Tsionis v Sekas Law Group, LLC 2023 NY Slip Op 30423(U) February 9, 2023
Supreme Court, New York County Docket Number: Index No. 158575/2016
Judge: David B. Cohen is an example of a well-known subset of the New York legal malpractice world – real estate problems.

“In January 2005, plaintiffs, as owners, sold commercial property located at 60-72 Route
303, Tappan, New York (the property) to nonparties So Young Choi, Sarah Kim and Mi-Hyang Yang ( collectively, the Original Mortgagors) (NYSCEF 268). The contract of sale provides that a portion of the sale price, or $1. 65 million, was secured by a purchase money mortgage and note given to plaintiffs from, and personally guaranteed by, the Original Mortgagors (id.; NYSCEF 292).
Sekas represented plaintiffs on the transaction and prepared the loan documents,
including a Term Loan Note dated January 12, 2005 (the Note), which provides for repayment of the principal over 10 years at 6.25% interest per annum (NYSCEF 268; 363; 368). Article I, Section 27 of the First Term Loan Mortgage dated January 12, 2005 (the Mortgage) prohibited the Original Mortgagors from causing a second mortgage or other encumbrance, apart from certain permitted encumbrances, to be placed on the Property without plaintiffs’ written consent (id. at 29). “

Things went south from there. The details are too long to present here, but use the link to read the story.

”In January 2005, plaintiffs, as owners, sold commercial property located at 60-72 Route
303, Tappan, New York (the property) to nonparties So Young Choi, Sarah Kim and Mi-Hyang Yang ( collectively, the Original Mortgagors) (NYSCEF 268). The contract of sale provides that a portion of the sale price, or $1. 65 million, was secured by a purchase money mortgage and note given to plaintiffs from, and personally guaranteed by, the Original Mortgagors (id.; NYSCEF 292).
Sekas represented plaintiffs on the transaction and prepared the loan documents,
including a Term Loan Note dated January 12, 2005 (the Note), which provides for repayment of the principal over 10 years at 6.25% interest per annum (NYSCEF 268; 363; 368). Article I, Section 27 of the First Term Loan Mortgage dated January 12, 2005 (the Mortgage) prohibited the Original Mortgagors from causing a second mortgage or other encumbrance, apart from certain permitted encumbrances, to be placed on the Property without plaintiffs’ written consent (id. at 29).”

Moreover, according to SLG’ s expert, if plaintiffs had proceeded with litigating the
foreclosure action and a sale was held for the Property, plaintiffs were assured of being “made whole” as the appraised value of the property was more than the amount owed to plaintiffs, and thus plaintiffs would have suffered no damages if they had chosen to litigate the foreclosure action rather than settling with Yong.
To the extent that SLG should not have moved for a default judgment against Yong, the
Second Department found that the presiding justice erred in granting the judgment and compounded the error by granting plaintiffs relief against Yong that SLG had not requested in the foreclosure complaint. If the default judgment had instead been correctly denied in the first instance, then plaintiffs would have been in the same position that they were in following the Appellate Division’s reversal, namely, having to either litigate the validity of Yong’s mortgage or settle with him. Thus, SLG shows that any errors it may have made related to the default judgment motion did not result in any detrimental change to plaintiffs’ position regarding the Yong’s mortgage.”

ORDERED that the motions of defendant/third-party plaintiff Sekas Law Group, LLC
and defendant Nicholas G. Sekas, Esq. for summary judgment dismissing the complaint (motion sequence nos. 008 and 009) are granted, and the complaint is dismissed in its entirety with costs and disbursements to said defendants as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further ORDERED that the cross-motion of third-party defendant Rosenberg & Estis, P.C. for summary judgment dismissing the third-party complaint (motion sequence no. 008) is granted, and the third-party complaint is dismissed in its entirety with costs and disbursements to said
third-party defendant as taxed by the Clerk upon the submission of an appropriate bill of costs;
and it is further
ORDERED that the cross-motion of plaintiffs Elias Tsionis and George Tzoulafis for
summary judgment (motion sequence no. 009) is denied”