Source: http://kirschenbaumesq.com/article/goettler-v-peters-225-ad2d-660-639-nys2d-843-nyad-2-dept-mar-18-1996-no-94-07287-95-00794
Timestamp: 2019-04-18 20:19:25+00:00

Document:
Reynolds C. Graves, et al., Appellants.
Insurance Law § § 1113(a)(18), 6401(b).
rescission action pursuant to terms of that commitment.
prosecution based on representation of vendor in action to rescind sale.
rescind sale was to injure and damage purchaser.
damages sustained as result of alleged breach.
purchaser's subsequent effort to recover on money judgment against vendor.
Corp., and Chicago Title Insurance Company.
Gold & Darbee a/k/a Graves, Darbee & Medvin.
Ellen Unger, New Hyde Park, for respondent.
Before MILLER, J.P., and O'BRIEN, PIZZUTO and KRAUSMAN, JJ.
*660 MEMORANDUM BY THE COURT.
the tenth cause of action of the amended complaint.
are awarded one bill of costs.
firm refused to provide *663 the information claiming that it was privileged.
that none of these defendants were involved in the negotiations for the sale.
dismissing the tenth cause of action.
Paul GOETTLER, Respondent,v.Rodney PETERS, etc., et al., Defendants,Reynolds C. Graves, et al., Appellants.
Purchaser brought action against, inter alia, vendor's attorney and his law firm and against title insurer, asserting contract and tort claims in connection with vendor's action to rescind sale. The Supreme Court, Suffolk County, Lama, J., denied defendants' motions to dismiss and/or for summary judgment, and they appealed. The Supreme Court, Appellate Division, held that: (1) title insurer did not breach its contractual duties even though it did not issue actual title policy until after purchaser commenced instant action; (2) title insurer and its agents were not liable under negligence theory; (3) purchaser stated claim against attorney and law firm for malicious prosecution, but claim was time barred; (4) purchaser did not state claim against attorney and his firm for prima facie tort or breach of fiduciary duty; but (5) purchaser's allegations were sufficient to state claim against attorney and firm for fraud under conspiracy theory.
Title insurance commitment, which is issued at time of closing, constitutes policy or contract of indemnity by title insurer, and issuance of clean policy merely confirms obligations already undertaken by title company. McKinney's Insurance Law § § 1113(a)(18), 6401(b).
Title insurer did not breach its contractual duties even though actual title policy was not issued until after purchaser brought suit; through its agents, insurer issued commitment insuring purchaser's title, and defended purchaser in rescission action pursuant to terms of that commitment.
Title insurer and its agents were not liable under negligence theory for losses allegedly sustained by purchaser when suit was brought on behalf of vendor to rescind purchase agreement; there was no evidence that purchaser's injury was caused by actions of insurer, which defended purchaser in rescission action, or its agents.
Purchaser stated claim against vendor's attorney and his firm for malicious prosecution based on representation of vendor in action to rescind sale.
Purchaser did not state claim for prima facie tort against vendor's attorney and his firm absent any allegation that sole motivation in bringing action to rescind sale was to injure and damage purchaser.
Purchaser did not state claim against vendor's attorney and his firm for breach of fiduciary duty in connection with action to rescind sale; since deed was delivered at closing and subsequently recorded, there was no allegation of any damages sustained as result of alleged breach.
Purchaser stated claim against vendor's attorney and his firm for fraud under conspiracy theory in connection with vendor's action to rescind sale and purchaser's subsequent effort to recover on money judgment against vendor. **844 Kirschenbaum & Kirschenbaum, P.C., Garden City (Samuel Kirschenbaum and Ira Levine, of counsel), for appellants Barbara Barahal, Citation Abstract Corp., and Chicago Title Insurance Company.
Rivkin, Radler & Kremer, Uniondale (Evan H. Krinick and Merril Schapiro Biscone, of counsel), for appellants Reynolds C. Graves, John Kelly and Graves, Gold & Darbee a/k/a Graves, Darbee & Medvin.
Motion by the respondent for reargument of appeals from two orders of the Supreme Court, Suffolk County, dated July 26, 1994, and December 28, 1994, respectively, which were determined by decision and order of this court dated December 18, 1995.
In an action, inter alia, to recover damages for fraud, (1) the defendants Reynolds C. Graves, John Kelly, and Graves, Gold & Darbee a/k/a Graves, Darbee & Medvin appeal from so much of an order of the Supreme Court, Suffolk County (Lama J.), dated July 26, 1994, as denied the branches of their motion which were to dismiss the second, third, fifth, eighth, and ninth causes of action of the complaint insofar as they are asserted against them, and the defendants Barbara Barahal, Citation Abstract Corp., and Chicago Title Insurance Company separately appeal, as limited by their brief, from so much of the same order as denied the branch of their motion which was for summary judgment dismissing the fourth cause of action insofar as it is asserted against them and granted the plaintiff's *661 cross motion for leave to serve an amended complaint, and (2) the defendants Reynolds C. Graves, John Kelly, and Graves, Gold & Darbee a/k/a Graves, Darbee & Medvin appeal, as limited by their brief, from so much of an order of the same court, dated December 28, 1994, as, upon reargument, adhered to the prior determination, and the defendants Barbara Barahal, Citation Abstract Corp., and Chicago Title Insurance Company separately appeal from so much of the same order as, (a) upon reargument, adhered to the prior determination **845 and (b) denied their motion for summary judgment to dismiss the tenth cause of action of the amended complaint.
ORDERED that the appellants, appearing separately and filing separate briefs, are awarded one bill of costs.
