Marrero v Thomas

[*1] Marrero v Thomas 2019 NY Slip Op 50620(U) Decided on April 25, 2019 Supreme Court, Kings County Rivera, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 April 25, 2019
Supreme Court, Kings County

Edwin Marrero, EDGAR MARRERO AND ANGEL MARRERO, Plaintiff,

against

Marlon Thomas, MELANIO DIAZ, KAREN WHARTON, LOUIS A. GARCIA, NOEL ROBERTS, PAREDIUM INVESTMENT GROUP INC., FREEMONT INVESTMENT & LOAN, WELLS FARGO BANK N.A., REGENCY ABSTRACT, LLC AND STEWART TITLE INSURANCE, CO., Defendants.



KAREN WHARTON, Third Party Plaintiff,

against

ALBAA RUFAI, ESQ., UMANA OTON, ESQ.AND STEWART TITLE INSURANCE CO., Third Party Defendants



921/05



Attorney for Movant/

Third Party Defendant Alaba A. Rufai:

Romel Daniel

92 Prospect Place

Brooklyn, NY 11217

(212) 528-9944

Attorney for Third-Party Plaintiff Karen Wharton:

John S. James, Esq.

305 Broadway, Suite 1400

New York, NY 10007

Attorney for Third-Party Defendant Umana Oton:

Olusegun Adedeji, Esq.

14 vesey Street

New York, NY 10007

Attorney for Third-Party Defendant Stewart Title Insurance Co. :

Thomas G. Sherwood, LLC

300 garden Plaza, Suite 222

Garden City, NY 11530
Francois A. Rivera, J.

Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of motion of third-party defendant Alaba A. Rufai (movant or Rufai) filed on August 8, 2018, under motion sequence thirty-four, for an order granting summary judgment in his favor dismissing: (1) third-party plaintiff Karen Wharton's (hereinafter third-party plaintiff or Wharton) complaint and (2) third-party defendant Umana Oton's (hereinafter third-party defendant or Oton) cross claims. Wharton has opposed the motion and Oton has not.

Notice of Motion

Affirmation in Support of Motion

Exhibit A-J

Memorandum of Law in Support of Motion

Reply Affirmation

Affirmation in Opposition

Exhibit A-E

BACKGROUND

On March 16, 2005, Edwin Marrero, Edgar Marrero and Angel Marrero (hereinafter the Marreros) commenced an action (hereinafter the Marrero action) against defendants Marlon Thomas, Melanio Diaz, and Karen Wharton, among others, by filing a summons and complaint with the Kings County Clerk's Office (KCCO). On August 8, 2005, defendant Wharton commenced a third-party action against third-party defendants Rufai, Oton and Stewart Title Insurance Company (hereinafter Stewart Title). On August 19, 2005, third-party plaintiff Wharton filed an amended third-party summons and amended verified third-party complaint with the KCCO. On September 23, 2005, Oton interposed an answer with a cross claim. On October 11, 2005, Rufai filed a verified answer to the amended verified third-party complaint. On the same day, Rufai also filed a separate answer to Oton's cross claim.

Wharton's amended verified third-party complaint contains forty-four allegations of fact in support of seven causes of action. The first cause of action is for conspiracy, the second is for contribution, the third is for indemnification, the fourth is for fraud and deceit, the fifth is for implied contract, the sixth is for breach of fiduciary duty and the seventh is for negligence. The Marrero action pertains to the alleged illegal transfer of 3712 Lyme Avenue, Brooklyn, New York (hereinafter the subject property) to Wharton. Wharton's third-party action pertains to the third-party defendants' legal representation during the course of purchasing the subject property.

Wharton's amended verified third-party complaint alleges the following salient facts. Sometime prior to March 25, 2004, Wharton hired Oton to represent her in the purchase of the subject property. Subsequently, Wharton hired Rufai to represent her in the purchase of the subject property which included reviewing the title to the subject property. Wharton alleges that although public record showed that the sellers did not have good title to the subject property, Oton, Rufai and Stewart Title misled her to believe that she could purchase the property.

On January 4, 2019, at oral argument of the instant motion, Wharton withdrew the first, fourth, fifth and seventh causes of action as asserted against Rufai. The Court, thereafter reserved decision on Rufai's request for summary judgment dismissing Wharton's remaining causes of action for contribution, indemnification and breach of fiduciary duty.

