| Cervini v Zanoni |
| 2012 NY Slip Op 03582 [95 AD3d 919] |
| May 8, 2012 |
| Appellate Division, Second Department |
| Ricardo Cervini et al., Appellants, v Elio D. Zanoni,Respondent. |
—[*1] Wilson Elser Moskowitz Edelman & Dicker LLP, New York, N.Y. (Thomas W. Hyland,Richard E. Lerner, Joseph L. Francouer, and Leanne M. Carvino of counsel), forrespondent.
In an action to recover damages for legal malpractice, the plaintiffs appeal from an order ofthe Supreme Court, Suffolk County (Tannenbaum, J.), entered November 1, 2010, which grantedthe defendant's motion to dismiss the complaint pursuant to CPLR 3211 (a) (1) and (7) anddenied, as academic, their cross motion for leave to amend the complaint.
Ordered that the order is modified, on the law, (1) by deleting the provision thereof grantingthat branch of the defendant's motion which was to dismiss the complaint pursuant to CPLR3211 (a) (1), and substituting therefor a provision denying that branch of the motion, and (2) bydeleting the provision thereof denying, as academic, the plaintiffs' cross motion for leave toamend the complaint, and substituting therefor a provision denying the cross motion on themerits; as so modified, the order is affirmed, with costs payable to the defendant.
The plaintiffs allege that the defendant, their former attorney in a mortgage foreclosure actioninstituted against them by their lender, Wells Fargo Bank, N.A. (hereinafter Wells Fargo) (see Wells Fargo Bank, N.A. v Cervini,84 AD3d 789 [2011]), negligently failed to interpose an answer in that action on their behalf,instead filing only a notice of appearance, and negligently failed to rescind the subject loan andmortgage pursuant to Wells Fargo's alleged violation of a provision in the Truth-in-Lending Act(15 USC § 1601 et seq. [hereinafter TILA]) requiring notice of the right to rescinda mortgage loan within three days of closing. The plaintiffs further allege that such failureresulted in a default judgment being entered against them in the foreclosure action and the loss ofinterest and closing costs that Wells Fargo would have refunded to them if the subject loan andmortgage had been rescinded pursuant to the TILA.
In lieu of an answer, the defendant moved to dismiss the complaint pursuant to CPLR 3211(a) (1) and (7). The plaintiffs opposed and cross-moved for leave to serve an amended complaintthat provided greater detail with respect to Wells Fargo's alleged TILA disclosure violation andthe defendant's alleged negligence in failing to rescind the subject loan and mortgage pursuant tothe TILA. The Supreme Court granted the defendant's motion and denied the plaintiffs' [*2]cross motion as academic.
To state a cause of action to recover damages for legal malpractice, a plaintiff must allege:(1) that the attorney "failed to exercise the ordinary reasonable skill and knowledge commonlypossessed by a member of the legal profession," and (2) that the breach of this duty proximatelycaused the plaintiff to sustain actual and ascertainable damages (Leder v Spiegel, 9 NY3d 836, 837[2007], cert denied sub nom. Spiegel v Rowland, 552 US 1257 [2008] [internal quotationmarks omitted]; see Dempster vLiotti, 86 AD3d 169, 176 [2011]). "To establish the element of causation, a plaintiffmust show that he or she would have prevailed in the underlying action or would not haveincurred any damages but for the attorney's negligence" (Snolis v Clare, 81 AD3d 923, 925 [2011]).
A motion to dismiss pursuant to CPLR 3211 (a) (1) "may be appropriately granted onlywhere the documentary evidence utterly refutes plaintiff's factual allegations, conclusivelyestablishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of N.Y., 98NY2d 314, 326 [2002]; see Leon v Martinez, 84 NY2d 83, 88 [1994]; Shaya B. Pac., LLC v Wilson, Elser,Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38 [2006]). Here, the defendantfailed to present any documentary evidence that conclusively established a defense as a matter oflaw (see DeStaso v Condon Resnick,LLP, 90 AD3d 809, 814 [2011]; Nisari v Ramjohn, 85 AD3d 987, 990 [2011]). Accordingly, theSupreme Court should have denied that branch of the defendant's motion which was to dismissthe complaint pursuant to CPLR 3211 (a) (1).
The Supreme Court, however, properly granted that branch of the defendant's motion whichwas to dismiss the complaint pursuant to CPLR 3211 (a) (7). In considering a motion pursuant toCPLR 3211 (a) (7), the facts alleged in the complaint are generally accepted as true and theplaintiffs are afforded the benefit of every possible inference (see Reid v Gateway Sherman, Inc., 60 AD3d 836, 837 [2009];Roth v Goldman, 254 AD2d 405, 406 [1998]). In determining a motion to dismisspursuant to CPLR 3211 (a) (7), the court is concerned with only whether the facts as alleged fitwithin any cognizable legal theory (seeAG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582, 591[2005]; Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d at 326; Leon vMartinez, 84 NY2d at 87-88; Peeryv United Capital Corp., 84 AD3d 1201 [2011]).
"The equitable goal of rescission under TILA is to restore the parties to the 'status quo ante'. . . [I]t was not the intent of Congress to reduce the mortgage company to anunsecured creditor or to simply permit the debtor to indefinitely extend the loan without interest"(American Mtge. Network, Inc. v Shelton, 486 F3d 815, 820-821 [2007] [citationsomitted]). Accordingly, "[e]ffective rescission under the [TILA] requires the borrower to makerestitution of the amounts expended by the lender" (Clemmer v Liberty Fin. Planning,Inc., 467 F Supp 272, 276 [1979]; see Bustamante v First Fed. Sav. & Loan Assn. of SanAntonio, 619 F2d 360, 365 [1980]). Thus, in order to state a cause of action for rescission ofa loan and mortgage under the TILA, a mortgagee must assert both the mortgagor's alleged TILAdisclosure violation and that he or she can tender to the mortgagor the principal of the loan(see Berkeley Fed. Bank & Trust v Siegel, 247 AD2d 498 [1998]).
Here, in alleging that the defendant committed legal malpractice by failing to answer and byfailing to rescind the subject mortgage and loan pursuant to the TILA, the complaint fails toallege that the plaintiffs were able to tender to Wells Fargo the principal of the mortgage loan.Moreover, the plaintiffs admit in their proposed amended complaint that they "could not maketheir mortgage payments under [a] forbearance agreement" they had entered into whilerepresented by the defendant herein. Accordingly, both the complaint and the proposed amendedcomplaint failed to state a cause of action for legal malpractice based on the defendant's failure torescind the subject loan and mortgage pursuant to Wells Fargo's alleged violation of the TILA.Therefore, the Supreme Court properly granted that branch of the defendant's motion which wasto dismiss the complaint pursuant to CPLR 3211 (a) (7).
Since the proposed amended complaint was patently devoid of merit, the plaintiffs' crossmotion for leave to amend the complaint should have been denied on the merits (seeCPLR 3025 [b]; Martin v SouthernContainer Corp., 92 AD3d 647, 649 [2012]).[*3]
The plaintiffs' remaining contentions are without merit.Balkin, J.P., Belen, Hall and Miller, JJ., concur.