Preview
INDEX NO. 605098/2024
FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM
NYSCEF DOC. NO. 45 RECEIVED NYSCEF 05/15/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK
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HAPPY LENDER, LLC,
Index No.: 605098/2024
Plaintiff,
-against-
BARBARA ROSLAWSK], individually and President and
sole shareholder of 11 Penguin Lane Corp.; 11 PENGUIN
LANE CORP.; CRAIG BLANCHARD, HOWARD E.
GREENBERG, ESQ., P.C.
“JOHN DOE #1” through “JOHN DOE #100,” the last one
hundred names being fictitious and unknown to plaintiff,
the persons or parties intended being the tenants, occupants,
persons or corporations, if any, having or claiming an
interest in or lien upon the premises, described in the
complaint,
Defendants.
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MEMORANDUM OF LAW IN SUPPORT OF
THE GREENBERG DEFENDANTS’ MOTION TO DISMISS
KAUFMAN DOLOWICH, LLP
Attorneys for Defendants
The Law Firm of Adam I. Kitzen, P.C.
and Adam I. Kitzen, Esq.
135 Crossways Park Drive, Suite 201
Woodbury, New Y ork 11797
T: (516) 681-1100
On the brief:
Brett A. Scher, Esq.
Kari Olszewski, Esq.
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TABLE OF CONTENTS
TABLE OF AUTHORITIES ml
PRELIMINARY STATEMENT
STATEMENT OF FACTS
ARGUMENT
POINT I: PLAINTIFF FAILS TO STATE A CLAIM FOR LEGAL
MALPRACTICE
A The Greenberg Defendants Are Not in Privity With Plaintiff
B The Greenberg Defendants Were Not the Proximate Cause
of Plaintiff's Damages
Cc Plaintiff's Claims against the Greenberg Defendants are Premature.
POINT II: PLAINTIFF REMAINING CLAIMS SHOULD BE DISMISSED AS
DUPLICATIVE OF THE LEGAL MALPRACTICE CLAIM
POINT III: PLAINTIFF FAILS TO STATE A CLAIM FOR NEGLIGENT
MISREPRESENTATION
A. Plaintiff Fails to Allege a Misrepresentation
B. Plaintiff Fails to Allege Justifiable Reliance
POINT IV: PLAINTIFF FAILS TO STATE A CLAIM FOR FRAUD AS
AGAINST THE GREENBERG DEFENDANTS 10
A. Plaintiff Failed to Meet the Stringent Pleading Requirements
of CPLR 3016(b) 10
Plaintiff Failed to anes Any Material
M al Mistepresentation Made
M de by
Greenberg Defendants.. 11
Cc Plaintiff Fails to Allege Scienter. 12
D. Plaintiff Fails to Allege Justifiable Reliance 13
POINT V: PLAINTIFF FAILS TO STATE ANY CONTRACT-BASED
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CLAIMS AS AGAINST THE GREENBERG DEFENDANTS 13
POINT VI: PLAINTIFF FAILS TO STATE A CLAIM FOR CONVERSION AS
AGAINST THE GREENBERG DEFENDANTS... 15
POINT VII: PLAINTIFF FAILS TO STATE A CLAIM FOR UNJUST
ENRICHMENT AS AGAINST THE GREENBERG
DEFENDANTS 15
POINT VIII: PLAINTIFF FAILS TO STATE A CLAIM FOR BREACH OF
FIDUCIARY DUTY AS AGAINST THE GREENBERG
DEFENDANTS.. 16
Plaintiff Fails to Allege the Existence of ‘aa Fiduclary Relationship
with the Greenberg Defendants.. 16
B. Plaintiff Fails to Allege a Breach by the Greenberg Defendants 17
C. Plaintiff Fails to Alege the
tt Greenberg Defendants
D is Proximately
Caused It damages... 18
POINT IX: PLAINTIFF FAILS TO STATE A VIABLE RICO CLAIM 18
A. Plaintiff Fails to Plead the Existence of a RICO Enterprise 18
B. Plaintiff Fails to Plead a Pattern of Racketeering Activity 19
POINT X: PLAINTIFF’S REQUEST FOR AN ACCOUNTING AND AN
INJUNCTION MUST BE DENIED AS AGAINST THE
GREENBERG DEFENDANTS 21
CONCLUSION 22
i
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TABLE OF AUTHORITIES
Case Page
4 Hour Wireless v. Smith,
No. 01 CIV. 9133 (RO), 2002 WL 31654963, at *2 (S.D.N.Y. Nov 22, 2002) 13
Aglira v. Julien & Schlesinger, P.C
214 A.D.2d 178 (1* Dep’t 1995)
Alvord & Swift v. Stewart M. Muller Constr. Co
46 N.Y .2d 276 (1978) 14
Appel v. Giddins,
89 A.D.3d 543 (1 Dep’t 2011)
ASR Levensverzekering NV v. Breithorn ABS Funding p.l.c.
102 A.D.3d 556 (1° Dep’t 2013) 13
Barry& Sons. Inc. v. Instinct Productions, LLC
15 A.D.3d 62 (1° Dep’t 2005) 14
Benzemann v. Citibank N.A
149 A.D.3d 586 (1° Dep’t 2017)
Betz v. Blatt,
116 A.D.3d 813 (2d Dep’t 2014)
Big Apple Consulting USA, Inc. v. Belmont Partners, LLC
873 N.Y .S.2d 232 (Sup. Ct., Nassau Cnty Sept. 15, 2008) 9, 10
Carmel v. Lunney,
70 N.Y .2d 169 (1987)
City of New York v. Smokes-Spirits.com, Inc:
541 F.3d 425 (2d Cir. 2008) 20
Cnty. of Nassauv. Expedia, Inc
120 A.D.3d 1178 (2d Dep’t 2014) 15
Cofacredit, S.A. v. Windsor Plumbing Supply Cc
Co.,
187 F.3d 229 (2d Cir. 1999)... 20
il
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Colavito v. New York Organ Donor Network, Inc.
8 N.Y .3d 43 (2006) 15
Consol. Bus Transit. Inc. v. Treiber Grp., LLC
97 A.D.3d 778 (2d Dep’t 2012) 12
De Falco v. Bernas
244 F.3d 286 (2d Cir. 2001) 20
DeGregorio v. Bender
4 A.D.3d 384 (2 Dep’t 2004)
DeMartino v. Golden,
150 A.D.3d 1200 (1% Dep’t 2017)
Dobroshi v. Bank of America,
65 A.D.3d 882 N.Y .S.2d 106 (1% Dep’t 2009) 15
Dousmanis v J oe Hornstein, Inc
181 A.D.2d 592 (1° Dep’t 1992)
Edelman v. Berman,
195 A.D.3d 995 (2d Dep’t 2021) 12
Eurycleia Partners, LP v. Seward & Kissel, LLP
12 N.Y .3d 553 (2009) 10
First Capital Asset Mgmt., Inc. v. Satinwood,
385 F.3d 159 (2d Cir. 2004) 18, 19
Ford v. Sivilli
2 A.D.3d 773 (2d Dep’t 2003) 13
Fortress Credit Corp. v. Dechert LLP
89 A.D.3d 615 (1 Dep’t 2011) 8,12
Georgia Malone & Co v. Rieder,
19 N.Y .3d 511 (2012) 16
Gershon v. Goldberg,
30 A.D.3d 372 (2d Dep’t 2006)
GICC Capital Corp. v. sociology Financece Group, InInc.,
67 F.3d 463 (2d Cir. 1995)... 20
Iv
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Goel v. Ramachandran,
111 A.D.3d 783 (2d Dep’t 2013)...
Gordon v. Dino De Laurentiis Corp.,
141 A.D.2d 435 (1° Dep’t 1988) sass 14
Guzman v. Ramos,
191 A.D.3d 644 (2d Dep’t 2021)...
Hashmi v Messiha,
65 A.D.3d 1193 (2d Dep’t 2009)... cee
Kahan Jewelry Corp. v. Rosenfeld,
295 A.D.2d 261 (1* Dep't 2002) .ssssssse
HJ. Inc. v. Northwestern Bell Tel. Co.,
492 U.S. 229 S. Ct. 2893 (U.S. 1989)... sesso 9, 20
J.A.O. Acquisition Corp. v. Stavitsky,
8 N.Y .3d 144 (2007) seesseseeseeseessesaeeaessecatessssesseesassseeaesaesseestessssessesssssseeaesaesseesscssssessessessaeeaesaesseeseengee
Katsoris v. Bodnar & Milone, LLP,
186 A.D.3d 1504 (2d Dep’t 2020)...
Keness v. Feldman, Kramer & Monaco, P.C.,
105 A.D.3d 812 (2d Dep’t 2013)... eee
Kenford Co., Inc. v. Erie County,
67 N.Y .2d 257 (1986)... 13
Klepetko v. Reisman,
41 A.D.3d 551 (2d Dep’t 2007)...
Kliger-Weiss Infosystems, Inc. v. Ruskin Moscou Faltischek, P.C.,
159 A.D.3d 683 (2d Dep’t 2018)...
Kline v. Taukpoint Realty,
302 A.D.2d 433 (2? Dep’t 2003) veecccssssooss 11
KNK Enterprises, Inc. v. Harriman Enterprises, Inc.,
33 A.D.3d 872 (2d Dep’t 2006)...
Laub v. Faessel,
297 A.D.2d 28 N.Y .S.2d 534 (1% Dep’t 2002) seeaeeeceseeseesseeaeeaessecaeeessseesessaesaeeaesaesseessssesseseeesaeeatenes 18
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Lapine v. Seinfeld.
