Preview
FILED: NEW YORK COUNTY CLERK 11/14/2016 05:09 PM INDEX NO. 159591/2016
NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 11/14/2016
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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KAREN LIEBERMAN,
Plaintiff, Index No.
-against- VERIFIED COMPLAINT
WARREN J. MALONE, WJM 2014 LLC,
VELOCITY COMMERCIAL CAPITAL, LLC,
ROSARIO MCCLAIN, and JACQUES JIHA, as
Commissioner of the New York City Department
of Finance,
Defendants.
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Plaintiff, KAREN LIEBERMAN, by her attorneys, Gordon & Haffner, LLP, complaining
of defendants, WARREN J. MALONE, WJM 2014 LLC, VELOCITY COMMERICAL
CAPITAL, LLC, ROSARIO MCCLAIN, and JACQUES JIHA, as Commissioner of the New
York City Department of Finance, alleges as follows:
NATURE OF ACTION
1. Plaintiff KAREN LIEBERMAN (“KAREN”) sues defendants for equitable relief,
compensatory damages, punitive damages, and attorneys’ fees arising from the forgery of her
signature on a deed which purports to convey away, of record, her partial ownership interest in a
residential condominium unit to defendant WJM 2014 LLC (“WJM”), an entity owned and/or
controlled by defendant WARREN J. MALONE (“MALONE”), which then mortgaged it to
defendant VELOCITY COMMERCIAL CAPITAL, LLC (“VELOCITY”).
2. KAREN also sues MALONE for specific enforcement of, and for damages for
breach of, written agreements between them which granted her exclusive lifetime occupancy and
possession of the subject residential condominium unit, and imposed various obligations on
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MALONE, including the obligations to pay common charges, taxes, and repairs incident to
ownership and maintenance of the unit.
3. KAREN also sues MALONE for intentional infliction of emotional distress,
arising from a campaign of harassment he conducted against her after she confronted him over
his forgery of her signature on the deed and his various breaches of agreements between them.
PARTIES
4. Plaintiff KAREN is a natural person, residing in the County of New York and
State of New York.
5. Defendant MALONE is a natural person.
6. Defendant WJM is a limited liability company, organized and existing under the
laws of the State of New York, with a principal place of business in the County of New York and
State of New York. Upon information and belief, MALONE is the manager of WJM and/or a
member of WJM with authority to act for it.
7. Defendant VELOCITY is a registered foreign limited liability company,
organized under the laws of the State of California, with a principal place of business in the State
of New York in the County of Albany.
8. Upon information and belief, defendant ROSARIO MCCLAIN (“MCCLAIN”) is
a natural person.
9. Defendant JACQUES JIHA (“Commissioner”) is the Commissioner of the New
York City Department of Finance (the “DOF”), and is sued here in that capacity. The DOF
operates the Office of the City Register of the City of New York.
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BACKGROUND
10. At all times alleged hereafter, plaintiff KAREN was disabled by severe anxiety
disorder, for which she received SSI benefits, her only income.
11. Upon information and belief, MALONE is, and at all times alleged hereafter was,
a successful New York City real estate investor and/or developer, and a hedge fund manager,
with extensive financial resources.
12. In 2006, KAREN was the tenant and occupant under a lease of rent-stabilized
apartment 1F (the “Apartment”) at 30 West 85th Street, New York, New York (the “Building”),
where KAREN had previously and continuously resided for approximately 25 years.
13. On or about May 23, 2006, MALONE purchased the Building.
14. Upon information and belief, MALONE purchased the Building with the
intention of converting it to a singlefamily dwelling for his own use or else formulated this
intention shortly after purchasing it. Toward that end, beginning in 2006, MALONE commenced
and carried out a campaign of harassment against KAREN, for the purpose of forcing her out of
the Apartment by rendering it uninhabitable and its continued occupancy otherwise unbearable.
15. In furtherance of his campaign of harassment, defendant MALONE obtained, or
caused his agents to obtain, an interior demolition permit from the New York City Department of
Buildings (the “DOB”) for the Building. Upon information and belief, defendant MALONE’s
application for the demolition permit falsely certified to DOB the Building was vacant of
residents and occupants, although MALONE knew KAREN resided in and occupied the
Apartment.
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16. Upon issuance of the demolition permit in or around June 2006, defendant
MALONE caused interior demolition activities to proceed at the Building, causing actual injuries
to KAREN, and creating grave risks of other harms to KAREN and to her property.
17. For example, in the course of demolition, MALONE caused paint remover to be
applied copiously at the Building, filling the Apartment with toxic fumes. In consequence,
KAREN developed allergic conjunctivitis and a cough, for which she required and received
medical treatment.
18. Other demolition activities conducted by MALONE, or at his behest, further
rendered the Apartment uninhabitable by damaging its ceiling, walls and plumbing, causing
water to come cascading into the Apartment through one of its light fixtures creating floods and
unbearably loud noises.
19. Upon information and belief, in or about October 2006, the DOB cited MALONE
for hazardous conditions his activities had created throughout the Apartment.
20. MALONE’s harassment campaign also included his commencement of frivolous
legal proceedings (the “Harassment Suits”) against KAREN to intimidate and overwhelm her,
and to exploit the vulnerabilities incident to her disability, including: (i) an action (the “DJ
Action”) in New York State Supreme Court for a declaration KAREN was not disabled and not
entitled to renew her lease of the rent-stabilized Apartment; and (ii) a defamation action in New
York State Supreme Court against KAREN and the company which owns the New York Daily
News over a published article which reported, among other things, some of MALONE’s
harassment of KAREN.
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21. Apart from its other lack of merit, MALONE brought the DJ Action without first
having offered KAREN another residence, equivalent or superior to the Apartment, as required
by law.
