Preview
FILED: SUFFOLK COUNTY CLERK 09/20/2023 03:04 PM INDEX NO. 614442/2023
NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 09/20/2023
EXHIBIT G
FILED: SUFFOLK COUNTY CLERK 09/20/2023
08/16/2023 03:04
08:55 PM INDEX NO. 614442/2023
NYSCEF DOC. NO. 24
11 RECEIVED NYSCEF: 09/20/2023
08/16/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK
----------------------------------------------------------------X
LOIS T. CONFORTI, Individually and as Personal
Representative of The Estate of
ANTHONY T. CONFORTI, deceased,
Petitioner, VERIFIED ANSWER WITH
COUNTERCLAIMS and
-against- THIRD-PARTY COMPLAINT
SANDY HILLS, LLC, WJ INVESTORS CORP., Index No.: 614442/2023
THE GROSS FAMILY HOLDINGS, LLC,
THE WHEATLEY HARBOR, LLC, NEW YORK
STATE DEPARTMENT OF TAXATION AND
FINANCE
AND
ONE" HUNDRED"
"JOHN THROUGH "JOHN ONE
They being tenants, occupants or parties having a
Mortgage, judgment, lien, warrant or other encumbrance
Affecting the premises, all of which are subordinate to
Plaintiff's,
Respondent.
_________________________________________________________Ç
PLEASE TAKE NOTICE, that the Defendant, SANDY HILLS, LLC, hereinafter
referred to as "Defendant", by their attorneys, CARLINSKY, DUNN & PASQUARIELLO,
PLLC, answering the Counterclaims of the Respondent alleges and states as follows:
1. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form
a belief as to paragraphs 1-3 of the Plaintiff's Complaint.
2. Defendant, Sandy Hills, LLC, denies the allegations set forth in paragraph 4 of the
Plaintiff's Complaint to the extent that their addresses are not correct.
3. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form
a belief as to paragraphs 5, 6, 7, 10 and 11 of the Plaintiff's Complaint.
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4. Defendant, Sandy Hills, LLC, acknowledges as to paragraph 12 of the Plaintiff's
Complaint that a written mortgage modification was delivered but Defendant alleges that the
execution and delivery of such modification was obtained done fraudulently.
5. Defendant, Sandy Hills, LLC, denies the allegations set forth in paragraphs 13-16
of the Plaintiff's Complaint.
6. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form
a belief as to paragraph 17 of the Plaintiff's Complaint.
7. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form
a belief as to paragraph 18 of the Plaintiff's Complaint as to all Defendants other than the
answering Defendant and denies that answering Defendant's interest is subordinate.
8. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form
a belief as to paragraphs 19-22 of the Plaintiff's Complaint.
AS AND FOR A FIRST AFFIRMATIVE DEFENSE
9. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-8 above.
10. Plaintiff's Complaint fails to state a cause of action upon which relief can be
granted.
AS AND FOR A SECOND AFFIRMATIVE DEFENSE
11. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-10 above.
12. By reason of the Plaintiff's conduct which constitutes unclean hands the Plaintiff
is estopped to assert any right of relief requested in the complaint.
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AS AND FOR A THIRD AFFIRMATIVE DEFENSE
13. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-12 above.
14. Because of the courses of conduct and actions of the Plaintiffs, the Defendant was
led to rely upon such conduct to its detriment, thereby barring every cause of action herein under
the Doctrine of Equitable Estoppel.
AS AND FOR A FOURTH AFFIRMATIVE DEFENSE
15. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-14 above.
16. The Plaintiffs conspired to commit fraud against the Defendant.
17. As a result of the fraud committed by the Plaintiffs, the Plaintiffs are barred from
every cause of action.
AS AND FOR A FIFTH AFFIRMATIVE DEFENSE
18. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-17 above.
19. The plaintiffs are barred from relief due to their inequitable and bad faith conduct.
AS AND FOR A FIRST COUNTERCLAIM AGAINST THE PLAINTIFF,
THE ESTATE OF ANTHONY T. CONFORTI
20. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1- 19 above.
21. The deceased, Anthony Conforti, was an attorney licensed to practice in the State
of New York from 1975 through the date ofhis death, which upon information and belief occurred
in 2022.
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22. The deceased provided legal representation to the Defendant, Sandy Hills, LLC,
from its inception of May 2003.
