Preview
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
-------------------- ------------------------------------------x
QUENTIN MANOR LLC, Index No. :
Date Filed:
Plaintiff
-against- SUMMONS
Plaintiff designates Kings
LAW OFFICES OF ABRAHAM KAPPEL P.C.
County as the Place of Trial.
ABRAHAM KAPPEL, ESQ., HERMAN SEGAL and
Venue is based upon
YOCHEVED SEGAL,
residence of the parties in this
litigation.
Defendants.
------------------------------------------ ------------------x
TO THE ABOVE-NAMED DEFENDANTS:
YOU ARE HEREBY SUMMONED to answer the attached Verified Complaint in this
action and to serve a copy of your Answer, or, if the Verified Complaint is not served with this
Summons, to serve a Notice of Appearance, on the Plaintiff within 20 days after the service of
this Summons, exclusive of the day of service (or within 30 days after the service is complete if
this Summons is not personally delivered to you within the State of New York); and in case of
your failure to appear or answer, judgment will be taken against you by default for the relief
demanded in the Verified Complaint.
This is an action for inter alia, breach of fiduciary duty, negligence, legal malpractice,
breach of contract, other claims.
Dated: Brooklyn, New York
December 3, 2019
The Law Offi , of
Izidor M 1, PLLC
By: idor Mi hli, EEq.
3118 Quentin Road, 2nd Floor
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Brooklyn, NY 11234
(0) 212-933-9298 x 1
(F) 718-795-4378
IZIDOR@MIKHLILAW.COM
To:
Abraharn Kappel, Esq.
The Law Offices of Abraham Kappel
1203 Nostrand Avenue
Brooklyn, New York 11225
Herman Segal
4115 Quentin Road
Brooklyn, New York 11234
Yocheved Segal
4115 Quentin Road
Brooklyn, New York 11234
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
---------------------------------------------------------------------X
QUENTIN MANOR LLC, Index No.:
Plaintiff
-against- VERIFIED COMPLAINT
LAW OFFICES OF ABRAHAM KAPPEL P.C.,
ABRAHAM KAPPEL, ESQ., HERMAN SEGAL and
YOCHEVED SEGAL,
Defendants.
---------------------------------------------------------------------X
Plaintiff Quentin Manor LLC ("Plaintiff"), complaining of the above-captioned
Defendants, sets forth and alleges the following, upon information and belief:
INTRODUCTION
1. This action concerns a real estate transaction in which Defendants the Law
Offices of Abraham Kappel, P.C. ("Law Office"), and Abraham Kappel, Esq. ("Kappel"), while
simultaneously acting as escrow agent and attorney to the transaction, wrongfully released from
escrow $103,000.00 of Plaintiff's funds and wrongfully delivered these funds to Defendants
Herman Segal and/or Yocheved Segal (collectively, the "Segal Defendants"), without first
ensuring that Plaintiff was given possession of the property per the terms of the contract entered
into between the parties.
2. The Law Office and Kappel breached their obligations to Plaintiff as escrow agent
and breached their contract with Plaintiff by violating the terms therein, and are thus liable to
Plaintiff for breach of fiduciary duty, breach of contract, fraud, negligence, bad faith, gross
negligence, willful misconduct, conversion, failure to return property following bailment, legal
malpractice, breach of Rule 1.15 of the Rule of Professional Conduct, and violation of Section
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487 of New York's Judiciary Law. As such, Plaintiff is entitled to demand and receive
$103,000.00 from Defendants Law Office and Kappel.
3. In addition, given that the Segal Defendants have failed to vacate the property as
required under the terms of the contract, as per Section 3 of the Contract, the Segal Defendants
are liable to Plaintiff in the amount of $375,711.28 and continuing therefrom at a per diem rate
of $714.28 for each passing day until Plaintiff is given possession of the property. As the Segal
Defendants are in breach of the terms of the contract, they are liable to Plaintiff for such
damages, plus all interest, costs, disbursements and attorney's fees.
THE PARTIES
4. Plaintiff is a limited liability company duly organized under the laws of the State
of New York, with itsprincipal place of business located in the State of New York, County of
Kings.
5. Upon information and belief, Defendant Law Office is a professional corporation
duly organized under the laws of the State of New York, and provides legal services in the State
of New York, with itsprincipal place of business in the State of New York, County of Kings.
6. Upon information and belief, Defendant Kappel is an individual who resides in
the State of New York, County of Kings, is an attomey duly licensed to practice law in the State
of New York, and is the principal attorney of Defendant Law Office.
7. As a result of the foregoing, Defendant Law Office, and each of its members,
employees or associate attorneys, including Kappel, were and are bound by the laws of the State
of New York pertaining to the governance of the practice of law and/or the conduct of attorneys,
law firms, law practices and/or law partnerships including, but not limited to, the relevant
portions of, among other things, the Judiciary Law and/or the Rules of Professional Conduct.