22. All litigation between MALONE and KAREN was subsequently settled by
stipulation (the “Stipulation”), filed in the DJ Action on August 13, 2008 (copy attached as
Exhibit A).
23. Pursuant to the terms of the Stipulation:
(i) KAREN surrendered her possession of, and tenancy in, the Apartment;
(ii) MALONE purchased unit no. 6H (“Unit 6H”) in the Pythian Condominium at 135
West 70th Street, New York, New York (block 1142, lot 1051), as a substitute for the
Apartment; the deed to Unit 6H (the “Original Deed”, copy attached as Exhibit B),
recorded under CRFN 2008000444871 in the Office of the City Register of the City of
New York, granted KAREN a 0.01% undivided ownership interest (“KAREN’s
INTEREST”) and MALONE a 99.99% ownership interest (“MALONE’s INTEREST”),
as tenants in common;
(iii) MALONE and KAREN entered into a Joint Ownership Agreement (the “JOA”, copy
attached as Exhibit C), further setting out their rights and obligations with respect to Unit
6H and, among other things, granting KAREN the exclusive right to possess and to
occupy Unit 6H until the earlier of her death or her vacation of the premises;
(iv) in or around November 2008, MALONE delivered and KAREN accepted exclusive
possession and occupancy of Unit 6H, where KAREN has since continuously resided.
24. KAREN has performed all of her obligations under the Stipulation and the JOA,
and is ready, willing and able to continue to perform all of her obligations thereunder. All
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conditions precedent to MALONE’s performance under both the Stipulation and the JOA have
been satisfied.
DEFENDANTS’ FRAUDS
25. On December 23, 2014, a Bargain and Sale Deed (the “Forged Deed”, copy
annexed as Exhibit D), dated November 24, 2014, was recorded under CRFN 2014000421272 in
the Office of the City Register of the City of New York, which purported to convey all of
MALONE’s INTEREST and all of KAREN’s INTEREST to defendant WJM for nominal
consideration.
26. Purported signatures of MALONE and KAREN, as grantors, appear on the
Forged Deed.
27. KAREN neither signed the Forged Deed nor authorized anyone to sign it on her
behalf.
28. KAREN never consented to the execution or recording of the Forged Deed, and
was neither aware nor had notice of its existence until after its recording.
29. Upon information and belief, MALONE forged KAREN’s signature on the
Forged Deed or caused an agent of his to do so, with the intention and for the purpose of
misappropriating KAREN’s INTEREST.
30. The Forged Deed contains defendant MCCLAIN’s executed acknowledgments of
MALONE’s signature and of KAREN’s forged signature, and stamps below the
acknowledgments, reading:
ROSARIO McCLAIN
NOTARY PUBLIC
MY COMMISSION EXPIRES MAR. 31, 2017
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31. Although the acknowledgments in the Forged Deed recite execution in the State
of New York, the words, “Qual in Fairfield, CT #160207”, are written in hand below the notary
stamps. There is no indication anywhere in the Forged Deed MCCLAIN is a New York notary or
is otherwise authorized to administer oaths in the State of New York.
32. Contrary to the recitation in the acknowledgment of KAREN’s forged signature:
(i) KAREN never appeared before MCCLAIN; (ii) KAREN never acknowledged any signature
in the FORGED DEED to be hers; and (iii) the person who forged KAREN’s signature was
neither personally known by MCCLAIN to be KAREN nor proved to MCCLAIN by satisfactory
evidence to be KAREN.
33. Upon information and belief, MCCLAIN executed the acknowledgment of
KAREN’s forged signature in the knowledge the signature had been forged and in the knowledge
the Forged Deed would be submitted for recording with the City Register of the City of New
York.
34. Upon information and belief, MCCLAIN executed the acknowledgment of
KAREN’s signature, at the behest of MALONE, and in conspiracy with him, for the purpose of
misappropriating KAREN’s interest in Unit 6H and conveying it to WJM.
35. Upon information and belief, in the knowledge KAREN’s signature on the Forged
Deed had been forged, MALONE caused it to be recorded in the Office of the City Register of
the City of New York.
36. On January 23, 2015, a Mortgage (the “Mortgage”, copy annexed as Exhibit E)
in the principal amount of $721,000.00, dated January 12, 2015, was recorded under CRFN
2015000027182 in the Office of the City Register of the City of New York, under which
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defendant WJM, as mortgagor, purported to grant a mortgage lien upon the entire fee interest in
Unit 6H to defendant VELOCITY, as mortgagee.
37. The Mortgage bears MALONE’s signature, as member of WJM.
38. KAREN never consented to the execution or recording of the Mortgage. She was
neither aware nor had notice of the existence of the MORTGAGE until after its recording, and
received none of the proceeds of the indebtedness it supposedly secures.
39. The execution and recording of the Forged Deed and of the Mortgage constitute
breaches of the Stipulation and of the JOA.
40. The Forged Deed and the Mortgage have created clouds on KAREN’s
INTEREST.
41. In attempting to misappropriate and to encumber KAREN’s INTEREST, and in
creating clouds upon it, defendants MALONE, WJM and MCCLAIN acted willfully, knowingly,
intentionally, and maliciously to cause harm to KAREN, or at the least acted with reckless
indifference to such harm.
42. In recording the Forged Deed and the Mortgage, or in causing or facilitating their
recording, MALONE, WJM and MCCLAIN corrupted the public records of the City of New
York and County of New York.
FIRST CAUSE OF ACTION
(Declaratory and Injunctive Relief
Vacating the Forged Deed and the Mortgage)
43. KAREN repeats and realleges paragraphs 1 through 42 as if fully recited herein.
44. By reason of the forgery of KAREN’s signature, the Forged Deed is a nullity,
void ab initio. As such, it was incapable of conveying KAREN’s INTEREST to WJM.
