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Humbert v. Allen

Supreme Court of New York, Second Department

November 9, 2011

Christine O'Keeffe Humbert, plaintiff,
v.
Allison E. Allen, et al., defendants third-party plaintiffs-respondents, Luigi Rosabianca, etc., defendant-appellant; Rosabianca & Associates, PLLC, third-party defendant-appellant, et al., third-party defendants. Index No. 3059/08

Rosabianca & Associates, PLLC, New York, N.Y. (Jeremy Panzella of counsel), third-party defendant-appellant pro se, and for defendant-appellant.

Moss & Kalish, PLLC, New York, N.Y. (James Schwartzman of counsel), for defendants third-party plaintiffs-respondents.

REINALDO E. RIVERA, J.P. ANITA R. FLORIO LEONARD B. AUSTIN SANDRA L. SGROI, JJ.

DECISION & ORDER

In an action to recover damages for breach of contract, the defendant Luigi Rosabianca and the third-party defendant Rosabianca & Associates, PLLC, appeal from an order of the Supreme Court, Nassau County (Brandveen, J.), entered June 22, 2010, which, inter alia, granted that branch of the cross motion of the defendants third-party plaintiffs which was for summary judgment on the cross claim and the third-party cause of action alleging legal malpractice insofar as asserted against them, awarding the defendants third-party plaintiffs the principal sum of $25, 000 as partial damages, and directing a hearing to determine the amount of "litigation expenses" incurred by the defendants third-party plaintiffs as a result of their alleged legal malpractice.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the cross motion of the defendants third-party plaintiffs which was for summary judgment on the cross claim and the third-party cause of action alleging legal malpractice insofar as asserted against the defendant Luigi Rosabianca and the third-party defendant Rosabianca & Associates, PLLC, awarding the defendants third-party plaintiffs the principal sum of $25, 000 as partial damages, and directing a hearing to determine the amount of "litigation expenses" incurred by the defendants third-party plaintiffs as a result of the alleged legal malpractice of the defendant Luigi Rosabianca and the third-party defendant Rosabianca & Associates, PLLC, and substituting therefor a provision denying that branch of the cross motion; as so modified, the order is affirmed, with one bill of costs payable to the defendant Luigi Rosabianca and the third-party defendant Rosabianca & Associates, PLLC, by the defendants third-party plaintiffs, and, upon searching the record, summary judgment is awarded to the defendant Luigi Rosabianca and the third-party defendant Rosabianca & Associates, PLLC, dismissing the cross claim and the third-party cause of action alleging legal malpractice insofar as asserted against them.

The defendants third-party plaintiffs, Allison E. Allen and Robert T. Allen (hereinafter together the Allens), entered into a contract to purchase a condominium unit from the plaintiff for a total purchase price of $475, 000. Upon signing the contract, the Allens deposited a down payment in the sum of $47, 500 into an escrow account managed by the Allens' lawyer, the defendant Luigi Rosabianca, and his law firm, the third-party defendant Rosabianca & Associates, PLLC (hereinafter together the appellants). The contract of sale contained a mortgage contingency clause that entitled the Allens to a refund of their down payment if they could not secure a commitment for a mortgage loan in the amount of $427, 500, after making a good faith and diligent attempt to obtain such a commitment. The Allens proceeded to apply for a mortgage loan in a far greater amount, intending to purchase another condominium unit in addition to the unit owned by the plaintiff. Although the Allens received a "counteroffer" commitment from a bank for a loan in the amount of $846, 000, they instructed the appellants to cancel the contract of sale with the plaintiff in accordance with the mortgage contingency clause.

The plaintiff subsequently commenced this action against the Allens and Rosabianca, alleging breach of contract and seeking to receive and retain the down payment as liquidated damages. In her complaint, the plaintiff alleged, inter alia, that the Allens had violated the terms of the mortgage contingency clause and forfeited their down payment by failing to make a diligent application for a mortgage loan in the amount of $427, 500. The Allens asserted, inter alia, a cross claim against Rosabianca and a third-party cause of action against Rosabianca & Associates, PLLC, alleging legal malpractice.

