The following e-filed papers read herein: NYSCEF Doc Nos. MS 5 171-178 Decision & Order Upon the forgoing papers, the motion by defendants Marc A. Landis (“Landis”), David Rosenberg (“Rosenberg”), and Phillips Nizer LLP (“Nizer LLP”) to dismiss the amended complaint, is decided as follows: Background Plaintiff Issac Hagar (“plaintiff”) alleges that he was introduced to defendant Inner Circle Logistics, Inc. (“ICL”) by Jay Rubin, because ICL needed one million dollars for a temporary downpayment for the purchase of four parcels of property in Orange County, New York. ICL purportedly promised plaintiff significant returns and a risk-free investment, representing that the one million dollar downpayment (“Downpayment”) was refundable and temporary. Plaintiff purportedly negotiated with [CL's attorney, Rosenberg, and reached an agreement that (a) the Downpayment would be repaid as soon as ICL replaced it with its own financing; (b) if it is not repaid during the 60-90 days due diligence period, plaintiff has the right to cancel the purchase agreements between ICL and seller for the return of the Downpayment; and (c) the Downpayment cannot be used for closing of the transactions. Plaintiff alleges that ICL failed to repay the Downpayment by the end date of the due diligence period. Plaintiff alleges that he demanded Landis and Rosenberg terminate the purchase agreements and requested a return of the Downpayment from defendant Riverside Abstract, LLC ("Riverside"). Plaintiff alleges that Landis and Rosenberg denied knowing plaintiff and instructed Riverside to release the funds to close the deals, which Riverside refused. Later, ICL purportedly defaulted for not completing the purchases. On September 7, 2022, plaintiff commenced this action against ICL, its attorneys Landis, Rosenberg, and Nizer LLP (collectively "Attorney Defendants"), and sellers. Plaintiff amended his complaint on October 3, 2023 asserting claims for breach of contract, money had and received, unjust enrichment, and fraudulent inducement against ICL; claims for malpractice, prima facie tort against Attorney Defendants, claims for tortious interference with contract and declaratory judgment against property sellers; and permanent injunction against Riverside. By the instant motion filed on November 22, 2023, Attorney Defendants move to dismiss plaintiff' claims against them. Attorney Defendants' motion to dismiss Attorney Defendants submit that, before finalizing the purchase agreements, they provided plaintiff with draft agreements containing clear terms that the termination right could only be assigned to third-party Steward Project 3, LLC. Additionally, that the drafts disclaimed the existence or rights of any third-party beneficiary. Attorney Defendants assert that plaintiff relies on the oral agreement that it would get the Downpayment back and has the right to cancel the purchase agreements if the Downpayment was not replaced by ICL. However, that plaintiff does not allege any written evidence of such promises. Attorney Defendants further assert that despite plaintiff's allegations, ICL and sellers agreed to postpone the closing and waive ICL's right of termination. Attorney Defendants argue that plaintiff fails to state a claim for malpractice. Specifically, that the amended complaint does not allege any improper actions by Attorney Defendants or their failure to exercise reasonable skills, causing plaintiff damages. They point out that the allegations only show that the damages are caused by plaintiff's failure to read or object to the terms of the purchase agreements. Moreover, Attorney Defendants argue that plaintiff fails to allege privity or near-privity between himself and Attorney Defendants, since there was no attorney-client relationship, and that plaintiff was never entitled to rely on them because they were not representing him, but were directly opposed to him. In addition, Attorney Defendants argue that plaintiff fails to state a claim for prima facie tort as he does not allege or provide any evidence of malicious intent or disinterested malevolence, an essential element for the claim. Attorney Defendants argue that plaintiff only alleges a breach of contract claim based on oral promises. Furthermore, Attorney Defendants argue that plaintiff's claims are barred by the Statute of Frauds because the claimed downpayment was intended to provide liquidity to support the purchase of property, which is required to be in writing by law. In opposition, plaintiff argues that it forwarded the Downpayment in reliance on ICL and Rosenberg's promises. Plaintiff asserts that he directly contacted Rosenberg to confirm the terms regarding the downpayment and that ICL delegated its termination right under the purchase agreements to plaintiff by email on January 26, 2022. Plaintiff argues that the amended complaint states a claim for malpractice, citing that "while privity of contract is generally necessary to state a cause of action for attorney malpractice, liability is extended to third parties, not in privity, for harm caused by professional negligence in the presence of fraud, collusion, malicious acts or other special circumstances." In addition, plaintiff argues that the purchase agreements between ICL and sellers are separate from the oral agreement between ICL and plaintiff. Moreover, that the purchases agreements do not trump the oral agreement as plaintiff is not a party to the purchase agreements. Plaintiff also argues that the amended complaint states a prima facie tort claim. Plaintiff contends that malicious intent and disinterested malevolence can be inferred from Rosenberg and Landis' actions of denying the existence of the oral agreement, directing Riverside not to return the Downpayment, and assisting ICL to waive the termination right. Furthermore, plaintiff argues that the Statute of Frauds is inapplicable as the agreement to forward ICL the Downpayment was not a contract concerning real property, instead, it