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FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023
NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF SUFFOLK
-----------------------------------------------------------------X Hon. James Hudson
LOIS T. CONFORTI, Individually and as Personal
Representative of The Estate of Index No.: 614442/2023
ANTHONY T. CONFORTI, deceased,
Petitioner, AFFIRMATION IN
OPPOSITION TO MOTION
-against- FOR SUMMARY JUDGMENT
SANDY HILLS, LLC, WJ INVESTORS CORP.,
THE GROSS FAMILY HOLDINGS, LLC,
THE WHEATLEY HARBOR, LLC, NEW YORK
STATE DEPARTMENT OF TAXATION AND
FINANCE
AND
“JOHN ONE” THROUGH “JOHN ONE HUNDRED”
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.
-----------------------------------------------------------------X
Mitchell Carlinsky, an attorney at law duly admitted to practice law in the State of New
York, in opposition to the Plaintiff’s motion for Summary Judgment hereby affirms the
following under the penalties of perjury:
1. I am a partner with the firm of Carlinsky, Dunn & Pasquariello, PLLC, the attorneys
for Sandy Hills, LLC., (Sandy Hills), a named Defendant herein. I am familiar with all of the facts
and circumstances set forth herein based on my conversations with Francis X. Weber, who is the
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managing member of the Defendant Sandy Hills, my review of all of the submissions in this matter
and from my own personal handling of this matter.
2. The above-entitled action was commenced by the Plaintiff against the above-named
Defendants by the filing of a summons and complaint, (NYCEF #1) to foreclose on a mortgage
(NYCEF #2) recorded against the subject real property owned by the Defendant Sandy Hills, in
which the Plaintiffs allege to assignees of said mortgage (NYCEF #3). Service was made upon
the Sandy Hills on or about June 22, 2023. (Affidavit of Service NYCEF #6).
3. On or about the August 16, 2023 the Defendant Sandy Hills, LLC. duly appeared in the
above-entitled action by the service of an answer with counterclaims, (NYCEF #11) upon the
Plaintiff’s attorney. A reply to the counterclaims was filed by the Plaintiff on August 24, 2023
(NYCEF#12). The Plaintiff then filed the subject motion for summary judgment on or about
September 20, 2023. ( NYCEF #14 ).
4. Plaintiff’s counsel, Teresa A. White, submits an affirmation in support of the Plaintiff’s
motion. In doing so, counsel takes us through each of the responses, affirmative defenses and
counterclaims in the Sandy Hills answer to this action. She also lists certain documentation in
support of the motion from Exhibits “A” through “M”.
5. In opposition to the Plaintiff’s motion, the Defendant also relies upon the Affidavit in
Opposition of Francis X. Weber (Weber), who is the member and managing member of the
Defendant, Sandy Hills.
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6. Further, upon information and belief, the Plaintiff lacks proper authority under Article 16
of the Surrogate’s Court Procedure Act (“SCPA”) to commence this proceeding as the Plaintiff,
as a fiduciary for a decedent, is operating under a foreign decree (NYSCEF Doc. # 13 and 26) and
never sought ancillary letters in New York. This requires a denial of the motion and a dismissal
of the Plaintiff’s case.
7. Plaintiff also failed to submit a statement of material undisputed facts as required under the
Uniform Rules of the Commercial Division, 22 NYCRR 202.70, Rule 19-a, also requiring a denial
of the motion.
8. The Plaintiff’s motion is premature. This is not a typical mortgage forecourse action and
it should not be treated as such. As stated in the Weber Affidavit, the Deceased, Anthony Conforti,
(Conforti) was an attorney at law who represented the Defendant from its formation in 2003 until
he passed away. For more than 35 years he represented Weber, Weber’s family and Weber’s
business ventures from time to time and he was a close friend to Weber. Weber discusses the trust
he had in Conforti when it came to legal matters and how over the years, he essentially did
whatever Conforti advised him to.
9. Weber’s affidavit reveals Conforti’s disturbing patterns of professional malpractice,
fraudulent inducement, breach of fiduciary obligations, unjust enrichment, fraudulent concealment
and professional misconduct.
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10. It is also important for the Court to take note of the verified answer with affirmative
defenses, counterclaims and crossclaims with Exhibits annexed thereto that has been filed by
Thomas Newman, (Newman) as the successor in interest to the Defendant Wheatley Harbor, LLC
and The Gross Family Holdings, LLC. (NYCEF #36 and 37); and also, to the Notice of Cross-
Motion filed by Newman (NYCEF #40) with the supporting affirmation of Adam Love, Esq.
(NYCEF #41) and the supporting Affidavit of Merit of Thomas Newman (NYCEF #43).
11. The Weber Affidavit, the Newman verified answer and the Newman Affidavit of Merit all
lay out Conforti’s disturbing pattern of professional malpractice, fraudulent inducement, breach of
fiduciary obligations, unjust enrichment, fraudulent concealment and professional misconduct.
12. Plaintiff’s counsel in her Affirmation attaches Exhibit “M”, which is the Final Decree from
the Chapter 11 Bankruptcy Petition filed by the Petitioner 2012 in the United States Bankruptcy
Court of the Eastern District of New York under case number 12-74482. That’s an
acknowledgment that the Plaintiff was aware that there was a bankruptcy filed by Sandy Hills in
2012.
13. Weber’s affidavit describes the terms and conditions of the Second Amended Plan of
Reorganization, (Exhibit “B” to the Weber Affidavit), that resulted in the issuance of a Mortgage,
Mortgage Note and Mortgage Participation Agreement (Creditor’s Mortgage) to five impaired
creditors for the principal amount of $855,373.90. (Exhibit “C” to the Weber Affidavit). The Plan
provides that it is signed by Conforti as the Manager of Sandy Hills.