918 N.Y .S.2d 313 (Sup. Ct., N.Y. Cnty. Feb. 23, 2011) 14
Leder v. Spiegel
31 A.D.3d 266(1* Dep’t 2006)
Leser v. Multi Capital Group LLC
13 N.Y.S.3d 850 (Sup. Ct. Kings Cnty. Mar. 2, 2015) 17
Linden v. Moskowitz,
294 A.D.2d 114 (1st Dep't 2002)
Lopesv. Mangiatordi, Maher & Lemmo, LLC
2004 NY Slip Op 51722U (Sup. Ct. Queens 2004)
Mandarin Trading Ltd. v. Wildenstein,
16 N.Y .3d 173 (2011) 16
Markowitz v. Friedman,
144 A.D.3d 993 (2d Dep’t 2016) 15
Mecca v. Shang,
258 A.D.2d 569 (2d Dep’t 1999)
Metro. Bank& Tr. Co. v. Lopez
189 A.D.3d 443 (1° Dep’t 2020) 21
Nanomedicon, LLC v. Research Found. Of State Univ. of N.Y.,
112 A.D.3d 594 (2d Dep’t 2013) 11
National Union Fire Ins. Co. of Pittsburg, P.A. v. Robert Christopher Associates,
257 A.D.2d 1 (1 Dep’t 1999) 13
Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft, LLP
26 N.Y .3d 40 (2015)
Old Republic Nat. Title Ins. Co. v. Cardinal Abstractct Corp.,»
14 A.D.3d 678 (2d Dep’t 2005)... 11,13
Oppedisano v. D’Agostino,
196 A.D.3d 497 (2d Dep’t 2021) 12
Pacev. Raisman & Associates, Esqs., LLP
95 A.D.3d 1185 (2d Dep’t 2012) 13
Vi
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Palmetto Partners, L.P. v. AJW Qualified Partners, LLC,
83 A.D.3d 804 (2d Dep’t 2011)... 17
Parametric Capital Mgmt., LLC v. Lacher,
15 A.D.3d 301 (1% Dep’t 2005)
Pellegrino v. File,
291 A.D.2d 60 (1* Dep’t 2002)
Pomerance v. McGrath
124 A.D.3d 481 (1° Dep’t 2015) 15
Prudential Life Insurance Company of America v. Dewey Ballantine
170 A.D.2d 108 (1° Dep’t 1991) 2,4
Reznick v. Bluegreen Resorts Management, Inc
154 A.D.3d 891 (2d Dep’t 2017) 14
Riverbay Corp. v. “hysserrupp N. Elevator Comp.»
116 A.D. 487 (1° Dep’t 2014)... 11
Rosario-Suarz v. Wormuth Bros. Foundry Inc
233 A.D.2d 575 (3d Dep’t 1995) 14
Rut v. Young Adult Institute, Inc.
74 A.D.3d 776 (2d Dep’t 2010) 16, 18
Sebastian Holdings, Inc. v. Deutsche Bank, AG
108 A.D.3d 433 (1° Dep’t 2013)
Sergeants Benevolent Ass'n Health & Welfare Fund v. Sanofi-Aventis U.S. LLP
806 F.3d 71 (2d Cir. 2015) 21
Smallwood v. Lupoli
2007 WL 2713841, at *6 (E.D.N.Y . Sept. 14, 2007) 19
Sperry v. Crompton Corp.,
8 N.Y .3d 2014 (2007) 16
Spool v. World Child Int'l adoption Agency,
520 F.3d 178 (2d Cir. 2008)... 20
Standard Federal Bank v. Healy,
7 A.D.3d 610 (2d Dep’t 2004) 18
vil
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Sud v. Sud,
211 A.D.2d 423 (1 Dep't 1995) vissssssne 14
Swartz v. Swartz,
145 A.D.3d 818 (2d Dep’t 2016)... 17
Tall Tower Capital LLC v. Stonepeak Partners LP,
174 A.D.3d 441 (1° Dep’t 2019) sasecssee
Travelsavers Enterprises, Inc. v. Analog Analytics, Inc.,
149 A.D.3d 1003 (2d Dep’t 2017)... 15
United States v. Turkette,
452 U.S. 576 (1981)... sessed, 19
Walters v. Pennon Assocs., Ltd.,
188 A.D.2d 596 (2d Dep’t 1992)... 13
Weaver v. James,
2011 WL 4472062, at *3 (S.D.N.Y. Sept. 27, 2011) 19
Weight v. Day,
134 A.D.3d 806 (2d Dep’t 2015)...
RULES AND STATUTES
CPLR §3211(a)(7) .....
N.Y. C.P.L.R §3016(b) (McKinney) ............ seeseees Passim,
vili
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PRELIMINARY STATEMENT
This action wrongfully attempts to force Defendants Craig Blanchard and Howard E.
Greenberg, Esq., P.C. (collectively, the “Greenberg Defendants”) into the role as personal
guarantors with respect to a hard money loan Plaintiff, Happy Lender, LLC (“Plaintiff”) made to
defendants 11 Penguin Lane Corp. (“11 Corp.”) and Barbara Roslawski (“Ms. Roslawski”).
Plaintiff's entire complaint is based on the misguided notion that the Greenberg Defendants
became Plaintiffs attorneys and were responsible for conducting Plaintiff's due diligence even
though the Greenberg Defendants represented the borrower, 11 Corp. Plaintiff makes this leap of
faith based solely upon the fact that the Greenberg Defendants provided an Opinion Letter to
Plaintiff on behalf of 11 Corp. The Complaint is silent as to any misrepresentations in the Opinion
Letter and instead attempts to make the Greenberg Defendants liable for alleged fraudulent
statements made by Ms. Roslawski outside of the Opinion Letter.
Unlike the “typical” claim against an attorney who prepares an Opinion Letter, here
Plaintiff sought an opinion letter from the Greenberg Defendants regarding inter alia the ability of
11 Corp. to enter into the Loan, 11 Corp’s ability to execute the Loan documents, and their
knowledge of any current actual knowledge of pending or threatened lawsuits against 11 Corp. or
Ms. Roslawski, yet Plaintiff's claims and alleged damages arise from an alleged fraud that Plaintiff
contends was perpetrated regarding collateral she offered for the Loan — an account at TD
Ameritrade (the “TD Account”). However, the Greenberg Defendants did not opine or make any
representations regarding the TD Account. Instead, Plaintiff, a sophisticated lender (whose
principal is an attorney), communicated directly with Ms. Roslawski (prior to funding the Loan)
as part of its due diligence process and accepted the representations from Ms. Roslawski directly
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conceming the account. If a fraud was perpetrated on Plaintiff concerning the TD Account, it has
nothing to do with the Opinion Letter.
STATEMENT OF FACTS
The Court is respectfully referred to the A ffirmation of BrettA. Scher, dated May 15, 2024
(“Scher Aff.”) for a full recitation of the facts.
ARGUMENT
In considering a motion to dismiss for failure to state a cause of action pursuant to CPLR
3211(a)(7), the Court must determine whether the factual allegations in the complaint manifest
any cognizable cause of action. See Klepetko v. Reisman, 41 A.D.3d 551, 551 (2d Dep’t 2007);
Gershon v. Goldberg, 30 A.D.3d 372, 373 (2d Dep’t 2006). Further, bare legal conclusions and
factual claims that are inherently incredible ... are not presumed to be true on a motion to dismiss
for legal insufficiency.” O’Donnell, Fox & Gartner v. R-2000 Corp., 198 A.D.2d 154 (15 Dep’t
1993); Parola, Gross & Marino, P.C. v. Susskind, 43 A.D.3d 1020 (2d Dep’t 2007) (“bare legal
conclusions and factual claims which are flatly contradicted by the record are not presumed to be
true”); Goel v. Ramachandran, 111 A.D.3d 783, 791 (2d Dep’t 2013) (“[OJn a motion to dismiss
pursuant to CPLR 3211(a)(7), bare legal conclusions are not presumed to be true.”’).