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45. Further, the Forged Deed is voidable due to the fraudulent and otherwise
defective acknowledgment of KAREN’s purported signature.
46. WJM knew of the forgery of KAREN’s signature on the Forged Deed at the time
of its execution, and otherwise lacked good faith in accepting the conveyance of KAREN’s
INTEREST.
47. Since the Forged Deed failed to grant KAREN’s INTEREST to WJM, the
Mortgage executed by WJM is a nullity, void ab initio and incapable of conveying a mortgage
lien against KAREN’s INTEREST to defendant VELOCITY.
48. Upon information and belief, when VELOCITY accepted the Mortgage, it knew
or, in the exercise of reasonable care, itshould have known WJM had not acquired KAREN’s
INTEREST and could not grant a mortgage lien against it.
49. The Forged Deed and the Mortgage cloud title to KAREN’S INTEREST, thereby
causing her irreparable injury for which she lacks an adequate remedy at law.
50. By reason of the foregoing, KAREN is entitled to judgment declaring the Forged
Deed and the Mortgage void, the interests and encumbrances conveyed thereunder nullities,
without force or effect, and directing Defendant Commissioner to cancel the Forged Deed and
the Mortgage of record.
SECOND CAUSE OF ACTION
(Cancellation of the Forged Deed and the Mortgage)
51. KAREN repeats and realleges paragraph 1 through 42 as if fully recited herein.
52. By reason of the foregoing, KAREN is entitled to judgment, pursuant to section
329 of the Real Property Law, directing Defendant Commissioner to cancel the Forged Deed and
the Mortgage of record.
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THIRD CAUSE OF ACTION
(Fraud and Conspiracy to Defraud)
53. KAREN repeats and realleges paragraph 1 through 42 as if fully recited herein.
54. Defendants MALONE, WJM and MCCLAIN conspired and acted together to
misappropriate and to encumber KAREN’s INTEREST by means of fraud and forgery, all for
their own benefit.
55. KAREN has been damaged by the forgeries and other frauds committed by
defendants MALONE, WJM and MCCLAIN in an amount to be determined by the trier of fact,
but not less than $2,000,000.00.
FOURTH CAUSE OF ACTION
(Slander of Title)
56. KAREN repeats and realleges paragraph 1 through 42 as if fully recited herein.
57. The Forged Deed falsely casts doubt on the validity of KAREN’s title to
KAREN’S INTEREST.
58. The making and recording of the Forged Deed were reasonably calculated to
cause harm to KAREN.
59. KAREN sustained pecuniary damage from the making and recording of the
Forged Deed, including the costs of having the Forged Deed and the Mortgage cancelled of
record.
60. By reason of the foregoing, MALONE, WJM, MCCLAIN and VELOCITY have
slandered KAREN’s title to KAREN’S INTEREST, causing her injury in an amount to be
determined by the trier of fact, but not less than $2,000,000.00.
FIFTH CAUSE OF ACTION
(Notarial Misconduct)
61. KAREN repeats and realleges paragraphs 1 through 42 as if fully recited herein.
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62. By reason of the foregoing, MCCLAIN committed notarial misconduct, causing
injury to KAREN in an amount to be determined by the trier of fact, but not less than
$2,000,000.00, for which he is liable under section 135 of the Executive Law.
SIXTH CAUSE OF ACTION
(Specific Performance of the Stipulation and the JOA)
63. KAREN repeats and realleges paragraph 1 through 42 as if fully recited herein.
64. In forging and recording the Forged Deed, or in causing its forgery and recording,
and in making and recording of the Mortgage, or in causing its making and recording, MALONE
breached the Stipulation and the JOA.
65. MALONE committed other breaches of the Stipulation and the JOA, including:
(i) his failure to deliver to KAREN a copy of the JOA in recordable form; (ii) his failures, from
time to time, to make timely payments of common charges to the Condominium; (iii) his tenders
of checks to the Condominium for common charges, drawn against insufficient funds; and (iv)
his failures to make timely payments to a contractor for plumbing repairs in Unit 6H.
66. MALONE’s failures to pay common charges timely, and his tenders of bad
checks for such payments, created a lien against Unit 6H in favor of the Pythian Condominium,
and a substantial risk Pythian Condominium would foreclose upon the lien.
67. Additionally, due to MALONE’s failures to pay common charges timely, and his
tenders of bad checks for such payments, the Pythian Condominium declined to provide Unit 6H
with services it would otherwise have been required to furnish including, in or around February
2016, repairs of the HVAC equipment in the unit.
68. MALONE’s failures to make timely payments for plumbing repairs also created
grounds for, and a substantial risk, the plumbing contractor(s) would file notices of mechanics’
and/or materialmen’s liens against Unit 6H, and would foreclose upon them.
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69. KAREN has suffered, and is continuing to suffer, irreparable injury from
MALONE’s breaches of the Stipulation and JOA, for which she lacks adequate remedy at law.
70. KAREN is entitled to judgment decreeing that MALONE specifically perform all
of his obligations under the JOA.
SEVENTH CAUSE OF ACTION
(Intentional Infliction of Emotional Distress)
71. KAREN repeats and realleges paragraph 1 through 42 and 63 through 70 as if
fully recited herein.
72. Shortly after learning of the Forged Deed and the Mortgage, KAREN confronted
MALONE over them.
73. Upon being confronted, MALONE initially admitted his responsibility for the
forging of KAREN’s signature on the Forged Deed and for the mortgaging of the entire fee
interest in Unit 6H to VELOCITY, feigned contrition, and promised to “fix it” by putting title to
KAREN’s INTEREST back in KAREN’s name and causing it to be released from VELOCITY’s
Mortgage.