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14. These creditors of Sandy Hills would participate based on the amounts that were stated to
be owed in the Creditor’s Mortgage The Creditor’s Mortgage provides that Conforti executed the
documents as the Manager of Sandy Hills.
15. Weber states that Conforti assured him that he would take care of recording the Creditor’s
Mortgage with the Clerk of the County of Suffolk. Conforti signed the Creditor’s Mortgage as the
Manager of Sandy Hills, and he would also be the one to sign the documents necessary to record
the Creditor’s Mortgage on behalf of Sandy Hills. He was the person who negotiated the terms of
the settlement with the creditors. The main creditor that had to be negotiated was Certilman, Balin,
Adler and Hyman.
16. The circumstances of why Conforti signed as the Manager is set forth in Weber’s Affidavit.
The resolution appointing Conforti as Manager and Weber withdrawing as manager is annexed to
the Weber affidavit as Exhibit “E”.
17. Conforti never recorded the Creditor’s Mortgage and never told anyone that it wasn’t
recorded. It’s still not recorded.
18. The creditors that participated in the Creditor’s Mortgage and note 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 Creditor’s Mortgage.
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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 Creditor’s
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 Creditor’s Mortgage.
iv. Lucille Weber in the amount of $200,000.00 representing 23.82% of the
total principal sum secured by the Creditor’s 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 Creditor’s Mortgage.
19. Of those creditors secured by the mortgage, Lucille Weber is the wife of Francis X. Weber
and she was also represented by Conforti over that 35-year period. Weber is the Trustee of
Commonwealth Holdings, Pension and Profit-Sharing Plan. Commonwealth is creditor and also
an owner of Sandy Hills. Conforti also represented Commonwealth.
20. The Creditor’s Mortgage was only to be subordinate to a mortgage held by Edward J.
Barone having a reduced principal balance at that 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.
21. Weber sets forth that at all times he believed that Conforti recorded the Creditor’s
Mortgage and that he only became aware that the Creditor’s Mortgage was not recorded when the
Plaintiff filed this foreclosure action in July of 2023.
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22. As set forth in Weber’s affidavit, Conforti counseled Weber and Sandy Hills through the
Chapter 11 process, which continued into June of 2015. Conforti recommended Stephen Gelfand,
the bankruptcy attorney that was used by Sandy Hills. Conforti lobbied and negotiated the
settlements with the creditors.
23. Weber then describes how about a year after the confirmation of the Plan, in October of
2016, Conforti advised Weber that he had made arrangements for an individual known as Thomas
Newman to loan to Sandy Hills, LLC the sum of $500,000.00 that would be secured by a new
mortgage (Newman Mortgage) that he always assumed would be subordinate to the Creditor’s
Mortgage. The amount on the Mortgage and Note ended up at $750,000.00, but that sum was not
immediately funded and according to Weber, he still believes that $50,000.00 was not funded.
Weber also recently learned from the Newman Answer and Cross-Motion, that Conforti never told
Newman about the Creditor’s Mortgage and because it was never recorded, it did not come up in
a Title report. Conforti represented Newman and Sandy Hill for that mortgage transaction.
24. Had either Newman or Sandy Hills had their own attorney other than Conforti, it would
have been discovered in the title report that the Creditor’s Mortgage was not recorded. Another
attorney might have reviewed the Plan and saw that a Creditor’s Mortgage was supposed to have
been issued. As the sole attorney representing both parties, Conforti was able to hide the fact that
it was not recorded.
25. Then there are the payments from the Newman mortgage proceeds. After numerous
requests for an accounting of the mortgage proceeds, Conforti eventually supplied Weber with a
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26. handwritten one page spread sheet showing the mortgage proceeds going to what was
presumed to be his Escrow or Trust Account and then the disbursements that came out from that.
(Exhibit “G” to the Weber Affidavit).
27. The Newman Answer however, provided additional information as to the mortgage
proceeds and distributions on a three page spread sheet. (Exhibit “H” to the Weber Affidavit). The
third page of that Exhibit matches Exhibit “I”, but the first two pages provide additional
information and some inconsistencies as to the disbursements and who they were made on behalf
of because some of those payments have nothing to do with Sandy Hills.
28. The deposits of $200,000.00 on October 1, 2016 and of $500,000.00 on October 13, 2023
only total $700,000.00. Sandy Hills signed a mortgage for $750,000.00. There is a disbursement
on that first page shows a loan made to “DiNapoli” for the sum of $150,631.44. DiNapoli, was a
friend and business partner of Conforti. That loan had nothing to do with Sandy Hills and was
made without the knowledge of anyone from Sandy Hills or Newman for that matter.
29. There is a disbursement on that first page shows a loan made to “Brian A. Ammar” for the
sum of $30,000.00. Ammar, was a friend and business partner of Conforti. That loan had nothing
to do with Sandy Hills and was made without the knowledge of anyone from Sandy Hills or
Newman for that matter.
30. Then there were some payments made on behalf of Sandy Hills but they were not proper.
Certilman Balin was paid $200,000.00 on February 15, 2017. Conforti told Weber that was a
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settlement amount for which he obtained a release from Certilman. Not until the Newman Answer
was filed did Weber learn that Certilman did not issue a release or a satisfaction. They assigned
their claim to Newman. If we are to take that on its face, Conforti used mortgage proceeds that
belonged to Sandy Hills to settle Certilman’s claim of $371,567.52 for $200,000 from which there
should have been a satisfaction of mortgage or release delivered from Certilman to Sandy Hills as
to their claim. Instead, they assigned their claim to Newman. That would mean that Conforti
negotiated a settlement of the Certilman claim with mortgage proceeds that belonged to Sandy
Hills, but he had the remainder of the claim assigned to Newman.