23. The deceased provided legal representation to the member of the Defendant, Sandy
Hills, LLC, Francis Weber, and his family, for approximately 35 years, up to and including at least
the calendar year 2021.
24. For that entire time of approximately 35 years the deceased, Anthony Conforti, was
the personal attorney for virtually all legal matters and in some instances a business partner with
the aforementioned Francis Weber.
25. In or about the calendar year 2014 the Defendant, Sandy Hills, LLC, filed a Chapter
11 Bankruptcy Petition in the United States Bankruptcy Court of the Eastern District of New York
under case number 8-12-74482.
26. On or about March 5, 2014, advised Francis Weber to resign as the Manager of the
Defendant and Anthony Conforti was appointed by the Defendant, Sandy Hills, LLC, as Special
Member and Manager to complete the sale of certain property owned by said Defendant and to
execute any and all documentation to complete that sale, which in fact did take place.
27. Upon information and belief, in February 2015 certain negotiations that were
carried out through the Bankruptcy matter resulted in a proposed agreement for an Amended Plan
of Reorganization under the aforementioned Petition in bankruptcy.
28. On or about February 26, 2015, the deceased, Anthony Conforti, advised Francis
Weber that in order to complete the proposed agreement for an Amended Plan of Reorganization
Francis Weber would need to resign as Manager and Anthony Conforti would need to be appointed
as the Manager of Sandy Hills, LLC, which in fact occurred on or about February 26, 2015.
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29. On March 31, 2015, the Second Amended Plan of Reorganization was so-ordered
by the Hon. Alan Trust and was executed by the deceased, Anthony Conforti, as the Manager of
the debtor, the Defendant herein Sandy Hills, LLC.
30. Under the terms and conditions of the Second Amended Plan of Reorganization
there was to be the issuance of a Mortgage and Mortgage Note for the principal amount of
$855,373.90 to secure certain creditors and the principal of the debtor, which the Defendant herein.
31. Under the terms and conditions of the Second Amended Plan of Reorganization
and the resulting Mortgage and Mortgage Note, it was the obligation of the debtor, Sandy Hills,
LLC, by its manager, the deceased, Anthony Conforti, to record said Mortgage with the Clerk of
the County of Suffolk.
32. The terms of said Mortgage required that the cost to record the mortgage would be
borne by the parties secured by the Mortgage, which parties were as follows:
i. Certilman, Balin, Adler and Hyman in the amount of $371,567.52, which
represented 43.349% of the total principal sum secured by the Mortgage.
ii. Commonwealth Holdings, Pension and Profit-Sharing Plan in the amount
of $275,000.00 representing 32.150% of the total principal sum secured by the mortgage.
iii. The firm of Egan and Golden in the amount of $2,236.38 representing
0.261% of the total principal sum secured by the Mortgage.
iv. Lucille Weber in the amount of $200,000.00 representing 23.382% of the
total principal sum secured by the Mortgage.
v. Owen Peterson and Co., LLC, in the amount of $6,570.00 representing
0.768% of the total principal sum secured by the mortgage.
33. The mortgage issued pursuant to the Plan of Reorganization was only to be
subordinate to a mortgage held by Edward J. Barone having a reduced principal balance at that
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time of $146,618.50; and to a security interest of Nelson and Pope Engineers and Land Surveyors,
PLLC in the amount of $114,496.73, which security interest was subordinate to the Edward J.
Barone Mortgage.
34. At all times after the execution of the Second Amended Plan of Reorganization and
subsequently of the Mortgage and Mortgage Note, the Defendant, Sandy Hills, LLC, was of the
belief that the deceased, Anthony Conforti, had recorded said mortgage as required pursuant to the
Second Amended Plan of Reorganization.
35. Upon information and belief, on or about October 13, 2016 the deceased, Anthony
Conforti, made arrangements for an individual known as Thomas Newman to loan to Sandy Hills,
LLC the sum of $500,000.00.
36. Upon information and belief, Thomas Newman actually funded the sum of
$699,000.00 to the Trust Account of the deceased, Anthony Conforti.
37. Upon information and belief, the Note and Mortgage with Thomas Newman stated
the loan was for $750,000.00.
