Ferreira v Citiwide Real Estate & Mgt. Co.

[*1] Ferreira v Citiwide Real Estate & Mgt. Co. 2013 NY Slip Op 50745(U) Decided on May 8, 2013 Supreme Court, Queens County Kitzes, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 May 8, 2013
Supreme Court, Queens County

Johnny Ferreira, Plaintiff,

against

Citiwide Real Estate & Management Co., DEUTSCHE BANK NAT'L TRUST CO, AS TRUSTEE c/o PITNICK & MARGOLIN, LLP, JENNIFER L. BERNSTEIN, ESQ., PAUL J. SOLDA, ESQ., PABLO A. GEYMAR, ESQ., MIGUELINA FANA, AMERIMOD INC., JOHN DOE & JANE DOE, Defendants.



3699 / 2010

Orin R. Kitzes, J.

The following papers numbered 1 to 22 read on this motion by defendants Deutsche Bank Nat'l Trust Co, as Trustee (Deutsche Bank) and Paul J. Solda, Esq. for summary judgment dismissing the complaint, cancelling the lis pendens and awarding counsel fees and costs; cross-motion by co-defendant Jennifer L. Bernstein, Esq. For summary judgment dismissing the complaint; and cross-motion by plaintiff for leave to serve an amended complaint and to refer this action to the Honorable Allan B. Weiss.

Papers

Numbered

Notice of Motion-Affirmation-Exhibits...........1-3

Supporting Affidavit-Exhibits...................4-5

Memorandum of Law

Affirmation in Opposition.......................6-7

Notice of Cross Motion-Affirmation-Exhibits.....8-11

Notice of Cross Motion-Affidavits-Exhibits......12-17 [*2]

Opposing Affirmation............................18-19

Reply Affirmation...............................20-21

Stipulation.....................................22

Upon the foregoing papers the motion and cross motions are determined as follows:

Defendant Jennifer L. Bernstein's cross motion is moot, as the parties entered into a so-ordered stipulation, dated October 3, 2012, whereby said cross motion was withdrawn and the caption was amended to delete this defendant as a party defendant, with prejudice.

This action arises out of a foreclosure proceeding commenced on August 21, 2008 by Deutsche Bank against Johnny Ferreira, plaintiff herein, and Jose Quinones, et al. bearing index number 21059/2010. Mr. Ferreira and Mr. Quinones were the co-owners of the premises known as 27-24 Curtis Street, East Elmhurst, New York. Mr. Ferreira, pursuant to an unrecorded deed, dated January 26, 2009, became the sole owner of the mortgaged property. Upon the alleged default of defendants therein, Deutsche Bank moved by way of ex-parte applications for an Order of Reference and for a Judgment of Foreclosure and Sale. The foreclosure and sale were held on March 27, 2009 and the referee executed a deed on the same day and transferred ownership to Deutsche Bank, the successful bidder at the sale.

According to plaintiff, when he received a 10 day notice to vacate the premises, he retained Paul Solda to represent him in the eviction proceeding that was commenced by Deutsche Bank on or about May 20, 2009 in civil court. On June 30, 2009, Mr. Solda entered into a stipulation granting Deutsche Bank a judgment of possession and providing Mr. Ferreira until August 31, 2009 to vacate the premises. Mr. Ferreira vacated the premises on November 30, 2009.

On February 16, 2010, Mr. Ferreira, then self represented, commenced the within action by filing a summons and complaint, and also filed a notice of pendency. Plaintiff Ferreira seeks to reinstate his ownership of the foreclosed property, and to recover damages. He alleges that Deutsche Bank, and his former counsel Paul Solda, acted in concert and interfered with his due process rights by filing a fraudulent stipulation of settlement in the eviction proceeding. He further alleges that Paul Solda lacked the authority to enter into the stipulated judgment of possession; that defendant Amerirod Inc., a loan modification company, its officers and agents defendants Pablo A. Geymar and Miguelina Fana, engaged in fraudulent actions which resulted in the mortgage foreclosure action. Plaintiff in his wherefore clause seeks injunctive and declaratory relief, and damages.

Citiwide Real Estate & Management Co., Pitnik & Margolin, LLP and Jennifer L. Bernstein, Deutsche Bank and Paul Solda have each served and filed an answer. The remaining defendants have not appeared or answered and plaintiff has not moved for a default judgment with respect to those defendants. [*3]

In 2011, Mr. Ferreira moved in the mortgage foreclosure action to vacate the default judgment of foreclosure and sale, setting aside the foreclosure sale, vacating the referee's deed, and dismissing the action pursuant to CPLR 5015(a)(1) and (4). The Honorable Allan B. Weiss, in an order dated June 22, 2011, withdrew its prior order of May 16, 2011, granted Mr. Ferreira's motion in its entirety, and dismissed the foreclosure action, as Deutsche Bank had failed to establish that jurisdiction had been obtained over Mr. Ferreira by proper service of process. Mr. Ferreira, thus, was reinstated to possession of the subject real property.