31. If one were to surmise why it was done that way, it’s because Newman didn't know about
the mortgage. If a partial mortgage satisfaction was issued, that it’s logical to conclude that would
have been a red flag to Newman to indicate the existence of another mortgage. We will need
further discovery to find that out.
32. When Conforti sought to pay any creditor to that Creditor’s Mortgage From the Newman
mortgage proceeds, it was supposed to have been done pursuant to the terms of the Mortgage
Participation Agreement to be proportionate based on the percentage interest of a creditor to the
mortgage. Conforti on his own made a payment contrary to those provisions to the detriment of
Sandy Hills, Lucille Weber and Commonwealth. Any distribution or payment to the creditors
participating in the Creditor’s Mortgage were to have been paid based on their percentage interest
in that mortgage as follows:
I. Certilman: $371,567.52; 43.349% of the Mortgage.
II. Commonwealth: $275,000.00; 32.150% of the mortgage.
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III. Egan and Golden: $2,236.38; 0.261% of the Mortgage.
IV. Lucille Weber: $200,000.00; 23.82% of the Mortgage.
V. Owen Peterson and Co., LLC: $6,570.00; 0.768% of the mortgage.
Based on that premise, if $200,000.00 was distributed then:
I. Certilman should have received $86,698.00.
II. Commonwealth should have received $64,300.
III. Egan and Golden should have received $522.00.
IV. Lucille Weber should have received $47,640.00
V. Owen and Peterson should have received $1,536.00
33. This action by Conforti impacted Sandy Hills. Sandy Hills was not required to rush to pay
off Certilman. Had proportionate funds gone to Commonwealth and Lucille Weber, those are funds
that could have been put back into Sandy Hills. They could have avoided taking out the Advantage
Mortgage being foreclosed herein.
34. Conforti chose on his own to take a portion of the mortgage proceeds to payoff his close
friend Edward Barone who had the first mortgage. That was not required that it be paid off when
he paid it off. That was $146,618.50. Upon information and belief Conforti did that to the benefit
Barone and not to the benefit of Sandy Hills. He loaned his friend DiNapoli $150,631.44 from
Newman mortgage proceeds.
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35. We know that Conforti also represented Baron as a creditor in the Bankruptcy. See the
19th page of The Order Confirming Debtor’s Second Amended Play annexed to Weber’s affidavit
as Exhibit “D”, where the bankruptcy court is made aware of the conflict but Conforti at that time
states there was no longer a conflict. That apparently was not accurate.
36. Plaintiff’s counsel makes mention of the Mortgage Modification Agreement dated June 1,
2021 referencing the wavier of defenses and counterclaims. Based on the professional malpractice,
fraudulent inducement, breach of fiduciary obligations, unjust enrichment and fraudulent
concealment, the Plaintiff cannot be entitled to rely on the provisions of that Mortgage
Modification Agreement. The fact that said document was obtained by Conforti misleading Weber
as to the purpose of that document and not explaining what it was, Conforti committed professional
malpractice and committed a fraud. Based on that alone the mortgage being foreclosed on should
be voided. At the very least it cannot be senior to the Creditor’s Mortgage that Conforti signed.
37. As stated in Weber’s Affidavit, when Conforti presented the Modification Agreement to
him for signature, he still believed that the Creditor’s Mortgage was at that time in the first position,
still not being made aware that it was never recorded. Further, as Weber points out, for what
reason would he sign that modification agreement to give up any rights. He believed it was an
acknowledgment of the assignment of the mortgage.
38. In Archer Capital Fund, L.P. v. GEL, LLC (95 AD3d 800 [2d Dept 2012] ), the Appellate
Division, Second Department, held that in a mortgage foreclosure action, where, in the mortgage
and loan documents, the mortgagor had waived its right to assert defenses or counterclaims in
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response to any action commenced by the mortgagee to enforce the mortgagor's obligations
thereunder and to recover the debt, the mortgagor's counterclaim alleging fraud would survive such
a waiver. [A] written waiver in any form cannot operate to shield a party from [its] own fraud' (
Pike v. New York Life Ins. Co., 72 AD3d 1043, 1051 [2d Dept 2010] , quoting Sterling Natl. Bank
& Trust Co. of N.Y. v. Giannetti, 53 A.D.2d 533, 533 [1st Dept 1976] ; see also European Am.
Bank v. Mr. Wemmick, Ltd., 160 A.D.2d 905, 907 [2d Dept 1990] ). To enforce a waiver provision
to bar a defendant from interposing a counterclaim against a plaintiff based upon fraud would
allow the plaintiff to shield itself from its own tortious conduct ( see European Am. Bank, 160
A.D.2d at 906 907; Bayside Fuel Oil Depot Corp. v. Savino Oil & Heating Co., 133 A.D.2d 658,
659 [2d Dept 1987] ; Federal Deposit Ins. Corp. v. Marino Corp., 74 A.D.2d 620, 620 621 [2d
Dept 1980] ; Sterling Natl. Bank & Trust Co. of NY, 53 A.D.2d at 533).