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8. Upon information and belief, Defendant Herman Segal is an individual who
resides in the State of New York, County of Kings.
9. Upon information and belief, Defendant Yocheved Segal is an individual who
resides in the State of New York, County of Kings.
10. In or around April 2018, Plaintiff and the Segal Defendants entered into an
agreement for the sale of the property known as 4115 Quentin Road, Brooklyn, New York 11234
(the "Property") pursuant to an Order of the United States Bankruptcy Court for the Eastern
District of New York, Case No. 13-45519-nhl; Adv. Pro. No. 14-01140-nhl, wherein the parties
agreed that Plaintiff would purchase the Property from the Segal Defendants.
11. Thereafter, the parties entered into an agreement, dated April 26, 2018, providing
that the closing of title would take place on April 26, 2018 under the following material terms:
1. The Purchasers agree that the Sellers may occupy said
premises until 5:00pm, June 26, 2018. It is further agreed that all
utilities, heat, interest on Purchaser's loan and Maintenance
charges shall be borne by Seller.
2. The Sellers agree to vacate the premises no later than
5:00pm on June 26, 2018 and leave said premises in accordance
with the terms of the contract.
3. The Sellers agree to pay the Purchasers.... the sum of
$714.28 for each day after the date specified in paragraph 1 above.
In addition, the Sellers agree to pay the entire Purchaser's cost and
expenses, including, but not limited to reasonable attorney's fees,
in removing the Sellers from the premises.
***
5. The Sellers agree to deposit the sum of $103,000.00 in
escrow with their attorney to insure the Seller's compliance with
this agreernent... Purchasers hereby authorize the Seller's attorney
to release said deposit to Seller not less than 5 days from the date
Sellers'
of possession is delivered to Purchasers provided that
attorney-has not received written instruction to the contrary before
expiration of such period.
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12. Despite the terms of the agreement, the Segal Defendants have not vacated the
premises and have not provided possession of the Property to Plaintiff.
13. On or about October 23, 2019, Plaintiff sent written instruction to all of the
Defendants demanding the release of the escrow funds to Plaintiff in light of the Segal
Defendants'
failure to vacate the property.
14. Unbeknownst to Plaintiff, Kappel and his Law Office wrongfully, improperly,
negligently and/or recklessly released and delivered the funds in escrow in the amount of
$103,000.00 to the Segal Defendants without prior authorization or approval from Plaintiff and
without confirmation that possession of the Property was given to Plaintiff.
FIRST CAUSE OF ACTION
(Breach of Fiduciary Duty against Law Office and Kappel)
14. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
15. Defendants Law Office and Kappel, by virtue of the attorney Rules of
Professional Conduct in effect at the time including, but not limited to, Rule 1.15 (22 NYCRR §
1200.0), were under a statutory duty/rule-based duty to preserve Plaintiff's funds in a segregated
account and/or in escrow for Plaintiff and, as such, they were fiduciaries of Plaintiff and owed a
fiduciary duty to Plaintiff to exercise their responsibilities as such with scrupulous good faith.
16. Defendants Law Office and Kappel breached their fiduciary duties owed to
Plaintiff by releasing the escrow funds, which they were holding in escrow for Plaintiff, to third
parties, including the Segal Defendants, without authorization, good cause or justification and for
the benefit of the Segal Defendants as well as their own benefit.
17. Defendants Law Office and Kappel acted deliberately, grossly negligent, in bad
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faith, and/or recklessly for the purposes of benefiting the Segal Defendants as well as benefiting
themselves, all at the expense of Plaintiff.
18. Upon information and belief, Defendants Law Office and Kappel knowingly
participated in and substantially assisted the Segal Defendants by acting for the benefit of said
parties and themselves and at the expense of Plaintiff with respect to the matters described
above.
19. Upon information and belief, Defendants Law Office and Kappel engaged in the
aforesaid activities because their primary loyalty was to their other clients, the Segal Defendants,
and to themselves, rather than to Plaintiff, notwithstanding their existing fiduciary relationship
with Plaintiff as escrow agent.
20. As set forth above, Defendants Law Office and Kappel are liable for their breach
of fiduciary duty.
21. Accordingly, Plaintiff has been damaged as a result of the foregoing and is
entitled to damages in an amount to be determined at trial,but no less than $103,000.00 and such
additional amounts believed to be in excess of the jurisdictional limits of all lower courts that
would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with
punitive damages.
SECOND CAUSE OF ACTION
(Breach of Contract against Law Office and Kappel)
22. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
23. As a result of the foregoing, a contract in fact and/or in law was created between
Plaintiff and Defendants Law Office and Kappel.
24. In the alternative, Plaintiff was an identified and known third-party beneficiary
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with respect to the existing contract between Defendants and the Segal Defendants.
