Upstate New York, Cayuga Lake;  each of the plaintiffs wanted a lake front property on a Finger Lake.  First, the Andersons bought the property only to learn that then had less lake frontage, had an easement running through the property and that their out-buildings were encroaching on the neighbor’s property.  The litigated and then sued their attorney Albanese.  They settled with Albanese. 

Some time later they want to sell the property.  New potential buyers come along, and either intentionally or inadvertently hire Albanese to represent them in the purchase of the lake front property.  Albanese knows about the encroachments and the prior litigation. The purchasers then sued their attorney in Meador v. Albanese Law Office, 2010 U.S. Dist. LEXIS 100243

"The Meadors put down a $25,000 deposit toward the $720,000 purchase price. After the contract was signed, the Meadors retained defendants on June 6, 2005, to represent them in the transaction. The parties dispute whether prior to plaintiffs retaining Albanese, he informed them he had previously represented the Andersons in any capacity and that he had been sued by the Andersons. Defs’. Response to Pls’. SMF ¶ 20, Dkt. No. 40-3. It is undisputed defendants at that [*4] time did not inform the Meadors that the detached garage on the property encroached upon a right-of-way and violated setback requirements, nor did they advise plaintiffs the house was alleged to have structural defects. After engaging defendants, Dr. Meador requested she be kept informed of the progress and be given copies of any correspondence related to the transaction.

On June 23, 2005, the attorney for the Andersons delivered a letter to defendants which disclosed some but not of all the encumbrances and defects to the title. It is disputed whether a telephone call between Albanese and Dr. Meador took place on June 24, 2005. Defendants did not investigate the disclosed defects in the title at that time, opting to wait for voluntary disclosure by the Andersons’ attorney. Albanese did not disclose the encumbrances to plaintiffs, nor did he inform them he was expecting further information regarding the same from the Andersons’ attorney. On July 11, 2005, defendants received additional information regarding the defects. Albanese again failed to inform the Meadors of these disclosures. The parties dispute whether Albanese or the Office informed Dr. Meador the closing would occur on or [*5] about July 20, 2005.

Plaintiffs contend that in reliance upon this communication, they liquidated assets, transferred funds, alerted their lender and secured insurance in anticipation of the closing. Dr. Meador then traveled to Ithaca, New York on or about July 19, 2005, to attend the closing. Pls’. SMF ¶¶ 37-39, Dkt. No. 37. On July 20, 2005, she attended a pre-closing inspection of the property, during which time she discovered several title encumbrances from the Andersons’ realtor as well as the encroachments on the neighboring properties. Id. ¶ 41.

The Meadors contacted defendants and requested they terminate the contract and return plaintiffs’ $25,000 deposit. Albanese then communicated with the Andersons’ attorney and requested the contract be dissolved and the deposit returned. On July 28, 2005, defendants forwarded a list of objections regarding the property prepared by Dr. Meador to the Andersons’ attorney. The Meadors allege they made several attempts to contact Albanese between July 28, 2005, and August 15, 2005, to determine the status of the matter, but were told by staff of the Office that Albanese was "unavailable," and he did not return any of the calls. Pls’. SMF ¶ 46. [*6] On August 10, 2005, Dr. Meador faxed the Andersons’ attorney, demanding dissolution of the contract and return of escrow. On August 15, 2005, plaintiffs retained their current attorney, Michael D. Pinnisi, Sr., ("Pinnisi") as litigation counsel.

On or about August 17, 2005, the Andersons commenced a lawsuit against plaintiffs seeking to enforce the contract. On September 6, 2005, the Andersons’ attorney submitted an offer to cure to the Meadors, which they rejected on September 9, 2005. On November 20, 2008, the Appellate Division Third Department found that questions of fact as to material misrepresentations made by the Andersons existed so that it could not be determined as a matter of law if the contract was void as of its inception. The court let the Meadors’ cross-claim for fraud stand, and reversed the lower court’s order directing the $25,000 escrow funds payment to the Andersons. Anderson v. Meador, 56 A.D.3d 1030, 869 N.Y.S.2d 233 (N.Y. App. Div. 3d Dep’t 2008). Thereafter the Andersons and Meadors settled the action with the return of the $25,000 to the Meadors, the dismissal of all remaining claims, and the exchange of releases."