Skarla v NPSFT LLC 2016 NY Slip Op 30152(U) January 27, 2016 Supreme Court, Queens County Docket Number: 90/14 Judge: Allan B. Weiss takes a long time to explain, but its all about real estate, and the desire to take over some juicy properties. Did the attorney wrongfully help out? That’s still to be decided, but while the legal malpractice case is gone, breach of fiduciary duty and other claims remain.
“Plaintiff commenced this action on January 6, 2014, asserting various claims, including causes of action against defendants Golfinopoulos for breach of fiduciary duty, fraud in the inducement, constructive fraud, fraudulent concealment, unjust enrichment, and constructive trust. Plaintiff sought to set aside the judicial sale of the real properties known as 329 150 Street, Whitestone, New York (Block 4507, Lot 8) (the Whitestone property) th (a residential property) and 23-33 31 Street, Long Island City, New York (Block 835, Lot st 25) (the Long Island City property) (a commercial mixed-use property) (together “the mortgaged premises”) held on May 3, 2013 pursuant to the judgment of foreclosure and sale entered in the action entitled Eldridge Properties, Inc. v Skarla, (Supreme Court, Queens County, Index No. 10936/2007) (the foreclosure action), void the referee’s deed to Eldridge Properties, Inc. (Eldridge), and the deeds from Eldridge to NPSFT LLC (NPSFT) and NPSFT 1 LLC (NPSFT1) (the NPSFT entities), impose a constructive trust on the Whitestone and Long Island City properties, pierce the veils of the corporate defendants so as to recover damages individually from their officers, directors and employees, and for injunctive relief. Plaintiff alleged that due to the purported wrongful acts of defendants, she was unlawfully deprived of the Whitestone and Long Island City properties, and equity therein, through foreclosure and sale in the foreclosure action.”
“Thereafter, by order dated July 28, 2014, the action entitled Skarla v Golfinopoulos (Supreme Court, Index No. 7649/2014) was consolidated with the instant action. In that second action (Index No. 7694/2014), plaintiff Helen Skarla named Kostas Golfinopoulos, Esq. and Steven W. Stutman, Esq. as party defendants and asserted causes of action against defendant Golfinopoulos for legal malpractice and “attorney misconduct and deceit,” and sought compensatory, consequential, punitive and treble damages. By order dated December 8, 2014, the complaint insofar as asserted against defendant Steven Stutman, Esq. was dismissed and the remainder of the action was severed. Meanwhile, by order dated October 17, 2014 in the foreclosure action, the judicial sale of the Whitestone and Long Island City properties was vacated, and the referee’s deed to Eldridge, and the subsequent deeds dated June 5, 2013 from Eldridge were stricken from the records of the City Register. By virtue of the vacatur of the foreclosure sale and setting aside of the deeds, record title of the mortgaged premises was returned to plaintiff.”
“Defendants Golfinopoulos assert that because the foreclosure sale of the properties and the deeds have been set aside, plaintiff has suffered no cognizable injury to support the remainder of the causes of action (i.e., those portions not barred by the applicable statutes of limitations) based upon breach of fiduciary duty and fraud insofar as asserted against them. In an action for breach of fiduciary duty or fraud, injury is a required element of the cause of action (see Lama Holding Co. v Smith Barney, 88 NY2d 413, 421 [1996]; Channel Master Corp. v Aluminium Ltd. Sales, 4 NY2d 403, 407 [1958]; Kurtzman v Bergstol, 40 AD3d 588, 590 [2d Dept 2007]). Plaintiff alleges that during the period of the engagement of defendants Golfinopoulos, Golfinopoulos schemed with Steven Louros, Esq. to defraud her and enable defendants Eldridge and the NPSFT entities, companies with whom Golfinopoulos was purportedly associated, to acquire the mortgage loan and obtain the properties at a severely discounted value at foreclosure, and divest her of all ownership interest. Plaintiff also alleges that defendants Golfinopoulos breached their fiduciary duties to her by engaging in selfdealing and acting for the benefit of defendants Eldridge and the NPSFT entities rather than for her benefit. According to plaintiff, defendants Golfinopoulos conspired with Louros to acquire the note and mortgage on behalf of defendant Eldridge, and then received disbursed moneys from defendant Eldridge after the transfer of the parcels to the NPSFT entities. She alleges she suffered injuries including becoming homeless as a result of the reliance on the alleged advice of defendants Golfinopoulos to rent out her home in an effort to generate income, incurring legal fees to defendants Golfinopoulos relative to their representation of her in connection with the foreclosure action, incurring of expenses and legal fees related to the efforts to set aside the foreclosure sale and subsequent deeds, and incurring, during the period of her divestment of title, water damage to and building violations on the Whitestone property. Plaintiff hence has sufficiently alleged the element of injury to state causes of action based upon breach of fiduciary duty and fraud insofar as asserted against defendants Golfinopoulos.”