POINT I
PLAINTIFF FAILS TO STATE A CLAIM FOR LEGAL MALPRACTICE
A The Greenberg Defendants Are Not in Privity With Plaintiff
In order to establish a claim for legal malpractice, Plaintiff must first demonstrate privity
or that the attorney in question owed it a duty of care. Prudential Life Insurance Company of
America v. Dewey Ballantine, 170 A.D.2d 108, 114 (1% Dep’t 1991), aff'd, 80 N.Y .2d 377 (1992);
Betz v. Blatt, 116 A.D.3d 813 (2d Dep’t 2014). The absence of an attomey-client relationship or
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privity is fatal to a claim for legal malpractice. Keness v. Feldman, Kramer & Monaco, P.C., 105
A.D.3d 812 (2d Dep’t 2013). New Y ork courts have consistently confirmed that an attorney owes
no duty to anon-client. Benzemann v. Citibank N.A., 149 A.D.3d 586 (1% Dep’t 2017); DeMartino
v. Golden, 150 A.D.3d 1200 (1% Dep’t 2017); Linden v. Moskowitz, 294 A.D.2d 114 (1st Dep't
2002).
In the case at bar, Plaintiff broadly contends that the Greenberg Defendants “represented
[Plaintiff] as its attorneys in the loan transaction and thereafter.” Scher Aff., Ex. “A”, 9102.
Plaintiff offers no retainer agreement or does not even attempt to explain how the Greenberg
Defendants could have represented both sides of a transaction — lender and borrower.
Yet, pointing to the Opinion Letter, Plaintiff claims that the Greenberg Defendants
somehow “expressly promised to [Plaintiff] that [they were] its attorney...” Scher Aff., Ex. “H”,
p. 3; Ex. “A”, §32. While the Greenberg Defendants do not dispute that they issued the Opinion
Letter on behalf of its client, 11 Corp., it did not create an attorney-client relationship between
them and Plaintiff. In fact, the Opinion Letter, expressly states that the Greenberg Defendants
only represented 11 Corp., as the borrower, and Ms. Roslawski as guarantor. Scher Aff., Ex, “A”
997-8; Ex. “H.” Plaintiff, a sophisticated hard money lender, whose principal, Jared Kaplan, Esq.,
is an attorney, was also represented by its own counsel - Erick Vallely, Esq. of Vallely Law, PLLC.
Scher Aff., Ex. “G.”
As there was no attomey-client relationship between Plaintiff and the Greenberg
Defendants, Plaintiff is unable to maintain a legal malpractice claim against them.
B. The Greenberg Defendants Were Not the Proximate Cause of Plaintiff’s
Damages
Moreover, a legal malpractice plaintiff must also plead that the attorney’s conduct was the
proximate cause of plaintiff's loss and the plaintiff suffered actual and ascertainable damages as a
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result thereof. See Prudential Life Insurance Company of America, 170 A.D.2d at 114;
DeGregorio v. Bender, 4 A.D.3d 384 (2"4 Dep’t 2004). Conclusory assertions without supporting
facts showing negligence require dismissal of a legal malpractice claim. See Katsoris v. Bodnar
& Milone, LLP, 186 A.D.3d 1504 (2d Dep’t 2020); Hashmi v Messiha, 65 A.D.3d 1193 (2d Dep’t
2009).
It is well-settled that proximate cause requires a showing that “but for” the attorney’s
negligence, the plaintiff would have been successful in the underlying matter or would not have
sustained any ascertainable damages. Nomura Asset Capital Corp. v. Cadwalader, Wickersham &
Taft, LLP, 26 N.Y .3d 40 (2015); Carmel v. Lunney, 70 N.Y .2d 169 (1987). The failure to plead
proximate cause mandates the dismissal of a legal malpractice action regardless of whether the
attorney was negligent. Leder v. Spiegel, 31 A.D.3d 266, 268 (1% Dep’t 2006), aff'd 9 N.Y .3d 836
(2007); Pellegrino v. File, 291 A.D.2d 60, 63 (1S' Dep’t 2002).
Here, as discussed more thoroughly in the negligent misrepresentation argument,
Plaintiff's damages stem solely from Ms. Roslawski’s alleged fraud with respect to the collateral
—the TD Account. The Greenberg Defendants did not opine on Plaintiff's ability to collateralize
the TD Account or whether Plaintiff was actually made a beneficiary on the TD Account. Scher
Aff., Ex. “H.” Indeed, on January 24, 2023 (four days after the Loan closing and prior to funding),
Plaintiff communicated directly with Ms. Roslawski to confirm that it had been added to the TD
Account. Scher Aff., Ex. “P.” Plaintiff's principal, Jared Kaplan, Esq., specifically advised Ms.
Roslawski that Plaintiff would not fund the Loan until they received written confirmation from
TD that Plaintiff had been added to the account. Id. Plaintiff accepted an undated letter purportedly
from TD that they received five (5) days after the Closing to complete its due diligence. Scher
Aff., Ex. “P,” “Q” and “R.”
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Moreover, to the extent that Plaintiff argues that it was damaged as a result of the Opinion
Letter’s failure to disclose pending lawsuits against Ms. Roslawski, such a claim is unavailing.
Scher Aff., Ex. “A”, 954. With respect to the one claim that appears to have been commenced
before the Opinion Letter was executed, above and beyond the fact that the Greenberg Defendants
first appeared in the Maddaleno Action on behalf of Ms. Roslawski two months after the Closing,
Plaintiff fails to plead how the reported failure to disclose the Maddaleno Action — a matter of
public record — proximately caused Plaintiff's damages. Scher Aff., Ex. “A”, 953; Ex .“S"; Ex.
“7.” As conceded by Plaintiff, the other two lawsuits against Ms. Roslawski were commenced
over nine (9) months after the Closing. Scher Aff., Ex. “A”, 55; see also NYSCEF Doc. 1
NY SCEF Doc. 1.
Cc Plaintiff's Claims Against the Greenberg Defendants are Premature
Actions against professionals are regularly dismissed as premature where a plaintiff's proof
of damages are dependent upon the outcome or resolution of other claims or proceedings. See
Parametric Capital Mgmt., LLC v. Lacher, 15 A.D.3d 301 (1% Dep’t 2005); Kahan Jewelry Corp.
v. Rosenfeld, 295 A.D.2d 261 (1% Dep’t 2002); Lopes v. Mangiatordi, Maher & Lemmo, LLC,
2004 NY Slip Op 51722U (Sup. Ct. Queens 2004).
Plaintiff does not dispute that it currently has a valid first priority security lien on the
Subject Property. Scher Aff., Ex. “A”, 9912-16; 28. Indeed, Plaintiff filed a Notice of Pendency
against the Subject Property with this lawsuit. See NY SCEF Doc. 11. Nor does Plaintiff dispute
that it has a valid security interest in 11 Corp.’s leases and subleases and in Ms. Roslawski’s shares
in 11 Corp. Scher Aff., Ex. “M”, “N”. Furthermore, Plaintiff has a personal guaranty from Ms.
Roslawski. Scher Aff., BX.
Ex. “K”.
KN.
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Until such time as Plaintiff exhausts its remedies against 11 Corp. and Ms. Roslawski, it
cannot be heard that the Greenberg Defendant proximately caused Plaintiff's damages.
POINT II
PLAINTIFF’S REMAINING CLAIMS SHOULD BE DISMISSED
AS DUPLICATIVE OF THE LEGAL MALPRACTICE CLAIM
Courts have routinely held that any claims which are based upon the same underlying facts
and circumstances and seek similar damages, are subject to dismissal as duplicative. See Guzman
v. Ramos, 191 A.D.3d 644 (2d Dep’t 2021) (dismissing duplicative unjust enrichment claim);
Kliger-Weiss Infosystems, Inc. v. Ruskin Moscou Faltischek, P.C., 159 A.D.3d 683 (2d Dep’t
2018) (dismissing negligent misrepresentation claim as duplicative); Weight v. Day, 134 A.D.3d
806 (2d Dep’t 2015) (dismissing breach of contract, breach of covenant of good faith and fair
dealing, and fraud claims as duplicative of breach of fiduciary duty and malpractice claims);
Sebastian Holdings, Inc. v. Deutsche Bank, AG, 108 A.D.3d 433 (1% Dep’t 2013) (dismissing
“parallel” claims for conversion and breach of the implied covenant of good faith and fair dealing
as duplicative of breach of contract claim); Mecca v. Shang, 258 A.D.2d 569 (2d Dep’t 1999)
(claims for breach of contract, fraud and negligent misrepresentation duplicative of malpractice).
