| 10 Cardinal Lane, LLC v N.K.T. Land Acquisitions,Inc. |
| 2014 NY Slip Op 02990 [117 AD3d 1133] |
| May 1, 2014 |
| Appellate Division, Third Department |
[*1]
| 10 Cardinal Lane, LLC, Appellant-Respondent, vN.K.T. Land Acquisitions, Inc., et al., Defendants, and David M. Lenney, Appellant, andJames G. Doyle, Respondent. |
FitzGerald Morris Baker Firth, PC, Glens Falls (Jill E. O'Sullivan of counsel), forappellant-respondent.
David M. Lenney, Clifton Park, appellant pro se.
Nicholas E. Tishler, Niskayuna, for respondent.
Stein, J. Appeals from an order of the Supreme Court (Ferradino, J.), enteredFebruary 8, 2013 in Saratoga County, which, among other things, granted defendantJames G. Doyle's motion for summary judgment dismissing the complaint against himand denied defendant David M. Lenney's cross motion for, among other things, summaryjudgment dismissing the complaint against him.
Defendant N.K.T. Land Acquisitions, Inc. (hereinafter NKT) owned real property inthe Village of Stillwater, Saratoga County that was subject to a $400,000 mortgage heldby Harold [*2]Cowles. Cowles commenced a mortgageforeclosure action against NKT, and defendant David M. Lenney was retained to serve asits counsel in that action. Plaintiff engaged defendant Scott M. Ronda, NKT'stransactional counsel, in negotiations to purchase the property, which ultimately resultedin the execution by NKT's president of a "Contract For Purchase And Sale Of RealEstate" (hereinafter the August 2011 contract). The sale never proceeded to closing,which plaintiff asserts was due in part to difficulties reaching an agreement over thepayment of monies owed to Cowles as required by the contract and in part to Ronda'sdispleasure over an attorney disciplinary complaint made against him by one of plaintiff'smembers. Ongoing negotiations between plaintiff and NKT regarding the sale of theproperty were initially handled on NKT's behalf by Ronda, and then by Lenney. Thetransaction was never completed and, in April 2012, the property was transferred todefendant James G. Doyle.
After learning of NKT's sale of the property to Doyle, plaintiff commenced thisaction seeking cancellation of the conveyance and specific performance of the August2011 contract. Plaintiff also asserted claims for damages and alleged, among otherthings, collusion by Ronda, Doyle and Lenney and that Ronda, Lenney, NKT's presidentand Doyle had tortiously induced NKT to breach the August 2011 contract. Doyle servedan answer and moved for summary judgment dismissing the complaint against him,contending, among other things, that he took title to the property as a bona fide purchaserfor value. Ronda and Lenney each moved for summary judgment as well. Supreme Courtgranted Doyle's motion, but denied the motions of Ronda and Lenney, finding thatquestions of fact existed as to whether the August 2011 contract was a binding contractand as to the nature of the later negotiations between the attorneys for plaintiff and NKT.Upon plaintiff's and Lenney's appeals, we affirm.
Initially, we reject plaintiff's assertion that Supreme Court erred in finding that Doylewas a bona fide purchaser as a matter of law. "A bona fide purchaser—one whopurchases real property in good faith, for valuable consideration, without actual or recordnotice of another party's adverse interests in the property and is the first to record thedeed or conveyance—takes title free and clear of such adverse interests" (Panther Mtn. Water Park, Inc. vCounty of Essex, 40 AD3d 1336, 1338 [2007] [citations omitted]; seeReal Property Law §§ 291, 294 [3]; T & V Constr., Inc. vCalapai, 90 AD3d 908, 908 [2011]; Sprint Equities [NY], Inc. v Sylvester, 71 AD3d 664, 665[2010]). In support of his motion, Doyle averred that he purchased the property for$455,000, recorded the deed on April 20, 2012 and "was unaware of any contract topurchase [the property] between [NKT] and anyone" prior to doing so. He also deniedhaving ever heard of either plaintiff or its principal prior to filing the deed. Rondaconfirms that he did not inform Doyle of the negotiations with plaintiff—or evenof plaintiff's existence—prior to the sale of the property. Further, the recordingpage accompanying the deed—which indicates a purchase price of $455,000 andreflects payment of a transfer tax commensurate with that amount—corroboratesDoyle's allegation regarding the consideration paid for the property (see Tax Law§ 1402 [a]). Given this evidence, the burden shifted to plaintiff to raise aquestion of fact as to whether Doyle "ha[d] knowledge of any fact, sufficient to put himon inquiry [notice] as to the existence of some right or title in conflict with that he [was]about to purchase" (Williamson v Brown, 15 NY 354, 362 [1857]; see Ward v Ward, 52 AD3d919, 920-921 [2008]).