25. In either event, there thus existed between Plaintiff and Defendants Law Office
and Kappel a contract, agreement and/or exchange of promises, by which, in exchange for good
and valuable consideration, Defendants Law Office and Kappel had promised and agreed, and
were obligated, to hold $103,000.00 in escrow, in a segregated account and/or otherwise in a safe
and secure manner solely for the benefit of Plaintiff until such time as Plaintiff obtains
possession of the Property.
26. Defendants Law Office and Kappel promised to perform, but subsequently failed
to perform, upon the contracts, agreements or exchange of promises when they released the
aforesaid $103,000.00 in cash which they were holding in escrow for Plaintiff, to the Segal
Defendants or other third parties without authorization, good cause or justification and for the
benefit of the Segal Defendants, as well as their own benefit.
27. Defendants Law Office and Kappel specifically undertook to discharge a specific
task for Plaintiff's benefit and then wholly failed to discharge that task.
28. Plaintiff has fully performed its obligations under the agreements.
29. Accordingly, Plaintiff has been damaged as a result of the foregoing and is
entitled to damages in an amount to be determined at trial,but no less than $103,000.00 and such
additional amounts believed to be in excess of the jurisdictional limits of all lower courts that
would otherwise have jurisdiction and Plaintiff hereby makes claim for same.
THIRD CAUSE OF ACTION
(Misappropriation of Funds/Breach of Rule of Professional Conduct 1.15 against Law
Office and Kappel)
30. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
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31. At all relevant times attorney Rule of Professional Conduct 1.15 [22 NYCRR §
1200.0] was in existence and was in effect.
32. At all relevant times, Defendants Law Office and Kappel knew or should have
known of the existence of this rule and itsprovisions.
33. At all relevant times, Defendants Law Office and Kappel, and their conduct, were
covered by and bound by the provisions of Rule of Professional Conduct 1.15, including
"(a)"
subsection of this rule.
34. At all relevant times, Defendants Law Office and Kappel were in possession of
funds and/or property belonging to another person (Plaintiff) incident to their practice of law.
35. Pursuant to applicable rules/statutes, Defendants Law Office and Kappel were
under a duty not to misappropriate such funds and/or not to comingle such funds with their own
funds.
36. Defendants did misappropriate Plaintiff's funds and/or comingle such funds with
their own funds.
37. The foregoing was done in direct contravention of Rule of Professional Conduct
1.15 and constituted a violation of this rule.
38. Accordingly, Plaintiff has been damaged and is entitled to damages in an amount
to be determined at trial,but no less than $103,000.00 and such additional amounts believed to
be in excess of the jurisdictional limits of all lower courts that would otherwise have jurisdiction
and Plaintiff hereby makes claim for same, together with punitive damages.
FOURTH CAUSE OF ACTION
(Conversion against All Defendants)
39. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
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40. Plaintiff had certain and recognized rights with respect to the funds deposited in
Defendant Law Office's escrow account including, but not limited to, the right to possession of
said funds and the right to receive, and enjoy the benefit of, said funds in the event possession of
the Property is not timely provided by the Segal Defendants.
41. Defendants, without authority, intentionally exercised complete dominion and
control over the funds to the exclusion of Plaintiff, and therefore interfered with Plaintif's rights.
Defendants'
42. conduct was wrong and improper and constituted a conversion, thus
rendering them liable to Plaintiff to the extent of the value of the converted funds.
43. Accordingly, Plaintiff has been damaged as a result of the foregoing and is
entitled to damages in an amount to be detennined at trial,but no less than $103,000.00 and such
additional amounts believed to be in excess of the jurisdictional limits of all lower courts that
would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with
punitive damages.
FIFTH CAUSE OF ACTION
(Breach of Judiciary Law § 487 against Law Office and Kappel)
44. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
45. Defendants Law Office and Kappel, by their conduct described above, have
engaged in deceit and/or collusion with intent to deceive Plaintiff, and are guilty of same and
have violated section 487 of the Judiciary Law.
46. Alternately, Defendants Law Office and Kappel, by their conduct described
above, have consented to deceit and/or collusion with the Segal Defendants with intent to
deceive Plaintiff, and are guilty of same and have violated section 487 of the Judiciary Law.
47. Accordingly, Plaintiff has been damaged as a result of the foregoing and is
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entitled to damages in an amount to be determined at trial,but no less than $103,000.00 and such
additional amounts believed to be in excess of the jurisdictional limits of all lower courts that
would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with
attorneys'
treble damages, punitive damages and fees as authorized by law.
SIXTH CAUSE OF ACTION
(Failure to Return Property Following Bailment against Law Office and Kappel)
48. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
49. Defendants Law Office and Kappel were delivered possession of certain property,
to wit, the funds belonging to Plaintiff.
50. Defendants Law Office and Kappel accepted possession of these funds voluntarily
and intentionally with the understanding that the funds would be kept in their possession and
turned over, or returned to, Plaintiff within a specified time on demand, if certain conditions
were not met.