38. Upon information and belief, the deceased, Anthony Conforti, never informed
Thomas Newman that there was supposed to be a mortgage recorded against the Defendant's real
property in the amount of $855,373.90, pursuant to the aforementioned Second Amended Plan of
Reorganization, even though the deceased, Anthony Conforti, was the individual responsible to
record said Mortgage and failed to do so.
39. Upon information and belief, the only mortgage that Thomas Newman was made
aware of was the mortgage to Edward J. Barone in the sum of $146,618.50, which indebtedness,
upon information and belief was paid in full, from a portion of the proceeds of the Thomas
Newman Mortgage.
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40. Upon information and belief, Thomas Newman believed that his mortgage was a
first mortgage against the property being foreclosed on herein after the payment to Edward J.
Barone in the sum of $146,618.50.
41. On or about April 5, 2019 Sandy Hills, LLC issued a mortgage to Advantage
Capital, LLC and Land Co. Mortgages Bankers, Inc. for a loan in the amount of $480,000.00 which
loan was recorded on August 20, 2019 under Liber 23053, Page 574.
42. Upon information and belief, the deceased, Anthony Conforti, negotiated a
Subordination Agreement from Thomas Newman for the sum of $50,000.00, which sum was paid
from the proceeds of the Advantage Capital, LLC loan so that the Advantage Capital, LLC loan
would be in a position superior to the Thomas Newman Mortgage.
43. Subsequent thereto, as alleged in the Plaintiff's Complaint, the Plaintiff acquired
the Advantage Capital, LLC and Land Co. Mortgage Bankers, Inc. Mortgage and Security
Agreement.
44. Had the deceased, Anthony Conforti, complied with the Order of the Court as a
manager of the Defendant, Sandy Hills, LLC, and also as legal counsel to Francis Weber, the
mortgage in the amount of $855,373.90 issued pursuant to the Second Amended Plan of
Reorganization would be in the first position of the subject property that is being foreclosed
hereunder.
45. Thereafter, Anthony Conforti, acting as legal counsel to the Defendant, advised
Francis Weber, the then Manager of the Defendant, to execute The Mortgage Modification
Agreement that reflected the Plaintiff's acquisition of said mortgage, which Weber did execute
based solely on the advice and trust that Francis had in Anthony Conforti, believing at all times
that the Advantage Capital Loan that had been acquired by the Plaintiffs was still subordinate to
the $855,373.90 mortgage issued pursuant to the Second Amended Plan of Reorganization.
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46. As a result of the failure of Anthony Conforti to record that Mortgage issued
pursuant to the Second Amended Plan of Reorganization as he was required to do in his fiduciary
capacity as Manager of the Defendant, Sandy Hills, LLC, the Plaintiffs are unjustly enriched by
having their mortgage in a first position that they are not entitled to.
47. Based on the foregoing the relief requested by the Plaintiffs herein must be denied.
AS AND FOR A SECOND COUNTERCLAIM AGAINST PLAINTIFF,
THE ESTATE OF ANTHONY T. CONFORTI
48. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-47 above.
49. Anthony Conforti was self-dealing for his own personal interest and was
intentionally deceitful by failing to disclose to the Defendant and to Francis Weber, its manager,
and intentionally failing to record the $855,373.90 mortgage issued pursuant to the Second
Amended Plan of Reorganization.
50. As a result of the violation of his fiduciary obligations herein to the plaintiff,
of his misconduct and wrongdoing, and his willful deceit for which The Estate of Anthony
Conforti is answerable and for which the Plaintiffs ended up with a mortgage in a superior position
that they were not entitled, The Estate of Anthony Conforti is liable to the Defendant for treble
damages as well as punitive damages because of his actions herein that were in violation of ImL
Law § 487.
AS AND FOR A THIRD COUNTERCLAIM AGAINST PLAINTIFF, THE
ESTATE OF ANTHONY T. CONFORTI
51. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-50 above.
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52. Based on the actions of Anthony Conforti, breaching his fiduciary obligations and
responsibilities as an attorney as aforesaid, the Defendant demands an order to require that the
$855,373.90 mortgage be recorded and placed in a superior position to the mortgage being
foreclosed herein.
AS AND FOR A FOURTH COUNTERCLAIM AGAINST PLAINTIFF, THE
ESTATE OF ANTHONY T. CONFORTI
53. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-52 above.