In opposition, plaintiff argues that issues of fact exist both as to whether Doyle hadinquiry notice of plaintiff's interest in the property and as to whether he actually paidconsideration therefor. Plaintiff points to particular aspects of the deed filed in April2012 which transferred title to Doyle—specifically, that the deed is dated January9, 2011 and contains a signature of NKT's president that was acknowledged on January9, 2012, well before the [*3]conveyance to Doyle.Plaintiff also notes that the execution page is essentially identical to that contained in adeed in lieu of foreclosure that was executed previously by NKT's president as part of theongoing negotiations between NKT and plaintiff. However, even assuming that there issome significance to these facts, plaintiff fails to demonstrate that Doyle ever saw theprevious deed or offer any explanation beyond mere speculation as to how the dates,alone, would have placed Doyle on inquiry notice to suspect that plaintiff had aconflicting interest in the property.[FN1]
Nor has plaintiff submitted any competent evidence to counter Doyle's proof withrespect to the consideration he allegedly paid. Accordingly, even when we view theevidence in a light most favorable to plaintiff and give plaintiff the benefit of thereasonable inferences that can be drawn therefrom (see McColgan v Brewer, 112 AD3d 1191, 1193 [2013]),we find that plaintiff has failed to demonstrate the existence of triable issues of fact withrespect to Doyle's status as a bona fide purchaser in good faith for value (see PantherMtn. Water Park, Inc. v County of Essex, 40 AD3d at 1338-1339; Foster vPiasecki, 259 AD2d 804, 805-806 [1999]; W.I.L.D. W.A.T.E.R.S. vMartinez, 152 AD2d 799, 800-801 [1989]; compare Nagavi v Newcomb,305 AD2d 904, 906-907 [2003]).
Also unavailing is plaintiff's assertion that the deed conveying title to Doyle was voidbecause it was either a "forgery or obtained by false pretenses." Notably absent from therecord is any assertion by either NKT or Doyle that the deed did not represent theirintentions to convey title or that they otherwise contest its validity. In fact, a month afterthe challenged deed was recorded, Doyle recorded a corrective deed, countering anysuggestion that the transfer did not reflect their true intent. Under these circumstances,plaintiff's speculative claims are insufficient to render the deed void and Doyle's motionfor summary judgment dismissing the complaint against him was properly granted.
Turning to Lenney's appeal, we are unpersuaded by Lenney's argument that SupremeCourt erred in denying his cross motion for summary judgment dismissing, among otherthings, the claim alleging tortious interference with contract.[FN2]
Such a claim "requires the existence of a valid contract between . . .plaintiff and [NKT], [Lenney]'s knowledge of that contract, [Lenney]'s intentionalprocurement of [NKT]'s breach of the contract without justification, actual breach of thecontract, and damages resulting therefrom" (Lama Holding Co. v Smith Barney,88 NY2d 413, 424 [1996]; seeARB Upstate Communications LLC v R.J. Reuter, L.L.C., 93 AD3d 929, 933[2012]; Ulysses I & Co.,Inc. v Feldstein, 75 AD3d 990, 992 [2010], lv dismissed and denied 15NY3d 944 [2010]; Schmidt& Schmidt, Inc. v Town of Charlton, 68 AD3d 1314, 1316[*4][2009]). In support of his cross motion, Lenney offered hisaffirmation, in which he vehemently denies knowledge of the August 2011 contractbefore being served with the pleadings in this action[FN3]
and asserts that no binding contract existed between NKT and plaintiff at the time theproperty was conveyed to Doyle. However, Supreme Court correctly found that there arequestions of fact as to the existence of a contract at that time. It is undisputed thatplaintiff and NKT entered into the August 2011 contract, which bound "the heirs, legalrepresentatives, successors and assigns of the respective parties."[FN4]
Whether the subsequent negotiations between plaintiff and NKT in which Lenneywas involved were related to their attempts to finalize that contract—as plaintiffalleges—or represented their attempt to reach a new contract, after they failed toconsummate the August 2011 contract—as Lenney alleges—cannot bedetermined on the record before us.
