FKB’S A. MICHAEL FURMAN AND SPENCER A. RICHARDS SUCCESSFULLY OBTAIN SUMMARY JUDGMENT IN SUFFOLK COUNTY SUPREME COURT DISMISSING A LEGAL MALPRACTICE CLAIM

04/29/2019

On March 20, 2019, FKB obtained a CPLR § 3212 summary judgment dismissal in the Supreme Court, Suffolk County of a legal malpractice claim for successfully arguing that the plaintiffs failed to prove the existence of an attorney-client relationship. During the underlying mortgage transaction, FKB’s client provided a standard form sales contract to a mortgage broker, who had been assisting the plaintiffs refinance their mortgage. Given that the plaintiffs’ credit did not qualify to refinance their home on affordable terms, the mortgage broker and the plaintiffs developed a scheme to add a straw man with a good credit rating to their deed. The straw man would refinance the mortgage based upon his credit, and the plaintiffs would make the payments on the loan.  Ultimately, the plaintiffs knowingly signed documents, including FKB’s client’s standard form sales contract, transferring their deed to the straw man instead of adding the straw man to the deed.

Thereafter, the plaintiffs commenced an action against FKB’s client for legal malpractice, breach of fiduciary duty, and fraud. Specifically, the plaintiffs alleged that FKB’s client represented the plaintiffs in the mortgage refinance transaction because FKB’s client provided the sales contract and received compensation from the title company. In its motion for summary judgment, FKB successfully argued that no attorney-client relationship existed between FKB’s client and the plaintiffs because the standard form contract did not give rise to an attorney-client relationship. The Court also adopted FKB’s argument that FKB’s client did not affirmatively lead the plaintiffs to believe that an attorney-client relationship or other fiduciary relationships existed. Finally, the Court was persuaded by FKB’s argument that FKB’s client’s compensation from the title company for the standard form contract did not give rise to an attorney-client relationship or other fraudulent conduct. On March 20, 2019, the Hon. Denise M. Molia, J.S.C., granted FKB’s motion for summary judgment dismissing the plaintiffs’ complaint against FKB’s client.

If you have any questions about this decision, or the defense of attorneys in general, please contact A. Michael Furman or Spencer A. Richards.

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