was a loan conditioned on the promise that the funds would be repaid before the expiration of the due diligence period for each contract (purchase agreements) that plaintiff was never a party to. Additionally, that the oral agreement does not confer plaintiff with any right or interest to the property. Moreover, plaintiff argues that a party gives up the right to use Statute of Frauds as a defense if they let the other party partially perform, which occurred here. In reply, Attorney Defendants argue that plaintiff concedes that it has no privity or near privity with them, which is black-letter law in New York to state a claim for malpractice. Additionally, that plaintiff fails to allege any facts to support its conclusory allegations of malice by the Attorney Defendants, which as a matter of law cannot circumvent the privity requirement for a malpractice claim or support a claim for prima facie tort. Furthermore, Attorney Defendants argue that plaintiff's arguments on Statute of Frauds is contradicted by his own allegations. Specifically, plaintiff claims a right to terminate purchase agreements, which is an interest in real property. Moreover, that plaintiff's motivation to be involved in the real property investment can be inferred as it is illogical to offer a one million dollar interest-free loan without expecting any financial gain from the property. Discussion CPLR 3211(a)(1) provides that a defendant can seek dismissal of a complaint or part of it on the ground that "a defense is founded upon documentary evidence." Dismissal is appropriate where the evidence conclusively refutes the plaintiff's allegations or conclusively establishes a defense to the action (Beal Sav. Bank v. Sommer, 8 NY3d 318 [2007], AG Capital Funding Partners, L.P. v. State St. Bank and Tr. Co., 5 NY3d 582 [2005], Goshen v. Mut. Life Ins. Co. of New York, 98 NY2d 314 [2002]). The complaint is to be afforded a liberal construction, the facts as alleged in the complaint accepted as true, and the plaintiff accorded the benefit of every favorable inference (Goldman v. Metro. Life Ins. Co., 5 NY3d 561 [2005], EBC I, Inc. v. Goldman, Sachs & Co., 5 NY3d 11 [2005]). Courts have concluded that a paper qualifies as “documentary evidence” only if (1) it is unambiguous, (2) it is of undeniable authenticity, and (3) its contents are essentially undeniable (Fontanetta v. Doe, 73 AD3d 78 [2d Dept 2010], Mason v. First Cent. Nat. Life Ins. Co. of New York, 86 AD3d 854 [3d Dept 2011], Bronxville Knolls, Inc. v. Webster Town Ctr. Partnership, 221 AD2d 248 [1st Dept 1995]). CPLR 3211(a)(7) provides that a defendant may seek judgment dismissing the complaint on the ground that it fails to state a cause of action. Where a defendant has challenged the facial sufficiency of a complaint, the court’s inquiry is limited to whether the allegations state a claim cognizable at law. Case law makes it clear that a defendant can submit evidence in support of a motion for failure to state a cause of action, thereby permitting the movant to challenge a well-pleaded, cognizable cause of action (Matter of Lawrence v. Miller, 11 NY3d 588 [2008]). When evidence is submitted by the defendant, the standard morphs from whether the plaintiff states a cause of action to whether it has one. Thus, if the defendant’s evidence establishes conclusively that the plaintiff has no cause of action (i.e., that a well-pleaded, cognizable claims is flatly refuted by actual evidence), dismissal may be appropriate (Matter of Lawrence v. Miller, 11 NY3d 588 [2008], M & B Joint Venture, Inc. v. Laurus Master Fund, Ltd., 12 NY3d 798 [2009]). The plaintiff may submit evidence of its own, and a complaint will not be dismissed for failure to state a cause of action where affidavits or other documentary evidence submitted by the plaintiff demonstrate that a cause of action may exist (Johnson City Cent. School Dist. v. Fid. and Deposit Co. of Maryland, 263 AD2d 580 [3d Dept 1999]). Here, plaintiff’s amended complaint states a claim for malpractice against Attorney Defendants because “[w]hile privity of contract is generally necessary to state a cause of action for attorney malpractice, liability is extended to third parties, not in privity, for harm caused by professional negligence in the presence of fraud, collusion, malicious acts or other special circumstances” (Ginsburg Dev. Companies, LLC v. Carbone, 85 AD3d 1110 [2d Dept 2011]). Although the amended complaint does not allege an attorney-client relationship between plaintiff and Attorney Defendants, the allegations fall within the exception of fraud, collusion, malicious acts or other special circumstances under which a cause of action alleging attorney malpractice may be asserted absent a showing of actual or near-privity. Accordingly, Attorney Defendants’ motion to dismiss plaintiff’s claim for malpractice is denied. Turning to the claim for prima facie tort, “to state a cause of action for prima facie tort, the plaintiff must allege (1) the intentional infliction of harm, (2) which results in special damages, (3) without any excuse or justification, (4) by an act or series of acts which would otherwise be lawful” (Kickertz v. New York Univ., 110 AD3d 268 [1st Dept 2013]). Moreover, “there is no recovery in prima facie tort unless malevolence is the sole motive for the defendant’s otherwise lawful act” (Wiggins & Kopko, LLP v. Masson, 116 AD3d 1130 [3d Dept 2014]). Other than conclusory contentions, plaintiff alleges no facts indicating that Attorney Defendants acted solely to harm him. Since disinterested malevolence has not been alleged, it is not necessary to address the other elements of a prima facie tort claim. Therefore, plaintiff’s claim for prima facie tort against Attorney Defendants is dismissed. Based on the forgoing, Attorney Defendants’ motion is granted to the extent that plaintiff’s cause of action for prima facie tort is dismissed as against them. The motion is otherwise denied. Dated: January 18, 2024
