2456. REMEDIATION CAPITAL FUNDING LLC, plf-ap, v. PAUL J. NOTO, def-res, MICHAL ATTIA def — Sinnreich Kosakoff & Messina LLP, Central Islip (Jarrett M. Behar of counsel), for ap — Furman Kornfeld & Brennan LLP, New York (Andrew R. Jones of counsel), for res — Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered August 11, 2014, which granted the motion of defendant Paul J. Noto to dismiss the complaint as against him, and denied plaintiff’s cross motion to amend the complaint, unanimously reversed, on the law, with costs, Noto’s motion denied, and plaintiff’s cross motion granted.
In March 2007, plaintiff made a loan of approximately $6.6 million to nonparty Sheldrake Lofts, LLC (Sheldrake) to finance Sheldrake’s purchase of a property in Westchester County. Plaintiff alleges that Sheldrake presented it with a purchase agreement for the property, providing for a purchase price comprising $1.9 million in cash and a $5 million preferred equity interest in the buyer, which plaintiff was led to believe was the product of arm’s-length negotiations. Plaintiff made the loan in reliance on the purported $6.9 million purchase price as an indication of the property’s fair market value, without conducting an independent appraisal or other due diligence, because Sheldrake told it that the transaction had to be closed within two weeks. At the closing of the transaction, plaintiff received an opinion letter addressed to it and signed by defendant Noto, the attorney representing Sheldrake and its principal, Ofer Attia, who was the guarantor of the loan. In this letter, Noto opined, inter alia, that “[t]he execution and delivery of the Loan Documents, to my knowledge, after due inquiry, will not violate, conflict with, result in the breach of or constitute a default under any contract, agreement, instrument, judgment, decree, order, statute, rule or regulation to which [Sheldrake] and/or [Attia], as may be applicable, is subject”.
