In addition, it identifies Edward Dahan and Moskowitz as giving the home buyers the loan applications and interviewing some or all of the buyers. The amended complaint alleges that Edward Dahan was the contact person for each transaction and that 21st Century provided the mortgage loans to each purchaser. It further states that 21st Century then sold the mortgage loans to the plaintiff.
With respect to the Park Street Property, 21st Century sold the mortgage loan to Golden First. After Islam defaulted on her loan, Golden First contacted Edward Dahan to locate Islam. Edward Dahan responded that he had no information concerning her or her whereabouts. However, at the time Edward Dahan stated that he had no information on Islam, Dahan & Associates was involved in securing a mortgage for a prospective purchaser for Islam's Mountain Drive Property.
Furthermore, in the Ridge Avenue Property transaction, Edward Dahan and Moskowitz faxed to the plaintiff the allegedly fraudulent HUD-1 Settlement Statement, which indicated that Towns had sold and closed on the Alexander Street Property and listed Community Home Mortgage Corp. as the lender. On June 23, 2000, when Flaherty placed a telephone call to the offices of Dahan & Associates and 21st Century, the phone was answered "Community Home Mortgage Corp." A few days later, Flaherty placed a second call and spoke with Moskowitz. When she demanded that 21st Century repurchase the Ridge Avenue Property loan, Moskowitz responded that he would close on the Alexander Property "soon," inferring that the facsimile sent by Edward Dahan and Moskowitz was false insofar as the Alexander Street Property was never sold and closed as was indicated in the HUD-1 Settlement Statement.
Edward Dahan and Moskowitz knew that as a condition for closing the Ridge Avenue Property, the plaintiff required that Towns close the sale of the Alexander Property. As such, when they faxed the HUD-1 Settlement Statement to Golden First, they knew that it would mislead the plaintiff into thinking that the condition for closing on the Ridge Avenue Property was satisfied.
Furthermore, the amended complaint alleges that for the Mount Vernon Avenue Property, Tassielli had two separate mortgage loans. The amended complaint provides that Community Home Mortgage Corp. wrote the first mortgage loan, which was subsequently sold to the plaintiff, while Stewart Dahan, who was also president of Dahan & Associates, wrote the second mortgage loan as an agent of IndyMac. Accepting all factual allegations in the amended complaint as true and drawing all inferences in favor of the plaintiff, as the Court must, it appears that Community Home Mortgage Corp. and IndyMac both operated out of the same offices with Dahan & Associates and 21st Century.
Based on these allegations, the Court finds that the amended complaint contains a sufficient amount of specific allegations with regard to the Dahan defendants' alleged fraudulent activity. However, with respect to Steward Dahan, the amended complaint fails to contain any misrepresentations made by him. It states only that he acted as an agent on behalf of IndyMac and acted as president of Dahan & Associates. However, it does not identify any statements Stewart Dahan made which induced the plaintiff. Accordingly, the fraud claim is dismissed as to Steward Dahan.
Notably, the Dahan defendants contend that the alleged fraud could have been committed by the purchasers alone. Such an argument goes to the weight of the evidence set forth in the pleadings rather than their sufficiency. At this juncture, because the Court is presently deciding a motion to dismiss for failure to state a claim, it would be improper to entertain this argument. Internet Law Library, Inc. v. Southridge Capital Management, 223 F. Supp.2d 474, 481 (S.D.N.Y. 2002) (citing Jubran v. Muskikahn Corp., 673 F. Supp. 108, 112 (E.D.N.Y. 1987) (""Since the Court is bound, in the context of a motion to dismiss to [draw] all inferences in favorable to the pleader, the Court must accept the veracity of plaintiff's pleadings.").
Similarly, the Court finds that the amended complaint provides fair notice to Berger as to the nature of the alleged fraud. The amended complaint provides that Dahan & Associates introduced Berger to the home buyers. Berger acted as both the closing agent for Dahan & Associates and as the attorney for the buyers. In the Park Street Property transaction, Berger prepared the HUD-1 Closing Statement. Golden First claims that on or about April 2, 2000, Berger conducted the closing at his office. The amended complaint indicates that Berger's office notarized the signatures of Islam and Selective Realty either with false identification or in their absence because Islam never paid the sum of $27,521.83 at the time of the closing, which was required under the HUD-1 Closing Statement. Furthermore, Berger was the closing agent for Islam for the Mountain Drive Property sale. Islam's signatures, which Berger's office notarized, for the various closings were completely different. In addition, the spelling of her name for the closing of the South Park Street Property was "Zakiyah S. Islam" while the spelling of her name for the closing of the Mountain Drive Property was "Zakiyya Islam."
