In this upstate Legal Malpractice Case, plaintiffs entered into a high stakes high risk real estate and mortgage deal with sellers, who were encumbered and hounded by the IRS, County tax liens, and other debts.  Sales, mortgages, liens and law suits later the results of a legal malpractice case:

"It is undisputed that prior to accepting the mortgage, plaintiff was aware that its $300,000 loan which carried a 16% interest rate was a high risk transaction, as the Carneys had in excess of $1 million in judgments and liens at the time the loan was made. Indeed, the Carneys indebtedness to the Internal Revenue Service alone exceeded $955,000. Significantly, the $300,000 loan proceeds check was made directly payable to the Internal Revenue Service, which accepted this sum in partial satisfaction of the Carneys’ indebtedness and agreed to subordinate its remaining liens to plaintiff’s mortgage. Hence, the value of plaintiff’s security interest, even before the tax certificates were sold, was impacted by the superior liens of the unpaid property taxes. Had plaintiff acquired the property through foreclosure, for example, the taxes still would have had to be satisfied, the Carney debt would have been eliminated and, as such, so would any damages to plaintiff stemming from defendants’ alleged malpractice (see Central Hanover Bank & Trust Co. v Roslyn Estates, Inc., 266 App Div 244, 248-249 [1943], affd 293 NY 680 [1944]).

We must also reject plaintiff’s assertion that it has, nevertheless, been damaged by the loss of its opportunity to foreclose on the mortgage because the tax sale certificates had already been sold when the Carneys defaulted, giving the holder of the certificates the right to apply for a deed free of plaintiff’s mortgage. Plaintiff knew that in order to protect the mortgage, the rapidly accumulating unpaid real property tax liability would ultimately have to be satisfied. Thus, any failure by defendants to report the precise significance of the real property tax liability as of the closing is of no real consequence under these circumstances [FN1]. When plaintiff became aware that [*5]the tax sale certificates had been sold, an opportunity still existed to purchase them from their holder. The resulting devaluation of plaintiff’s security interest was no greater than it had been as a result of plaintiff’s acceptance of the mortgage with full knowledge of the outstanding tax liens. In fact, Corvetti was able to purchase the tax sale certificates from TCA in December 1996 at essentially the then current cost of satisfying the original tax liens.[FN2]

Thus, we conclude that the purchase of the tax sale certificates and ultimate acquisition of the property would have placed plaintiff in essentially the same position that it would have been in had it been able to foreclose on the property. Plaintiff argues, however, that it remains damaged because it was Corvetti and his wife, rather than plaintiff, that ultimately took title to the property. We reject this argument because, in our view, the facts presented represent one of those rare opportunities where we are able to find, as a matter of law, that a breach of fiduciary duty occurred (see Matter of Greenberg [Madison Cabinet & Interiors], 206 AD2d 963, 964 [1994]). By acquiring the property personally rather than on behalf of plaintiff, Corvetti misappropriated a corporate opportunity in breach of his fiduciary duty as president of plaintiff. Thus, any damage to plaintiff as a result of the tax sale was caused by Corvetti, rather than the alleged negligence of defendants.