74. MALONE never honored these promises. Record titleto the entirety of the fee
interest in Unit 6H remains in WJM, and continues to be encumbered by VELOCITY’s
Mortgage.
75. Instead, MALONE harassed KAREN by making offensive, disturbing,
intimidating and frightening statements to her in telephone calls, and in voice messages on her
cell phone and land line telephone, including the following:
a. “Hey Karen, it’s Warren Malone calling. I’ve talked to a number of people
and you are beyond insane. Your lawyer thinks you’re beyond insane, but
that’s irrelevant to me.”
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b. “There is zero point zero chance you’re getting your thousand dollars.
Zero. Now, you can sue me. You can have your lawyers sue me. You can
spend all the money you want. But, there’s no way you’re going to extort
one thousand dollars from me. So go fuck yourself.”
c. “And, by the way, Karen, you’re so fucking smart. Google something.
Google this. Have your lawyers google it because you don’t have a
computer. Google this. Google ‘New York Times profitable flip’. Have
your lawyers google that. Print out the article about me selling the highest
priced townhouse in the history of the West Side above 80th Street in
October. And then go talk to prosecutors about charging me with
anything. Please enough.”
d. “Karen, it’s Warren Malone. You remember me? I’m the owner of your
apartment.”
e. “Really, don’t harass me anymore. Because you are like talking to
someone in an insane asylum. And believe me when you talk to your
lawyer and you replay this message your lawyer will agree you’re like
someone who is insane. You don’t have email. You barely have voice
mail. God knows what the fuck your life’s about. But you lived in my
building for years and years and years at the largesse of Fred Herzog who
I bought the building from in 2006. Who knows?”
f. “That was my credit card. You’ll get your thousand dollars. Leave me and
my family alone, okay. My son, Matthew has a 4.1 average at Columbia.
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My daughter, Abby, has a four point… no, no, no,… a 3.9 average at
Brown University. You have no children and no husband.”
g. “And you think you’re going to call the cops on me for something I did
incorrectly, what, thirteen months ago? It wasn’t really that incorrect. It
was really kind of brilliant. What you’ve done is harass me. Just stop it.”
h. “Tell your lawyer if you call me again, I will call the cops on you. I know
where you live. It’s 135 West 70th.”
76. MALONE’s conduct alleged in this Complaint has been extreme and outrageous,
in excess of bounds of decency, and of a sort intolerable in a civilized community.
77. MALONE engaged in the conduct alleged in this Complaint, in the knowledge
KAREN was disabled with severe anxiety order, and his statements and acts would cause her
severe anxiety, stress, emotional distress and mental suffering.
78. MALONE engaged in the conduct alleged in this Complaint with the conscious
intention of causing KAREN severe and extreme anxiety, stress, mental pain and emotional
distress, or in willful disregard of a substantial probability of causing the same, and with the
motive of driving her to abandon KAREN’S INTEREST and her occupancy of Unit 6H. As the
direct and proximate result of MALONE’s conduct alleged in this Complaint, KAREN suffered
severe and extreme anxiety, stress, mental pain and emotional distress.
79. KAREN has been damaged by MALONE’S intentional infliction of emotional
distress, in an amount to be determined by the trier of fact.
WHEREFORE, plaintiff KAREN LIEBERMAN prays for judgment as follows:
1. On the firstcause of action, (a) declaring the Forged Deed is a nullity, void ab
initio, and that it conveyed none of KAREN’s INTEREST to defendant WJM, or to any of its
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successors or assigns; (b) declaring the Mortgage is a nullity, void ab initio, and that it created no
encumbrance or lien in favor of defendant VELOCITY, or in favor of any of its successors or
assigns, in or upon KAREN’s INTEREST; (c) directing the Commissioner to cancel the Forged
Deed of record and to cancel the Mortgage of record;
2. On the second cause of action, directing the Commissioner to cancel the Forged
Deed of Record and to cancel the Mortgage of record;
3. On the third cause of action, awarding KAREN compensatory damages against
defendants MALONE, WJM and MCCLAIN, jointly and severally, in an amount to be
determined by the trier of fact, not less than $2,000,000.00, punitive damages against MALONE,
WJM and MCCLAIN, in amounts to be determined by the trier of fact, and reasonable attorneys’
fees;
4. On the fourth cause of action, awarding KAREN compensatory damages against
MALONE, WJM and MCCLAIN, jointly and severally, in an amount to be determined by the
trier of fact, not less than $2,000,000.00, punitive damages, against MALONE, WJM and
MCCLAIN, in amounts to be determined by the trier of fact, and reasonable attorneys’ fees;
5. On the fifth cause of action, awarding KAREN compensatory damages against
MCCLAIN, in an amount to be determined by the trier of fact, not less than $2,000,000.00, plus
punitive damages and reasonable attorneys’ fees;
6. On the sixth cause of action, decreeing that MALONE specifically perform all of
his obligations under the Stipulation and the JOA, and awarding KAREN compensatory damages
against MALONE, for his breaches of the Stipulation and of the JOA, in an amount to be
determined by the trier of fact;
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7. On the seventh cause of action, awarding KAREN compensatory damages against
MALONE, in an amount to be determined by the trier of fact, punitive damages, in an amount to
be determined by the trier of fact, and reasonable attorneys’ fees;
8. Granting KAREN the costs and disbursements of this action, her reasonable
attorneys’ fees, pre-judgment interest, and such other and further relief as may be appropriate.