39. Plaintiff raises the statute of limitations as a defense. In Greene v Greene, 56 NY2d 86
[1982], the court held that the plaintiff's right of action did not accrue until she became aware of
the alleged breach of the fiduciary relationship. The court found (p. 58, 437 N.Y.S.2d 339) that in
“many respects the situation parallels that which gave rise to the doctrine of ‘continuous treatment’
in medical and legal malpractice cases. The Court in Greene, citing Whitehead v Kennedy, 69
NY 462 [1877] stated that an attorney who seeks to avail himself of a contract made with his client,
is bound to establish affirmatively that it was made by the client with full knowledge of all the
material circumstances known to the attorney and was in every respect free from fraud on his part,
or misconception on the part of the client, and that a reasonable use was made by the attorney of
the confidence reposed in him”. Under this rule it is not necessary for the client to show that the
agreement was obtained by fraud or undue influence on the part of the attorney (Matter of Howell,
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215 N.Y. 466, 109 N.E. 572) although, of course, that would make the agreement unenforceable
if it were proven. Even in the absence of such misconduct the agreement may be invalid if it
appears that the attorney “got the better of the bargain”, unless he can show that the client was
fully aware of the consequences and that there was no exploitation of the client's confidence in the
attorney Howard v Murray, 43 NY2d 417 [1977].
40. An Attorney-client relationship imposes on an attorney a duty to deal fairly, honestly, and
with undivided loyalty, including maintaining confidentiality, avoiding conflicts of interest,
operating competently, safeguarding client property, and honoring client’s interests over lawyer's.
To recover on breach of fiduciary duty claim against an attorney the client is required to prove
both breach of duty owed to it and damages sustained as result. The attorney-client relationship
“imposes on the attorney the duty to deal fairly, honestly and with undivided loyalty including
maintaining confidentiality, avoiding conflicts of interest, operating competently, safeguarding
client property and honoring the client’s interests over the lawyer's” ( Ulico Cas. Co. v. Wilson,
Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d at 9, 865 N.Y.S.2d 14.
THERE ARE TRIABLE ISSUES OF FACT AND QUESTIONS OF
PROFESSIONAL MALPRACTICE, FRAUDULENT INDUCEMENT, BREACH OF
FIDUCIARY OBLIGATIONS, UNJUST ENRICHMENT AND FRAUDULENT
CONCEALMENT
41. Based on the foregoing and the affidavit of Francis X. Weber with supporting
documentation annexed thereto, and the Affidavit or Merit Thomas Newman, with exhibits
annexed thereto, it is requested that the Court deny the Plaintiff’s motion for summary judgment
and that the subject mortgage be rescinded.
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42. “To obtain summary judgment it is necessary that the movant establish his cause of action
or defense ‘sufficiently to warrant the court as a matter of law in directing judgment’ in his favor
(CPLR 3212, subd. (b)), and he must do so by tender of evidentiary proof in admissible form. In
this instance the Plaintiff has chosen to ignore the actions of the deceased Anthony Conforti.
43. Because of the drastic nature of granting summary judgment, the evidence reviewed by the
court must be seen in the light most favorable to the non-moving party (Toure v Avis Rent-A-Car
Systems, Inc., 98 N.Y.2d 345, 746 N.Y.S.2d 865, 774 N.E.2d 1197 [2002]; Kogan v Bizekis, 180
A.D.3d 659, 115 N.Y.S.3d 690 [2d Dep't. 2020]).
44. To defeat a motion for summary judgment the opposing party must show facts sufficient
to require a trial of any issue of fact (CPLR 3212, subd. (b)). Normally if the opponent is to succeed
in defeating a summary judgment motion, he too, must make his showing by producing
evidentiary proof in admissible form. The rule with respect to defeating
a motion for summary judgment, however, is more flexible, for the opposing party, as contrasted
with the movant. Zuckerman v City of New York, 49 NY2d 557 [1980].
45. The Defendant by the affidavit of Weber with supporting documentation has provided
significant proof as to the professional malpractice, fraudulent inducement, breach of fiduciary
obligations, unjust enrichment, fraudulent concealment and professional misconduct committed
by Conforti that at the very least justifies the denial of the Plaintiff’s motion for summary judgment
and for other relief to be considered in the form of a rescission of the subject mortgage. The
Plaintiff has failed to meet its required burden to succeed.
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The Plaintiff's claim that Sandy Hills is not the proper party to raise the affirmative
defenses and counterclaims set forth in the Sandy Hills Answer. That argument would fail on at
least the issue of the Modification Agreement that Conforti had Weber sign, misrepresenting what
it stated and Conforti being the sole beneficiary of that document.
WHEREFORE, it is respectfully requested that the Court find as follows:
A. That the motion of the Plaintiff be denied in its entirety;
B. That the Mortgage of the Plaintiff be deemed rescinded or void;
C. That if not rescinded or voided that the Mortgage of the Plaintiff be deemed
subordinate to the Creditor's Mortgage;
D. That the Plaintiff provide an accounting of the proceeds of the mortgage being
foreclosed on and the Newman Mortgage;
E. That the Court evaluate the actions of Conforti to consider damages based on his
actions; and
E. For such other and further relief as the court deems to be just and proper.
Dated: December 11, 2023
Melville, New York
CARLINSKY, DUNN & PA QUARIELLO, PLLC.
By: MITCHELL CARLINS Y, ESQ.
Attorney for Respondent Petitioner
532 Broadhollow Road
Suite 129
Melville, NY. 11747
mearlinsky@cdplawyers.com
516-622-0099
Cell: 516-456-9292
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TO: PINKS, LIPSHIE & WHITE, ESQS.
Att: Teresa A. White
140 Fll Court Suite 303
Hauppauge, NY 11788
631-234-4400
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CERTIFICATION OF WORD COUNT
I hereby certify pursuant to 22 NYCRR 202.8-b, that the total number of words in the foregoing
document, exclusive of the caption and signature block, is 3,699 according to the word counting
function of Microsoft Word, which was utilized to prepare the document and the document is in
compliance with the word count limit.