54. Upon information and belief, the deceased, Anthony Conforti, did not fund all the
proceeds from the Thomas Newman Mortgage proceeds.
55. In the event there are any proceeds that were not disbursed, the Defendants demand
that said proceeds belong to Defendant Sandy Hills, LLC. and must be turned over to the
Defendant, Sandy Hills, LLC forthwith.
AS AND FOR A FIFTH COUNTERCLAIM AGAINST PLAINTIFF,
THE ESTATE OF ANTHONY T. CONFORTI
56. Defendant repeats, reiterates and realleges each and every allegation set forth in
paragraphs 1-55 above.
57. In his capacity as the personal attorney to Sandy Hills, LLC, and Francis Weber,
Francis Weber trusted the deceased, Anthony Conforti, to always act in his best interest for all
purposes, when it came to legal matters and certain business matters, Francis Weber generally did
whatever Anthony Conforti advised them to do.
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58. Anthony Conforti's actions resulted in a conflict of interest that impaired Anthony
Conforti's ability to provide proper representation to the Defendant to the detriment of the
Defendant and its members.
59. Anthony Conforti's was self-dealing to the detriment of the Defendant and the
members of the Defendant causing irreparable damage to the Defendant and its members.
60. Anthony Conforti's actions violated the Code of Professional Responsibility and is
liable to the Defendant for Treble damages in accordance with of Jud. Law § 487 and for such As
other damages and relief as shall be determined by this court.
WHEREFORE, the Defendant Sandy Hills, LLC., demands judgment against the Plaintiffs
as follows:
A. For dismissal of each cause of action of the Plaintiff's complaint;
B. For damages on the First Counterclaim as shall be determined by this Court;
C. For damages on the Second Counterclaim with a finding that Anthony Conforti's
actions alleged herein were in violation of Jud. Law § 487 justifying an award for treble
damages as well as punitive damages as shall be determined by this court;
D. On the Third Counterclaim, for an order to place the $855,373.90 mortgage issued
pursuant to the Second Amended Plan of Reorganization in a superior position to the
Plaintiff's mortgage.
E. For damages on the Fourth Counterclaim for non-disbursed proceeds;
F. For damages on the Fifth Counterclaim for treble damages as well as punitive damages
as shall be determined by this court; and
G. For such other and further relief as this court shall deem to be just and proper.
Preview
FILED: SUFFOLK COUNTY CLERK 09/20/2023 03:04 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 09/20/2023 EXHIBIT G FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK ----------------------------------------------------------------X LOIS T. CONFORTI, Individually and as Personal Representative of The Estate of ANTHONY T. CONFORTI, deceased, Petitioner, VERIFIED ANSWER WITH COUNTERCLAIMS and -against- THIRD-PARTY COMPLAINT SANDY HILLS, LLC, WJ INVESTORS CORP., Index No.: 614442/2023 THE GROSS FAMILY HOLDINGS, LLC, THE WHEATLEY HARBOR, LLC, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE AND ONE" HUNDRED" "JOHN THROUGH "JOHN ONE They being tenants, occupants or parties having a Mortgage, judgment, lien, warrant or other encumbrance Affecting the premises, all of which are subordinate to Plaintiff's, Respondent. _________________________________________________________Ç PLEASE TAKE NOTICE, that the Defendant, SANDY HILLS, LLC, hereinafter referred to as "Defendant", by their attorneys, CARLINSKY, DUNN & PASQUARIELLO, PLLC, answering the Counterclaims of the Respondent alleges and states as follows: 1. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form a belief as to paragraphs 1-3 of the Plaintiff's Complaint. 2. Defendant, Sandy Hills, LLC, denies the allegations set forth in paragraph 4 of the Plaintiff's Complaint to the extent that their addresses are not correct. 3. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form a belief as to paragraphs 5, 6, 7, 10 and 11 of the Plaintiff's Complaint. 1 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 4. Defendant, Sandy Hills, LLC, acknowledges as to paragraph 12 of the Plaintiff's Complaint that a written mortgage modification was delivered but Defendant alleges that the execution and delivery of such modification was obtained done fraudulently. 5. Defendant, Sandy Hills, LLC, denies the allegations set forth in paragraphs 13-16 of the Plaintiff's Complaint. 6. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form a belief as to paragraph 17 of the Plaintiff's Complaint. 7. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form a belief as to paragraph 18 of the Plaintiff's Complaint as to all Defendants other than the answering Defendant and denies that answering Defendant's interest is subordinate. 8. Defendant, Sandy Hills, LLC, denies knowledge and information sufficient to form a belief as to paragraphs 19-22 of the Plaintiff's Complaint. AS AND FOR A FIRST AFFIRMATIVE DEFENSE 9. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-8 above. 10. Plaintiff's Complaint fails to state a cause of action upon which relief can be granted. AS AND FOR A SECOND AFFIRMATIVE DEFENSE 11. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-10 above. 12. By reason of the Plaintiff's conduct which constitutes unclean hands the Plaintiff is estopped to assert any right of relief requested in the complaint. 2 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 AS AND FOR A THIRD AFFIRMATIVE DEFENSE 13. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-12 above. 14. Because of the courses of conduct and actions of the Plaintiffs, the Defendant was led to rely upon such conduct to its detriment, thereby barring every cause of action herein under the Doctrine of Equitable Estoppel. AS AND FOR A FOURTH AFFIRMATIVE DEFENSE 15. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-14 above. 16. The Plaintiffs conspired to commit fraud against the Defendant. 17. As a result of the fraud committed by the Plaintiffs, the Plaintiffs are barred from every cause of action. AS AND FOR A FIFTH AFFIRMATIVE DEFENSE 18. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-17 above. 19. The plaintiffs are barred from relief due to their inequitable and bad faith conduct. AS AND FOR A FIRST COUNTERCLAIM AGAINST THE PLAINTIFF, THE ESTATE OF ANTHONY T. CONFORTI 20. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1- 19 above. 21. The deceased, Anthony Conforti, was an attorney licensed to practice in the State of New York from 1975 through the date ofhis death, which upon information and belief occurred in 2022. 3 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 22. The deceased provided legal representation to the Defendant, Sandy Hills, LLC, from its inception of May 2003. 23. The deceased provided legal representation to the member of the Defendant, Sandy Hills, LLC, Francis Weber, and his family, for approximately 35 years, up to and including at least the calendar year 2021. 24. For that entire time of approximately 35 years the deceased, Anthony Conforti, was the personal attorney for virtually all legal matters and in some instances a business partner with the aforementioned Francis Weber. 25. In or about the calendar year 2014 the Defendant, Sandy Hills, LLC, filed a Chapter 11 Bankruptcy Petition in the United States Bankruptcy Court of the Eastern District of New York under case number 8-12-74482. 26. On or about March 5, 2014, advised Francis Weber to resign as the Manager of the Defendant and Anthony Conforti was appointed by the Defendant, Sandy Hills, LLC, as Special Member and Manager to complete the sale of certain property owned by said Defendant and to execute any and all documentation to complete that sale, which in fact did take place. 27. Upon information and belief, in February 2015 certain negotiations that were carried out through the Bankruptcy matter resulted in a proposed agreement for an Amended Plan of Reorganization under the aforementioned Petition in bankruptcy. 28. On or about February 26, 2015, the deceased, Anthony Conforti, advised Francis Weber that in order to complete the proposed agreement for an Amended Plan of Reorganization Francis Weber would need to resign as Manager and Anthony Conforti would need to be appointed as the Manager of Sandy Hills, LLC, which in fact occurred on or about February 26, 2015. 4 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 29. On March 31, 2015, the Second Amended Plan of Reorganization was so-ordered by the Hon. Alan Trust and was executed by the deceased, Anthony Conforti, as the Manager of the debtor, the Defendant herein Sandy Hills, LLC. 30. Under the terms and conditions of the Second Amended Plan of Reorganization there was to be the issuance of a Mortgage and Mortgage Note for the principal amount of $855,373.90 to secure certain creditors and the principal of the debtor, which the Defendant herein. 31. Under the terms and conditions of the Second Amended Plan of Reorganization and the resulting Mortgage and Mortgage Note, it was the obligation of the debtor, Sandy Hills, LLC, by its manager, the deceased, Anthony Conforti, to record said Mortgage with the Clerk of the County of Suffolk. 