The plaintiff and the Allens ultimately entered into a settlement agreement pursuant to which each of them received a portion of the down payment. By stipulation, the plaintiff discontinued her claims against the Allens and Rosabianca. The Allens, however, maintained the aforementioned cross claim and third-party cause of action against the appellants, alleging that they were negligent in failing to tender written notice of cancellation to the plaintiff in accordance with the terms of the contract of sale, that this negligence was a proximate cause of the Allens' damages, and thus, that the appellants were liable for the portion of the down payment that the Allens forfeited to the plaintiff. In the order appealed from, the Supreme Court, inter alia, granted that branch of the Allens' cross motion which was for summary judgment on the cross claim and the third-party cause of action alleging legal malpractice insofar as asserted against the appellants, awarding the Allens the principal sum of $25, 000 as partial damages, and directing a hearing to determine the amount of "litigation expenses" incurred by the Allens as a result of the appellants' alleged legal malpractice. We modify.

To recover damages for legal malpractice, the Allens were required to demonstrate that their "attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession' and that the attorney's breach of this duty proximately caused [them] to sustain actual and ascertainable damages" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 438, 442, quoting McCoy v Feinman, 99 N.Y.2d 295, 301 [internal quotation marks omitted]; see Bilin v Segal, Goodman & Goodman, LLP, 81 A.D.3d 680, 682). To establish causation, the Allens were required to show that they "would not have incurred any damages, but for the lawyer's negligence" (Kennedy v H. Bruce Fischer, Esq., P.C., 78 A.D.3d 1016, 1018 [internal quotation marks omitted]), and that they "incurred actual damages as a direct result of the attorney's actions or inaction" (Bauza v Livington, 40 A.D.3d 791, 793 [internal quotation marks omitted]). " [M]ere speculation about a loss resulting from an attorney's alleged omission is insufficient to sustain a prima facie case of legal malpractice" (Dempster v Liotti, 86 A.D.3d 169, 177, quoting Siciliano v Forchelli & Forchelli, 17 A.D.3d 343, 345).

Here, the Allens did not meet their prima facie burden of establishing their entitlement to judgment as a matter of law on the cross claim and the third-party cause of action alleging legal malpractice insofar as asserted against the appellants. They failed to demonstrate that the appellants' alleged malpractice (the failure to tender written notice of cancellation of the contract of sale) was a proximate cause of their damages (see Bells v Foster, 83 A.D.3d 876, 877; compare Logalbo v Plishkin, Rubano & Baum, 163 A.D.2d 511). The Allens did not establish, prima facie, that they would have been entitled to the return of their down payment, but for this alleged malpractice (see Kluczka v Lecci, 63 A.D.3d 796, 797). As the record indicates, and the Allens do not dispute, they applied for a mortgage loan in an amount far greater than that which was specified under the express terms of the mortgage contingency clause, and they received a "counteroffer" commitment from a lender for a loan in an amount almost double that which they needed to secure pursuant to the terms of the contract of sale. Under these circumstances, the Allens did not have grounds to cancel the contract of sale pursuant to the terms of the mortgage contingency clause (see Post v Mengoni, 198 A.D.2d 487; Silva v Celella, 153 A.D.2d 847');">153 A.D.2d 847, 848). Thus, regardless of any malpractice on the part of the appellants in allegedly failing to tender written notice of cancellation, the Allens independently breached the contract of sale and forfeited their down payment to the plaintiff as liquidated damages (see Post v Mengoni, 198 A.D.2d 487; Silva v Celella, 153 A.D.2d at 848).

Since the Allens failed to establish, prima facie, that the appellants' alleged malpractice was a proximate cause of their damages, the Supreme Court should have denied that branch of the Allens' cross motion which was for summary judgment on the cross claim and the third-party cause of action alleging legal malpractice insofar as asserted against the appellants, awarding the Allens the principal sum of $25, 000 as partial damages, and directing a hearing to determine the amount of "litigation expenses" incurred by the Allens as a result of the appellants' alleged legal malpractice. Further, under the circumstances of this case, we award summary judgment to the appellants dismissing the Allens' cross claim and third-party cause of action alleging legal malpractice insofar as asserted against them pursuant to our authority to search the record and award summary judgment to the nonmoving parties with respect to an issue that was the subject of the motion before the Supreme Court (see Blair v O'Donnell, 85 A.D.3d 954, 956-957).

The parties' remaining contentions either are without merit or need not be reached in light of our determination.

RIVERA, J.P., FLORIO, AUSTIN and SGROI, JJ., concur.


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