51. The circumstances described above constituted an express or constructive
bailment and rendered Defendants Law Office and Kappel the bailees, or constructive bailees,
with respect to the bailment.
52. During the period of the bailment, i.e.,the time that Defendants Law Office and
Kappel had possession of the funds, Plaintiff was wholly excluded from possession of the funds.
53. Plaintiff requested or demanded the return of the funds, or Defendants Law Office
and Kappel were otherwise obligated to turn over, or return, the funds to Plaintiff, and
Defendants Law Office and Kappel wholly failed to do so.
54. Accordingly, Plaintiff has been damaged as a result of the foregoing and is
entitled to damages in an amount to be determined at trial, but believed to be in excess of the
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jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff
hereby makes claim for same, together with punitive damages.
SEVENTH CAUSE OF ACTION
(Negligence against Law Office and Kappel)
55. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
56. Defendants Law Office and Kappel owed a duty to Plaintiff.
57. Among other things, Defendants Law Office and Kappel had a duty to hold
Plaintiff's funds in a safe and secure manner.
58. By virtue of the conduct described above, Defendants Law Office and Kappel
breached their duty to Plaintiff.
59. Defendants Law Office and Kappel, by virtue of the wrongful conduct described
above, were negligent, grossly negligent, careless, reckless, taken in bad faith, and/or willfully
failed to exercise their duties toward Plaintiff in a proper and non-negligent manner and with the
level of care that a reasonable and prudent person would have exercised under the circumstances.
60. Wholly and solely as a result of the negligence, gross negligence, carelessness,
recklessness and/or willful failure of Defendants Law Office and Kappel, as set forth above,
Plaintiff was injured and, among other things, lost its funds without any fault, want of care or
culpable conduct on the part of Plaintiff contributing thereto.
61. Defendants Law Office and Kappel's negligence, carelessness and/or
recklessness, as set forth above, was the direct and proximate cause of Plaintiff's damages.
62. Accordingly, Plaintiff has been damaged as a result of the foregoing and is
entitled to damages in an amount to be determined at trial, but believed to be in excess of the
jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff
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hereby makes claim for same, together with punitive damages.
EIGHTH CAUSE OF ACTION
(Legal Malpractice against Law Office and Kappel)
63. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
64. Defendants Law Office and Kappel owed a duty to Plaintiff.
65. By virtue of the conduct described above, Defendants Law Office and Kappel
breached their duty to Plaintiff.
66. Defendants Law Office and Kappel, in their representation of Plaintiff and/or
acting as escrow agent for Plaintiff, by virtue of the wrongful conduct described above, breached
the attorney Rules of Professional Conduct
67. Among other things, Defendants Law Office and Kappel, in their representation
of Plaintiff and/or acting as escrow agent, by virtue of the wrongful conduct described above,
breached their duty of undivided loyalty to Plaintiff.
68. Among other things, Defendants Law Office and Kappel, in their representation
of Plaintiff and/or acting as escrow agent, by virtue of the wrongful conduct described above,
breached their duty of candor to Plaintiff.
69. Among other things, Defendants Law Office and Kappel had a conflict of interest
in representing Plaintiff and/or the Segal Defendants while simultaneously acting as escrow
agent.
70. Defendants Law Office and Kappel, in their representation of Plaintiff and/or
acting as escrow agent, by virtue of the wrongful conduct described above, were professionally
negligent, careless, reckless, grossly negligent, committed legal malpractice and/or willfully
failed to exercise their toward Plaintiff in a proper and non- negligent manner and with the
duty
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ordinary reasonable skill and knowledge possessed by a member of the legal profession.
71. Wholly and solely as a result of the professional negligence, gross negligence,
carelessness, legal malpractice and/or recklessness of Defendants Law Office and Kappel, as set
forth above, Plaintiff was injured and, among other things, lost its funds without any fault, want
of care or culpable conduct on the part of Plaintiff contributing thereto.
72. Defendants Law Office and Kappel's professional negligence, gross negligence,
carelessness, legal malpractice and/or recklessness, as set forth above, was the direct and
proximate cause of Plaintiff's damages.
73. But for Defendants Law Office and Kappel's professional negligence, gross
negligence, carelessness, legal malpractice and/or recklessness, as set forth above, Plaintiff
would not have sustained the damages for which it seeks recovery herein.
74. Accordingly, Plaintiff has been damaged as a result of the foregoing and is
entitled to damages in an amount to be determined at trial,but believed to be in excess of the
jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff
hereby makes claim for same, together with punitive damages.
NINTH CAUSE OF ACTION
(Breach of Contract against Segal Defendants)
75. Plaintiff repeats and realleges each and every allegation contained in the
preceding paragraphs as if fully set forth herein.
76. As a result of the foregoing, a contract in fact and/or in law was created between
Plaintiff and the Segal Defendants.
