Castro v. Fermin
| Decision Date | 14 March 2016 |
| Docket Number | No. 16001–2014.,16001–2014. |
| Citation | 36 N.Y.S.3d 406 (Table) |
| Parties | Jose CASTRO and Rosa Castro, Plaintiffs, v. Maria E. FERMIN, Exit Realty Success, J.C. First Corp., Jorge Andrade, Moshe Abraham, Barry N. Frank, Esq., Gorriti Real Estate & Legal Support Services d/b/a 888Casa Gorriti & Waters Company, Inc., and Jeffrey Galperin, Esq., Defendants. |
| Court | New York Supreme Court |
Upon the following papers numbered 1 to 30 read on this motion by defendant Maria E. Fermin, defendant Exit Realty Success, and defendant JC First Corp., for an order, inter alia, dismissing the complaint against them, or in the alternative, to disqualify Barry N. Frank, Esq., from representing plaintiffs in this action and on this cross motion by plaintiff Jose Castro and plaintiff Rosa Castro for an order permitting them to serve an amended complaint:
| Papers | |
| Numbered | |
| Notice of Motion/Affirm(s)–Exhibits | 1–4 |
| Notice of Cross Motion & Affirm in Opposition–Exhibits | 5–26 |
| Affirm in Opposition & Reply. | 27–28 |
| Memorandum of Law | 29 |
| Memorandum of Law | 30 |
IT IS ORDERED that the branch of the motion for an order dismissing the amended complaint as to defendant Maria E. Fermin, defendant Exit Realty Success, and defendant JC First Corp., pursuant to CPLR § 3211(a)(7) for failure to state a cause of action is granted as to the causes of action enumerated 1, 2, 4–13, 16, 17, 21, 22, 25, and 26–29.
ORDERED that the branch of the motion dismiss the plaintiff's complaint for failure to state a cause of action is denied as to the causes of action enumerated (3) and (15) for fraud, (18) unjust enrichment, (20) tortious interference with contract, and (23 & 24) breach of fiduciary duty. Causes of action enumerated 14 and 19 are asserted against defendant Andrade and were not the subject of this motion; and it is further
ORDERED the plaintiffs' cross motion for an order permitting the service of an amended complaint is granted but not in the form that plaintiff's have proposed. Plaintiffs are given leave to serve, within thirty days of the service of a copy of this order with notice of entry, an amended complaint asserting causes of action against defendant Maria E. Fermin, defendant Exit Realty Success, and defendant JC First Corp., for fraud, aiding and abetting fraud, conspiracy to commit fraud, breach of fiduciary duty, unjust enrichment, tortious interference with contract, and quieting title; and it is further
ORDERED that the alternative relief moved for in the motion by defendant Maria E. Fermin, defendant Exit Realty Success, and defendant JC First Corp., to disqualify plaintiff's counsel Barry N. Frank, Esq., from representing the plaintiffs is denied.
The plaintiffs began this action on November 3, 2014 by the filing of a summons and a complaint. On September 22, 2015, defendants Fermin, Exit Realty, and JC First submitted the instant CPLR 3211(a)(7) motion, and the plaintiff submitted a cross motion for an order permitting the service of an amended complaint. The proposed amended complaint has twenty-nine causes of action.
“Filing of an amended pleading does not automatically abate a motion to dismiss that was addressed to the original pleading, ( Sage Realty Corp. v. Proskauer Rose LLP, 251 A.D.2d 35 ; see, Sobel v. Ansanelli, 98 AD3d 1020 ; 49 West 12 Tenants Corp. v. Seidenberg, 6 AD3d 243.) The party moving to dismiss has the option to decide whether its motion should be applied to the new pleading., Id. In the case at bar, the defendants did not withdraw their CPLR § 3211(a)(7) motion and, indeed, submitted reply papers. As such, their motion will be considered a motion to dismiss the amended complaint.
Plaintiffs allege in their amended complaint that they owned a home located at 41–30 Benham Street, Elmhurst, New York which they wanted to convert from single-family to two-family. In 2003, an attempt to refinance the property and make the conversion failed. Plaintiffs allege that on or about August 1, 2005, defendant Jorge Andrade proposed to plaintiff Castro that he convey the property to both Andrade and himself for the purpose of obtaining new financing. Plaintiffs allege that in consideration of Andrade's help in obtaining a new mortgage, Castro agreed to pay Andrade $10,000 cash and make all the payments on the new mortgage. Plaintiffs allege that on September 15, 2005, Castro delivered a deed to Andrade who executed a mortgage for $640,000. Plaintiffs allege that throughout 2005 and 2006, Castro, who is a contractor, worked on the conversion of the home and that some time in the middle of 2006, Andrade told plaintiff to make the mortgage payments to Andrade and that he would pay the mortgage. Plaintiffs allege that on June 26, 2006, Andrade refinanced the property without Castro's knowledge, and the latter did not receive any money from the transaction. Plaintiffs allege that shortly thereafter they learned that plaintiff Jose Castro's name had not been placed on the deed.
