Overbay, LLC v. Berkman, Henoch, Peterson, Peddy & Fenchel, P.C.
| Decision Date | 08 July 2020 |
| Docket Number | 2018–13824,Index No. 609537/18 |
| Parties | OVERBAY, LLC, et al., Appellants, v. BERKMAN, HENOCH, PETERSON, PEDDY & FENCHEL, P.C., et al., Respondents. |
| Court | New York Supreme Court — Appellate Division |
Pinks, Lipshie, White & Nemeth, Hauppauge, NY (Harold I. Guberman and Steven G. Pinks of counsel), for appellants.
Berkman, Henoch, Peterson, Peddy & Fenchel, P.C., Garden City, NY (Bruce J. Bergman and Martin Valk of counsel), respondent pro se and for respondent Harbour Trio Management, LLC.
REINALDO E. RIVERA, J.P., JOSEPH J. MALTESE, FRANCESCA E. CONNOLLY, VALERIE BRATHWAITE NELSON, JJ.
DECISION & ORDER
In an action to recover damages for economic duress, the plaintiffs appeal from an order of the Supreme Court, Suffolk County (Jerry Garguilo, J.), dated November 8, 2018. The order granted the defendants' motion for summary judgment dismissing the complaint.
ORDERED that the order is affirmed, with costs.
The plaintiffs, Overbay, LLC (hereinafter Overbay), and its principal, Demetrius A. Tsunis, were the respective mortgagor and guarantor on a commercial mortgage loan that was foreclosed by the mortgagee, the defendant Harbour Trio Management, LLC (hereinafter Harbour), pursuant to a judgment of foreclosure and sale dated March 28, 2018. Pursuant to the terms of the mortgage, Harbour was entitled to an award of attorney's fees it incurred in foreclosing the mortgage. In the judgment of foreclosure and sale, the Supreme Court directed that the amount of attorney's fees would be determined at a hearing to be held on May 15, 2018. However, instead of proceeding to the hearing, the plaintiffs exercised their right of redemption. The plaintiffs demanded from Harbour a pay-off letter so that they could satisfy the judgment with the proceeds of a construction loan, upon which they had to close before the date of the hearing; the loan commitments would otherwise have expired by that point in time. After having received an initial pay-off letter that demanded payment of attorney's fees in the sum of $68,259.20 and raising objections to certain components of the pay-off amount which did not include the sum demanded for attorney's fees, the plaintiffs received an additional pay-off letter that included the sum of $82,561.92 for attorney's fees demanded by Harbour. The plaintiffs ultimately paid the full sum demanded in a final pay-off letter, which included the sum of $82,561.92 for attorney's fees, without raising a contemporaneous objection to the amount paid. In exchange therefor, Harbour delivered a satisfaction of mortgage to the plaintiffs dated April 24, 2018.
On May 17, 2018, the plaintiffs commenced this action against Harbour and the defendant Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. (hereinafter Berkman), the attorneys who represented Harbour in the mortgage foreclosure action. The plaintiffs sought reimbursement of the subject attorney's fees, alleging that they were forced to pay those fees involuntarily under economic duress in order to close on their refinancing loan. The defendants moved for summary judgment dismissing the complaint, contending that the plaintiffs were not subjected to economic duress and that the attorney's fees were not paid under protest, that recovery is barred by the voluntary payment doctrine and estoppel, and that Berkman cannot be held liable in this action under the law of agency. In an order dated November 8, 2018, the Supreme Court granted the defendants' motion. The plaintiffs appeal, and we affirm.
An agent who acts on behalf of a disclosed principal will not be liable for breach of contract unless there is clear and explicit evidence of the agent's intention to be bound (see Savoy Record Co. v. Cardinal Export Corp., 15 N.Y.2d 1, 4, 254 N.Y.S.2d 521, 203 N.E.2d 206 ; Mencher v. Weiss, 306 N.Y. 1, 4, 114 N.E.2d 177 ; Safety Envtl., Inc. v Barberry Rose Mgt. Co., Inc. , 94 A.D.3d 969, 942 N.Y.S.2d 200 ; Weinreb v. Stinchfield, 19 A.D.3d 482, 797 N.Y.S.2d 521 ). Here, the defendants demonstrated, prima facie, that Berkman was merely acting as Harbour's disclosed agent in the underlying mortgage foreclosure action, and thus, cannot be held liable in damages in this action. In opposition, the plaintiffs...
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