32. The terms of said Mortgage required that the cost to record the mortgage would be borne by the parties secured by the Mortgage, which parties were as follows: i. Certilman, Balin, Adler and Hyman in the amount of $371,567.52, which represented 43.349% of the total principal sum secured by the Mortgage. ii. Commonwealth Holdings, Pension and Profit-Sharing Plan in the amount of $275,000.00 representing 32.150% of the total principal sum secured by the mortgage. iii. The firm of Egan and Golden in the amount of $2,236.38 representing 0.261% of the total principal sum secured by the Mortgage. iv. Lucille Weber in the amount of $200,000.00 representing 23.382% of the total principal sum secured by the Mortgage. v. Owen Peterson and Co., LLC, in the amount of $6,570.00 representing 0.768% of the total principal sum secured by the mortgage. 33. The mortgage issued pursuant to the Plan of Reorganization was only to be subordinate to a mortgage held by Edward J. Barone having a reduced principal balance at that 5 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 time of $146,618.50; and to a security interest of Nelson and Pope Engineers and Land Surveyors, PLLC in the amount of $114,496.73, which security interest was subordinate to the Edward J. Barone Mortgage. 34. At all times after the execution of the Second Amended Plan of Reorganization and subsequently of the Mortgage and Mortgage Note, the Defendant, Sandy Hills, LLC, was of the belief that the deceased, Anthony Conforti, had recorded said mortgage as required pursuant to the Second Amended Plan of Reorganization. 35. Upon information and belief, on or about October 13, 2016 the deceased, Anthony Conforti, made arrangements for an individual known as Thomas Newman to loan to Sandy Hills, LLC the sum of $500,000.00. 36. Upon information and belief, Thomas Newman actually funded the sum of $699,000.00 to the Trust Account of the deceased, Anthony Conforti. 37. Upon information and belief, the Note and Mortgage with Thomas Newman stated the loan was for $750,000.00. 38. Upon information and belief, the deceased, Anthony Conforti, never informed Thomas Newman that there was supposed to be a mortgage recorded against the Defendant's real property in the amount of $855,373.90, pursuant to the aforementioned Second Amended Plan of Reorganization, even though the deceased, Anthony Conforti, was the individual responsible to record said Mortgage and failed to do so. 39. Upon information and belief, the only mortgage that Thomas Newman was made aware of was the mortgage to Edward J. Barone in the sum of $146,618.50, which indebtedness, upon information and belief was paid in full, from a portion of the proceeds of the Thomas Newman Mortgage. 6 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 40. Upon information and belief, Thomas Newman believed that his mortgage was a first mortgage against the property being foreclosed on herein after the payment to Edward J. Barone in the sum of $146,618.50. 41. On or about April 5, 2019 Sandy Hills, LLC issued a mortgage to Advantage Capital, LLC and Land Co. Mortgages Bankers, Inc. for a loan in the amount of $480,000.00 which loan was recorded on August 20, 2019 under Liber 23053, Page 574. 42. Upon information and belief, the deceased, Anthony Conforti, negotiated a Subordination Agreement from Thomas Newman for the sum of $50,000.00, which sum was paid from the proceeds of the Advantage Capital, LLC loan so that the Advantage Capital, LLC loan would be in a position superior to the Thomas Newman Mortgage. 43. Subsequent thereto, as alleged in the Plaintiff's Complaint, the Plaintiff acquired the Advantage Capital, LLC and Land Co. Mortgage Bankers, Inc. Mortgage and Security Agreement. 44. Had the deceased, Anthony Conforti, complied with the Order of the Court as a manager of the Defendant, Sandy Hills, LLC, and also as legal counsel to Francis Weber, the mortgage in the amount of $855,373.90 issued pursuant to the Second Amended Plan of Reorganization would be in the first position of the subject property that is being foreclosed hereunder. 45. Thereafter, Anthony Conforti, acting as legal counsel to the Defendant, advised Francis Weber, the then Manager of the Defendant, to execute The Mortgage Modification Agreement that reflected the Plaintiff's acquisition of said mortgage, which Weber did execute based solely on the advice and trust that Francis had in Anthony Conforti, believing at all times that the Advantage Capital Loan that had been acquired by the Plaintiffs was still subordinate to the $855,373.90 mortgage issued pursuant to the Second Amended Plan of Reorganization. 