| Agai v Liberty Mut. Agency Corp. |
| 2014 NY Slip Op 04455 [118 AD3d 830] |
| June 18, 2014 |
| Appellate Division, Second Department |
[*1] (June 18, 2014)
| Jacob Agai, Appellant, v Liberty MutualAgency Corporation, Doing Business as Ohio Casualty Insurance Company, et al.,Respondents, et al., Defendants. |
Kasowitz, Benson, Torres & Friedman LLP, New York, N.Y. (Michael PaulBowen and Sondra D. Grigsby of counsel), for appellant.
Torre, Lentz, Gamell, Gary & Rittmaster, LLP, Jericho, N.Y. (Benjamin D.Lentz, Lawrence S. Novak, and Michael A. Prisco of counsel), for respondent LibertyMutual Agency Corporation, doing business as Ohio Casualty Insurance Company.
Winget, Spadafora & Schwartzberg, LLP, New York, N.Y. (Matthew Tracy andMichael R. Gaico of counsel), for respondents King & King, LLP, and PeterKutil.
In an action, inter alia, to recover damages pursuant to Judiciary Law§ 487, pursuant to the Debtor and Creditor Law, and for breach of contract,the plaintiff appeals from an order of the Supreme Court, Richmond County (Dollard, J.),entered December 10, 2012, which granted the motion of the defendant Liberty MutualAgency Corporation, doing business as Ohio Casualty Insurance Company, to dismissthe complaint insofar as asserted against it pursuant to CPLR 3211 (a) (7) for failure tostate a cause of action, and the separate motion of the defendants Peter Kutil and King& King, LLP, to dismiss the complaint insofar as asserted against them pursuant toCPLR 3211 (a) (1) and (5), based on documentary evidence and as barred by thedoctrines of res judicata and collateral estoppel.
Ordered that the order is affirmed, with one bill of costs payable to the respondentsappearing separately and filing separate briefs.
The instant action concerns a dispute regarding the disposition of the collateral for abond that was posted in connection with an appeal from a judgment in a prior actionbetween the parties. In the prior action (hereinafter the note action), the plaintiff, JacobAgai, sought to recover on a promissory note that was issued in his favor by thedefendants Dennis Mihalatos and Diontech Consulting, Inc. (hereinafter Diontech) inconnection with a $500,000 loan. In the note action, the Supreme Court, in an orderdated March 11, 2008, granted Agai's motion pursuant to CPLR 3213 for summaryjudgment in lieu of complaint, and judgment was entered thereon. Mihalatos andDiontech appealed, and this Court ultimately reversed the judgment and denied themotion for summary judgment (see Agai v Diontech Consulting, Inc., 64 AD3d 622[2009]).
In connection with the appeal in the note action, Mihalatos and Diontech together[*2]filed a bond with the Supreme Court. The bond wasguaranteed by Liberty Mutual Insurance Corporation, sued herein as Liberty MutualAgency Corporation, doing business as Ohio Casualty Insurance Company (hereinafterOhio Casualty). It is undisputed that, subsequent to this Court's determination in Agaiv Diontech Consulting, Inc. (64 AD3d at 622), the attorney representing Mihalatosand Diontech in the note action, Peter Kutil of King & King, LLP, obtained, fromOhio Casualty, the return of the collateral for the bond.
Agai then commenced the instant action, inter alia, to recover damages pursuant toJudiciary Law § 487 against, among others, Ohio Casualty, Kutil, and King& King, LLP.
The Supreme Court properly granted the motion of Ohio Casualty to dismiss thecomplaint insofar as asserted against it pursuant to CPLR 3211 (a) (7) for failure to statea cause of action. "On a motion to dismiss the complaint pursuant to CPLR 3211 (a) (7)for failure to state a cause of action, the court must afford the pleading a liberalconstruction, accept all facts as alleged in the pleading to be true, accord the plaintiff thebenefit of every possible inference, and determine only whether the facts as alleged fitwithin any cognizable legal theory" (Breytman v Olinville Realty, LLC, 54 AD3d 703, 703-704[2008]; see Leon v Martinez, 84 NY2d 83, 87 [1994]). Where evidentiarymaterial is submitted and considered on a motion to dismiss a complaint pursuant toCPLR 3211 (a) (7), and the motion is not converted into one for summary judgment, thequestion becomes whether the plaintiff has a cause of action, not whether the plaintiffhas stated one and, unless it has been shown that a material fact as claimed by theplaintiff to be one is not a fact at all and unless it can be said that no significant disputeexists regarding it, dismissal should not eventuate (see Guggenheimer vGinzburg, 43 NY2d 268, 274-275 [1977]; Fishberger v Voss, 51 AD3d 627, 628 [2008]).