Dated: December 11, 2023
Mitchell J. Carlinsky, E q.
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FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK -----------------------------------------------------------------X Hon. James Hudson LOIS T. CONFORTI, Individually and as Personal Representative of The Estate of Index No.: 614442/2023 ANTHONY T. CONFORTI, deceased, Petitioner, AFFIRMATION IN OPPOSITION TO MOTION -against- FOR SUMMARY JUDGMENT SANDY HILLS, LLC, WJ INVESTORS CORP., THE GROSS FAMILY HOLDINGS, LLC, THE WHEATLEY HARBOR, LLC, NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE AND “JOHN ONE” THROUGH “JOHN ONE HUNDRED” 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. -----------------------------------------------------------------X Mitchell Carlinsky, an attorney at law duly admitted to practice law in the State of New York, in opposition to the Plaintiff’s motion for Summary Judgment hereby affirms the following under the penalties of perjury: 1. I am a partner with the firm of Carlinsky, Dunn & Pasquariello, PLLC, the attorneys for Sandy Hills, LLC., (Sandy Hills), a named Defendant herein. I am familiar with all of the facts and circumstances set forth herein based on my conversations with Francis X. Weber, who is the 1 1 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 managing member of the Defendant Sandy Hills, my review of all of the submissions in this matter and from my own personal handling of this matter. 2. The above-entitled action was commenced by the Plaintiff against the above-named Defendants by the filing of a summons and complaint, (NYCEF #1) to foreclose on a mortgage (NYCEF #2) recorded against the subject real property owned by the Defendant Sandy Hills, in which the Plaintiffs allege to assignees of said mortgage (NYCEF #3). Service was made upon the Sandy Hills on or about June 22, 2023. (Affidavit of Service NYCEF #6). 3. On or about the August 16, 2023 the Defendant Sandy Hills, LLC. duly appeared in the above-entitled action by the service of an answer with counterclaims, (NYCEF #11) upon the Plaintiff’s attorney. A reply to the counterclaims was filed by the Plaintiff on August 24, 2023 (NYCEF#12). The Plaintiff then filed the subject motion for summary judgment on or about September 20, 2023. ( NYCEF #14 ). 4. Plaintiff’s counsel, Teresa A. White, submits an affirmation in support of the Plaintiff’s motion. In doing so, counsel takes us through each of the responses, affirmative defenses and counterclaims in the Sandy Hills answer to this action. She also lists certain documentation in support of the motion from Exhibits “A” through “M”. 5. In opposition to the Plaintiff’s motion, the Defendant also relies upon the Affidavit in Opposition of Francis X. Weber (Weber), who is the member and managing member of the Defendant, Sandy Hills. 2 2 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 6. Further, upon information and belief, the Plaintiff lacks proper authority under Article 16 of the Surrogate’s Court Procedure Act (“SCPA”) to commence this proceeding as the Plaintiff, as a fiduciary for a decedent, is operating under a foreign decree (NYSCEF Doc. # 13 and 26) and never sought ancillary letters in New York. This requires a denial of the motion and a dismissal of the Plaintiff’s case. 7. Plaintiff also failed to submit a statement of material undisputed facts as required under the Uniform Rules of the Commercial Division, 22 NYCRR 202.70, Rule 19-a, also requiring a denial of the motion. 8. The Plaintiff’s motion is premature. This is not a typical mortgage forecourse action and it should not be treated as such. As stated in the Weber Affidavit, the Deceased, Anthony Conforti, (Conforti) was an attorney at law who represented the Defendant from its formation in 2003 until he passed away. For more than 35 years he represented Weber, Weber’s family and Weber’s business ventures from time to time and he was a close friend to Weber. Weber discusses the trust he had in Conforti when it came to legal matters and how over the years, he essentially did whatever Conforti advised him to. 9. Weber’s affidavit reveals Conforti’s disturbing patterns of professional malpractice, fraudulent inducement, breach of fiduciary obligations, unjust enrichment, fraudulent concealment and professional misconduct. 3 3 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 10. It is also important for the Court to take note of the verified answer with affirmative defenses, counterclaims and crossclaims with Exhibits annexed thereto that has been filed by Thomas Newman, (Newman) as the successor in interest to the Defendant Wheatley Harbor, LLC and The Gross Family Holdings, LLC. (NYCEF #36 and 37); and also, to the Notice of Cross- Motion filed by Newman (NYCEF #40) with the supporting affirmation of Adam Love, Esq. (NYCEF #41) and the supporting Affidavit of Merit of Thomas Newman (NYCEF #43). 11. The Weber Affidavit, the Newman verified answer and the Newman Affidavit of Merit all lay out Conforti’s disturbing pattern of professional malpractice, fraudulent inducement, breach of fiduciary obligations, unjust enrichment, fraudulent concealment and professional misconduct. 12. Plaintiff’s counsel in her Affirmation attaches Exhibit “M”, which is the Final Decree from the Chapter 11 Bankruptcy Petition filed by the Petitioner 2012 in the United States Bankruptcy Court of the Eastern District of New York under case number 12-74482. That’s an acknowledgment that the Plaintiff was aware that there was a bankruptcy filed by Sandy Hills in 2012. 13. Weber’s affidavit describes the terms and conditions of the Second Amended Plan of Reorganization, (Exhibit “B” to the Weber Affidavit), that resulted in the issuance of a Mortgage, Mortgage Note and Mortgage Participation Agreement (Creditor’s Mortgage) to five impaired creditors for the principal amount of $855,373.90. (Exhibit “C” to the Weber Affidavit). The Plan provides that it is signed by Conforti as the Manager of Sandy Hills. 