Dated: November 14, 2016
GORDON & HAFFNER, LLP
Attorneys for Plaintiff
480 Mamaroneck Avenue
Harrison, New York 10528
(914) 381-4848
By: /s/
David Gordon, Esq.
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Preview
FILED: NEW YORK COUNTY CLERK 11/14/2016 05:09 PM INDEX NO. 159591/2016 NYSCEF DOC. NO. 2 RECEIVED NYSCEF: 11/14/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------------------------------------X KAREN LIEBERMAN, Plaintiff, Index No. -against- VERIFIED COMPLAINT WARREN J. MALONE, WJM 2014 LLC, VELOCITY COMMERCIAL CAPITAL, LLC, ROSARIO MCCLAIN, and JACQUES JIHA, as Commissioner of the New York City Department of Finance, Defendants. ----------------------------------------------------------------------X Plaintiff, KAREN LIEBERMAN, by her attorneys, Gordon & Haffner, LLP, complaining of defendants, WARREN J. MALONE, WJM 2014 LLC, VELOCITY COMMERICAL CAPITAL, LLC, ROSARIO MCCLAIN, and JACQUES JIHA, as Commissioner of the New York City Department of Finance, alleges as follows: NATURE OF ACTION 1. Plaintiff KAREN LIEBERMAN (“KAREN”) sues defendants for equitable relief, compensatory damages, punitive damages, and attorneys’ fees arising from the forgery of her signature on a deed which purports to convey away, of record, her partial ownership interest in a residential condominium unit to defendant WJM 2014 LLC (“WJM”), an entity owned and/or controlled by defendant WARREN J. MALONE (“MALONE”), which then mortgaged it to defendant VELOCITY COMMERCIAL CAPITAL, LLC (“VELOCITY”). 2. KAREN also sues MALONE for specific enforcement of, and for damages for breach of, written agreements between them which granted her exclusive lifetime occupancy and possession of the subject residential condominium unit, and imposed various obligations on 1 of 17 MALONE, including the obligations to pay common charges, taxes, and repairs incident to ownership and maintenance of the unit. 3. KAREN also sues MALONE for intentional infliction of emotional distress, arising from a campaign of harassment he conducted against her after she confronted him over his forgery of her signature on the deed and his various breaches of agreements between them. PARTIES 4. Plaintiff KAREN is a natural person, residing in the County of New York and State of New York. 5. Defendant MALONE is a natural person. 6. Defendant WJM is a limited liability company, organized and existing under the laws of the State of New York, with a principal place of business in the County of New York and State of New York. Upon information and belief, MALONE is the manager of WJM and/or a member of WJM with authority to act for it. 7. Defendant VELOCITY is a registered foreign limited liability company, organized under the laws of the State of California, with a principal place of business in the State of New York in the County of Albany. 8. Upon information and belief, defendant ROSARIO MCCLAIN (“MCCLAIN”) is a natural person. 9. Defendant JACQUES JIHA (“Commissioner”) is the Commissioner of the New York City Department of Finance (the “DOF”), and is sued here in that capacity. The DOF operates the Office of the City Register of the City of New York. 2 of 17 BACKGROUND 10. At all times alleged hereafter, plaintiff KAREN was disabled by severe anxiety disorder, for which she received SSI benefits, her only income. 11. Upon information and belief, MALONE is, and at all times alleged hereafter was, a successful New York City real estate investor and/or developer, and a hedge fund manager, with extensive financial resources. 12. In 2006, KAREN was the tenant and occupant under a lease of rent-stabilized apartment 1F (the “Apartment”) at 30 West 85th Street, New York, New York (the “Building”), where KAREN had previously and continuously resided for approximately 25 years. 13. On or about May 23, 2006, MALONE purchased the Building. 14. Upon information and belief, MALONE purchased the Building with the intention of converting it to a singlefamily dwelling for his own use or else formulated this intention shortly after purchasing it. Toward that end, beginning in 2006, MALONE commenced and carried out a campaign of harassment against KAREN, for the purpose of forcing her out of the Apartment by rendering it uninhabitable and its continued occupancy otherwise unbearable. 15. In furtherance of his campaign of harassment, defendant MALONE obtained, or caused his agents to obtain, an interior demolition permit from the New York City Department of Buildings (the “DOB”) for the Building. Upon information and belief, defendant MALONE’s application for the demolition permit falsely certified to DOB the Building was vacant of residents and occupants, although MALONE knew KAREN resided in and occupied the Apartment. 3 of 17 16. Upon issuance of the demolition permit in or around June 2006, defendant MALONE caused interior demolition activities to proceed at the Building, causing actual injuries to KAREN, and creating grave risks of other harms to KAREN and to her property. 17. For example, in the course of demolition, MALONE caused paint remover to be applied copiously at the Building, filling the Apartment with toxic fumes. In consequence, KAREN developed allergic conjunctivitis and a cough, for which she required and received medical treatment. 18. Other demolition activities conducted by MALONE, or at his behest, further rendered the Apartment uninhabitable by damaging its ceiling, walls and plumbing, causing water to come cascading into the Apartment through one of its light fixtures creating floods and unbearably loud noises. 19. Upon information and belief, in or about October 2006, the DOB cited MALONE for hazardous conditions his activities had created throughout the Apartment. 