MOTION PAPERS

The movant's motion papers consist of a notice of motion, an affirmation of counsel, Rufai's affidavit in support and ten annexed exhibits labeled A through J. Exhibit A is a copy of the verified amended complaint of plaintiffs Edwin Marrero, Edgar Marrero and Angel Marrero. Exhibit B includes a copy of the amended third-party summons and amended verified third-party complaint. Exhibit C is a copy of the third-party defendant Rufai's verified answer with cross claims. Exhibit D is a copy of the third-party defendant Oton's answer with affirmative defenses and a cross claim. Exhibit E is a copy of the third-party defendant Stewart Title Insurance Company's answer. Exhibit F is a copy of an affidavit signed by Karen Wharton dated March 25, 2004. Exhibit G is purported to be a copy of an escrow agreement. Exhibit H is a document denominated as Schedule A. It is described as a copy of the certification page of the title report for the subject property. Exhibit I is a copy of a deed to the subject property dated March 25, 2004. Exhibit J is described as a Partial Stipulation of Settlement.

Wharton's opposition papers consist of an affirmation of counsel and five annexed exhibits labeled A through E. Exhibit A is a copy of an affidavit signed by Karen Wharton dated March 25, 2004. It is a duplicate of the movant's exhibit F. Exhibit B is a copy of a deed to the subject property dated June 23, 2000. Exhibit C is a document entitled Schedule A. Exhibit C is a duplicate of the movant's exhibit H. Exhibit D is a copy of a document purported to be an escrow agreement. It is a duplicate of the movant's exhibit G. Exhibit E is a Partial Stipulation of Settlement. Exhibit E is a duplicate of movant's exhibit J.

LAW AND APPLICATION

Rufai seeks the dismissal of the amended verified third-party complaint's remaining causes of action for breach of contribution, indemnification and breach of fiduciary duty. By his affidavit he has averred that he was hired as Wharton's counsel for the purchase of the subject property on the same date as the closing. He has further averred that he had no involvement in any transaction that occurred prior to the closing date such as securing the services of title company or insuring title for the sale of the property. He contends that he diligently represented Wharton's legal interest at the closing.

Summary Judgment

It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists (Alvarez v Prospect Hospital, 68 NY2d 320 [1986]). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of material facts (Guiffirda v Citibank, 100 NY2d 72 [2003]).

A failure to make that showing requires the denial of the summary judgment motion, regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 NY2d 1062 [1993]). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact (Alvarez, 68 NY2d at 324).

A party opposing a motion for summary judgment is obligated "to lay bare his proofs" to sufficiently demonstrate, with admissible evidence, that a triable issue of fact will exist (Friends of Animals, Inc. v Associated Fur Manufacturers, Inc., 46 NY2d 1065 [1979]). A genuine issue of fact may not be demonstrated by using mere conclusions, expressions of hope or unsubstantiated allegations or assertions (Amatulli v Delhi Constr. Corp., 77 NY2d 525 [1991]).

"Pursuant to CPLR 3212 (b) a court will grant a motion for summary judgment upon a determination that the movant's papers justify holding, as a matter of law, "that there is no defense to the cause of action or that the cause of action or defense has no merit." Further, all of the evidence must be viewed in the light most favorable to the opponent of the motion (Marine Midland Bank v Dino & Artie's Automatic Transmission Co., 168 AD2d 610 [2nd Dept 1990])" (People ex rel. Spitzer v Grasso, 50 AD3d 535, 544 [1st Dept 2008]).

Contribution

A cause of action for contribution requires that the culpable parties must be subject to liability for damages for the same personal injury (Nassau Roofing & Sheet Metal v Facilities Development Corporation, 71 NY2d 599 [1988]). The parties need not be liable under the same theories or whether the party whom contribution is sought is allegedly responsible for the injury as a "concurrent, successive, independent, alternative or even intentional tort-feasor" (Id.). Contribution is not founded upon, nor does it necessarily arise from, contract, and only a ratable or proportional reimbursement is sought (McDermott v City of New York, 50 NY2d 211 [1980]; McFall v Compagnie Maritime Belge S.A., 304 NY 314 [1952]; Fox v County of Nassau, 183 AD2d 746, 746 [2nd Dept 1992]). Where a party is held liable at least partially because of its own negligence, contribution against other culpable tort-feasors is the only available remedy" (Fox, 183 AD2d at 746). "To sustain a third-party cause of action for contribution, a third-party plaintiff is required to show that ... a duty was owed to the plaintiffs as injured parties and that a breach of that duty contributed to the alleged injuries" (Eisman v Vil. Of E. Hills, 149 AD3d 806, 808-809 [2nd Dept 2017] quoting Guerra v St Catherine of Sienna, 79 AD3d 808 [2nd Dept 2010]). "The critical requirement ... is that the breach of duty by the contributing party must have had a part in causing or augmenting the injury for which contribution is sought" (Eisman, 149 AD3d at 808-09 quoting Nassau Roofing & Sheet Metal Co., 71 NY2d at 603).