At bar, the alleged conduct giving rise to Plaintiffs second, third, fourth, fifth, sixth,
seventh, eighth and ninth causes of action (i.e., the preparation of the Opinion Letter) is the same
conduct that purportedly gives rise to Plaintiff's legal malpractice claim. Scher Aff., Ex. “A”, (970-
114. Moreover, Plaintiff alleges the same damages for all its causes of action. Scher
A ff., Ex. “A”,
9172-73, 78-79, 83-84, 87-88, 93-94, 99-100, 105-106, 113-114.
As such, Plaintiffs second, third, fourth, fifth, sixth, seventh, and ninth causes of action
must be dismissed as duplicative.
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POINT III
PLAINTIFF FAILS TO STATE A CLAIM FOR NEGLIGENT
MISREPRESENTATION
In order to prevail on a claim for negligent misrepresentation, Plaintiff must demonstrate
“(1) the existence of a special or privity-like relationship imposing a duty on the defendant to
impart correct information to the plaintiff; (2) that the information was incorrect; and (3)
reasonable reliance.” J.A.O. Acquisition Corp. v. Stavitsky, 8 N.Y .3d 144, 148 (2007).
A Plaintiff Fails to Allege a Misrepresentation
It is well-settled that where a “cause of action...is based upon misrepresentation...the
circumstances constituting the wrong shall be stated in detail.” N.Y. C.P.L.R. 3016(b)
(McKinney). In the case at hand, Plaintiff broadly engages in a formulaic recitation of the elements
of a negligent misrepresentation claim before alleging that the Greenberg Defendants “knew or
should have known that the statements in the Opinion Letter were false and there (sic) statements
afterwards concering...the monies in the TD Ameritrade account....were also false...” Scher Aff.,
Ex. “A”, §112. Plaintiff wholly fails to allege the purported misrepresentation with particularity
under CPLR 3016(b) and should be dismissed on this basis alone.
The Opinion Letter contains an opinion based upon the documents reviewed by the
Greenberg Defendants that execution and delivery of the Loan Documents by 11 Corp. was
authorized and in accordance with the law. It also stated that the Greenberg Defendants had no
actual knowledge of any pending litigation against 11 Corp. or Ms. Roslawski or affecting any real
property described in the mortgages. Scher Aff., Ex. “H”. The Opinion Letter contains no
representations regarding Plaintiff's ability to collateralize the TD Account or whether Plaintiff
was made a beneficiary on the account. Id. Instead, Plaintiff, under the guidance of its principal,
Jared Kaplan, Esq. (an attomey) as well as Plaintiffs counsel - Erick Vallely, Esq., elected to close
7
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on the Loan before it received confirmation from TD. In fact, as discussed in Point I supra,
Plaintiff elected to communicate directly with Ms. Roslawski to complete its due diligence and
confirm that Plaintiff had been added to the TD Account. Scher Aff., Ex. “P.” Before funding,
Plaintiff accepted an undated and unsigned letter from (the 2"4 TD Letter) from Ms. Roslawski as
sufficient proof of that its demands had been met by 11 Corp. Scher Aff., Ex. “P,” “Q” and “R.”
If the 2"! TD Letter was fraudulent, Plaintiff cannot look to the Greenberg Defendants as the
authors of an Opinion Letter prepared before and without reference to the account for relief.
Moreover, as to the claims regarding the Greenberg Defendants’ purported knowledge of
existing litigation, the Greenberg Defendants opined that they had “no current actual knowledge
of any pending or threatened litigation against either the Borrower or the Guarantors or affecting
any real property in the mortgages.” Scher Aff., Ex. “H” (emphasis added). The Complaint is
silent as how the Greenberg Defendants had knowledge of the first litigation — the Maddaleno
Action at the time of the Opinion Letter. The Greenberg Defendants eventually appeared as
counsel for Ms. Roslawski on March 17, 2023 — almost two (2) months after the closing but that
does not impart knowledge of the lawsuit to them at the time of the Opinion Letter. Scher Aff., Ex.
“T.” Lastly, the two Cognat lawsuits were commenced almost nine (9) months after the Closing
and, thus, there can be no misrepresentation as to their existence in the Opinion Letter. See
NY SCEF Doc. 1, NYSCEF Doc. 1.
As the Opinion Letter contains no material misrepresentations, there is no claim. See
Fortress Credit Corp. v. Dechert LLP, 89 A.D.3d 615, 616 (1% Dep’t 2011) (finding that the
defendant-attorney’s opinion letter “assumed the genuineness of all signatures and the authenticity
of the documents, made no independent inquiry into the accuracy of [the documents]...and
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undertook no independent investigation in ascertaining those facts. Thus, defendants’ statements
as contained in the opinion, were not misrepresentations.”)
B. Plaintiff Fails to Allege
J ustifiable Reliance
Lastly, Plaintiff is wholly unable to establish justifiable reliance on the Greenberg
Defendants’ purported misrepresentations. Plaintiff broadly alleges that it “reasonably relied upon
the Opinion Letter...” and it “has and will continued to be damaged....” Scher Aff., Ex. “A”, 9111;
113.
Plaintiff cannot claim that it justifiably relied on any purported misrepresentation by the
Greenberg Defendants. See Aglira v. Julien & Schlesinger, P.C., 214 A.D.2d 178, 185 (1% Dep’t
1995) (“As far as reliance is concerned, it is a well-settled principle that neither a party nor his
attorney may justifiably rely on the legal opinion or conclusions of his or her adversary’s
counsel.”); Appel v. Giddins, 89 A.D.3d 543, 544 (15 Dep’t 2011) (“Nor does the tenth cause of
action state a cause of action for negligent misrepresentation, since plaintiff could not reasonably
rely on Giddins in its role as Goldberg’s attorney”); Dousmanis v J oe Hornstein, Inc., 181 A.D.2d
592 (1°* Dep’t 1992).
Moreover, it is well-settled that a plaintiff may not claim justifiable reliance on a
misrepresentation where plaintiff (or its agent) “could have discovered the truth with due
diligence.” KNK Enterprises, Inc. v. Harriman Enterprises, Inc., 33 A.D.3d 872 (2d Dep’t 2006);
Tall Tower Capital LLC v. Stonepeak Partners LP, 174 A.D.3d 441 (1 Dep’t 2019) (finding
Defendant failed to allege justifiable reliance for negligent misrepresentation counterclaim where
“lawsuit was a matter of public record and could have been verified...through the exercise of
ordinary diligence.”); Big Apple Consulting USA, Inc. v. Belmont Partners, LLC, 873 N.Y .S.2d
232 (Sup. Ct., Nassau Cnty Sept. 15, 2008).
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Here, as discussed above, Plaintiff had no legal right to rely on the Opinion Letter as
evidence of that the TD Account would serve as collateral. Plaintiff elected to verify that
information directly with Ms. Roslawski. Scher Aff., Ex. “P.” Any claim of reliance fails once
Plaintiff decided to accept the undated and unsigned 2° TD Letter from Ms. Roslawski before
funding the loan. Scher Aff., Ex. “P,” “Q” and “R.” Likewise, any issues concerning an alleged
failure to disclose existing litigation against Ms. Roslawski fail because said claims were publicly
filed documents and could have been verified through the exercise of ordinary diligence. Big Apple
Consulting, supra.
POINT IV
PLAINTIFF FAILS TO STATE A CLAIM FOR FRAUD AS AGAINST THE
GREENBERG DEFENDANTS
In the unlikely event case that the Court finds that Plaintiff's claim for fraud! is not
duplicative, it should be dismissed for failure to state a claim. Plaintiff's fraud claim fails as a
matter of law because Plaintiff fails to allege: (a) its claim with particularity; (b) that the Greenberg
Defendants made any material misrepresentation to Plaintiff; (c) scienter; (d) justifiable reliance;
and (e) proximately caused damages.