Moreover, Lenney's alleged ignorance of the August 2011 contract is arguablycontradicted by allegations in the complaint and in an affidavit of plaintiff's attorney,Thomas Spinrad, wherein Spinrad averred that Lenney told him that the transactionbetween plaintiff and NKT would not proceed unless the disciplinary grievance againstRonda was withdrawn. Additionally, an "[o]ffer sheet," which was prepared as part ofthe later negotiations and provided to Lenney, expressly refers to "the contract between[NKT and plaintiff]." The question of whether "the contract" referred to the August 2011contract or to a new contract under negotiation cannot be determined on a summaryjudgment motion.[FN5]
Thus, notwithstanding the substantial evidence in the record contradicting plaintiff'sclaims, when we view the evidence in the light most favorable to plaintiff (see Brown & Brown, Inc. vJohnson, 115 AD3d 162, 173 [2014]; Hobler v Hussain, 111 AD3d 1006, 1008 [2013]), weconcur with Supreme Court's decision that there are triable issues of fact which precludesummary judgment dismissing the [*5]claim of tortiousinterference of contract against Lenney.
To the extent not specifically addressed herein, the parties' remaining contentionshave been considered and found to be without merit.
Peters, P.J., Rose and Egan Jr., JJ., concur. Ordered that the order is affirmed,without costs.
Footnote 1:Plaintiff also makesmuch of the date that Doyle allegedly became aware of the foreclosure of the propertyand its availability for purchase. However, once again, plaintiff fails to explain how thisrelates to the question of whether Doyle had notice of the existence of plaintiff's allegedconflicting interest in the property.
Footnote 2:We note that SupremeCourt correctly determined that Lenney's arguments regarding the fourth and seventhcauses of action (alleging conspiracy and fraud, respectively) were improperly raised forthe first time in his reply affirmation (see Potter v Blue Shield of NortheasternN.Y., 216 AD2d 773, 775 [1995]). Therefore, such arguments are not properlybefore us.
Footnote 3:In his affirmation,Ronda also denies informing Lenney of such contract.
Footnote 4:There is also someindication in the record that plaintiff tendered a payment in escrow as partialconsideration therefor.
Footnote 5:Lenney also claims that,inasmuch as his conduct with respect to negotiation of a contract with Doyle wasundertaken in his capacity as an attorney to protect the interests of his client (i.e., to avoidforeclosure), it is not actionable. While, "[g]enerally, an action against an attorney by anonclient third party will not lie . . . , an attorney may be held liable forinjuries sustained by a third party as a consequence of the attorney's wrongful orimproper exercise of authority, or where the attorney has committed fraud or collusion ora malicious or tortious act" (Singer v Whitman & Ransom, 83 AD2d 862,863 [1981] [citation omitted]; see Ginther v Jones, 35 AD3d 1224, 1224 [2006], lvdenied 8 NY3d 810 [2007]). Here, plaintiff alleges that Lenney made threats that thetransaction would not proceed unless the disciplinary claim against Ronda waswithdrawn and that he induced his client to wrongfully breach the contract with plaintiffwithout any legitimate or legal reason for doing so. Such allegations, if proven, could beactionable.