However, contribution is not available in the absence of a breach of a duty, owed either to plaintiff, cross-claimant or third-party plaintiff, which caused or augmented the injury for which contribution is sought (see DiMarco v New York City Health and Hospitals Corp., 187 AD2d 479 [2nd Dept 1992]). Thus, contribution is not available where the third-party defendant owed no duty to defendant/third-party plaintiff and breached no duty owed to the main action plaintiff; or breached no duty to either plaintiff or defendant (see Rodriguez v Suffolk, 305 AD2d 574 [2nd Dept 2003]).

Here, Rufai established that he was hired to work for Wharton at the closing. Moreover, as set forth below, Rufai's conduct did not result in a breach of his fiduciary duty to Wharton. Rufai, as Wharton's counsel, did not owe a duty to the Marreos. Therefore, Rufai has demonstrated entitlement to judgment as a matter of law dismissing Wharton's claim against him [*2]for contribution. Wharton's opposition papers did not raise a triable issue.

Indemnification

Rufai also seeks to dismiss Wharton's cause of action for indemnification. Contribution arises automatically when certain factors are present and does not require any kind of agreement between or among the wrongdoers (Eisman, 149 AD3d at 808-809 citing Fox, 183 AD2d at 747). "Indemnity, on the other hand, arises out of a contract which may be express or may be implied in law 'to prevent a result which is regarded as unjust or unsatisfactory' " (Id.).

Contractual indemnification emerges not out of an agreement to perform work, but out of an agreement to indemnify (see Nesterczuk v Goldin Mgt., Inc., 77 AD3d 800, 804-05 [2nd Dept 2010]). The intention to indemnify a party against his or her own negligence must be unequivocally expressed (see Hogeland v Sibley, Lindsay & Curr Co., 42 NY2d 153[1977]). In the instant matter, defendant contends that there was no written agreement between Wharton and himself. He indicates that he was retained only to represent at the closing date for the subject property, which he purports is demonstrated by an affidavit purportedly signed by Wharton. In opposition, Wharton does not aver that there was a written indemnification agreement. Therefore, there is no viable claim for contractual indemnification.

Nevertheless, indemnification may be implied by law to prevent unjust enrichment or an unfair result (see McCarthy v Turner Const., Inc., 17 NY3d 369 [2011]). "The principle of common-law, or implied, indemnification permits one who has been compelled to pay for the wrong of another to recover from the wrongdoer the damages it paid to the injured party" (Bd. of Managers of Olive Park Condominium v Maspeth Properties, LLC,170 AD3d 645 [2nd Dept 2019]). Common-law indemnification is warranted where a defendant/third party plaintiff's role in causing the plaintiff's injury is solely passive, and thus its liability is purely vicarious (Bd. of Managers of Olive Park Condominium v Maspeth Properties, LLC, 170 AD3d at 647). "Since the predicate of common-law indemnity is vicarious liability without actual fault on the part of the proposed indemnitee, it follows that a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the doctrine" (Bd. of Managers of Olive Park Condominium v Maspeth Properties, LLC 170 AD3d 645 [2nd Dept 2019] quoting Desena v North Shore Hebrew Academy, 119 AD3d 631, 635 [ 2nd Dept 2014]). Consequently, when the liability of the third-party plaintiff is wholly vicarious, there may be recovery from the third party defendant whose negligence was imputed to the party liable (see Baron v Grant, 48 AD3d 608 [2nd Dept 2008]).

On the other hand, where the liability of the third-party plaintiff is not solely derivative and the third-party plaintiff is found to have directly breached a duty owed to the prime plaintiff, common law indemnification is not available and contribution may be the applicable remedy (see Eisman, 149 AD3d at 806).

Here, Rufai is not a party to the Marrero action. The allegations of fact in the Marrero action allege that Wharton actively aided and abated in the fraudulent transfer of the subject property by acting as a straw buyer. It also alleges that Wharton had a personal relationship with the seller or real estate broker. The Marrero action alleges that Wharton actually participated in the wrongdoing (see Bivona v Danna & Assoc., P.C., 123 AD3d 956, 958 [2nd Dept 2014]).

Rufai contends that his representation of Wharton was solely at the closing of the property. Even if Rufai was found to be negligent in his actions, Wharton's alleged liability to the Marreros is not solely passive and purely vicarious (see Bivona, 123 AD3d at 958). Therefore, Rufai has demonstrated his prima facie entitlement to judgment as a matter of law [*3]dismissing the cause of action for common law indemnification.