20. MALONE’s harassment campaign also included his commencement of frivolous legal proceedings (the “Harassment Suits”) against KAREN to intimidate and overwhelm her, and to exploit the vulnerabilities incident to her disability, including: (i) an action (the “DJ Action”) in New York State Supreme Court for a declaration KAREN was not disabled and not entitled to renew her lease of the rent-stabilized Apartment; and (ii) a defamation action in New York State Supreme Court against KAREN and the company which owns the New York Daily News over a published article which reported, among other things, some of MALONE’s harassment of KAREN. 4 of 17 21. Apart from its other lack of merit, MALONE brought the DJ Action without first having offered KAREN another residence, equivalent or superior to the Apartment, as required by law. 22. All litigation between MALONE and KAREN was subsequently settled by stipulation (the “Stipulation”), filed in the DJ Action on August 13, 2008 (copy attached as Exhibit A). 23. Pursuant to the terms of the Stipulation: (i) KAREN surrendered her possession of, and tenancy in, the Apartment; (ii) MALONE purchased unit no. 6H (“Unit 6H”) in the Pythian Condominium at 135 West 70th Street, New York, New York (block 1142, lot 1051), as a substitute for the Apartment; the deed to Unit 6H (the “Original Deed”, copy attached as Exhibit B), recorded under CRFN 2008000444871 in the Office of the City Register of the City of New York, granted KAREN a 0.01% undivided ownership interest (“KAREN’s INTEREST”) and MALONE a 99.99% ownership interest (“MALONE’s INTEREST”), as tenants in common; (iii) MALONE and KAREN entered into a Joint Ownership Agreement (the “JOA”, copy attached as Exhibit C), further setting out their rights and obligations with respect to Unit 6H and, among other things, granting KAREN the exclusive right to possess and to occupy Unit 6H until the earlier of her death or her vacation of the premises; (iv) in or around November 2008, MALONE delivered and KAREN accepted exclusive possession and occupancy of Unit 6H, where KAREN has since continuously resided. 24. KAREN has performed all of her obligations under the Stipulation and the JOA, and is ready, willing and able to continue to perform all of her obligations thereunder. All 5 of 17 conditions precedent to MALONE’s performance under both the Stipulation and the JOA have been satisfied. DEFENDANTS’ FRAUDS 25. On December 23, 2014, a Bargain and Sale Deed (the “Forged Deed”, copy annexed as Exhibit D), dated November 24, 2014, was recorded under CRFN 2014000421272 in the Office of the City Register of the City of New York, which purported to convey all of MALONE’s INTEREST and all of KAREN’s INTEREST to defendant WJM for nominal consideration. 26. Purported signatures of MALONE and KAREN, as grantors, appear on the Forged Deed. 27. KAREN neither signed the Forged Deed nor authorized anyone to sign it on her behalf. 28. KAREN never consented to the execution or recording of the Forged Deed, and was neither aware nor had notice of its existence until after its recording. 29. Upon information and belief, MALONE forged KAREN’s signature on the Forged Deed or caused an agent of his to do so, with the intention and for the purpose of misappropriating KAREN’s INTEREST. 30. The Forged Deed contains defendant MCCLAIN’s executed acknowledgments of MALONE’s signature and of KAREN’s forged signature, and stamps below the acknowledgments, reading: ROSARIO McCLAIN NOTARY PUBLIC MY COMMISSION EXPIRES MAR. 31, 2017 6 of 17 31. Although the acknowledgments in the Forged Deed recite execution in the State of New York, the words, “Qual in Fairfield, CT #160207”, are written in hand below the notary stamps. There is no indication anywhere in the Forged Deed MCCLAIN is a New York notary or is otherwise authorized to administer oaths in the State of New York. 32. Contrary to the recitation in the acknowledgment of KAREN’s forged signature: (i) KAREN never appeared before MCCLAIN; (ii) KAREN never acknowledged any signature in the FORGED DEED to be hers; and (iii) the person who forged KAREN’s signature was neither personally known by MCCLAIN to be KAREN nor proved to MCCLAIN by satisfactory evidence to be KAREN. 33. Upon information and belief, MCCLAIN executed the acknowledgment of KAREN’s forged signature in the knowledge the signature had been forged and in the knowledge the Forged Deed would be submitted for recording with the City Register of the City of New York. 34. Upon information and belief, MCCLAIN executed the acknowledgment of KAREN’s signature, at the behest of MALONE, and in conspiracy with him, for the purpose of misappropriating KAREN’s interest in Unit 6H and conveying it to WJM. 35. Upon information and belief, in the knowledge KAREN’s signature on the Forged Deed had been forged, MALONE caused it to be recorded in the Office of the City Register of the City of New York. 36. On January 23, 2015, a Mortgage (the “Mortgage”, copy annexed as Exhibit E) in the principal amount of $721,000.00, dated January 12, 2015, was recorded under CRFN 2015000027182 in the Office of the City Register of the City of New York, under which 7 of 17 defendant WJM, as mortgagor, purported to grant a mortgage lien upon the entire fee interest in Unit 6H to defendant VELOCITY, as mortgagee. 37. The Mortgage bears MALONE’s signature, as member of WJM. 38. KAREN never consented to the execution or recording of the Mortgage. She was neither aware nor had notice of the existence of the MORTGAGE until after its recording, and received none of the proceeds of the indebtedness it supposedly secures. 39. The execution and recording of the Forged Deed and of the Mortgage constitute breaches of the Stipulation and of the JOA. 40. The Forged Deed and the Mortgage have created clouds on KAREN’s INTEREST. 41. In attempting to misappropriate and to encumber KAREN’s INTEREST, and in creating clouds upon it, defendants MALONE, WJM and MCCLAIN acted willfully, knowingly, intentionally, and maliciously to cause harm to KAREN, or at the least acted with reckless indifference to such harm. 42. In recording the Forged Deed and the Mortgage, or in causing or facilitating their recording, MALONE, WJM and MCCLAIN corrupted the public records of the City of New York and County of New York. FIRST CAUSE OF ACTION (Declaratory and Injunctive Relief Vacating the Forged Deed and the Mortgage) 43. KAREN repeats and realleges paragraphs 1 through 42 as if fully recited herein. 