Furthermore, Berger prepared and signed a HUD-1 Settlement Statement on the Alexander Street Property, which indicated that a closing had taken place on December 14, 1999 on the property and that Towns had sold it to Brenda Sandiford. On December 20, 1999, Berger faxed the HUD-1 Settlement Statement to Edward Dahan and Moskowitz, who then faxed it to the plaintiff on the following day. On June 22, 2000, Essex County Tax Assessor informed Golden First that Towns still owed money on the Alexander Street Property. The next day, Golden First ran a credit report on Towns, which revealed that he resided at the Alexander Street Property. The credit report also indicated that the prior mortgage loan on the Alexander Street Property was still open and current, contrary to what was indicated on the HUD-1 Settlement Statement.
In addition, as described above, when Flaherty
spoke to Moskowitz that Golden First wanted 21st Century
to repurchase the Ridge Avenue Property loan, Moskowitz
responded that he would close on the Alexander Property
"soon", thereby indicating that the facsimile sent by
Berger, which was eventually faxed to Golden First,
misled the plaintiff into believing that the Alexander
Street Property was sold and closed. Given that the
HUD-1 Settlement Statement was prepared and signed by
Berger and that he acted as the closing agent for both
the Ridge Avenue Property and the Alexander Street
Property, the Court finds that Berger knew that as a
condition for closing the Ridge Avenue Property, the
plaintiff required Towns to close the sale of the
Alexander Property. Furthermore, viewing all inferences
in favor of the plaintiff, the Court finds that the
pleadings sufficiently allege that he knew that the
HUD-1 Settlement Statement he faxed was false and that
the fax would mislead the plaintiff into thinking that
the condition for Ridge Avenue Property had been met.
Accordingly, the Court finds that the amended complaint
sufficiently alleges a claim of fraud against Berger.
2. The Plaintiff's Claim for Punitive Damages
The Dahan defendants and Berger also move to dismiss the plaintiff's fifth cause of action which asserts a separate punitive damages claim based on the alleged fraud. They are correct in asserting that it is well-established that there exists no separate cause of action for punitive damages. Bologna v. Allstate Ins. Co., 138 F. Supp.2d 310, 327 (E.D.N.Y. 2001) (citing Rocanova v. Equitable Life Assurance Soc'y of the United States, 83 N.Y.2d 603, 616-17, 612 N.Y.S.2d 339, 634 N.E.2d 940 (1994)). A demand for punitive damages "`is parasitic and possess no viability absent its attachment for a substantive cause of action.'" Id. (quoting Rocanova, 83 N.Y.2d at 616). Thus, the motion to dismiss the plaintiff's separate cause of action for punitive damages is granted. However, because the Court must construe the amended complaint in the most favorable light in favor of the plaintiff, it interprets Golden First's cause of action for punitive damages as being as part of its fraud claims.
3. The Plaintiff's Claim for Negligence against Berger
Berger moves to dismiss the plaintiff's claim for negligence. In order to establish a claim of negligence under New York law, the plaintiff must show: (1) a duty owed to the plaintiff by the defendant; (2) breach of that duty; and (3) injury substantially caused by the breach. Dooner v. Keefe, Bruyette & Woods, Inc., 157 F. Supp.2d 265, 285 (S.D.N.Y. 2001) (citing Curley v. AMR Corp., 153 F.3d 5, 13 (2d Cir. 1998)).
A review of the amended complaint shows that the plaintiff has not sufficiently alleged a negligence cause of action. The amended complaint asserts only that "Berger owed a duty to Golden National to use due care in the performance of its duties." This bald assertion fails to demonstrate that he owed the plaintiff a duty of care. In addition, the complaint is permeated with allegations of intentional conduct rather than negligence. Accordingly, Berger's motion to dismiss the claim for negligence is granted.
B. Berger's Motion to Transfer Venue
Section 1404(a) provides that a court may transfer an action "for the convenience of parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). Because Golden First does not dispute that this action could have been brought in New Jersey, the Court concludes that it may consider Berger's motion.
