Legal Malpractice

A Tangled Real Estate Web and Legal Malpractice

By (Andrew Lavoott Bluestone)

Reading the decision in a case like this requires both a score card and a play diagram.  In LZG Realty LLC v H.D.W. 2005 Forest LLC  ;2010 NY Slip Op 50958(U) ; Decided on May 28, 2010
Supreme Court, Richmond County ; McMahon, J.  a series of real estate transactions led to mortgages, foreclosure and charges of professional negligence and fraud.
 

"These actions have been joined for trial and are brought by the first and second mortgagees to foreclose mortgages held against real property owned by defendant H.D.W. 2005 Forest LLC, ("H.D.W.") and guaranteed by defendant Eli Weinstein ("Weinstein"). Defendants Benjamin Hager, Esq. and Mallow Konstam & Hager, P.C. (collectively, the "Hager defendants") allegedly represented the mortgagor and Weinstein at the title closing and at both mortgage closings. "

"In its first claim against the Hager defendants, H.D.W. alleges that "[as] a result of Hager's negligence . . . H.D.W. is now defending itself in the foreclosure action brought by LZG and Tissa, and the premises has two invalid mortgages placed against them (sic)."

In seeking summary judgment dismissing this claim, the Hager defendants allege that Benjamin Hager never purported to represent either H.D.W. or Wolinetz, and argue that the claim sounds in legal malpractice and therefore must be dismissed as there is no privity between Hager and either H.D.W. or its alleged principal, Wolinetz.[FN6] "

"However denominated, it cannot be gainsaid that the pleadings herein give the Hager defendants notice of the transaction out of which H.D.W.'s claim purports to arise. CPLR 3017 allows the Court to grant "any type of relief... appropriate to the proof whether or not demanded." Here, the third-party complaint sets forth sufficient facts to state a claim upon which relief can be granted, and so long as that pleading can be read to embrace the elements of a provable claim, the fact that the pleading theorizes it as something else is immaterial (see e.g. McGinnis v. Bankers Life Co., 39 AD2d 393 [2nd Dept 1972]).

To that extent, so much of the Hager defendants' motion for summary judgment addressed [*8]to the third-party claim of professional negligence and grounded on the argument that "H.D.W. cannot establish privity, a necessary element in order to prove legal malpractice" is denied. "

Full post as published by New York Attorney Malpractice Blog on June 02, 2010 (boomark / email).