4 4 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 14. These creditors of Sandy Hills would participate based on the amounts that were stated to be owed in the Creditor’s Mortgage The Creditor’s Mortgage provides that Conforti executed the documents as the Manager of Sandy Hills. 15. Weber states that Conforti assured him that he would take care of recording the Creditor’s Mortgage with the Clerk of the County of Suffolk. Conforti signed the Creditor’s Mortgage as the Manager of Sandy Hills, and he would also be the one to sign the documents necessary to record the Creditor’s Mortgage on behalf of Sandy Hills. He was the person who negotiated the terms of the settlement with the creditors. The main creditor that had to be negotiated was Certilman, Balin, Adler and Hyman. 16. The circumstances of why Conforti signed as the Manager is set forth in Weber’s Affidavit. The resolution appointing Conforti as Manager and Weber withdrawing as manager is annexed to the Weber affidavit as Exhibit “E”. 17. Conforti never recorded the Creditor’s Mortgage and never told anyone that it wasn’t recorded. It’s still not recorded. 18. The creditors that participated in the Creditor’s Mortgage and note 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 Creditor’s Mortgage. 5 5 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 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 Creditor’s 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 Creditor’s Mortgage. iv. Lucille Weber in the amount of $200,000.00 representing 23.82% of the total principal sum secured by the Creditor’s 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 Creditor’s Mortgage. 19. Of those creditors secured by the mortgage, Lucille Weber is the wife of Francis X. Weber and she was also represented by Conforti over that 35-year period. Weber is the Trustee of Commonwealth Holdings, Pension and Profit-Sharing Plan. Commonwealth is creditor and also an owner of Sandy Hills. Conforti also represented Commonwealth. 20. The Creditor’s Mortgage was only to be subordinate to a mortgage held by Edward J. Barone having a reduced principal balance at that 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. 21. Weber sets forth that at all times he believed that Conforti recorded the Creditor’s Mortgage and that he only became aware that the Creditor’s Mortgage was not recorded when the Plaintiff filed this foreclosure action in July of 2023. 6 6 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 22. As set forth in Weber’s affidavit, Conforti counseled Weber and Sandy Hills through the Chapter 11 process, which continued into June of 2015. Conforti recommended Stephen Gelfand, the bankruptcy attorney that was used by Sandy Hills. Conforti lobbied and negotiated the settlements with the creditors. 23. Weber then describes how about a year after the confirmation of the Plan, in October of 2016, Conforti advised Weber that he had made arrangements for an individual known as Thomas Newman to loan to Sandy Hills, LLC the sum of $500,000.00 that would be secured by a new mortgage (Newman Mortgage) that he always assumed would be subordinate to the Creditor’s Mortgage. The amount on the Mortgage and Note ended up at $750,000.00, but that sum was not immediately funded and according to Weber, he still believes that $50,000.00 was not funded. Weber also recently learned from the Newman Answer and Cross-Motion, that Conforti never told Newman about the Creditor’s Mortgage and because it was never recorded, it did not come up in a Title report. Conforti represented Newman and Sandy Hill for that mortgage transaction. 24. Had either Newman or Sandy Hills had their own attorney other than Conforti, it would have been discovered in the title report that the Creditor’s Mortgage was not recorded. Another attorney might have reviewed the Plan and saw that a Creditor’s Mortgage was supposed to have been issued. As the sole attorney representing both parties, Conforti was able to hide the fact that it was not recorded. 25. Then there are the payments from the Newman mortgage proceeds. After numerous requests for an accounting of the mortgage proceeds, Conforti eventually supplied Weber with a 7 7 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 26. handwritten one page spread sheet showing the mortgage proceeds going to what was presumed to be his Escrow or Trust Account and then the disbursements that came out from that. (Exhibit “G” to the Weber Affidavit). 27. The Newman Answer however, provided additional information as to the mortgage proceeds and distributions on a three page spread sheet. (Exhibit “H” to the Weber Affidavit). The third page of that Exhibit matches Exhibit “I”, but the first two pages provide additional information and some inconsistencies as to the disbursements and who they were made on behalf of because some of those payments have nothing to do with Sandy Hills. 28. The deposits of $200,000.00 on October 1, 2016 and of $500,000.00 on October 13, 2023 only total $700,000.00. Sandy Hills signed a mortgage for $750,000.00. There is a disbursement on that first page shows a loan made to “DiNapoli” for the sum of $150,631.44. DiNapoli, was a friend and business partner of Conforti. That loan had nothing to do with Sandy Hills and was made without the knowledge of anyone from Sandy Hills or Newman for that matter. 29. There is a disbursement on that first page shows a loan made to “Brian A. Ammar” for the sum of $30,000.00. Ammar, was a friend and business partner of Conforti. That loan had nothing to do with Sandy Hills and was made without the knowledge of anyone from Sandy Hills or Newman for that matter. 30. Then there were some payments made on behalf of Sandy Hills but they were not proper. Certilman Balin was paid $200,000.00 on February 15, 2017. Conforti told Weber that was a 8 8 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 settlement amount for which he obtained a release from Certilman. Not until the Newman Answer was filed did Weber learn that Certilman did not issue a release or a satisfaction. They assigned their claim to Newman. If we are to take that on its face, Conforti used mortgage proceeds that belonged to Sandy Hills to settle Certilman’s claim of $371,567.52 for $200,000 from which there should have been a satisfaction of mortgage or release delivered from Certilman to Sandy Hills as to their claim. Instead, they assigned their claim to Newman. That would mean that Conforti negotiated a settlement of the Certilman claim with mortgage proceeds that belonged to Sandy Hills, but he had the remainder of the claim assigned to Newman. 