Deutsche Bank and Solda now move for summary judgment dismissing the complaint on the grounds that it fails to state a cause of action. The court has examined the complaint and finds that it fails to state cognizable causes of actions against each of the named defendants. Further, to the extent plaintiff alleges that Mr. Solda was not authorized to enter into the stipulation in civil court and seeks to recover possession of the real property, this claim is now moot, as Judge Weiss' order of June 22, 2011 effectively restored Mr. Ferreira's possession of said property.

Plaintiff's counsel, concedes that the complaint does not state "comprehensive causes of action against the Defendants herein, together with their corresponding damages." Plaintiff therefore cross moves for leave to serve an amended complaint.

With respect to plaintiff's cross-motion, "[l]eave to amend or supplement pleadings should be freely granted unless the amendment sought is palpably improper or insufficient as a matter of law, or unless prejudice and surprise directly result from the delay in seeking the amendment" (Koenig v Action Target, Inc., 76 AD3d 997 [2d Dept 2010], quoting Yemini v Goldberg, 46 AD3d 806 [2d Dept 2007], quoting Maloney Carpentry, Inc. v Budnik, 37 AD3d 558, 558 [2d Dept2007]; see CPLR 3025 [b]; Bajanov v Grossman, 36 AD3d 572, 573 [2d Dept 2007]).An examination of the proposed amended complaint reveals that it contains factually inaccurate allegations. Plaintiff alleges that Deutsche Bank is the current owner of the subject premises, and that it acquired ownership of the property through Mortgage Electronic Registration System. The documentary evidence, however, reveals that Deutsche Bank acquired the mortgage through MERs, and acquired title to the subject real property by virtue of the referee's deed dated March 27, 2009. As Justice Weiss, in his order of June 22, 2011, vacated the referee's deed, title to the real property remains in Johnny Ferreira.

Plaintiff's proposed fifth cause of action against Deutsche Bank and Citiwide Real Estate & Management Co. does not state a claim for abuse of process. The requirements of that tort are (1) regularly issued process, civil or criminal, compelling performance or forbearance of a prescribed act, (2) motivation by a purpose to do harm which is without what has been traditionally described as economic or social excuse or justification, and (3) defendant seeking some collateral advantage or corresponding detriment to plaintiff which is outside the legitimate ends of the process (Board of Educ. v Farmingdale Classroom Teachers Assn., 38 NY2d 397, 403 [1975]). Additionally, a plaintiff must allege and prove actual or special damages (Supra, at 405). [*4]

The fact that a claimant may not prevail in the prosecution of a civil claim due to some procedural irregularity, such as a lack of jurisdiction, or lack of standing, or to the absence of merit in the claim, itself, does not transform the claimant into a tortfeasor or other wrongdoer (see Engel v CBS, Inc., 93 NY2d 195, 204-206 [1999]; Muro-Light v Farley, 95 AD3d 846 [2d Dept 2012] ["The institution of a civil action by summons and complaint will not give rise to a claim to recover damages for abuse of process, as doing so is not legally considered the type of process capable of being abused"]; Hornstein v Wolf, 109 AD2d 129 [2d Dept 1985] ["The mere bringing of a civil suit, even if groundless and ill motivated, does not result in special damage or injury sufficient to sustain an action for malicious prosecution"]).

Here, Deutsche Bank's commencement and prosecution of the mortgage foreclosure action cannot be the basis of an abuse of process claim, as it held the mortgage that was in default and said action was the proper legal means to litigate such a matter (see Key Bank of Northern NY v Lake Placid Co., 103 AD2d 19, 26-27 [3d Dept 1984], appeal dismissed 64 NY2d 644 [1984]). Furthermore, as Deutsche Bank obtained title to the property by virtue of the referee's deed, its commencement of a proceeding in civil court to evict Mr. Ferreira from the premises, cannot be the basis of an abuse of process claim, as it held title to the property at that time, and said action was the proper legal means to litigate the issue. Finally, Citiwide's alleged sale of the subject property at auction pursuant to the court's judgement of foreclosure and sale, which has now been vacated, cannot serve as the basis for a claim for abuse of process.

The proposed sixth cause of action against Deutsche Bank for the failure to provide a notice pursuant to RPAPL 1303 and Real Property Law § 265-a is not an actionable wrong. The failure to provide such a notice pursuant to statute is merely an affirmative defense in a mortgage foreclosure action, and does not create a right of action.