Plaintiffs further allege that n the fall of 2007, defendant Maria Fermin approached Castro, who knew her through friends and family, purportedly with a plan to help him. Fermin is a licensed realtor with defendant Exit Realty Success and an officer of JC First Corp. Plaintiffs allege that Castro told Fermin that he was the equitable owner of the property, and she suggested that he transfer the property to a family member in a “short sale.” Castro took Fermin's advice and decides to transfer the property to his nephew, Carlos Barrera. Fermin's fee for the “short sale” was $5,000. Andrade informed Castro that he wanted $15,000 to transfer the property to Barrera. On December12, 2008, Fermin prepared a contract of sale from Andrade to Barrera, and on February 9, 2009, Golden First Mortgage Corp. approved a mortgage for Barrera in the amount of $642,625. Castro repeatedly asked Barrera and Andrade to close the sale, but they never did. In early 2010, Castro asked Andrade to sell the property to his daughter Veronica and son-in-law Jorge Chiraboga, but that transaction did not close either.
On May 6, 2010, Castro received a notice from the Bank of New York that the property would be sold in a foreclosure sale pursuant to a default judgment. Castro hired an attorney and successfully had the judgment of foreclosure vacated. However, on June 27, 2014, defendant Andrade, using Fermin and Exit Realty, sold the plaintiffs' home to JC First Corp., for $244,000.
In determining a motion brought pursuant to CPLR § 3211(a)(7), the court “must afford the complaint a liberal construction, accept as true the allegations contained therein, accord the plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal theory * * *.” (1455 Washington Ave. Assocs. v. Rose & Kiernan, 260 A.D.2d 770, 770–771 ; Esposito–Hilder v. SFX Broadcasting Inc, 236 A.D.2d 186.) “The sole criterion is whether from [the complaint's] four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law' * * *.” (Mayer v. Sanders, 264 A.D.2d 827, 828 quoting Guggenheimer v. Ginzburg, 43 N.Y.2d 268, 275 ; see, Aranki v. Goldman & Associates, LLP, 34 AD3d 510 ; Operative Cake Corp. v. Nassour, 21 AD3d 1020.)
“It is enough now that a pleader state the facts making out a cause of action, and it matters not whether he gives a name to the cause of action at all or even that he gives it a wrong name * * *.” (Diemer v. Diemer, 8 N.Y.2d 206, 212 ; Van Gaasbeck v. Webatuck Cent. Sch. Dist. No. 1, 21 N.Y.2d 239.)
The first cause of action in the amended complaint is asserted against defendant Fermin and defendant JC First and is for “bad faith” in the purchase of the property. The first cause of action, like much of the amended complaint, is not a model of good draftsmanship. The first cause of action is captioned “Defendants Fermin and JC First bought the plaintiffs' property in bad [faith] & fail the test of a bona fide purchaser for value under common law.” The court can only speculate about what cause of action the plaintiffs have attempted to assert based on the common law and how it may be distinguished from other causes of action in the amended complaint, e.g., fraud. Moreover, while the New York Recording Act (Real Property Law § 290 et seq. ) “protects a good faith purchaser for value from a prior unrecorded interest in real property provided, inter alia, that the subsequent purchaser's interest is the first to be duly recorded” (Transland Assets, Inc. v. Davis, 29 AD3d 679, 679 ), the court finds that this statute has no relevance to the facts alleged in the first cause of action.
Accordingly, the court finds that the first cause of action in the amended complaint fails to state a cause of action.
The second cause of action is asserted against the moving defendants and purports to be for a violation of Real Property Law § 266, “Rights of purchaser or incumbrancer for valuable consideration protected,” which provides: “This article does not in any manner affect or impair the title of a purchaser or incumbrancer for a valuable consideration, unless it appears that he had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor.” (Williams v. Mentore, 115 AD3d 664.) The statute provides a defense to a good faith purchaser for value, and the plaintiffs did not cite any cases showing that it creates a cause of action for the monetary damages they seek.
Accordingly, the court finds that the second cause of action in the amended complaint fails to state a cause of action.
The third cause of action is for fraud. Reading plaintiff Castro's complaint liberally and in its entirety, the court finds that the complaint states a cause off action for aiding and abetting fraud. “To plead a cause of action to recover damages for aiding and abetting fraud,” the pleading “must allege the existence of an underlying fraud, knowledge of the fraud by the aider and...
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