77. There thus existed between Plaintiff and the Segal Defendants a contract,
agreement and/or exchange of promises, by which, in exchange for good and valuable
consideration, the Segal Defendants promised to: (i)vacate the Property no later than 5:00pm on
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June 26, 2018 and leave said premises in accordance with the terms of the contract; and (ii) pay
Plaintiff the sum of $71 4.28 for each day after sai
Preview
FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS -------------------- ------------------------------------------x QUENTIN MANOR LLC, Index No. : Date Filed: Plaintiff -against- SUMMONS Plaintiff designates Kings LAW OFFICES OF ABRAHAM KAPPEL P.C. County as the Place of Trial. ABRAHAM KAPPEL, ESQ., HERMAN SEGAL and Venue is based upon YOCHEVED SEGAL, residence of the parties in this litigation. Defendants. ------------------------------------------ ------------------x TO THE ABOVE-NAMED DEFENDANTS: YOU ARE HEREBY SUMMONED to answer the attached Verified Complaint in this action and to serve a copy of your Answer, or, if the Verified Complaint is not served with this Summons, to serve a Notice of Appearance, on the Plaintiff within 20 days after the service of this Summons, exclusive of the day of service (or within 30 days after the service is complete if this Summons is not personally delivered to you within the State of New York); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the Verified Complaint. This is an action for inter alia, breach of fiduciary duty, negligence, legal malpractice, breach of contract, other claims. Dated: Brooklyn, New York December 3, 2019 The Law Offi , of Izidor M 1, PLLC By: idor Mi hli, EEq. 3118 Quentin Road, 2nd Floor 1 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 Brooklyn, NY 11234 (0) 212-933-9298 x 1 (F) 718-795-4378 IZIDOR@MIKHLILAW.COM To: Abraharn Kappel, Esq. The Law Offices of Abraham Kappel 1203 Nostrand Avenue Brooklyn, New York 11225 Herman Segal 4115 Quentin Road Brooklyn, New York 11234 Yocheved Segal 4115 Quentin Road Brooklyn, New York 11234 2 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS ---------------------------------------------------------------------X QUENTIN MANOR LLC, Index No.: Plaintiff -against- VERIFIED COMPLAINT LAW OFFICES OF ABRAHAM KAPPEL P.C., ABRAHAM KAPPEL, ESQ., HERMAN SEGAL and YOCHEVED SEGAL, Defendants. ---------------------------------------------------------------------X Plaintiff Quentin Manor LLC ("Plaintiff"), complaining of the above-captioned Defendants, sets forth and alleges the following, upon information and belief: INTRODUCTION 1. This action concerns a real estate transaction in which Defendants the Law Offices of Abraham Kappel, P.C. ("Law Office"), and Abraham Kappel, Esq. ("Kappel"), while simultaneously acting as escrow agent and attorney to the transaction, wrongfully released from escrow $103,000.00 of Plaintiff's funds and wrongfully delivered these funds to Defendants Herman Segal and/or Yocheved Segal (collectively, the "Segal Defendants"), without first ensuring that Plaintiff was given possession of the property per the terms of the contract entered into between the parties. 2. The Law Office and Kappel breached their obligations to Plaintiff as escrow agent and breached their contract with Plaintiff by violating the terms therein, and are thus liable to Plaintiff for breach of fiduciary duty, breach of contract, fraud, negligence, bad faith, gross negligence, willful misconduct, conversion, failure to return property following bailment, legal malpractice, breach of Rule 1.15 of the Rule of Professional Conduct, and violation of Section 3 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 487 of New York's Judiciary Law. As such, Plaintiff is entitled to demand and receive $103,000.00 from Defendants Law Office and Kappel. 3. In addition, given that the Segal Defendants have failed to vacate the property as required under the terms of the contract, as per Section 3 of the Contract, the Segal Defendants are liable to Plaintiff in the amount of $375,711.28 and continuing therefrom at a per diem rate of $714.28 for each passing day until Plaintiff is given possession of the property. As the Segal Defendants are in breach of the terms of the contract, they are liable to Plaintiff for such damages, plus all interest, costs, disbursements and attorney's fees. THE PARTIES 4. Plaintiff is a limited liability company duly organized under the laws of the State of New York, with itsprincipal place of business located in the State of New York, County of Kings. 5. Upon information and belief, Defendant Law Office is a professional corporation duly organized under the laws of the State of New York, and provides legal services in the State of New York, with itsprincipal place of business in the State of New York, County of Kings. 6. Upon information and belief, Defendant Kappel is an individual who resides in the State of New York, County of Kings, is an attomey duly licensed to practice law in the State of New York, and is the principal attorney of Defendant Law Office. 7. As a result of the foregoing, Defendant Law Office, and each of its members, employees or associate attorneys, including Kappel, were and are bound by the laws of the State of New York pertaining to the governance of the practice of law and/or the conduct of attorneys, law firms, law practices and/or law partnerships including, but not limited to, the relevant portions of, among other things, the Judiciary Law and/or the Rules of Professional Conduct. 4 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 8. Upon information and belief, Defendant Herman Segal is an individual who resides in the State of New York, County of Kings. 