United States District Court, E.D. New York
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Vendor's claims against purchaser seeking a rescission or declaratory judgment with respect to sale of property that had already been foreclosed on and sold were moot, where relief requested would do nothing to address vendor's injuries.
Christopher Joseph Cassar, Christopher J. Cassar P.C., Huntington, NY, for Plaintiff.
Edward M. Gould, Jr., Edward M. Gould, Esq., Islip, NY, Peter David Rigelhaupt, Stephen C. Giametta, William T. McCaffery, L'Abbate, Balkan, Colavita & Contini, LLP, Garden City, NY, for Defendant.
MEMORANDUM AND ORDER
A. KATHLEEN TOMLINSON, United States Magistrate Judge.
I. PRELIMINARY STATEMENT
Plaintiff Guadalupe Bosch (" Plaintiff" or " Bosch" ) asserts claims of fraud, breach of contract, conversion, rescission, and seeks a declaratory judgment against Defendant Domenico LaMattina (" LaMattina" ) in connection with the sale of Plaintiff's home (the " Subject Property" ) to LaMattina as well as a related option contract. Plaintiff also brings claims against Defendant Thomas J. Bailey (" Bailey" ) (together with LaMattina, " Defendants" ) for deceptive trade practices under New York State General Business Law § 349 (" Deceptive Practices Act" ), fraud, and legal malpractice. Bailey is the attorney whom Plaintiff alleges represented her at the closing of the sale of the Subject Property to LaMattina. Defendants now move for summary judgment on all claims and Plaintiff opposes both motions.
Having considered the parties' submissions, including the parties' Local Civil Rule 56.1 Statements, as well as the applicable case law. the Court GRANTS in part and DENIES in part Defendants' motions for summary judgment for the reasons that follow.
II. BACKGROUND FACTS
The following facts are drawn from Defendant Bailey's Second Amended Rule 56.1 Statement (" Bailey's 56.1 Stmt." ) [DE 101], Defendant LaMattina's Amended
Rule 56.1 Statement (" LaMattina's 56.1 Stmt." ) [DE 108], Plaintiff's 56.1 Counterstatement in Response to Bailey's Second Amended 56.1 Statement (" Pl.'s 56.1 Stmt. (Bailey)" ) [DE 110]; Plaintiff's 56.1 Counterstatement in response to LaMattina's Amended Rule 56.1 Statement (" Pl.'s 56.1 Stmt. (LaMattina)" ) [DE 111], and declarations of the parties' counsel with exhibits attached to them, including copies of the parties' deposition transcripts. Relevant discrepancies in the evidence are noted. Upon consideration of a motion for summary judgment, the Court construes the facts in the light most favorable to the non-moving party. See Capobianco v. New York, 422 F.3d 47, 50 (2d Cir.2005).
A. Plaintiff Sells Her Home to Defendant LaMattina
Prior to November 2, 2006, plaintiff Guadalupe Bosch owned the home where she resided, located at 105 Barber Street, Brentwood, New York. Bailey's 56.1 Stmt. ¶ 1; Pl.'s 56.1 Stmt. (Bailey) ¶ 1. The home was subject to a mortgage held by Countrywide Home Loans. Bailey's 56.1 Stmt. ¶ 2; Pl.'s 56.1 Stmt. (Bailey) ¶ 2. In or about July 2006, Plaintiff fell behind on her mortgage payments. Bailey's 56.1 Stmt. ¶ 3; Pl.'s 56.1 Stmt. (Bailey) ¶ 3. On November 2, 2006, Defendant LaMattina purchased the Subject Property from Plaintiff for $440,000 (the " Closing" ). Bailey's 56.1 Stmt. ¶ 4; see Pl.'s 56.1 Stmt. (Bailey) ¶ 10; Transcript of the September 21-22, 2009 Deposition of Guadalupe Bosch (" Bosch Tr." ), annexed as Exhibits F & G to the Declaration of William T. McCaffery, Esq. (" McCaffery Decl." ) [DE 95], at 284:12-285:10. LaMattina was represented by the law firm of Young & Young, LLP in the purchase of the Subject Property. Bailey's 56.1 Stmt. ¶ 5; Pl.'s 56.1 Stmt. (Bailey) ¶ 5. At the time of the Closing, the outstanding mortgage debt Plaintiff owed on the Subject Property was $369,129.23. Bailey's 56.1 Stmt. ¶ 11; Pl.'s 56.1 Stmt. (Bailey) ¶ 11. Plaintiff's mortgage balance of $369,129.23 was satisfied from the proceeds of the sale. Bailey's 56.1 Stmt. ¶ 12; Pl.'s 56.1 Stmt. (Bailey) ¶ 12. However, Plaintiff left the Closing with zero dollars. see Complaint ¶ 7. Under the terms of the Closing, LaMattina took out two mortgages on the Subject Property, one for approximately $360,000 and the other for approximately $80,000. See Transcript of the September 22, 2009 Deposition of Domenico LaMattina (" LaMattina Tr." ), annexed as Exhibit H to the McCaffery Decl., at 19:1-13. LaMattina's monthly mortgage payment, including taxes, was approximately $3,500. Bailey's 56.1 Stmt. ¶ 4; LaMattina Tr. 18:24-19:9.