Here, the unambiguous terms of the bond, which Ohio Casualty submitted in supportof its motion, demonstrated that the bond was an appeal bond obtained pursuant to CPLR5519 (a) (2) and, thus, Agai's allegation that the bond was not an appeal bond was "not afact at all" (Guggenheimer v Ginzburg, 43 NY2d at 275; see W.W.W. Assoc.v Giancontieri, 77 NY2d 157, 162 [1990]). Since there is no ambiguity in the termsor nature of the bond, parol evidence as to the purpose for which the bond was issuedmay not be considered (see A.Gugliotta Dev., Inc. v First Am. Tit. Ins. Co. of N.Y., 112 AD3d 559, 560-561[2013]; McNamee Constr. Corp.v City of New Rochelle, 29 AD3d 544, 545 [2006]). Under these circumstances,by virtue of CPLR 5519 (a) (2), the posting of the bond effected an automatic stay ofenforcement of the order and the judgment in the note action, pending the appeal in thenote action. The bond was extinguished upon this Court's determination of the appeal inthe note action in favor of Mihalatos and Diontech. Accordingly, Ohio Casualty did notbreach the terms of the bond, nor any implied duty of good faith and fair dealing, byreleasing the collateral for the bond to Mihalatos and Diontech (see CPLR 5519[a] [2]; see also La Rocco v Federal Ins. Co., 35 NY2d 806, 808 [1974]; C.T.Chems. [U.S.A.] v Vinmar Impex, 189 AD2d 727, 729 [1993]), and the SupremeCourt properly directed the dismissal of the complaint in the instant action insofar asasserted against Ohio Casualty for failure to state a cause of action.
The Supreme Court also properly directed the dismissal of the complaint insofar asasserted against Kutil and King & King, LLP (hereinafter together the Kutildefendants), based on documentary evidence, which included the bond itself (seeCPLR 3211 [a] [1]; Fontanetta vJohn Doe 1, 73 AD3d 78, 86 [2010]). Since the bond, by its terms, was anappeal bond obtained pursuant to CPLR 5519 (a) (2), and since the bond wasextinguished upon this Court's determination of the appeal in the note action in favor ofMihalatos and Diontech, the Kutil defendants could not have acted with the "intent todeceive the court or any party" in violation of Judiciary Law § 487 (1) whenthey caused the collateral to be returned to Mihalatos and Diontech (see Dupree v Voorhees, 102AD3d 912, 913 [2013]). Further, the Supreme Court properly directed the dismissalof the remaining causes of action, which were to recover damages based on violations ofthe Debtor and Creditor Law, unjust enrichment, pursuant to CPLR 5225, and on otherequitable grounds, based upon the same documentary evidence (see Mandarin Trading Ltd. vWildenstein, 16 NY3d 173, 182-183 [2011]; Federal Deposit Ins. Corp. vPorco, 75 NY2d 840, 842 [1990]; Nanomedicon, LLC v Research Found. of State Univ. of N.Y.,112 AD3d 594, 598 [2013]; D'Mel & Assoc. v Athco, Inc., 105 AD3d 451, 452[2013]; Pesa v Dayan, 104AD3d 662, 663-664 [2013]). Accordingly, the Supreme Court properly granted theKutil defendants' motion to dismiss the entire complaint insofar as asserted against them,based on the [*3]documentary evidence.
The parties' remaining contentions have been rendered academic in light of ourdetermination. Rivera, J.P., Balkin, Chambers and Miller, JJ., concur.