7 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 46. As a result of the failure of Anthony Conforti to record that Mortgage issued pursuant to the Second Amended Plan of Reorganization as he was required to do in his fiduciary capacity as Manager of the Defendant, Sandy Hills, LLC, the Plaintiffs are unjustly enriched by having their mortgage in a first position that they are not entitled to. 47. Based on the foregoing the relief requested by the Plaintiffs herein must be denied. AS AND FOR A SECOND COUNTERCLAIM AGAINST PLAINTIFF, THE ESTATE OF ANTHONY T. CONFORTI 48. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-47 above. 49. Anthony Conforti was self-dealing for his own personal interest and was intentionally deceitful by failing to disclose to the Defendant and to Francis Weber, its manager, and intentionally failing to record the $855,373.90 mortgage issued pursuant to the Second Amended Plan of Reorganization. 50. As a result of the violation of his fiduciary obligations herein to the plaintiff, of his misconduct and wrongdoing, and his willful deceit for which The Estate of Anthony Conforti is answerable and for which the Plaintiffs ended up with a mortgage in a superior position that they were not entitled, The Estate of Anthony Conforti is liable to the Defendant for treble damages as well as punitive damages because of his actions herein that were in violation of ImL Law § 487. AS AND FOR A THIRD COUNTERCLAIM AGAINST PLAINTIFF, THE ESTATE OF ANTHONY T. CONFORTI 51. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-50 above. 8 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 52. Based on the actions of Anthony Conforti, breaching his fiduciary obligations and responsibilities as an attorney as aforesaid, the Defendant demands an order to require that the $855,373.90 mortgage be recorded and placed in a superior position to the mortgage being foreclosed herein. AS AND FOR A FOURTH COUNTERCLAIM AGAINST PLAINTIFF, THE ESTATE OF ANTHONY T. CONFORTI 53. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-52 above. 54. Upon information and belief, the deceased, Anthony Conforti, did not fund all the proceeds from the Thomas Newman Mortgage proceeds. 55. In the event there are any proceeds that were not disbursed, the Defendants demand that said proceeds belong to Defendant Sandy Hills, LLC. and must be turned over to the Defendant, Sandy Hills, LLC forthwith. AS AND FOR A FIFTH COUNTERCLAIM AGAINST PLAINTIFF, THE ESTATE OF ANTHONY T. CONFORTI 56. Defendant repeats, reiterates and realleges each and every allegation set forth in paragraphs 1-55 above. 57. In his capacity as the personal attorney to Sandy Hills, LLC, and Francis Weber, Francis Weber trusted the deceased, Anthony Conforti, to always act in his best interest for all purposes, when it came to legal matters and certain business matters, Francis Weber generally did whatever Anthony Conforti advised them to do. 9 of 12 FILED: SUFFOLK COUNTY CLERK 09/20/2023 08/16/2023 03:04 08:55 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 24 11 RECEIVED NYSCEF: 09/20/2023 08/16/2023 58. Anthony Conforti's actions resulted in a conflict of interest that impaired Anthony Conforti's ability to provide proper representation to the Defendant to the detriment of the Defendant and its members. 59. Anthony Conforti's was self-dealing to the detriment of the Defendant and the members of the Defendant causing irreparable damage to the Defendant and its members. 60. Anthony Conforti's actions violated the Code of Professional Responsibility and is liable to the Defendant for Treble damages in accordance with of Jud. Law § 487 and for such As other damages and relief as shall be determined by this court. WHEREFORE, the Defendant Sandy Hills, LLC., demands judgment against the Plaintiffs as follows: A. For dismissal of each cause of action of the Plaintiff's complaint; B. For damages on the First Counterclaim as shall be determined by this Court; C. For damages on the Second Counterclaim with a finding that Anthony Conforti's actions alleged herein were in violation of Jud. Law § 487 justifying an award for treble damages as well as punitive damages as shall be determined by this court; D. On the Third Counterclaim, for an order to place the $855,373.90 mortgage issued pursuant to the Second Amended Plan of Reorganization in a superior position to the Plaintiff's mortgage. E. For damages on the Fourth Counterclaim for non-disbursed proceeds; F. For damages on the Fifth Counterclaim for treble damages as well as punitive damages as shall be determined by this court; and G. For such other and further relief as this court shall deem to be just and proper.