The plaintiff alleged that the defendant Rodney Peters (hereinafter Peters) had conspired with his counsel Reynolds C. Graves (hereinafter Graves) of the law firm Graves, Gold & Darbee (hereinafter the law firm) in a scheme to deprive him *662 of the real property he had purchased from Peters. The plaintiff alleges that he was given only a few hours notice of the closing and therefore he was unrepresented by his own counsel. Graves refused to adjourn the closing until the plaintiff could obtain representation. Moreover, Graves told the plaintiff that he would assist him at the closing. Graves prepared a possession agreement between Peters and the plaintiff which provided that Peters would pay the plaintiff $100 for every day that he occupied the property after a certain date.
Because the plaintiff was unprepared for the closing he did not have certified funds to pay off liens against the property or to pay the balance of the purchase price. Therefore, he gave Graves personal checks which were to be replaced by certified funds several days later. Although the liens were satisfied several days later, and certified funds for the balance of the purchase price were accepted by Graves and placed in his firm's escrow account, Graves, on Peters' behalf, commenced an action against the plaintiff to rescind the sale based upon breach of the sales contract, and recorded a notice of pendency of action. During the ensuing litigation, Peters continued to occupy the plaintiff's property without complying with the terms of the possession agreement. Approximately three years later, the court entered a judgment in favor of the plaintiff which, inter alia, provided for Peters' eviction from the property and payment of the rental value of the property for that three- year period.
The defendant Barbara Barahal, an employee of Citation Abstract Corp., was the closer who prepared the title insurance commitment issued by Chicago Title Insurance Company (hereinafter Chicago Title). Although Chicago Title did not issue a title policy until after the instant action was commenced, the company defended the plaintiff in the rescission action pursuant to the terms of the commitment. Moreover, Chicago Title recorded the deed conveying title to the plaintiff, despite an initial delay in doing so because of representations made to it by Graves.
While the rescission action was still pending, Graves filed a bankruptcy petition on **846 Peters' behalf, which, inter alia, delayed the resolution of the rescission action and prevented the plaintiff from obtaining discovery regarding Peters' personal and financial matters. Although the bankruptcy action was later withdrawn, when the plaintiff sought information from the law firm regarding Peters, for purposes of executing the money judgment, the law firm refused to provide *663 the information claiming that it was privileged. The plaintiff commenced the instant action alleging causes of action, inter alia, sounding in fraud, conspiracy to defraud, malicious prosecution, prima facie tort, breach of contractual obligations, and negligence, and seeking damages including punitive damages. Barahal, Citation Abstract, and Chicago Title moved for summary judgment dismissing the complaint insofar as asserted against them, and Graves and his law firm moved, pursuant to CPLR 3211, to dismiss the complaint insofar as asserted against them. The plaintiff cross-moved for leave to amend the complaint to add a tenth cause of action. The court granted the motions to the extent of dismissing the first cause of action which alleged fraud in the inducement as to the sales contract, on the ground that none of these defendants were involved in the negotiations for the sale. The court otherwise denied the motions. The court granted the plaintiff's cross motion to amend the complaint. Upon reargument, the court adhered to its prior determination. It also denied the branch of the motion for reargument of Barahal, Citation Abstract, and Chicago Title, which was for summary judgment dismissing the tenth cause of action.
 A title insurance commitment, which is issued at the time of the closing, constitutes a policy or contract of indemnity by the title insurer (see, L. Smirlock Realty Corp. v. Title Guar. Co., 52 N.Y.2d 179, 187-188, 437 N.Y.S.2d 57, 418 N.E.2d 650; Insurance Law § 1113[a]; Insurance Law § 6401[b]; 5A Warren's Weed, New York Real Property, Title Insurance, § 4.01 [4th ed.] ). The issuance of a clean policy merely confirms the obligations already undertaken by the title company. Since Chicago Title, through its agents, issued a commitment insuring the plaintiff's title to the real property, and the company defended the plaintiff in the rescission action pursuant to the terms of the insurance commitment, it is irrelevant that the actual title policy was not issued until after the instant action was commenced. Thus, Chicago Title did not breach its contractual duties and the fourth cause of action should have been dismissed. Moreover, the plaintiff has failed to raise an issue of fact that his injury was caused by these defendants' actions, thus, the tenth cause of action for negligence against Chicago Title and its agents should have been dismissed.
 While the plaintiff's third cause of action to recover damages for malicious prosecution against Graves and the law firm based upon their representation of Peters in the rescission action was sufficiently stated, that cause of action was barred under the one-year Statute of Limitations (see, CPLR 215). The plaintiff did not adequately plead the eighth cause of action to *664 recover damages for prima facie tort since there is no allegation that the defendants' sole motivation was to injure and damage the plaintiff (see, Curiano v. Suozzi, 63 N.Y.2d 113, 117, 480 N.Y.S.2d 466, 469 N.E.2d 1324; see also, Burns Jackson Miller Summit & Spitzer v. Lindner, 59 N.Y.2d 314, 332, 464 N.Y.S.2d 712, 451 N.E.2d 459). Moreover, since the deed was delivered at the closing, and it was subsequently recorded, the plaintiff failed to allege any damages to sustain the fifth cause of action sounding in breach of fiduciary duty. Nevertheless, the plaintiff has stated sufficient allegations to maintain the second and ninth causes of action to recover damages for fraud, based upon a conspiracy theory (see, Kashi v. Gratsos, 2nd Cir., 790 F.2d 1050; see also, Chase Manhattan Bank, N.A. v. Perla, 65 A.D.2d 207, 211, 411 N.Y.S.2d 66).

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