A Plaintiff Failed to Meet the Stringent Pleading Requirements of C PLR 3016(b)
In order to state a cause of action for fraud, Plaintiff must allege that: (1) the Greenberg
Defendants made a material representation that was false; (2) they knew the representation to be
false and made it with the intent to deceive Plaintiff; (3) Plaintiff justifiably relied upon the
Preview
INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF 05/15/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK ween ene eee eee ene eee eee een ene e eee nen eee eenee HAPPY LENDER, LLC, Index No.: 605098/2024 Plaintiff, -against- BARBARA ROSLAWSK], individually and President and sole shareholder of 11 Penguin Lane Corp.; 11 PENGUIN LANE CORP.; CRAIG BLANCHARD, HOWARD E. GREENBERG, ESQ., P.C. “JOHN DOE #1” through “JOHN DOE #100,” the last one hundred names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises, described in the complaint, Defendants. ween ene eee eee ene eee eee een ene e eee nen eee eenee MEMORANDUM OF LAW IN SUPPORT OF THE GREENBERG DEFENDANTS’ MOTION TO DISMISS KAUFMAN DOLOWICH, LLP Attorneys for Defendants The Law Firm of Adam I. Kitzen, P.C. and Adam I. Kitzen, Esq. 135 Crossways Park Drive, Suite 201 Woodbury, New Y ork 11797 T: (516) 681-1100 On the brief: Brett A. Scher, Esq. Kari Olszewski, Esq. 1 of 32 INDEX NO. 605098/2024 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 TABLE OF CONTENTS TABLE OF AUTHORITIES ml PRELIMINARY STATEMENT STATEMENT OF FACTS ARGUMENT POINT I: PLAINTIFF FAILS TO STATE A CLAIM FOR LEGAL MALPRACTICE A The Greenberg Defendants Are Not in Privity With Plaintiff B The Greenberg Defendants Were Not the Proximate Cause of Plaintiff's Damages Cc Plaintiff's Claims against the Greenberg Defendants are Premature. POINT II: PLAINTIFF REMAINING CLAIMS SHOULD BE DISMISSED AS DUPLICATIVE OF THE LEGAL MALPRACTICE CLAIM POINT III: PLAINTIFF FAILS TO STATE A CLAIM FOR NEGLIGENT MISREPRESENTATION A. Plaintiff Fails to Allege a Misrepresentation B. Plaintiff Fails to Allege Justifiable Reliance POINT IV: PLAINTIFF FAILS TO STATE A CLAIM FOR FRAUD AS AGAINST THE GREENBERG DEFENDANTS 10 A. Plaintiff Failed to Meet the Stringent Pleading Requirements of CPLR 3016(b) 10 Plaintiff Failed to anes Any Material M al Mistepresentation Made M de by Greenberg Defendants.. 11 Cc Plaintiff Fails to Allege Scienter. 12 D. Plaintiff Fails to Allege Justifiable Reliance 13 POINT V: PLAINTIFF FAILS TO STATE ANY CONTRACT-BASED 2 of 32 INDEX NO. 605098/2024 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 CLAIMS AS AGAINST THE GREENBERG DEFENDANTS 13 POINT VI: PLAINTIFF FAILS TO STATE A CLAIM FOR CONVERSION AS AGAINST THE GREENBERG DEFENDANTS... 15 POINT VII: PLAINTIFF FAILS TO STATE A CLAIM FOR UNJUST ENRICHMENT AS AGAINST THE GREENBERG DEFENDANTS 15 POINT VIII: PLAINTIFF FAILS TO STATE A CLAIM FOR BREACH OF FIDUCIARY DUTY AS AGAINST THE GREENBERG DEFENDANTS.. 16 Plaintiff Fails to Allege the Existence of ‘aa Fiduclary Relationship with the Greenberg Defendants.. 16 B. Plaintiff Fails to Allege a Breach by the Greenberg Defendants 17 C. Plaintiff Fails to Alege the tt Greenberg Defendants D is Proximately Caused It damages... 18 POINT IX: PLAINTIFF FAILS TO STATE A VIABLE RICO CLAIM 18 A. Plaintiff Fails to Plead the Existence of a RICO Enterprise 18 B. Plaintiff Fails to Plead a Pattern of Racketeering Activity 19 POINT X: PLAINTIFF’S REQUEST FOR AN ACCOUNTING AND AN INJUNCTION MUST BE DENIED AS AGAINST THE GREENBERG DEFENDANTS 21 CONCLUSION 22 i 3 of 32 INDEX NO. 605098/2024 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 TABLE OF AUTHORITIES Case Page 4 Hour Wireless v. Smith, No. 01 CIV. 9133 (RO), 2002 WL 31654963, at *2 (S.D.N.Y. Nov 22, 2002) 13 Aglira v. Julien & Schlesinger, P.C 214 A.D.2d 178 (1* Dep’t 1995) Alvord & Swift v. Stewart M. Muller Constr. Co 46 N.Y .2d 276 (1978) 14 Appel v. Giddins, 89 A.D.3d 543 (1 Dep’t 2011) ASR Levensverzekering NV v. Breithorn ABS Funding p.l.c. 102 A.D.3d 556 (1° Dep’t 2013) 13 Barry& Sons. Inc. v. Instinct Productions, LLC 15 A.D.3d 62 (1° Dep’t 2005) 14 Benzemann v. Citibank N.A 149 A.D.3d 586 (1° Dep’t 2017) Betz v. Blatt, 116 A.D.3d 813 (2d Dep’t 2014) Big Apple Consulting USA, Inc. v. Belmont Partners, LLC 873 N.Y .S.2d 232 (Sup. Ct., Nassau Cnty Sept. 15, 2008) 9, 10 Carmel v. Lunney, 70 N.Y .2d 169 (1987) City of New York v. Smokes-Spirits.com, Inc: 541 F.3d 425 (2d Cir. 2008) 20 Cnty. of Nassauv. Expedia, Inc 120 A.D.3d 1178 (2d Dep’t 2014) 15 Cofacredit, S.A. v. Windsor Plumbing Supply Cc Co., 187 F.3d 229 (2d Cir. 1999)... 20 il 4 of 32 INDEX NO. 605098/2024 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 Colavito v. New York Organ Donor Network, Inc. 8 N.Y .3d 43 (2006) 15 Consol. Bus Transit. Inc. v. Treiber Grp., LLC 97 A.D.3d 778 (2d Dep’t 2012) 12 De Falco v. Bernas 244 F.3d 286 (2d Cir. 2001) 20 DeGregorio v. Bender 4 A.D.3d 384 (2 Dep’t 2004) DeMartino v. Golden, 150 A.D.3d 1200 (1% Dep’t 2017) Dobroshi v. Bank of America, 65 A.D.3d 882 N.Y .S.2d 106 (1% Dep’t 2009) 15 Dousmanis v J oe Hornstein, Inc 181 A.D.2d 592 (1° Dep’t 1992) Edelman v. Berman, 195 A.D.3d 995 (2d Dep’t 2021) 12 Eurycleia Partners, LP v. Seward & Kissel, LLP 12 N.Y .3d 553 (2009) 10 First Capital Asset Mgmt., Inc. v. Satinwood, 385 F.3d 159 (2d Cir. 2004) 18, 19 Ford v. Sivilli 2 A.D.3d 773 (2d Dep’t 2003) 13 Fortress Credit Corp. v. Dechert LLP 89 A.D.3d 615 (1 Dep’t 2011) 8,12 Georgia Malone & Co v. Rieder, 19 N.Y .3d 511 (2012) 16 Gershon v. Goldberg, 30 A.D.3d 372 (2d Dep’t 2006) GICC Capital Corp. v. sociology Financece Group, InInc., 67 F.3d 463 (2d Cir. 1995)... 20 Iv 5 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 Goel v. Ramachandran, 111 A.D.3d 783 (2d Dep’t 2013)... Gordon v. Dino De Laurentiis Corp., 141 A.D.2d 435 (1° Dep’t 1988) sass 14 Guzman v. Ramos, 191 A.D.3d 644 (2d Dep’t 2021)... Hashmi v Messiha, 65 A.D.3d 1193 (2d Dep’t 2009)... cee Kahan Jewelry Corp. v. Rosenfeld, 295 A.D.2d 261 (1* Dep't 2002) .ssssssse HJ. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229 S. Ct. 2893 (U.S. 1989)... sesso 9, 20 J.A.O. Acquisition Corp. v. Stavitsky, 8 N.Y .3d 144 (2007) seesseseeseeseessesaeeaessecatessssesseesassseeaesaesseestessssessesssssseeaesaesseesscssssessessessaeeaesaesseeseengee Katsoris v. Bodnar & Milone, LLP, 186 A.D.3d 1504 (2d Dep’t 2020)... Keness v. Feldman, Kramer & Monaco, P.C., 105 A.D.3d 812 (2d Dep’t 2013)... eee Kenford Co., Inc. v. Erie County, 67 N.Y .2d 257 (1986)... 13 Klepetko v. Reisman, 41 A.D.3d 551 (2d Dep’t 2007)... Kliger-Weiss Infosystems, Inc. v. Ruskin Moscou Faltischek, P.C., 159 A.D.3d 683 (2d Dep’t 2018)... Kline v. Taukpoint Realty, 302 A.D.2d 433 (2? Dep’t 2003) veecccssssooss 11 KNK Enterprises, Inc. v. Harriman Enterprises, Inc., 33 A.D.3d 872 (2d Dep’t 2006)... Laub v. Faessel, 297 A.D.2d 28 N.Y .S.2d 534 (1% Dep’t 2002) seeaeeeceseeseesseeaeeaessecaeeessseesessaesaeeaesaesseessssesseseeesaeeatenes 18 6 of 32 INDEX NO. 605098/2024 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 Lapine v. Seinfeld. 