| Lytell v Lorusso |
| 2010 NY Slip Op 04964 [74 AD3d 905] |
| June 8, 2010 |
| Appellate Division, Second Department |
| James Lytell, Respondent-Appellant, v Louise Lorusso etal., Defendants, and Ronald T. Levinson et al.,Appellants-Respondents. |
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In an action, inter alia, to recover damages for legal malpractice and fraud, the defendantsRonald T. Levinson and Levinson and Associates, P.C., appeal, as limited by their notice ofappeal and brief, from so much of an order of the Supreme Court, Nassau County (Martin, J.),dated December 18, 2008, as denied that branch of their motion which was pursuant to CPLR3211 (a) (7) to dismiss the cause of action alleging fraud insofar as asserted against them, and theplaintiff cross-appeals, as limited by his notice of cross appeal and brief, from so much of thesame order as granted that branch of the motion of the defendants Ronald T. Levinson andLevinson and Associates, P.C., which was pursuant to CPLR 3211 (a) (5) to dismiss the causesof action alleging legal malpractice.
Ordered that the order is affirmed insofar as appealed from; and it is further,
Ordered that the order is reversed insofar as cross-appealed from, on the law, that branch ofthe motion of the defendants Ronald T. Levinson and Levinson & Associates, P.C., which waspursuant to CPLR 3211 (a) (5) to dismiss the causes of action alleging legal malpractice insofaras asserted against them is denied; and it is further,
Ordered that one bill of costs is awarded to the plaintiff.
The plaintiff sold his home to the defendants James Hartmann and Louise Lorusso(hereinafter the purchasers) in a transaction arranged by the defendants Ronald T. Levinson andhis law firm, Levinson & Associates, P.C. (hereinafter together Levinson). Levinson prepared allof the documents used to effect the transaction and represented both the plaintiff and thepurchasers.
The plaintiff alleged that, by contract of sale dated May 11, 2004, he agreed to sell hisproperty for the sum of $912,500, a sum significantly less than its actual value, in return for alife estate in the property. At the closing, which took place on May 17, 2004, the plaintiff waspersuaded [*2]to accept part of the purchase price in the form ofa promissory note in the amount of $350,631.42. The note, which was signed by one of thepurchasers, indicated that it was secured by a mortgage on the property. The life estate wasgranted by the purchasers in a separate agreement after the plaintiff executed the deed. Theplaintiff alleged that Levinson promised to record the life estate agreement and to record themortgage securing the promissory note.
Approximately two years later, one of the purchasers obtained a loan in the sum of$2,480,000 from an institutional lender which was secured by a mortgage recorded on thesubject property. Within the year, and without ever making a payment on the loan, the purchaserdefaulted and the bank subsequently commenced an action to take possession of the property andto eject the plaintiff. Levinson had failed to secure the promissory note with a recordedmortgage, and had not recorded the agreement granting the plaintiff a life estate in the property.
On August 3, 2007, the plaintiff commenced this action asserting, among other things,causes of action alleging legal malpractice and fraud. The complaint alleged that Levinson hadfailed to protect the plaintiff's interests when representing him in the transaction and had failed todisclose the legal consequences of the transaction. The complaint further alleged that Levinsonnever intended to record the life estate agreement or secure the promissory note with a mortgageon the property because the purchasers did not want the property to appear encumbered whenthey sought to borrow against the property. The purchasers also failed to repay any portion of thepromissory note.
Levinson moved, inter alia, to dismiss the complaint pursuant to CPLR 3211 (a) (5),contending that the legal malpractice claims were commenced more than three years after theclosing date and thus were time-barred (see CPLR 214 [6]). The Supreme Courtconcluded, inter alia, that the causes of action sounding in legal malpractice accrued at the timeof closing and that the continuous representation doctrine did not apply. The Supreme Courtdetermined that all of the causes of action were time-barred except the one premised on fraud.
Assuming that the legal malpractice causes of action accrued more than three years beforethis action was commenced (see McCoy v Feinman, 99 NY2d 295, 301 [2002];Ackerman v Price Waterhouse, 84 NY2d 535, 543 [1994]; Melendez v Bernstein, 29 AD3d872, 872 [2006]; Alicanti vBianco, 2 AD3d 373, 374 [2003]), nevertheless, the complaint adequately alleged thatthe plaintiff was "left with the reasonable impression that [Levinson] was, in fact, activelyaddressing [his] legal needs" after the closing date (Shumsky v Eisenstein, 96 NY2d 164,169 [2001]). Thus the "pleading is sufficient to establish that the parties mutually contemplatedthat [Levinson's] work and representation for [the transaction] would continue after [the closingdate] and, therefore, the continuous representation doctrine applies," and the statute oflimitations was tolled (Symbol Tech.,Inc. v Deloitte & Touche, LLP, 69 AD3d 191, 195 [2009]; see Carnevali vHerman, 293 AD2d 698, 699 [2002]; Kahn v Hart, 270 AD2d 231 [2000]). Levinsonfailed to demonstrate that the plaintiff knew or should have known that Levinson had stoppedrepresenting him in the matter more than three years before the action was commenced (cf.Santulli v Englert, Reilly & McHugh, 78 NY2d 700, 709 [1992]). Accordingly, the legalmalpractice claims should not have been dismissed since Levinson failed to establish that theywere time-barred (see Zorn vGilbert, 8 NY3d 933, 934 [2007]; 730 J & J, LLC v Polizzotto & Polizzotto, Esqs., 69 AD3d 704[2010]; Town of Wallkill vRosenstein, 40 AD3d 972, 974 [2007]). In any event, we further note that "the plaintiffadequately pleaded facts which, if proven, would establish the existence of an equitableestoppel" in this case (Doe v NorthShore Univ. Hosp., 28 AD3d 603, 604 [2006]; see Simcuski v Saeli, 44 NY2d442 [1978]; General Stencils v Chiappa, 18 NY2d 125 [1966]).
The Supreme Court properly denied that branch of Levinson's motion which was to dismissthe cause of action alleging fraud insofar as asserted against them, for failure to state a cause ofaction (see CPLR 3211 [a] [7]). "[T]he allegations in the complaint describe a casewhere a defendant has fraudulently and positively as with personal knowledge stated thatsomething was to be done when he knew all the time it was not to be done and that hisrepresentations were false" (Channel Master Corp. v Aluminium Ltd. Sales, 4 NY2d403, 407-408 [1958] [internal quotation marks omitted]; see Braddock v Braddock, 60 AD3d 84, 90 [2009]; Romano vKey Bank of Cent. N.Y., 90 AD2d 679, 680 [1982]). Moreover, the cause of action allegedin the complaint "is premised upon one or more [*3]affirmative,intentional misrepresentations . . . which have caused additional damages, separateand distinct from those generated by the alleged malpractice" (White of Lake George vBell, 251 AD2d 777, 778 [1998]; see Simcuski v Saeli, 44 NY2d 442, 451-452[1978]; Bernstein v Oppenheim & Co., 160 AD2d 428, 430 [1990]). Additionally, theassertions in the complaint permit a reasonable inference of the alleged conduct (see Pludeman v Northern Leasing Sys.,Inc., 10 NY3d 486, 492 [2008]), and the complaint is otherwise "sufficient to advise[Levinson] of the incidents complained of" (Union State Bank v Weiss, 65 AD3d 584, 585 [2009]; seeCPLR 3116 [b]). Thus the complaint adequately alleged fraud.
The parties' remaining contentions are without merit or have been rendered academic by ourdetermination. Skelos, J.P., Santucci, Angiolillo and Chambers, JJ., concur.