Plaintiff was involved in several problematical joint real estate deals, each of which disappointed him as a participant. Was the law firm negligent in the transactions and was plaintiff damaged thereby? In Hobbick v Zegans 2018 NY Slip Op 32180(U) September 5, 2018 Supreme Court, New York County Docket Number: 159172/2017 Judge: Barbara Jaffe the answer is no.
“In April 2013, plaintiff and nonparty Calvin P. Hall jointly retained defendants to represent them in purchasing real property in Brooklyn. The closing was on September 10, 2013. Plaintiff believed that he was purchasing a 50 percent interest in the premises, and he obligated himself jointly and severally on a purchase money mortgage of approximately $440,000. Some time after the September 10, 2013 closing, plaintiff learned that the deed reflected that his ownership interest in the premises was one percent, whereas Hall’s was 99 percent. In October 2013, unaware of defendants’ malpractice in failing to ensure his 50 percent interest in the Brooklyn property, plaintiff had defendants represent him in selling a property in Saugerties, New York. At the time, he and nonparty Christopher Matson each held a 50 percent interest in that property. Before contracting for the sale of that property, defendants failed to secure a written agreement between plaintiff and Matson establishing an equal division of net proceeds from the sale, “with appropriate co-tenant accounting adjustments.” That failure “created a crisis immediately before closing where Matson refused to close the transaction unless he received more than he was entitled to as co-tenant” with plaintiff. Thus, plaintiff was forced to accept less than the amount to which he was entitled, and incurred adverse tax consequences in avoiding litigation concerning the sale. ”
“By decision dated September 5, 2017, a third-party action for legal malpractice brought by plaintiff against defendants in Supreme Court, Kings County, was dismissed without prejudice. (NYSCEF 16). Plaintiff timely filed a notice of appeal. (NYSCEF 23, Exh. C). ”
“As plaintiff’s third-party claim was dismissed on the merits in the Kings County litigation, it may not be relitigated here. (See Heritage Realty Advisors, LLC v Mohegan Hill Dev. LLC, 58 AD3d 435, 436 [1st Dept 2009], Iv denied 12 NY3d 830 “[Not only are the two . actions based on the same transactions, but the dismissal of the prior action, to the extent that it found that MHD was not in existence at the time the compensation agreements at issue were entered into, was not merely because of technical pleading defects, but on the merits”: complaint dismissed]; Singer v Boychuk, 194 AD2d 1049, 1051 f3d Dept 1993], Iv denied 82 NY3d 657 [grant of motion to dismiss under CPLR 321 l(a)(l) has effect of final judgment on merits]). That the dismissal was without prejudice and an appeal may be pending is of no moment. Even if the earlier decision is reversed, the action will .proceed in Kings County. ”
“On a motion to dismiss an action on the ground that it is barred by documentary evidence, the documentary evidence offered in support must utterly refute plaintiffs factual allegations, conclusively establishing the defense as a matter of law. (Goshen v Mutual Life Ins. Co. of New York, 98 NY 314, 326 ; Leon v Martinez, 84 NY2d 83, 88 1994]). Here, although the email correspondence relied on by defendants constitutes evidence indicating that plaintiff knowingly agreed to the division of the proceeds per Matson’s ‘Counteroffer, it does not utterly refute plaintiffs allegations that defendants breached their duty·to him by failing to prepare a written agreement between him and Matson providing for an equal or rhore equitable division before entering into the contract of sale for the Saugerties property and that they failed to advise him of the tax consequences of the sale.
However, absent any factual bases in the record tending to show: 1) that Matson was amenable to dividing the sales proceeds otherwise, and 2) the tax consequence that could have been obtained with tax advice from defendants, plaintiff’s claim for damages is speculative, thereby rendering his claim deficient as a matter of law. “