31. If one were to surmise why it was done that way, it’s because Newman didn't know about the mortgage. If a partial mortgage satisfaction was issued, that it’s logical to conclude that would have been a red flag to Newman to indicate the existence of another mortgage. We will need further discovery to find that out. 32. When Conforti sought to pay any creditor to that Creditor’s Mortgage From the Newman mortgage proceeds, it was supposed to have been done pursuant to the terms of the Mortgage Participation Agreement to be proportionate based on the percentage interest of a creditor to the mortgage. Conforti on his own made a payment contrary to those provisions to the detriment of Sandy Hills, Lucille Weber and Commonwealth. Any distribution or payment to the creditors participating in the Creditor’s Mortgage were to have been paid based on their percentage interest in that mortgage as follows: I. Certilman: $371,567.52; 43.349% of the Mortgage. II. Commonwealth: $275,000.00; 32.150% of the mortgage. 9 9 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 III. Egan and Golden: $2,236.38; 0.261% of the Mortgage. IV. Lucille Weber: $200,000.00; 23.82% of the Mortgage. V. Owen Peterson and Co., LLC: $6,570.00; 0.768% of the mortgage. Based on that premise, if $200,000.00 was distributed then: I. Certilman should have received $86,698.00. II. Commonwealth should have received $64,300. III. Egan and Golden should have received $522.00. IV. Lucille Weber should have received $47,640.00 V. Owen and Peterson should have received $1,536.00 33. This action by Conforti impacted Sandy Hills. Sandy Hills was not required to rush to pay off Certilman. Had proportionate funds gone to Commonwealth and Lucille Weber, those are funds that could have been put back into Sandy Hills. They could have avoided taking out the Advantage Mortgage being foreclosed herein. 34. Conforti chose on his own to take a portion of the mortgage proceeds to payoff his close friend Edward Barone who had the first mortgage. That was not required that it be paid off when he paid it off. That was $146,618.50. Upon information and belief Conforti did that to the benefit Barone and not to the benefit of Sandy Hills. He loaned his friend DiNapoli $150,631.44 from Newman mortgage proceeds. 10 10 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 35. We know that Conforti also represented Baron as a creditor in the Bankruptcy. See the 19th page of The Order Confirming Debtor’s Second Amended Play annexed to Weber’s affidavit as Exhibit “D”, where the bankruptcy court is made aware of the conflict but Conforti at that time states there was no longer a conflict. That apparently was not accurate. 36. Plaintiff’s counsel makes mention of the Mortgage Modification Agreement dated June 1, 2021 referencing the wavier of defenses and counterclaims. Based on the professional malpractice, fraudulent inducement, breach of fiduciary obligations, unjust enrichment and fraudulent concealment, the Plaintiff cannot be entitled to rely on the provisions of that Mortgage Modification Agreement. The fact that said document was obtained by Conforti misleading Weber as to the purpose of that document and not explaining what it was, Conforti committed professional malpractice and committed a fraud. Based on that alone the mortgage being foreclosed on should be voided. At the very least it cannot be senior to the Creditor’s Mortgage that Conforti signed. 37. As stated in Weber’s Affidavit, when Conforti presented the Modification Agreement to him for signature, he still believed that the Creditor’s Mortgage was at that time in the first position, still not being made aware that it was never recorded. Further, as Weber points out, for what reason would he sign that modification agreement to give up any rights. He believed it was an acknowledgment of the assignment of the mortgage. 38. In Archer Capital Fund, L.P. v. GEL, LLC (95 AD3d 800 [2d Dept 2012] ), the Appellate Division, Second Department, held that in a mortgage foreclosure action, where, in the mortgage and loan documents, the mortgagor had waived its right to assert defenses or counterclaims in 11 11 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 response to any action commenced by the mortgagee to enforce the mortgagor's obligations thereunder and to recover the debt, the mortgagor's counterclaim alleging fraud would survive such a waiver. [A] written waiver in any form cannot operate to shield a party from [its] own fraud' ( Pike v. New York Life Ins. Co., 72 AD3d 1043, 1051 [2d Dept 2010] , quoting Sterling Natl. Bank & Trust Co. of N.Y. v. Giannetti, 53 A.D.2d 533, 533 [1st Dept 1976] ; see also European Am. Bank v. Mr. Wemmick, Ltd., 160 A.D.2d 905, 907 [2d Dept 1990] ). To enforce a waiver provision to bar a defendant from interposing a counterclaim against a plaintiff based upon fraud would allow the plaintiff to shield itself from its own tortious conduct ( see European Am. Bank, 160 A.D.2d at 906 907; Bayside Fuel Oil Depot Corp. v. Savino Oil & Heating Co., 133 A.D.2d 658, 659 [2d Dept 1987] ; Federal Deposit Ins. Corp. v. Marino Corp., 74 A.D.2d 620, 620 621 [2d Dept 1980] ; Sterling Natl. Bank & Trust Co. of NY, 53 A.D.2d at 533). 