Breach of Fiduciary Duty

"A fiduciary relationship exists between two persons when one of them is under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation" (Smallberg v Raich Ende Malter & Co., LLP, 140 AD3d 942, 943-44 [2nd Dept 2016] quoting EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]). A plaintiff seeking to recover damages for breach of fiduciary duty must establish (1) the existence of a fiduciary relationship, (2) misconduct by the defendant and (3) damages directly caused by the defendant's misconduct (Nachbar v Cornwall Yacht Club, 160 AD3d 972, 973 [2nd Dept 2018]). It is well established that the relationship of client and attorney is one of "unique fiduciary reliance" which imposes on the attorney "[t]he duty to deal fairly, honestly and with undivided loyalty...including maintaining confidentiality, avoiding conflicts of interest, operating competently, safeguarding client property and honoring the clients' interests over the lawyer's" (St. Annes Dev. Co. v Batista, 165 AD3d 997, 997-98 [2nd Dept 2018] quoting Matter of Cooperman, 83 NY2d 465, 472 [1994]). "With rare exceptions, a lawyer may not place himself in a position where a conflicting interest may, inadvertently, affect, or give the appearance of affecting, the obligations of the professional relationship" (St. Annes Dev. Co., 165 AD3d at 997-98). Thus, any act of disloyalty by a lawyer will constitute a breach of the fiduciary duty owed to the client (see Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 9 [1st Dept 2008]). However, a violation of the disciplinary rule does not, without more, generate a cause of action for breach of fiduciary duty (see Schwartz v Olshan Grundman Frome & Rosenzweig, 302 AD2d 193 [1st Dept 2003]). Here, it is undisputed that Rufai was acting as Wharton's counsel at the closing for the subject property. Rufai's affidavit establishes that he relied on the title company's report rather than conduct an independent investigation of title to the subject property. However, this lack of due diligence does not rise to the level of misconduct akin to a direct violation of the rules of professional responsibility but rather mere negligence. Accordingly, Rufai has established, prima facie, that there was no malice or conflict of interest which would demonstrate disloyalty to Wharton. His affidavit, therefore, demonstrated that he did not breach his fiduciary duty to Wharton (see St. Annes Dev. Co., 165 AD3d at 997-98).

In opposition, Wharton contends that Rufai failed to exercise due diligence. It is noted that the amended verified third-party complaint did not plead a cause of action for legal malpractice. Had such a cause of action been plead, Rufai's alleged failure to exercise the reasonable skill and knowledge commonly possessed by a member of the legal profession would have been one of the essential element of (see Bakcheva v Law Offices of Stein & Associates, 169 AD3d 624 [2nd Dept 2019]).

In determining a motion for summary judgment, the court must view the evidence in the light most favorable to the nonmoving party and afford such party the benefit of every favorable inference (Ruggiero v DePalo, 153 AD3d 870, 872 [2nd Dept 2017] citing Gardella v Remizov, 144 AD3d 977 [2nd Dept 2016]). A motion for summary judgment should not be granted where the facts are in dispute, where conflicting inferences may be drawn from the evidence, or where there are issues of credibility (Id. at 979). Conclusory allegations, however, are insufficient to defeat summary judgment, and a plaintiff opposing the motion must provide more than a mere reiteration of those factual allegations contained in the complaint (Ruggiero, 153 AD3d at 872 citing Spaulding v Benenati, 57 NY2d 418, 425 [1982]).

Wharton's amended verified third party complaint makes only conclusory allegations [*4]regarding Rufai' alleged misconduct at the closing. Wharton's opposition papers did not include her affidavits or other documentary proof sufficient to raise a triable issue. Accordingly the cause of action for breach of fiduciary duty should be dismissed (see generally Alvarez, 68 NY2d at 324; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

Oton's Cross-Claim

Rufai also seeks an order granting summary judgment dismissing Oton's cross claim as asserted against him. Oton has not opposed Rufai's motion. By not doing so Oton is deemed to have abandoned its cross claims asserted against Rufai (see Ellis v Emerson, 34 AD3d 1334 [4th Dept 2006] citing Oberly v Bangs Ambulance, 96 NY2d 295, 297 [2001]). Therefore, this branch of Rufai's motion is granted.

CONCLUSION

Third-party defendant Alaba A. Rufai's motion for an order pursuant to CPLR 3212 granting summary judgment in his favor dismissing third-party plaintiff Karen Wharton's second cause of action for contribution is granted.

Third-party defendant Alaba A. Rufai's motion for an order pursuant to CPLR 3212 granting summary judgment in his favor dismissing third-party plaintiff Karen Wharton's third cause of action for indemnification is granted.

Third-party defendant Alaba A. Rufai's motion for an order pursuant to CPLR 3212 granting summary judgment in his favor dismissing third-party plaintiff Karen Wharton's second cause of action for contribution in the amended verified complaint is granted.Third-party defendant Alaba A. Rufai's motion for an order pursuant to CPLR 3212 granting summary judgment in his favor dismissing third-party plaintiff Karen Wharton's sixth cause of action for breach of fiduciary duty is granted.

Third-party defendant Alaba A. Rufai's motion for an order pursuant to CPLR 3212 granting summary judgment in his favor dismissing third-party defendant Umana Oton's cross claims is granted.

The foregoing constitutes the decision and order of this Court.

ENTER:

April 25, 2019

J.S.C.