918 N.Y .S.2d 313 (Sup. Ct., N.Y. Cnty. Feb. 23, 2011) 14 Leder v. Spiegel 31 A.D.3d 266(1* Dep’t 2006) Leser v. Multi Capital Group LLC 13 N.Y.S.3d 850 (Sup. Ct. Kings Cnty. Mar. 2, 2015) 17 Linden v. Moskowitz, 294 A.D.2d 114 (1st Dep't 2002) Lopesv. Mangiatordi, Maher & Lemmo, LLC 2004 NY Slip Op 51722U (Sup. Ct. Queens 2004) Mandarin Trading Ltd. v. Wildenstein, 16 N.Y .3d 173 (2011) 16 Markowitz v. Friedman, 144 A.D.3d 993 (2d Dep’t 2016) 15 Mecca v. Shang, 258 A.D.2d 569 (2d Dep’t 1999) Metro. Bank& Tr. Co. v. Lopez 189 A.D.3d 443 (1° Dep’t 2020) 21 Nanomedicon, LLC v. Research Found. Of State Univ. of N.Y., 112 A.D.3d 594 (2d Dep’t 2013) 11 National Union Fire Ins. Co. of Pittsburg, P.A. v. Robert Christopher Associates, 257 A.D.2d 1 (1 Dep’t 1999) 13 Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft, LLP 26 N.Y .3d 40 (2015) Old Republic Nat. Title Ins. Co. v. Cardinal Abstractct Corp.,» 14 A.D.3d 678 (2d Dep’t 2005)... 11,13 Oppedisano v. D’Agostino, 196 A.D.3d 497 (2d Dep’t 2021) 12 Pacev. Raisman & Associates, Esqs., LLP 95 A.D.3d 1185 (2d Dep’t 2012) 13 Vi 7 of 32 INDEX NO. 605098/2024 NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 Palmetto Partners, L.P. v. AJW Qualified Partners, LLC, 83 A.D.3d 804 (2d Dep’t 2011)... 17 Parametric Capital Mgmt., LLC v. Lacher, 15 A.D.3d 301 (1% Dep’t 2005) Pellegrino v. File, 291 A.D.2d 60 (1* Dep’t 2002) Pomerance v. McGrath 124 A.D.3d 481 (1° Dep’t 2015) 15 Prudential Life Insurance Company of America v. Dewey Ballantine 170 A.D.2d 108 (1° Dep’t 1991) 2,4 Reznick v. Bluegreen Resorts Management, Inc 154 A.D.3d 891 (2d Dep’t 2017) 14 Riverbay Corp. v. “hysserrupp N. Elevator Comp.» 116 A.D. 487 (1° Dep’t 2014)... 11 Rosario-Suarz v. Wormuth Bros. Foundry Inc 233 A.D.2d 575 (3d Dep’t 1995) 14 Rut v. Young Adult Institute, Inc. 74 A.D.3d 776 (2d Dep’t 2010) 16, 18 Sebastian Holdings, Inc. v. Deutsche Bank, AG 108 A.D.3d 433 (1° Dep’t 2013) Sergeants Benevolent Ass'n Health & Welfare Fund v. Sanofi-Aventis U.S. LLP 806 F.3d 71 (2d Cir. 2015) 21 Smallwood v. Lupoli 2007 WL 2713841, at *6 (E.D.N.Y . Sept. 14, 2007) 19 Sperry v. Crompton Corp., 8 N.Y .3d 2014 (2007) 16 Spool v. World Child Int'l adoption Agency, 520 F.3d 178 (2d Cir. 2008)... 20 Standard Federal Bank v. Healy, 7 A.D.3d 610 (2d Dep’t 2004) 18 vil 8 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 Sud v. Sud, 211 A.D.2d 423 (1 Dep't 1995) vissssssne 14 Swartz v. Swartz, 145 A.D.3d 818 (2d Dep’t 2016)... 17 Tall Tower Capital LLC v. Stonepeak Partners LP, 174 A.D.3d 441 (1° Dep’t 2019) sasecssee Travelsavers Enterprises, Inc. v. Analog Analytics, Inc., 149 A.D.3d 1003 (2d Dep’t 2017)... 15 United States v. Turkette, 452 U.S. 576 (1981)... sessed, 19 Walters v. Pennon Assocs., Ltd., 188 A.D.2d 596 (2d Dep’t 1992)... 13 Weaver v. James, 2011 WL 4472062, at *3 (S.D.N.Y. Sept. 27, 2011) 19 Weight v. Day, 134 A.D.3d 806 (2d Dep’t 2015)... RULES AND STATUTES CPLR §3211(a)(7) ..... N.Y. C.P.L.R §3016(b) (McKinney) ............ seeseees Passim, vili 9 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 PRELIMINARY STATEMENT This action wrongfully attempts to force Defendants Craig Blanchard and Howard E. Greenberg, Esq., P.C. (collectively, the “Greenberg Defendants”) into the role as personal guarantors with respect to a hard money loan Plaintiff, Happy Lender, LLC (“Plaintiff”) made to defendants 11 Penguin Lane Corp. (“11 Corp.”) and Barbara Roslawski (“Ms. Roslawski”). Plaintiff's entire complaint is based on the misguided notion that the Greenberg Defendants became Plaintiffs attorneys and were responsible for conducting Plaintiff's due diligence even though the Greenberg Defendants represented the borrower, 11 Corp. Plaintiff makes this leap of faith based solely upon the fact that the Greenberg Defendants provided an Opinion Letter to Plaintiff on behalf of 11 Corp. The Complaint is silent as to any misrepresentations in the Opinion Letter and instead attempts to make the Greenberg Defendants liable for alleged fraudulent statements made by Ms. Roslawski outside of the Opinion Letter. Unlike the “typical” claim against an attorney who prepares an Opinion Letter, here Plaintiff sought an opinion letter from the Greenberg Defendants regarding inter alia the ability of 11 Corp. to enter into the Loan, 11 Corp’s ability to execute the Loan documents, and their knowledge of any current actual knowledge of pending or threatened lawsuits against 11 Corp. or Ms. Roslawski, yet Plaintiff's claims and alleged damages arise from an alleged fraud that Plaintiff contends was perpetrated regarding collateral she offered for the Loan — an account at TD Ameritrade (the “TD Account”). However, the Greenberg Defendants did not opine or make any representations regarding the TD Account. Instead, Plaintiff, a sophisticated lender (whose principal is an attorney), communicated directly with Ms. Roslawski (prior to funding the Loan) as part of its due diligence process and accepted the representations from Ms. Roslawski directly 10 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 conceming the account. If a fraud was perpetrated on Plaintiff concerning the TD Account, it has nothing to do with the Opinion Letter. STATEMENT OF FACTS The Court is respectfully referred to the A ffirmation of BrettA. Scher, dated May 15, 2024 (“Scher Aff.”) for a full recitation of the facts. ARGUMENT In considering a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211(a)(7), the Court must determine whether the factual allegations in the complaint manifest any cognizable cause of action. See Klepetko v. Reisman, 41 A.D.3d 551, 551 (2d Dep’t 2007); Gershon v. Goldberg, 30 A.D.3d 372, 373 (2d Dep’t 2006). Further, bare legal conclusions and factual claims that are inherently incredible ... are not presumed to be true on a motion to dismiss for legal insufficiency.” O’Donnell, Fox & Gartner v. R-2000 Corp., 198 A.D.2d 154 (15 Dep’t 1993); Parola, Gross & Marino, P.C. v. Susskind, 43 A.D.3d 1020 (2d Dep’t 2007) (“bare legal conclusions and factual claims which are flatly contradicted by the record are not presumed to be true”); Goel v. Ramachandran, 111 A.D.3d 783, 791 (2d Dep’t 2013) (“[OJn a motion to dismiss pursuant to CPLR 3211(a)(7), bare legal conclusions are not presumed to be true.”’). POINT I PLAINTIFF FAILS TO STATE A CLAIM FOR LEGAL MALPRACTICE A The Greenberg Defendants Are Not in Privity With Plaintiff In order to establish a claim for legal malpractice, Plaintiff must first demonstrate privity or that the attorney in question owed it a duty of care. Prudential Life Insurance Company of America v. Dewey Ballantine, 170 A.D.2d 108, 114 (1% Dep’t 1991), aff'd, 80 N.Y .2d 377 (1992); Betz v. Blatt, 116 A.D.3d 813 (2d Dep’t 2014). The absence of an attomey-client relationship or 11 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 privity is fatal to a claim for legal malpractice. Keness v. Feldman, Kramer & Monaco, P.C., 105 A.D.3d 812 (2d Dep’t 2013). New Y ork courts have consistently confirmed that an attorney owes no duty to anon-client. Benzemann v. Citibank N.A., 149 A.D.3d 586 (1% Dep’t 2017); DeMartino v. Golden, 150 A.D.3d 1200 (1% Dep’t 2017); Linden v. Moskowitz, 294 A.D.2d 114 (1st Dep't 2002). In the case at bar, Plaintiff broadly contends that the Greenberg Defendants “represented [Plaintiff] as its attorneys in the loan transaction and thereafter.” Scher Aff., Ex. “A”, 9102. Plaintiff offers no retainer agreement or does not even attempt to explain how the Greenberg Defendants could have represented both sides of a transaction — lender and borrower. Yet, pointing to the Opinion