaint, pursuant to CPLR § 3211(a)(1), is denied.

Nevertheless, given the uncontroverted proof, the court does not see any reason to set this matter down for an assessment of damages. As noted, while Mr. Zisholtz alleges that the Plaintiff suffered some sort of emotional distress by virtue of the failure of the Defendants to timely pay the subject taxes, the Plaintiff makes no such allegation. Moreover, while the [*4]presence of a physical injury is unnecessary to sustain a claim for the infliction of emotional distress, a claim for such damages must generally be based upon conduct that unreasonably endangers a Plaintiff's physical safety or causes the Plaintiff to fear for his own safety. Gaylord v. Fiorilla, 28 AD3d 713, 813 NYS2d 534 (2nd Dept. 2006); Daluise v. Sottile, 40 AD3d 801, 837 NYS2d 175 (2nd Dept. 2007) Additionally, to be entitled to recover such damages, the Defendants' conduct must have been "so extreme in degree and outrageous in character as to go beyond all possible bounds of decency, so as to be regarded as atrocious and utterly intolerable in a civilized community (citation omitted)[,]" Naturman v. Crain Communitactions, Inc., 216 AD2d 150, 628 NYS2d 281 (1st Dept.1995); Hernandez v. City of New York, 255 AD2d 202, 679 NYS2d 818 (1st Dept. 1998); Glashow v. Linden Towers Co-op No.??4, Inc., 3 AD3d 550, 770 NYS2d 642 (2nd Dept. 2004); the "plaintiff must produce evidence which is sufficient to guarantee the genuineness of the claim (citation omitted)[,]" DiStefano v. Nabisco, Inc., 2 AD3d 484, 767 NYS2d 891 (2nd Dept. 2003); Johnson v. State, 37 NY2d 378, 372 NYS2d 638 (1975); Conway v. Brooklyn Union Gas Co., 189 AD2d 851, 592 NYS2d 782 (2nd Dept.1993); and, most importantly herein, such damages are not recoverable in a breach of contract action. Fleming v. Allstate Insurance Co., 106 AD2d 426, 482 NYS2d 519 (2nd Dept.1984); Campbell v. Silver Huntington Enterprises, LLC, 288 AD2d 416, 733 NYS2d 685 (2nd Dept. 2001); Martin v. Donald Park Acres At Hasting, Inc., 54 AD2d 975, 389 NYS2d 31 (2nd Dept. 1976) While the circumstances herein may have been upsetting to the Plaintiff, this is not a compensable injury.

Neither is the Plaintiff entitled to recover of the Defendants for the alleged negligence of the mortgagee in making a double tax payment. If there is any liability for such double payment, it lies with the mortgagee. Moreover, as indicated, the mortgagee has already advised the Plaintiff of its error and of the steps being taken by the mortgagee to remedy same and to make the Plaintiff whole.

Similarly, all of the documentation submitted unequivocally demonstrates that all of the funds escrowed by the Plaintiff with First Equity have been accounted for: $4,816.93 was paid for first half school taxes, interest and penalties; $727.64 was paid to the Plaintiff following the return of the village tax payment; and, a balance of $328.07 was paid to the Plaintiff, for a total of $5,872.64.

The only compensable loss sustained by the Plaintiff was the interest and penalties incurred by the failure of First Equity to timely pay the first half school taxes. Accordingly, the Plaintiff is entitled to summary judgment and to the entry of a judgment against the Defendant, First Equity Abstract Corp., in the sum of $140.29, with interest from December 20, 2006, plus the costs and disburdenments of this action.

That branch of the Plaintiff's motion seeking a trial preference pursuant to CPLR § 3403 is denied, as moot.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

October 17, 2007

___________________________

ANDREW M. ENGEL

J.D.C.