44. By reason of the forgery of KAREN’s signature, the Forged Deed is a nullity, void ab initio. As such, it was incapable of conveying KAREN’s INTEREST to WJM. 8 of 17 45. Further, the Forged Deed is voidable due to the fraudulent and otherwise defective acknowledgment of KAREN’s purported signature. 46. WJM knew of the forgery of KAREN’s signature on the Forged Deed at the time of its execution, and otherwise lacked good faith in accepting the conveyance of KAREN’s INTEREST. 47. Since the Forged Deed failed to grant KAREN’s INTEREST to WJM, the Mortgage executed by WJM is a nullity, void ab initio and incapable of conveying a mortgage lien against KAREN’s INTEREST to defendant VELOCITY. 48. Upon information and belief, when VELOCITY accepted the Mortgage, it knew or, in the exercise of reasonable care, itshould have known WJM had not acquired KAREN’s INTEREST and could not grant a mortgage lien against it. 49. The Forged Deed and the Mortgage cloud title to KAREN’S INTEREST, thereby causing her irreparable injury for which she lacks an adequate remedy at law. 50. By reason of the foregoing, KAREN is entitled to judgment declaring the Forged Deed and the Mortgage void, the interests and encumbrances conveyed thereunder nullities, without force or effect, and directing Defendant Commissioner to cancel the Forged Deed and the Mortgage of record. SECOND CAUSE OF ACTION (Cancellation of the Forged Deed and the Mortgage) 51. KAREN repeats and realleges paragraph 1 through 42 as if fully recited herein. 52. By reason of the foregoing, KAREN is entitled to judgment, pursuant to section 329 of the Real Property Law, directing Defendant Commissioner to cancel the Forged Deed and the Mortgage of record. 9 of 17 THIRD CAUSE OF ACTION (Fraud and Conspiracy to Defraud) 53. KAREN repeats and realleges paragraph 1 through 42 as if fully recited herein. 54. Defendants MALONE, WJM and MCCLAIN conspired and acted together to misappropriate and to encumber KAREN’s INTEREST by means of fraud and forgery, all for their own benefit. 55. KAREN has been damaged by the forgeries and other frauds committed by defendants MALONE, WJM and MCCLAIN in an amount to be determined by the trier of fact, but not less than $2,000,000.00. FOURTH CAUSE OF ACTION (Slander of Title) 56. KAREN repeats and realleges paragraph 1 through 42 as if fully recited herein. 57. The Forged Deed falsely casts doubt on the validity of KAREN’s title to KAREN’S INTEREST. 58. The making and recording of the Forged Deed were reasonably calculated to cause harm to KAREN. 59. KAREN sustained pecuniary damage from the making and recording of the Forged Deed, including the costs of having the Forged Deed and the Mortgage cancelled of record. 60. By reason of the foregoing, MALONE, WJM, MCCLAIN and VELOCITY have slandered KAREN’s title to KAREN’S INTEREST, causing her injury in an amount to be determined by the trier of fact, but not less than $2,000,000.00. FIFTH CAUSE OF ACTION (Notarial Misconduct) 61. KAREN repeats and realleges paragraphs 1 through 42 as if fully recited herein. 10 of 17 62. By reason of the foregoing, MCCLAIN committed notarial misconduct, causing injury to KAREN in an amount to be determined by the trier of fact, but not less than $2,000,000.00, for which he is liable under section 135 of the Executive Law. SIXTH CAUSE OF ACTION (Specific Performance of the Stipulation and the JOA) 63. KAREN repeats and realleges paragraph 1 through 42 as if fully recited herein. 64. In forging and recording the Forged Deed, or in causing its forgery and recording, and in making and recording of the Mortgage, or in causing its making and recording, MALONE breached the Stipulation and the JOA. 65. MALONE committed other breaches of the Stipulation and the JOA, including: (i) his failure to deliver to KAREN a copy of the JOA in recordable form; (ii) his failures, from time to time, to make timely payments of common charges to the Condominium; (iii) his tenders of checks to the Condominium for common charges, drawn against insufficient funds; and (iv) his failures to make timely payments to a contractor for plumbing repairs in Unit 6H. 66. MALONE’s failures to pay common charges timely, and his tenders of bad checks for such payments, created a lien against Unit 6H in favor of the Pythian Condominium, and a substantial risk Pythian Condominium would foreclose upon the lien. 67. Additionally, due to MALONE’s failures to pay common charges timely, and his tenders of bad checks for such payments, the Pythian Condominium declined to provide Unit 6H with services it would otherwise have been required to furnish including, in or around February 2016, repairs of the HVAC equipment in the unit. 68. MALONE’s failures to make timely payments for plumbing repairs also created grounds for, and a substantial risk, the plumbing contractor(s) would file notices of mechanics’ and/or materialmen’s liens against Unit 6H, and would foreclose upon them. 11 of 17 69. KAREN has suffered, and is continuing to suffer, irreparable injury from MALONE’s breaches of the Stipulation and JOA, for which she lacks adequate remedy at law. 70. KAREN is entitled to judgment decreeing that MALONE specifically perform all of his obligations under the JOA. SEVENTH CAUSE OF ACTION (Intentional Infliction of Emotional Distress) 71. KAREN repeats and realleges paragraph 1 through 42 and 63 through 70 as if fully recited herein. 72. Shortly after learning of the Forged Deed and the Mortgage, KAREN confronted MALONE over them. 73. Upon being confronted, MALONE initially admitted his responsibility for the forging of KAREN’s signature on the Forged Deed and for the mortgaging of the entire fee interest in Unit 6H to VELOCITY, feigned contrition, and promised to “fix it” by putting title to KAREN’s INTEREST back in KAREN’s name and causing it to be released from VELOCITY’s Mortgage. 