Letter, Plaintiff claims that the Greenberg Defendants somehow “expressly promised to [Plaintiff] that [they were] its attorney...” Scher Aff., Ex. “H”, p. 3; Ex. “A”, §32. While the Greenberg Defendants do not dispute that they issued the Opinion Letter on behalf of its client, 11 Corp., it did not create an attorney-client relationship between them and Plaintiff. In fact, the Opinion Letter, expressly states that the Greenberg Defendants only represented 11 Corp., as the borrower, and Ms. Roslawski as guarantor. Scher Aff., Ex, “A” 997-8; Ex. “H.” Plaintiff, a sophisticated hard money lender, whose principal, Jared Kaplan, Esq., is an attorney, was also represented by its own counsel - Erick Vallely, Esq. of Vallely Law, PLLC. Scher Aff., Ex. “G.” As there was no attomey-client relationship between Plaintiff and the Greenberg Defendants, Plaintiff is unable to maintain a legal malpractice claim against them. B. The Greenberg Defendants Were Not the Proximate Cause of Plaintiff’s Damages Moreover, a legal malpractice plaintiff must also plead that the attorney’s conduct was the proximate cause of plaintiff's loss and the plaintiff suffered actual and ascertainable damages as a 12 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 result thereof. See Prudential Life Insurance Company of America, 170 A.D.2d at 114; DeGregorio v. Bender, 4 A.D.3d 384 (2"4 Dep’t 2004). Conclusory assertions without supporting facts showing negligence require dismissal of a legal malpractice claim. See Katsoris v. Bodnar & Milone, LLP, 186 A.D.3d 1504 (2d Dep’t 2020); Hashmi v Messiha, 65 A.D.3d 1193 (2d Dep’t 2009). It is well-settled that proximate cause requires a showing that “but for” the attorney’s negligence, the plaintiff would have been successful in the underlying matter or would not have sustained any ascertainable damages. Nomura Asset Capital Corp. v. Cadwalader, Wickersham & Taft, LLP, 26 N.Y .3d 40 (2015); Carmel v. Lunney, 70 N.Y .2d 169 (1987). The failure to plead proximate cause mandates the dismissal of a legal malpractice action regardless of whether the attorney was negligent. Leder v. Spiegel, 31 A.D.3d 266, 268 (1% Dep’t 2006), aff'd 9 N.Y .3d 836 (2007); Pellegrino v. File, 291 A.D.2d 60, 63 (1S' Dep’t 2002). Here, as discussed more thoroughly in the negligent misrepresentation argument, Plaintiff's damages stem solely from Ms. Roslawski’s alleged fraud with respect to the collateral —the TD Account. The Greenberg Defendants did not opine on Plaintiff's ability to collateralize the TD Account or whether Plaintiff was actually made a beneficiary on the TD Account. Scher Aff., Ex. “H.” Indeed, on January 24, 2023 (four days after the Loan closing and prior to funding), Plaintiff communicated directly with Ms. Roslawski to confirm that it had been added to the TD Account. Scher Aff., Ex. “P.” Plaintiff's principal, Jared Kaplan, Esq., specifically advised Ms. Roslawski that Plaintiff would not fund the Loan until they received written confirmation from TD that Plaintiff had been added to the account. Id. Plaintiff accepted an undated letter purportedly from TD that they received five (5) days after the Closing to complete its due diligence. Scher Aff., Ex. “P,” “Q” and “R.” 13 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 Moreover, to the extent that Plaintiff argues that it was damaged as a result of the Opinion Letter’s failure to disclose pending lawsuits against Ms. Roslawski, such a claim is unavailing. Scher Aff., Ex. “A”, 954. With respect to the one claim that appears to have been commenced before the Opinion Letter was executed, above and beyond the fact that the Greenberg Defendants first appeared in the Maddaleno Action on behalf of Ms. Roslawski two months after the Closing, Plaintiff fails to plead how the reported failure to disclose the Maddaleno Action — a matter of public record — proximately caused Plaintiff's damages. Scher Aff., Ex. “A”, 953; Ex .“S"; Ex. “7.” As conceded by Plaintiff, the other two lawsuits against Ms. Roslawski were commenced over nine (9) months after the Closing. Scher Aff., Ex. “A”, 55; see also NYSCEF Doc. 1 NY SCEF Doc. 1. Cc Plaintiff's Claims Against the Greenberg Defendants are Premature Actions against professionals are regularly dismissed as premature where a plaintiff's proof of damages are dependent upon the outcome or resolution of other claims or proceedings. See Parametric Capital Mgmt., LLC v. Lacher, 15 A.D.3d 301 (1% Dep’t 2005); Kahan Jewelry Corp. v. Rosenfeld, 295 A.D.2d 261 (1% Dep’t 2002); Lopes v. Mangiatordi, Maher & Lemmo, LLC, 2004 NY Slip Op 51722U (Sup. Ct. Queens 2004). Plaintiff does not dispute that it currently has a valid first priority security lien on the Subject Property. Scher Aff., Ex. “A”, 9912-16; 28. Indeed, Plaintiff filed a Notice of Pendency against the Subject Property with this lawsuit. See NY SCEF Doc. 11. Nor does Plaintiff dispute that it has a valid security interest in 11 Corp.’s leases and subleases and in Ms. Roslawski’s shares in 11 Corp. Scher Aff., Ex. “M”, “N”. Furthermore, Plaintiff has a personal guaranty from Ms. Roslawski. Scher Aff., BX. Ex. “K”. KN. 14 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 Until such time as Plaintiff exhausts its remedies against 11 Corp. and Ms. Roslawski, it cannot be heard that the Greenberg Defendant proximately caused Plaintiff's damages. POINT II PLAINTIFF’S REMAINING CLAIMS SHOULD BE DISMISSED AS DUPLICATIVE OF THE LEGAL MALPRACTICE CLAIM Courts have routinely held that any claims which are based upon the same underlying facts and circumstances and seek similar damages, are subject to dismissal as duplicative. See Guzman v. Ramos, 191 A.D.3d 644 (2d Dep’t 2021) (dismissing duplicative unjust enrichment claim); Kliger-Weiss Infosystems, Inc. v. Ruskin Moscou Faltischek, P.C., 159 A.D.3d 683 (2d Dep’t 2018) (dismissing negligent misrepresentation claim as duplicative); Weight v. Day, 134 A.D.3d 806 (2d Dep’t 2015) (dismissing breach of contract, breach of covenant of good faith and fair dealing, and fraud claims as duplicative of breach of fiduciary duty and malpractice claims); Sebastian Holdings, Inc. v. Deutsche Bank, AG, 108 A.D.3d 433 (1% Dep’t 2013) (dismissing “parallel” claims for conversion and breach of the implied covenant of good faith and fair dealing as duplicative of breach of contract claim); Mecca v. Shang, 258 A.D.2d 569 (2d Dep’t 1999) (claims for breach of contract, fraud and negligent misrepresentation duplicative of malpractice). At bar, the alleged conduct giving rise to Plaintiffs second, third, fourth, fifth, sixth, seventh, eighth and ninth causes of action (i.e., the preparation of the Opinion Letter) is the same conduct that purportedly gives rise to Plaintiff's legal malpractice claim. Scher Aff., Ex. “A”, (970- 114. Moreover, Plaintiff alleges the same damages for all its causes of action. Scher A ff., Ex. “A”, 9172-73, 78-79, 83-84, 87-88, 93-94, 99-100, 105-106, 113-114. As such, Plaintiffs second, third, fourth, fifth, sixth, seventh, and ninth causes of action must be dismissed as duplicative. 