39. Plaintiff raises the statute of limitations as a defense. In Greene v Greene, 56 NY2d 86 [1982], the court held that the plaintiff's right of action did not accrue until she became aware of the alleged breach of the fiduciary relationship. The court found (p. 58, 437 N.Y.S.2d 339) that in “many respects the situation parallels that which gave rise to the doctrine of ‘continuous treatment’ in medical and legal malpractice cases. The Court in Greene, citing Whitehead v Kennedy, 69 NY 462 [1877] stated that an attorney who seeks to avail himself of a contract made with his client, is bound to establish affirmatively that it was made by the client with full knowledge of all the material circumstances known to the attorney and was in every respect free from fraud on his part, or misconception on the part of the client, and that a reasonable use was made by the attorney of the confidence reposed in him”. Under this rule it is not necessary for the client to show that the agreement was obtained by fraud or undue influence on the part of the attorney (Matter of Howell, 12 12 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 215 N.Y. 466, 109 N.E. 572) although, of course, that would make the agreement unenforceable if it were proven. Even in the absence of such misconduct the agreement may be invalid if it appears that the attorney “got the better of the bargain”, unless he can show that the client was fully aware of the consequences and that there was no exploitation of the client's confidence in the attorney Howard v Murray, 43 NY2d 417 [1977]. 40. An Attorney-client relationship imposes on an attorney a duty to deal fairly, honestly, and with undivided loyalty, including maintaining confidentiality, avoiding conflicts of interest, operating competently, safeguarding client property, and honoring client’s interests over lawyer's. To recover on breach of fiduciary duty claim against an attorney the client is required to prove both breach of duty owed to it and damages sustained as result. The attorney-client relationship “imposes on the attorney the duty to deal fairly, honestly and with undivided loyalty including maintaining confidentiality, avoiding conflicts of interest, operating competently, safeguarding client property and honoring the client’s interests over the lawyer's” ( Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 A.D.3d at 9, 865 N.Y.S.2d 14. THERE ARE TRIABLE ISSUES OF FACT AND QUESTIONS OF PROFESSIONAL MALPRACTICE, FRAUDULENT INDUCEMENT, BREACH OF FIDUCIARY OBLIGATIONS, UNJUST ENRICHMENT AND FRAUDULENT CONCEALMENT 41. Based on the foregoing and the affidavit of Francis X. Weber with supporting documentation annexed thereto, and the Affidavit or Merit Thomas Newman, with exhibits annexed thereto, it is requested that the Court deny the Plaintiff’s motion for summary judgment and that the subject mortgage be rescinded. 13 13 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 42. “To obtain summary judgment it is necessary that the movant establish his cause of action or defense ‘sufficiently to warrant the court as a matter of law in directing judgment’ in his favor (CPLR 3212, subd. (b)), and he must do so by tender of evidentiary proof in admissible form. In this instance the Plaintiff has chosen to ignore the actions of the deceased Anthony Conforti. 43. Because of the drastic nature of granting summary judgment, the evidence reviewed by the court must be seen in the light most favorable to the non-moving party (Toure v Avis Rent-A-Car Systems, Inc., 98 N.Y.2d 345, 746 N.Y.S.2d 865, 774 N.E.2d 1197 [2002]; Kogan v Bizekis, 180 A.D.3d 659, 115 N.Y.S.3d 690 [2d Dep't. 2020]). 44. To defeat a motion for summary judgment the opposing party must show facts sufficient to require a trial of any issue of fact (CPLR 3212, subd. (b)). Normally if the opponent is to succeed in defeating a summary judgment motion, he too, must make his showing by producing evidentiary proof in admissible form. The rule with respect to defeating a motion for summary judgment, however, is more flexible, for the opposing party, as contrasted with the movant. Zuckerman v City of New York, 49 NY2d 557 [1980]. 45. The Defendant by the affidavit of Weber with supporting documentation has provided significant proof as to the professional malpractice, fraudulent inducement, breach of fiduciary obligations, unjust enrichment, fraudulent concealment and professional misconduct committed by Conforti that at the very least justifies the denial of the Plaintiff’s motion for summary judgment and for other relief to be considered in the form of a rescission of the subject mortgage. The Plaintiff has failed to meet its required burden to succeed. 14 14 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 The Plaintiff's claim that Sandy Hills is not the proper party to raise the affirmative defenses and counterclaims set forth in the Sandy Hills Answer. That argument would fail on at least the issue of the Modification Agreement that Conforti had Weber sign, misrepresenting what it stated and Conforti being the sole beneficiary of that document. WHEREFORE, it is respectfully requested that the Court find as follows: A. That the motion of the Plaintiff be denied in its entirety; B. That the Mortgage of the Plaintiff be deemed rescinded or void; C. That if not rescinded or voided that the Mortgage of the Plaintiff be deemed subordinate to the Creditor's Mortgage; D. That the Plaintiff provide an accounting of the proceeds of the mortgage being foreclosed on and the Newman Mortgage; E. That the Court evaluate the actions of Conforti to consider damages based on his actions; and E. For such other and further relief as the court deems to be just and proper. Dated: December 11, 2023 Melville, New York CARLINSKY, DUNN & PA QUARIELLO, PLLC. By: MITCHELL CARLINS Y, ESQ. Attorney for Respondent Petitioner 532 Broadhollow Road Suite 129 Melville, NY. 11747 mearlinsky@cdplawyers.com 516-622-0099 Cell: 516-456-9292 15 15 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 TO: PINKS, LIPSHIE & WHITE, ESQS. Att: Teresa A. White 140 Fll Court Suite 303 Hauppauge, NY 11788 631-234-4400 16 16 of 17 FILED: SUFFOLK COUNTY CLERK 12/11/2023 03:05 PM INDEX NO. 614442/2023 NYSCEF DOC. NO. 49 RECEIVED NYSCEF: 12/11/2023 CERTIFICATION OF WORD COUNT I hereby certify pursuant to 22 NYCRR 202.8-b, that the total number of words in the foregoing document, exclusive of the caption and signature block, is 3,699 according to the word counting function of Microsoft Word, which was utilized to prepare the document and the document is in compliance with the word count limit. Dated: December 11, 2023 Mitchell J. Carlinsky, E q. 17 17 of 17