B. Plaintiff Signs an Option Contract Allowing Her to Remain in Her Home
At the Closing, Plaintiff signed a number of documents, including: a contract of sale; a deed; a HUD-1 Settlement Statement; a real estate transfer tax form; a lease; and an option contract. Bailey's 56.1 Stmt. ¶¶ 9-10; see Bosch Tr. 77:25-78:1-14, 80-83, 100-104 (discussing Plaintiff's signature on the contract of sale, option contract, lease, deed, and papers signed at the Closing generally). The option contract, drafted by Attorney Bailey, allowed Plaintiff to rent the Subject Property back from LaMattina with an option to buy back the property for $440,000 after two years. Bailey's 56.1 Stmt. ¶ 6; LaMattina's 56.1 Stmt. ¶ 3. Under the terms of the option contract, Plaintiff was to pay LaMattina a monthly rent of $1,750, or half of LaMattina's monthly mortgage payment, for one year. Bailey's 56.1 Stmt. ¶ 6; Option Contract § 2.2, annexed as Exhibit O to the McCaffery Decl. LaMattina was to receive the remaining $1,750 monthly payment towards the mortgage
from an escrow account administered by Young & Young which contained $21,000 in funds from the Closing. Bailey's 56.1 Stmt. ¶ 6; see Option Contract § 2.2, annexed as Exhibit O to the McCaffery Decl. After one year and the depletion of the escrow account, Plaintiff would be responsible for paying LaMattina approximately $3,500 in monthly rent to cover the entire mortgage payment.  Bailey's 56.1 Stmt. ¶ 6; LaMattina Tr. 50:11-20.
C. Plaintiff's Understanding of the Transactions at the Closing
Plaintiff does not admit all of the above facts in her 56.1 Statement. However, she does not appear to dispute them either. Rather, Plaintiff asserts that her understanding of the transactions which occurred at the Closing is different from the Defendants'. Plaintiff states that she did not understand when she signed the various documents at the Closing that LaMattina was taking title to her home. Pl.'s 56.1 Stmt. (Bailey) ¶ 4. Nor did she understand any of the material terms contained in the option contract or contract of sale. Pl.'s 56.1 Stmt. (LaMattina) ¶¶ 4-5. According to the Plaintiff, she did not desire to sell her house and she was under the impression that the transaction with LaMattina was a refinancing which would allow title to remain in her name. Pl.'s 56.1 Stmt. (Bailey) ¶ 7. After the Closing, Plaintiff contends she was not informed that she had sold the Subject Property to LaMattina, and she did not understand that she would be responsible for sending $1,750 to LaMattina each month for one year. Pl.'s 56.1 Stmt. (Bailey) ¶¶ 6, 8. Nor did she understand that (1) $21,000 was placed in escrow to be provided to LaMattina in monthly installments of $1,750 for the mortgage and tax payments for one year, and (2) when the escrow funds were exhausted that she would be required to pay LaMattina monthly payments of $3,500. Pl.'s 56.1 Stmt. (Bailey) ¶¶ 14-16.
D. Plaintiff's Legal Representation at the Closing
Plaintiff states that she was represented by Defendant Bailey at the Closing. Pl.'s 56.1 Stmt. (Bailey) ¶ 5. Prior to that time, she had not met Bailey and had had no contact with him. Pl.'s 56.1 Stmt. (Bailey) ¶ 9. Plaintiff claims that before the Closing, she was not provided with an opportunity to review the Closing materials and was never made aware by anyone that she was signing a deed transferring the title of her home to LaMattina. Pl.'s 56.1 Stmt. (Bailey) ¶ 9. Bailey states that although he attended the Closing and drafted the option contract, there was no attorney-client relationship between him and the Plaintiff. See Transcript of the October 1, 2009 Deposition of Thomas Bailey Dep. (" Bailey Tr." ), annexed as Exhibit J to the McCaffery Decl., at 14:8-21, 39:7-40:3, 78:3-7.