9. Upon information and belief, Defendant Yocheved Segal is an individual who resides in the State of New York, County of Kings. 10. In or around April 2018, Plaintiff and the Segal Defendants entered into an agreement for the sale of the property known as 4115 Quentin Road, Brooklyn, New York 11234 (the "Property") pursuant to an Order of the United States Bankruptcy Court for the Eastern District of New York, Case No. 13-45519-nhl; Adv. Pro. No. 14-01140-nhl, wherein the parties agreed that Plaintiff would purchase the Property from the Segal Defendants. 11. Thereafter, the parties entered into an agreement, dated April 26, 2018, providing that the closing of title would take place on April 26, 2018 under the following material terms: 1. The Purchasers agree that the Sellers may occupy said premises until 5:00pm, June 26, 2018. It is further agreed that all utilities, heat, interest on Purchaser's loan and Maintenance charges shall be borne by Seller. 2. The Sellers agree to vacate the premises no later than 5:00pm on June 26, 2018 and leave said premises in accordance with the terms of the contract. 3. The Sellers agree to pay the Purchasers.... the sum of $714.28 for each day after the date specified in paragraph 1 above. In addition, the Sellers agree to pay the entire Purchaser's cost and expenses, including, but not limited to reasonable attorney's fees, in removing the Sellers from the premises. *** 5. The Sellers agree to deposit the sum of $103,000.00 in escrow with their attorney to insure the Seller's compliance with this agreernent... Purchasers hereby authorize the Seller's attorney to release said deposit to Seller not less than 5 days from the date Sellers' of possession is delivered to Purchasers provided that attorney-has not received written instruction to the contrary before expiration of such period. 5 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 12. Despite the terms of the agreement, the Segal Defendants have not vacated the premises and have not provided possession of the Property to Plaintiff. 13. On or about October 23, 2019, Plaintiff sent written instruction to all of the Defendants demanding the release of the escrow funds to Plaintiff in light of the Segal Defendants' failure to vacate the property. 14. Unbeknownst to Plaintiff, Kappel and his Law Office wrongfully, improperly, negligently and/or recklessly released and delivered the funds in escrow in the amount of $103,000.00 to the Segal Defendants without prior authorization or approval from Plaintiff and without confirmation that possession of the Property was given to Plaintiff. FIRST CAUSE OF ACTION (Breach of Fiduciary Duty against Law Office and Kappel) 14. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 15. Defendants Law Office and Kappel, by virtue of the attorney Rules of Professional Conduct in effect at the time including, but not limited to, Rule 1.15 (22 NYCRR § 1200.0), were under a statutory duty/rule-based duty to preserve Plaintiff's funds in a segregated account and/or in escrow for Plaintiff and, as such, they were fiduciaries of Plaintiff and owed a fiduciary duty to Plaintiff to exercise their responsibilities as such with scrupulous good faith. 16. Defendants Law Office and Kappel breached their fiduciary duties owed to Plaintiff by releasing the escrow funds, which they were holding in escrow for Plaintiff, to third parties, including the Segal Defendants, without authorization, good cause or justification and for the benefit of the Segal Defendants as well as their own benefit. 17. Defendants Law Office and Kappel acted deliberately, grossly negligent, in bad 6 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 faith, and/or recklessly for the purposes of benefiting the Segal Defendants as well as benefiting themselves, all at the expense of Plaintiff. 18. Upon information and belief, Defendants Law Office and Kappel knowingly participated in and substantially assisted the Segal Defendants by acting for the benefit of said parties and themselves and at the expense of Plaintiff with respect to the matters described above. 19. Upon information and belief, Defendants Law Office and Kappel engaged in the aforesaid activities because their primary loyalty was to their other clients, the Segal Defendants, and to themselves, rather than to Plaintiff, notwithstanding their existing fiduciary relationship with Plaintiff as escrow agent. 20. As set forth above, Defendants Law Office and Kappel are liable for their breach of fiduciary duty. 21. Accordingly, Plaintiff has been damaged as a result of the foregoing and is entitled to damages in an amount to be determined at trial,but no less than $103,000.00 and such additional amounts believed to be in excess of the jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with punitive damages. SECOND CAUSE OF ACTION (Breach of Contract against Law Office and Kappel) 22. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 23. As a result of the foregoing, a contract in fact and/or in law was created between Plaintiff and Defendants Law Office and Kappel. 24. In the alternative, Plaintiff was an identified and known third-party beneficiary 7 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 with respect to the existing contract between Defendants and the Segal Defendants. 25. In either event, there thus existed between Plaintiff and Defendants Law Office and Kappel a contract, agreement and/or exchange of promises, by which, in exchange for good and valuable consideration, Defendants Law Office and Kappel had promised and agreed, and were obligated, to hold $103,000.00 in escrow, in a segregated account and/or otherwise in a safe and secure manner solely for the benefit of Plaintiff until such time as Plaintiff obtains possession of the Property. 