The defendant has the burden of establishing the propriety of transfer by a clear and convincing showing. Ford Motor Co. v. Ryan, 182 F.2d 329, 330 (2d Cir.) cert. denied, 340 U.S. 851 (1950). To determine whether transfer would be appropriate, courts consider the following factors: (1) the convenience of the parties; (2) convenience of the witnesses; (3) relative means of the parties; (4) locus of operative facts and relative ease of access to sources of proof; (5) attendance of witnesses; (6) the weight accorded to the plaintiff's choice of forum; (7) calendar congestion; (8) the desirability of having the case tried by the forum familiar with the substantive law to be applied; (9) trial efficiency; and (10) the interest of justice, based on an assessment of the totality of material circumstances. H.D. Brous & Co., Inc. v. Synthesys Secure Technologies, Inc., 229 F. Supp.2d 191, 198 (E.D.N.Y. 2002). Courts have discretion in balancing these factors. Citigroup Inc. v. City Holding Co., 97 F. Supp.2d 549, 561 (S.D.N.Y. 2000).
As stated above, a party seeking a transfer under Section 1404(a) bears the burden to make a "clear" showing that transfer would be appropriate. Furthermore, the party must support the application with an affidavit containing detailed factual statements relevant to the factors set forth above, including the potential principal witnesses expected to be called and general statement of the substance of their testimony. See Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978). Berger has failed to make this showing.
Berger argues that because all of the defendants reside in New Jersey and the alleged fraud occurred in New Jersey, a balancing of the factors tips in favor of transferring venue. Although Berger asserts, in support of his argument, that all the defendants reside in New Jersey, the Court notes that all of the Dahan defendants oppose a change of venue and have asserted that the present venue is more convenient for them. Furthermore, Berger's motion to transfer is not supported by any sworn affidavit containing detailed factual statements relevant to the factors outlined above. Nor is there an affidavit that contains a list of potential principal witnesses expected to be called and a general statement of the substance of their testimony. In addition, the Court notes that "[w]here the balance of convenience is equipose, plaintiff's choice of forum should not be disturbed." Ayers v. Arabian American Oil Co., 571 F. Supp. 707, 709 (S.D.N.Y. 1983). Accordingly, based upon the totality of the circumstances and especially given the absence of any affidavits by Berger relating to the ten factors outlined above and the Dahan defendants' opposition, Berger's motion to transfer venue to New Jersey is denied.
Based on the foregoing, it is hereby
ORDERED, that the Dahan defendants' motion to dismiss the claim of fraud is GRANTED in part as to Stewart Dahan and DENIED in part as to the remaining Dahan defendants; and it is further
ORDERED, that the Dahan defendants' motion to dismiss the punitive damages claim is DENIED insofar as it is a part of the fraud claims; and it is further
ORDERED, that Berger's motion to dismiss the claim of fraud is DENIED; and it is further
ORDERED, that Berger's motion to dismiss the punitive damages claim is DENIED insofar as it is a part of the fraud claims; and it is further
ORDERED, that Berger's motion to dismiss to dismiss the negligence claim is GRANTED; and it is further
ORDERED, that Berger's motion to transfer venue to New Jersey is DENIED; and it is further
ORDERED, that the parties are directed to contact United States Magistrate Judge Thomas Boyle forthwith to set up a schedule for discovery; and it is further
ORDERED, that the Clerk of the Court is directed to amend the caption of the complaint to read as follows:
GOLDEN FIRST MORTGAGE CORP., f/k/a GOLDEN NATIONAL
MORTGAGE BANKING CORP., Plaintiff, against MITCHELL
H. BERGER, ESQ., EDWARD DAHAN, SHOLOM "SOL"
MOSKOWITZ, BRENT W. HINDS, ZAKIYAH S. ISLAM, TERRI
COOPER, MICHAEL D. TOWNS, ROSEMARIE TASSIELLI, 21ST
CENTURY MORTGAGE, INC., DAHAN & ASSOCIATES, INC.,
DAHAN & ASSOCIATES MORTGAGE COMPANY, LLC, DAHAN
& ASSOCIATES CREDIT REPAIR CORP., SELECTIVE REALTY
INC., HASSAN ABDULLAH, AMERICAN DREAM REALTY, LLC, and
YANK AMENDOLA, Defendants.
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