E. LaMattina's and Plaintiff's Failures to Make Payments
At some point in time, Plaintiff discontinued rental payments to LaMattina. Bailey's 56.1 Stmt. ¶ 17; see Bosch Tr. 110:25-111:3, 256:3-262:10; LaMattina Tr. 56:4-8. Bailey and LaMattina allege that Plaintiff stopped making payments in or about December 2007. Bailey's 56.1 Stmt. ¶ 17; LaMattina Tr. 56:4-8. Plaintiff does not indicate with specificity when she discontinued making payments. See Bosch
Tr. 110:25-111:3. Plaintiff states that she was advised at the time by her then counsel, Donald Markowitz, not to pay rent because the sale of her home had been fraudulent. Pl.'s 56.1 Stmt. ¶ 17; see Bosch Tr. 261:23-7, 281:18-21.
At some point in time, LaMattina also fell behind on the mortgage and/or real property tax payments. Plaintiff alleges that LaMattina failed to make mortgage payments on the property and that he never paid any money toward the taxes. See Declaration of Christopher J. Cassar in Opp'n to Defendant LaMattina's Mot. for Summ. J. (" Cassar Decl." ) ¶¶ 17, 27. LaMattina states that he paid the mortgages and taxes for approximately three to six months after Plaintiff stopped making the rental payments. LaMattina Tr. 78:21-79:12. The facts are clearly disputed as to these issues.
Plaintiff commenced the present litigation on January 16, 2008. See Complaint [DE 1]. In her Complaint, Plaintiff had also asserted violations of the Real Estate Settlement Procedures Act, (" RESPA" ) 12 U.S.C. § 2601 et seq. against Bailey and LaMattina, but these claims were dismissed [DE 103], and only state law claims remain.
On September 20, 2010, a Judgment of Foreclosure and Sale on the Subject Property was entered by the Supreme Court of the State of New York, Suffolk County. LaMattina's 56.1 Stmt. ¶ 7; see Judgment of Foreclosure and Sale, Annexed as Exhibit C to the Declaration of Edward Gould in Supp. of LaMattina's Mot. for Summ. J. (" Gould Decl." ) [DE 106]. It is unclear from the parties' submissions whether the Subject Property has been sold or whether anyone currently resides there.
III. STANDARD OF REVIEW
Fed.R.Civ.P. 56(a) provides that a " court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The moving party bears the initial burden of establishing the absence of any genuine issue of material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Holcomb v. Iona Coll., 521 F.3d 130, 137 (2d Cir.2008). To determine whether the moving party has satisfied this burden, the Court is required to view the evidence and all factual inferences arising from that evidence in the light most favorable to the non-moving party. Doro v. Sheet Metal Workers' Int'l Ass'n, 498 F.3d 152, 155 (2d Cir.2007); Woodman v. WWOR-TV, Inc., 411 F.3d 69, 75 (2d Cir.2005).
Where the movant shows a prima facie entitlement to summary judgment, " the burden shifts to the nonmovant to point to record evidence creating a genuine issue of material fact." Salahuddin v. Goord, 467 F.3d 263, 273 (2d Cir.2006). " [T]he nonmovant cannot rest on allegations in the pleadings and must point to specific evidence in the record to carry its burden on summary judgment." Id.; see McPherson v. N.Y. City Dep't of Educ., 457 F.3d 211, 215 n. 4 (2d Cir.2006) (" [S]peculation alone is insufficient to defeat a motion for summary judgment." ); Byrnie v. Town of Cromwell, Bd. of Educ., 243 F.3d 93, 101 (2d Cir.2001) (" Even where facts are disputed, in order to defeat summary judgment, the non-moving party must offer enough evidence to enable a reasonable jury to return a verdict in its favor." ). Summary judgment is mandated if the non-moving party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial.
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see Dobbs v. Dobbs, No. 06-CV-6104, 2008 WL 3843528, at *5 (S.D.N.Y. Aug. 14, 2008) (" The Court's goal should be to isolate and dispose of factually unsupported claims." ) (internal quotation marks omitted).
As noted, prior to the filing of Defendants' motions for summary judgment, Plaintiff's RESPA claims under 12 U.S.C. § 2601 et seq. were dismissed, and only the state law claims remain. The RESPA claims provided the basis for this Court's subject matter jurisdiction. See 28 U.S.C. § 1331. With the dismissal of the only claim providing federal subject matter jurisdiction in this action, the ...