26. Defendants Law Office and Kappel promised to perform, but subsequently failed to perform, upon the contracts, agreements or exchange of promises when they released the aforesaid $103,000.00 in cash which they were holding in escrow for Plaintiff, to the Segal Defendants or other third parties without authorization, good cause or justification and for the benefit of the Segal Defendants, as well as their own benefit. 27. Defendants Law Office and Kappel specifically undertook to discharge a specific task for Plaintiff's benefit and then wholly failed to discharge that task. 28. Plaintiff has fully performed its obligations under the agreements. 29. Accordingly, Plaintiff has been damaged as a result of the foregoing and is entitled to damages in an amount to be determined at trial,but no less than $103,000.00 and such additional amounts believed to be in excess of the jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff hereby makes claim for same. THIRD CAUSE OF ACTION (Misappropriation of Funds/Breach of Rule of Professional Conduct 1.15 against Law Office and Kappel) 30. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 8 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 31. At all relevant times attorney Rule of Professional Conduct 1.15 [22 NYCRR § 1200.0] was in existence and was in effect. 32. At all relevant times, Defendants Law Office and Kappel knew or should have known of the existence of this rule and itsprovisions. 33. At all relevant times, Defendants Law Office and Kappel, and their conduct, were covered by and bound by the provisions of Rule of Professional Conduct 1.15, including "(a)" subsection of this rule. 34. At all relevant times, Defendants Law Office and Kappel were in possession of funds and/or property belonging to another person (Plaintiff) incident to their practice of law. 35. Pursuant to applicable rules/statutes, Defendants Law Office and Kappel were under a duty not to misappropriate such funds and/or not to comingle such funds with their own funds. 36. Defendants did misappropriate Plaintiff's funds and/or comingle such funds with their own funds. 37. The foregoing was done in direct contravention of Rule of Professional Conduct 1.15 and constituted a violation of this rule. 38. Accordingly, Plaintiff has been damaged and is entitled to damages in an amount to be determined at trial,but no less than $103,000.00 and such additional amounts believed to be in excess of the jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with punitive damages. FOURTH CAUSE OF ACTION (Conversion against All Defendants) 39. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 9 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 40. Plaintiff had certain and recognized rights with respect to the funds deposited in Defendant Law Office's escrow account including, but not limited to, the right to possession of said funds and the right to receive, and enjoy the benefit of, said funds in the event possession of the Property is not timely provided by the Segal Defendants. 41. Defendants, without authority, intentionally exercised complete dominion and control over the funds to the exclusion of Plaintiff, and therefore interfered with Plaintif's rights. Defendants' 42. conduct was wrong and improper and constituted a conversion, thus rendering them liable to Plaintiff to the extent of the value of the converted funds. 43. Accordingly, Plaintiff has been damaged as a result of the foregoing and is entitled to damages in an amount to be detennined at trial,but no less than $103,000.00 and such additional amounts believed to be in excess of the jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with punitive damages. FIFTH CAUSE OF ACTION (Breach of Judiciary Law § 487 against Law Office and Kappel) 44. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 45. Defendants Law Office and Kappel, by their conduct described above, have engaged in deceit and/or collusion with intent to deceive Plaintiff, and are guilty of same and have violated section 487 of the Judiciary Law. 46. Alternately, Defendants Law Office and Kappel, by their conduct described above, have consented to deceit and/or collusion with the Segal Defendants with intent to deceive Plaintiff, and are guilty of same and have violated section 487 of the Judiciary Law. 47. Accordingly, Plaintiff has been damaged as a result of the foregoing and is 10 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 entitled to damages in an amount to be determined at trial,but no less than $103,000.00 and such additional amounts believed to be in excess of the jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with attorneys' treble damages, punitive damages and fees as authorized by law. SIXTH CAUSE OF ACTION (Failure to Return Property Following Bailment against Law Office and Kappel) 48. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 49. Defendants Law Office and Kappel were delivered possession of certain property, to wit, the funds belonging to Plaintiff. 50. Defendants Law Office and Kappel accepted possession of these funds voluntarily and intentionally with the understanding that the funds would be kept in their possession and turned over, or returned to, Plaintiff within a specified time on demand, if certain conditions were not met. 51. The circumstances described above constituted an express or constructive bailment and rendered Defendants Law Office and Kappel the bailees, or constructive bailees, with respect to the bailment. 52. During the period of the bailment, i.e.,the time that Defendants Law Office and Kappel had possession of the funds, Plaintiff was wholly excluded from possession of the funds. 