The proposed seventh cause of action against Deutsche Bank for lack of standing in the now dismissed mortgage foreclosure action is not actionable wrong (see Deutsche Bank Nat. Trust Co. v Hunter, 100 AD3d 810 [2d Dept 2012]). Rather, a lack of standing on the part of a plaintiff is merely an affirmative defense which must be timely raised by a defendant in a mortgage foreclosure action (see HSBC Bank USA, N.A. v Taher, 104 AD3d 815 [2d Dept 2013]; see also US Bank, NA v Reed, 38 Misc 3d 1206(A) [Sup Ct, Suffolk County 2013]).

The proposed amended complaint alleges causes of action against Paul Solda for breach of fiduciary duty, fraud, breach of the duty of good faith and fair dealing and "legal fraud." These causes of action all arise from the same facts as the proposed legal malpractice cause of action, do not allege distinct damages, and are thus duplicative of the proposed legal malpractice cause of action (see Tsafatinos v Wilson Elser Moskowitz Edelman & Dicker, LLP, 75 AD3d 546 [2d Dept 2010]; Turner v Irving Finkelstein & Meirowitz, 61 AD3d 849 [2d Dept 2009]; Kvetnaya v Tylo, 49 AD3d 608, 609 [2d Dept 2008]). Therefore, these proposed causes of action are palpably improper and may not be included in the amended complaint against Mr. Solda.

With respect to the proposed cause of action for legal malpractice, "[t]o state a cause of [*5]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 breach of this duty proximately caused the plaintiff to sustain actual and ascertainable damages (Leder v Spiegel, 9 NY3d 836, 837 [2007], cert denied sub nom. Spiegel v Rowland, 552 US 1257 [2008] [internal quotation marks omitted]; see Dempster v Liotti, 86 AD3d 169, 176 [2011]). "To establish the element of causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages but for the attorney's negligence" (Cervini v Zanoni, 95 AD3d 919, 920 [2d Dept 2012], quoting Snolis v Clare, 81 AD3d 923, 925 [2011]).

The court finds that plaintiff's proposed complaint adequately alleges a cause of action for legal malpractice based Mr. Solda's alleged failure to review the mortgage foreclosure file, and move to vacate the judgment of default, foreclosure and sale, and the referee's deed on the grounds of lack of personal jurisdiction, rather than entering into the stipulation of settlement which resulted in plaintiff vacating the subject premises. To the extent that Mr. Soldas asserts that he was only retained to represent Mr. Ferreira in the civil court matter, the retainer agreement does not identify the court in which the Deutsche Bank action was pending, does not contain an Index Number for the matter entitled "Deutsche Bank v J Ferreira, et al", and refers to "[a]ll legal matters relative to defense of claims arising out of the above referenced matter and the foreclosed property." The retainer agreement on its face, thus, does not specifically limit Mr. Solda's representation of Mr. Ferreira to the civil court matter.

However, to the extent that Mr. Ferreira alleges he did not authorize Mr. Solda to enter into the stipulation in civil court, this claim cannot form a basis for legal malpractice. It is well settled that a stipulation made by the attorney may bind a client even where it exceeds the attorney's actual authority if the attorney had apparent authority to enter into the stipulation (see Hallock v State of New York, 64 NY2d 224, 231 [1984]).

In view of the foregoing, with respect to the motion by defendant Deutsche Bank and Paul Solda, summary judgment dismissing the complaint is granted as against Deutsche Bank and denied as to Paul J. Solda, Esq.; cancellation of the notice of pendency against 24-27 Curtis Street, East Elmhurst, New York is granted; and an award of counsel fees and costs are denied.

With respect to plaintiff's cross motion, the branch seeking leave to amend the complaint is granted in part consistent with the foregoing and to interpose an action for breach of fiduciary duty and fraud and deceit against Pablo A. Geymar, Miguelina Fana and Amerimod Inc., Co. and an action for legal malpractice against Paul J. Solda and denied in part as to Deutsche Bank. In addition, as a motion for summary judgment searches the record, the complaint is dismissed as to defendants Citiwide Real Estate and Management and Pitnick & Margolin LLP. Thus, leave to amend the complaint as to these defendants is also denied. Finally, that branch of plaintiff's cross motion which seeks to refer this action to Justice Weiss is denied.

Plaintiff is directed to serve a new amended complaint, in accordance with this order, on [*6]the remaining defendants and to amend the caption accordingly, within 20 days after the service of a copy of this order, together with notice of entry.

Dated: May 8, 2013_________________________

J.S.C.