15 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 POINT III PLAINTIFF FAILS TO STATE A CLAIM FOR NEGLIGENT MISREPRESENTATION In order to prevail on a claim for negligent misrepresentation, Plaintiff must demonstrate “(1) the existence of a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance.” J.A.O. Acquisition Corp. v. Stavitsky, 8 N.Y .3d 144, 148 (2007). A Plaintiff Fails to Allege a Misrepresentation It is well-settled that where a “cause of action...is based upon misrepresentation...the circumstances constituting the wrong shall be stated in detail.” N.Y. C.P.L.R. 3016(b) (McKinney). In the case at hand, Plaintiff broadly engages in a formulaic recitation of the elements of a negligent misrepresentation claim before alleging that the Greenberg Defendants “knew or should have known that the statements in the Opinion Letter were false and there (sic) statements afterwards concering...the monies in the TD Ameritrade account....were also false...” Scher Aff., Ex. “A”, §112. Plaintiff wholly fails to allege the purported misrepresentation with particularity under CPLR 3016(b) and should be dismissed on this basis alone. The Opinion Letter contains an opinion based upon the documents reviewed by the Greenberg Defendants that execution and delivery of the Loan Documents by 11 Corp. was authorized and in accordance with the law. It also stated that the Greenberg Defendants had no actual knowledge of any pending litigation against 11 Corp. or Ms. Roslawski or affecting any real property described in the mortgages. Scher Aff., Ex. “H”. The Opinion Letter contains no representations regarding Plaintiff's ability to collateralize the TD Account or whether Plaintiff was made a beneficiary on the account. Id. Instead, Plaintiff, under the guidance of its principal, Jared Kaplan, Esq. (an attomey) as well as Plaintiffs counsel - Erick Vallely, Esq., elected to close 7 16 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 on the Loan before it received confirmation from TD. In fact, as discussed in Point I supra, Plaintiff elected to communicate directly with Ms. Roslawski to complete its due diligence and confirm that Plaintiff had been added to the TD Account. Scher Aff., Ex. “P.” Before funding, Plaintiff accepted an undated and unsigned letter from (the 2"4 TD Letter) from Ms. Roslawski as sufficient proof of that its demands had been met by 11 Corp. Scher Aff., Ex. “P,” “Q” and “R.” If the 2"! TD Letter was fraudulent, Plaintiff cannot look to the Greenberg Defendants as the authors of an Opinion Letter prepared before and without reference to the account for relief. Moreover, as to the claims regarding the Greenberg Defendants’ purported knowledge of existing litigation, the Greenberg Defendants opined that they had “no current actual knowledge of any pending or threatened litigation against either the Borrower or the Guarantors or affecting any real property in the mortgages.” Scher Aff., Ex. “H” (emphasis added). The Complaint is silent as how the Greenberg Defendants had knowledge of the first litigation — the Maddaleno Action at the time of the Opinion Letter. The Greenberg Defendants eventually appeared as counsel for Ms. Roslawski on March 17, 2023 — almost two (2) months after the closing but that does not impart knowledge of the lawsuit to them at the time of the Opinion Letter. Scher Aff., Ex. “T.” Lastly, the two Cognat lawsuits were commenced almost nine (9) months after the Closing and, thus, there can be no misrepresentation as to their existence in the Opinion Letter. See NY SCEF Doc. 1, NYSCEF Doc. 1. As the Opinion Letter contains no material misrepresentations, there is no claim. See Fortress Credit Corp. v. Dechert LLP, 89 A.D.3d 615, 616 (1% Dep’t 2011) (finding that the defendant-attorney’s opinion letter “assumed the genuineness of all signatures and the authenticity of the documents, made no independent inquiry into the accuracy of [the documents]...and 17 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 undertook no independent investigation in ascertaining those facts. Thus, defendants’ statements as contained in the opinion, were not misrepresentations.”) B. Plaintiff Fails to Allege J ustifiable Reliance Lastly, Plaintiff is wholly unable to establish justifiable reliance on the Greenberg Defendants’ purported misrepresentations. Plaintiff broadly alleges that it “reasonably relied upon the Opinion Letter...” and it “has and will continued to be damaged....” Scher Aff., Ex. “A”, 9111; 113. Plaintiff cannot claim that it justifiably relied on any purported misrepresentation by the Greenberg Defendants. See Aglira v. Julien & Schlesinger, P.C., 214 A.D.2d 178, 185 (1% Dep’t 1995) (“As far as reliance is concerned, it is a well-settled principle that neither a party nor his attorney may justifiably rely on the legal opinion or conclusions of his or her adversary’s counsel.”); Appel v. Giddins, 89 A.D.3d 543, 544 (15 Dep’t 2011) (“Nor does the tenth cause of action state a cause of action for negligent misrepresentation, since plaintiff could not reasonably rely on Giddins in its role as Goldberg’s attorney”); Dousmanis v J oe Hornstein, Inc., 181 A.D.2d 592 (1°* Dep’t 1992). Moreover, it is well-settled that a plaintiff may not claim justifiable reliance on a misrepresentation where plaintiff (or its agent) “could have discovered the truth with due diligence.” KNK Enterprises, Inc. v. Harriman Enterprises, Inc., 33 A.D.3d 872 (2d Dep’t 2006); Tall Tower Capital LLC v. Stonepeak Partners LP, 174 A.D.3d 441 (1 Dep’t 2019) (finding Defendant failed to allege justifiable reliance for negligent misrepresentation counterclaim where “lawsuit was a matter of public record and could have been verified...through the exercise of ordinary diligence.”); Big Apple Consulting USA, Inc. v. Belmont Partners, LLC, 873 N.Y .S.2d 232 (Sup. Ct., Nassau Cnty Sept. 15, 2008). 18 of 32 INDEX NO. 605098/2024 FILED: SUFFOLK COUNTY CLERK 05/15/2024 06:06 PM NYSCEF DOC. NO. 45 RECEIVED NYSCEF: 05/15/2024 Here, as discussed above, Plaintiff had no legal right to rely on the Opinion Letter as evidence of that the TD Account would serve as collateral. Plaintiff elected to verify that information directly with Ms. Roslawski. Scher Aff., Ex. “P.” Any claim of reliance fails once Plaintiff decided to accept the undated and unsigned 2° TD Letter from Ms. Roslawski before funding the loan. Scher Aff., Ex. “P,” “Q” and “R.” Likewise, any issues concerning an alleged failure to disclose existing litigation against Ms. Roslawski fail because said claims were publicly filed documents and could have been verified through the exercise of ordinary diligence. Big Apple Consulting, supra. POINT IV PLAINTIFF FAILS TO STATE A CLAIM FOR FRAUD AS AGAINST THE GREENBERG DEFENDANTS In the unlikely event case that the Court finds that Plaintiff's claim for fraud! is not duplicative, it should be dismissed for failure to state a claim. Plaintiff's fraud claim fails as a matter of law because Plaintiff fails to allege: (a) its claim with particularity; (b) that the Greenberg Defendants made any material misrepresentation to Plaintiff; (c) scienter; (d) justifiable reliance; and (e) proximately caused damages. A Plaintiff Failed to Meet the Stringent Pleading Requirements of C PLR 3016(b) In order to state a cause of action for fraud, Plaintiff must allege that: (1) the Greenberg Defendants made a material representation that was false; (2) they knew the representation to be false and made it with the intent to deceive Plaintiff; (3) Plaintiff justifiably relied upon the