Court Opinion

ID: 5906916
Source: CourtListenerOpinion
Date Created: 2022-01-13 03:40:25.677825+00
Date Added: 2024-06-11T08:45:52.344524
License: Public Domain

Kupferman, J. P., and Smith, J.,
dissent in part in a memorandum by Smith, J., as follows: I dissent from that part of the majority opinion which concludes that no action lies against the adjusters because plaintiff did not obtain a deficiency judgment in its foreclosure action against the mortgagor and others. The present action is not one for a deficiency but for breach of contract and malpractice. A review of the facts makes this clear.
On or about November 22, 1971, plaintiff’s predecessor gave a mortgage to J. Clarence Davies, Inc. (Davies) on premises known as 14-20 East Burnside Avenue, Bronx, New York. The premises consisted of two parcels. On or about May 30, 1973 plaintiff’s predecessor modified the mortgage agreement to provide that in the event any actions or proceedings were brought on the note or the indebtedness securing the note, no deficiency judgment would be sought against Davies.
On February 5, 1979 a fire insurance policy was issued by the New York Property Insurance Underwriting Association (NYPIUA) naming plaintiff’s predecessor as the mortgagee and loss payee. Fires occurred at the premises on March 17 or 18, 1979 and again in April of 1980.
On March 19, 1979, following the first fire, the defendants were retained as adjusters. They submitted a proof of loss to the NYPIUA which was rejected on February 19, 1980 because an item as to the actual cash value of the building was missing. A second proof of loss was rejected on March 25, 1980, also because of incomplete items, namely, the actual cash value of the property and the "Whole Loss and Damage” figure. No payment was ever made by NYPIUA.
Plaintiff began a foreclosure action which led to a final judgment of foreclosure on December 2, 1981. Plaintiff did not *49move for a deficiency judgment because of its mortgage agreement with Davies. Prior to the commencement of the mortgage foreclosure action, plaintiff had begun an action against NYPIUA. That action was eventually dismissed by Justice Greenfield and the dismissal was affirmed without opinion (Ninth Fed. Sav. & Loan Assn. v New York Prop. Ins. Underwriting Assn., 114 AD2d 1052 [1985]).
The present action is not one seeking payment of the deficiency which remained after the foreclosure sale. The action is for breach of the agreement with the defendant adjusters and for their malpractice in failing to submit a proper claim. Plaintiff contends that it could have resolved its dispute with NYPIUA and obtained a satisfactory solution of its claims had it not been for the malpractice of the adjusters. The position taken here is supported by Corley v Miller (133 AD2d 732 [2d Dept 1987]). There the Appellate Division rejected an argument that an attorney could not be held liable for legal malpractice where he had failed to safeguard certain insurance proceeds received after a fire to the premises even though plaintiff had failed to move for a deficiency judgment in a foreclosure action.