74. MALONE never honored these promises. Record titleto the entirety of the fee interest in Unit 6H remains in WJM, and continues to be encumbered by VELOCITY’s Mortgage. 75. Instead, MALONE harassed KAREN by making offensive, disturbing, intimidating and frightening statements to her in telephone calls, and in voice messages on her cell phone and land line telephone, including the following: a. “Hey Karen, it’s Warren Malone calling. I’ve talked to a number of people and you are beyond insane. Your lawyer thinks you’re beyond insane, but that’s irrelevant to me.” 12 of 17 b. “There is zero point zero chance you’re getting your thousand dollars. Zero. Now, you can sue me. You can have your lawyers sue me. You can spend all the money you want. But, there’s no way you’re going to extort one thousand dollars from me. So go fuck yourself.” c. “And, by the way, Karen, you’re so fucking smart. Google something. Google this. Have your lawyers google it because you don’t have a computer. Google this. Google ‘New York Times profitable flip’. Have your lawyers google that. Print out the article about me selling the highest priced townhouse in the history of the West Side above 80th Street in October. And then go talk to prosecutors about charging me with anything. Please enough.” d. “Karen, it’s Warren Malone. You remember me? I’m the owner of your apartment.” e. “Really, don’t harass me anymore. Because you are like talking to someone in an insane asylum. And believe me when you talk to your lawyer and you replay this message your lawyer will agree you’re like someone who is insane. You don’t have email. You barely have voice mail. God knows what the fuck your life’s about. But you lived in my building for years and years and years at the largesse of Fred Herzog who I bought the building from in 2006. Who knows?” f. “That was my credit card. You’ll get your thousand dollars. Leave me and my family alone, okay. My son, Matthew has a 4.1 average at Columbia. 13 of 17 My daughter, Abby, has a four point… no, no, no,… a 3.9 average at Brown University. You have no children and no husband.” g. “And you think you’re going to call the cops on me for something I did incorrectly, what, thirteen months ago? It wasn’t really that incorrect. It was really kind of brilliant. What you’ve done is harass me. Just stop it.” h. “Tell your lawyer if you call me again, I will call the cops on you. I know where you live. It’s 135 West 70th.” 76. MALONE’s conduct alleged in this Complaint has been extreme and outrageous, in excess of bounds of decency, and of a sort intolerable in a civilized community. 77. MALONE engaged in the conduct alleged in this Complaint, in the knowledge KAREN was disabled with severe anxiety order, and his statements and acts would cause her severe anxiety, stress, emotional distress and mental suffering. 78. MALONE engaged in the conduct alleged in this Complaint with the conscious intention of causing KAREN severe and extreme anxiety, stress, mental pain and emotional distress, or in willful disregard of a substantial probability of causing the same, and with the motive of driving her to abandon KAREN’S INTEREST and her occupancy of Unit 6H. As the direct and proximate result of MALONE’s conduct alleged in this Complaint, KAREN suffered severe and extreme anxiety, stress, mental pain and emotional distress. 79. KAREN has been damaged by MALONE’S intentional infliction of emotional distress, in an amount to be determined by the trier of fact. WHEREFORE, plaintiff KAREN LIEBERMAN prays for judgment as follows: 1. On the firstcause of action, (a) declaring the Forged Deed is a nullity, void ab initio, and that it conveyed none of KAREN’s INTEREST to defendant WJM, or to any of its 14 of 17 successors or assigns; (b) declaring the Mortgage is a nullity, void ab initio, and that it created no encumbrance or lien in favor of defendant VELOCITY, or in favor of any of its successors or assigns, in or upon KAREN’s INTEREST; (c) directing the Commissioner to cancel the Forged Deed of record and to cancel the Mortgage of record; 2. On the second cause of action, directing the Commissioner to cancel the Forged Deed of Record and to cancel the Mortgage of record; 3. On the third cause of action, awarding KAREN compensatory damages against defendants MALONE, WJM and MCCLAIN, jointly and severally, in an amount to be determined by the trier of fact, not less than $2,000,000.00, punitive damages against MALONE, WJM and MCCLAIN, in amounts to be determined by the trier of fact, and reasonable attorneys’ fees; 4. On the fourth cause of action, awarding KAREN compensatory damages against MALONE, WJM and MCCLAIN, jointly and severally, in an amount to be determined by the trier of fact, not less than $2,000,000.00, punitive damages, against MALONE, WJM and MCCLAIN, in amounts to be determined by the trier of fact, and reasonable attorneys’ fees; 5. On the fifth cause of action, awarding KAREN compensatory damages against MCCLAIN, in an amount to be determined by the trier of fact, not less than $2,000,000.00, plus punitive damages and reasonable attorneys’ fees; 6. On the sixth cause of action, decreeing that MALONE specifically perform all of his obligations under the Stipulation and the JOA, and awarding KAREN compensatory damages against MALONE, for his breaches of the Stipulation and of the JOA, in an amount to be determined by the trier of fact; 15 of 17 7. On the seventh cause of action, awarding KAREN compensatory damages against MALONE, in an amount to be determined by the trier of fact, punitive damages, in an amount to be determined by the trier of fact, and reasonable attorneys’ fees; 8. Granting KAREN the costs and disbursements of this action, her reasonable attorneys’ fees, pre-judgment interest, and such other and further relief as may be appropriate. Dated: November 14, 2016 GORDON & HAFFNER, LLP Attorneys for Plaintiff 480 Mamaroneck Avenue Harrison, New York 10528 (914) 381-4848 By: /s/ David Gordon, Esq. 16 of 17 17 of 17