53. Plaintiff requested or demanded the return of the funds, or Defendants Law Office and Kappel were otherwise obligated to turn over, or return, the funds to Plaintiff, and Defendants Law Office and Kappel wholly failed to do so. 54. Accordingly, Plaintiff has been damaged as a result of the foregoing and is entitled to damages in an amount to be determined at trial, but believed to be in excess of the 11 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with punitive damages. SEVENTH CAUSE OF ACTION (Negligence against Law Office and Kappel) 55. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 56. Defendants Law Office and Kappel owed a duty to Plaintiff. 57. Among other things, Defendants Law Office and Kappel had a duty to hold Plaintiff's funds in a safe and secure manner. 58. By virtue of the conduct described above, Defendants Law Office and Kappel breached their duty to Plaintiff. 59. Defendants Law Office and Kappel, by virtue of the wrongful conduct described above, were negligent, grossly negligent, careless, reckless, taken in bad faith, and/or willfully failed to exercise their duties toward Plaintiff in a proper and non-negligent manner and with the level of care that a reasonable and prudent person would have exercised under the circumstances. 60. Wholly and solely as a result of the negligence, gross negligence, carelessness, recklessness and/or willful failure of Defendants Law Office and Kappel, as set forth above, Plaintiff was injured and, among other things, lost its funds without any fault, want of care or culpable conduct on the part of Plaintiff contributing thereto. 61. Defendants Law Office and Kappel's negligence, carelessness and/or recklessness, as set forth above, was the direct and proximate cause of Plaintiff's damages. 62. Accordingly, Plaintiff has been damaged as a result of the foregoing and is entitled to damages in an amount to be determined at trial, but believed to be in excess of the jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff 12 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 hereby makes claim for same, together with punitive damages. EIGHTH CAUSE OF ACTION (Legal Malpractice against Law Office and Kappel) 63. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 64. Defendants Law Office and Kappel owed a duty to Plaintiff. 65. By virtue of the conduct described above, Defendants Law Office and Kappel breached their duty to Plaintiff. 66. Defendants Law Office and Kappel, in their representation of Plaintiff and/or acting as escrow agent for Plaintiff, by virtue of the wrongful conduct described above, breached the attorney Rules of Professional Conduct 67. Among other things, Defendants Law Office and Kappel, in their representation of Plaintiff and/or acting as escrow agent, by virtue of the wrongful conduct described above, breached their duty of undivided loyalty to Plaintiff. 68. Among other things, Defendants Law Office and Kappel, in their representation of Plaintiff and/or acting as escrow agent, by virtue of the wrongful conduct described above, breached their duty of candor to Plaintiff. 69. Among other things, Defendants Law Office and Kappel had a conflict of interest in representing Plaintiff and/or the Segal Defendants while simultaneously acting as escrow agent. 70. Defendants Law Office and Kappel, in their representation of Plaintiff and/or acting as escrow agent, by virtue of the wrongful conduct described above, were professionally negligent, careless, reckless, grossly negligent, committed legal malpractice and/or willfully failed to exercise their toward Plaintiff in a proper and non- negligent manner and with the duty 13 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 ordinary reasonable skill and knowledge possessed by a member of the legal profession. 71. Wholly and solely as a result of the professional negligence, gross negligence, carelessness, legal malpractice and/or recklessness of Defendants Law Office and Kappel, as set forth above, Plaintiff was injured and, among other things, lost its funds without any fault, want of care or culpable conduct on the part of Plaintiff contributing thereto. 72. Defendants Law Office and Kappel's professional negligence, gross negligence, carelessness, legal malpractice and/or recklessness, as set forth above, was the direct and proximate cause of Plaintiff's damages. 73. But for Defendants Law Office and Kappel's professional negligence, gross negligence, carelessness, legal malpractice and/or recklessness, as set forth above, Plaintiff would not have sustained the damages for which it seeks recovery herein. 74. Accordingly, Plaintiff has been damaged as a result of the foregoing and is entitled to damages in an amount to be determined at trial,but believed to be in excess of the jurisdictional limits of all lower courts that would otherwise have jurisdiction and Plaintiff hereby makes claim for same, together with punitive damages. NINTH CAUSE OF ACTION (Breach of Contract against Segal Defendants) 75. Plaintiff repeats and realleges each and every allegation contained in the preceding paragraphs as if fully set forth herein. 76. As a result of the foregoing, a contract in fact and/or in law was created between Plaintiff and the Segal Defendants. 77. There thus existed between Plaintiff and the Segal Defendants a contract, agreement and/or exchange of promises, by which, in exchange for good and valuable consideration, the Segal Defendants promised to: (i)vacate the Property no later than 5:00pm on 14 of 17 FILED: KINGS COUNTY CLERK 12/06/2019 01/10/2020 10:02 12:46 AM INDEX NO. 526557/2019 526769/2019 NYSCEF DOC. NO. 1 67 RECEIVED NYSCEF: 12/06/2019 01/10/2020 June 26, 2018 and leave said premises in accordance with the terms of the contract; and (ii) pay Plaintiff the sum of $71 4.28 for each day after sai