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FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015
NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
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GREG R. HAVENS,
Index No. 68300/2015
Plaintiff,
-against- Hon. Charles D. Wood, J.S.C.
MATTHEW GREENBLATT, RBS CITIZENS, N.A. and
TIM HOURIHAN,
Defendants.
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PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION TO
DEFENDANT’S CROSS-MOTION TO RENEW AND IN FURTHER SUPPORT OF
PLAINTIFF’S MOTION TO LIFT STAY
MUCHMORE & ASSOCIATES PLLC
217 Havemeyer Street, 4th Floor
Brooklyn, NY 11211
(917) 932-0299
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PRELIMINARY STATEMENT
Plaintiff Greg R. Havens (“Havens”), through the undersigned counsel, Muchmore &
Associates PLLC, submit this memorandum of law in opposition to Defendant Matthew
Greenblatt (“Greenblatt”)’s Cross-Motion to Renew pursuant to CPLR 2221(e) and in further
support of Havens’ Motion to Lift Stay.
In Greenblatt’s cross-motion, Greenblatt seeks to renew his prior motion to dismiss the
Complaint based on two new evidence: (a) the Memorandum of Decision of Judge Sean H. Lane
dated November 7, 2016 in Gabrielle Salman (“Salman”)’s Chapter 13 bankruptcy proceeding,
and (b) the Order of Hon. Linda Jamieson dated April 9, 2019 issued in the action entitled Excel
Home Group, LLC v. Greg Havens, et al., Index No. 52525/2014 (“Excel Action”). However, the
newly-submitted evidence would not have changed the prior determination as they do not refute
the factual allegations or dispose of the claims as a matter of law.
Greenblatt was not a party to either the bankruptcy proceeding or the Excel Action.
Neither the Decision of Judge Lane nor the Order of Judge Jamieson considered the liability of
Greenblatt. Judge Lane and Judge Jamieson determined the relationship among Havens, Salman
and the modular home supplier, Excel Homes Group, LLC (“Excel”). They held that Salman
owed fiduciary duty to both Havens and Excel, but Havens did not owe a fiduciary duty to Excel.
However, this action arises from a separate duty of care owed by Greenblatt to Havens, as an
attorney, to exercise reasonable skill and knowledge in representing Havens in the construction
loan closing. Greenblatt breached his duty by allowing at least $151,000 above what was due to
an incorrect company that handled unrelated projects in North Dakota. As a result, the funds
were diverted to an unrelated project, Excel was not fully paid and commenced a lawsuit to
foreclose upon Havens’ house, and Havens lost funding to complete construction while he was
forced to pay the bank all the misappropriated funds with interest.
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STATEMENT OF FACTS
This Court is respectfully referred to the annexed Affidavit of Greg Havens (“Affidavit”)
and the Complaint for the relevant factual background of this action.
On or about October 26, 2012, Havens purchased the real property at 14 White Plains
Road, Eastchester, New York, County of Westchester, Block 6, Lot 3 (“the Property”), where he
planned to construct a dwelling for my family. The construction was to be funded by a
construction loan from the Defendant RBS Citizens, N.A. (“RBS”) for $680,000 (“the
Construction Loan”).
In October 2012, Havens entered into an agreement (“GSM Contract”) with Gabrielle
Salman Modular, Inc. (“GSM”) [Exhibit “A”], where GSM agreed to supply the modular units
and oversee the construction of the modular home for a total amount of $207,000. Pursuant to the
payment schedule of the GSM Contract, $31,000 was to be paid to GSM upon the execution of
the GSM Contract, $15,000 was to be paid to GSM at the closing of the Construction Loan,
which would be used to cover the closing expenses, and the final payment of $151,000 was to be
paid to GSM upon the delivery of the modular home at the Property.
Havens retained Greenblatt to represent him at the closing of the Construction Loan. The
closing took place on November 27, 2012. At the closing, Havens signed the Residential
Construction Loan Agreement (“Construction Loan Agreement”) [Exhibit “B”]. Article 5 of the
Construction Loan Agreement requires that lien releases shall be obtained before RBS’s
disbursement of loan proceeds, and each disbursement will be made based upon the percentage
of construction completed.
Despite the fact that the modular home had apparently not been delivered at the time of
the closing, Greenblatt and RBS made a disbursement in the amount of $197,454 to Arch-Mod
Inc., an entity owned by Salman and Tim Hourihan for construction projects in North Dakota.
This disbursement utterly contradicts the payment schedule of the GSM Contract. At least
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$151,000 above what was due at the closing was disbursed by mistake. Greenblatt also failed to
secure a lien release while issuing a full lump sum payment to the contractor.
Soon after the closing, Tim Hourihan took $120,000 from the bank account of Arch-Mod
Inc. and applied the funds to an unrelated project in North Dakota. As a result, Excel was not
paid, and filed a mechanic’s lien and a foreclosure action against the Property. RBS ceased
funding the Project and required Havens to pay back the misappropriated funds with interest. The
construction was forced to stop and was never complete. Havens and his family were forced to
live in a rental unit because their own house was left uninhabitable. Havens and his family have
been paying rent for an average of $3,000 per month for the past six years, plus all the mortgage,
property tax and insurance for an approximate amount of $103,000 on the Property we owned
but they cannot live in. They also spent tens of thousands of dollars in defending the lawsuit.
PROCEDURAL HISTORY AND RELATED ACTIONS
A. The Stay of This Action
This action was commenced by Havens on October 16, 2015 by filing of a Summons and
Complaint. The Complaint alleged eleven causes of action against Defendants Greenblatt, RBS,
and Tim Hourihan for, inter alia, malpractice, negligence and conversion.
On January 14, 2016, Greenblatt filed a motion to dismiss the Complaint pursuant to
CPLR 3211(a)(1) and (7), or in the alternative, to stay the action pending resolution of the
Bankruptcy Case. Havens opposed the dismissal, but did not oppose the stay, and informed the
Court that a Note of Issue had been filed in the Excel Action and Havens intended to file a
summary judgment motion in the Excel Action [Exhibit “F”].
This Court issued an Order dated May 31, 2016, denied Greenblatt’s relief sought to
dismiss the Complaint, stating that “the court has considered the remainder of the factual and
legal contentions of the parties and to the extent not specifically addressed herein, finds them to
be either without merit or rendered moot by other aspects of this decision.” The Order granted
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the alternative relief pursuant to CPLR 2201 is granted to stay this action pending the resolution
of the Bankruptcy Case. The Order further provided that “any of the parties to this action may
make an application by order to show cause to vacate, modify or lift this stay in accordance with
this order.”
By an Order to Show Cause filed on October 18, 2019, Havens now moves to lift the stay
of this action. Greenblatt cross-moved to renew its motion to dismiss the Complaint pursuant to
CPLR 2221(e).
B. Salman’s Bankruptcy Proceeding And The Decision Of Judge Lane
Salman commenced a Chapter 13 bankruptcy proceeding on January 7, 2014 in the
United States Bankruptcy Court for the Southern District of New York, Case No. 14-22017-shl.
Both Havens and Excel filed adversary proceedings in relation to the Bankruptcy Case, entitled
Havens v. Salman, Case No. 14-08219-shl, and Excel Homes Group, LLC v. Salman, Case No.
14-08220-shl.
On July 5, 2016, Bankruptcy Judge Robert D. Drain dismissed the bankruptcy
proceeding, holding that “the debtor’s chapter 13 plan was not feasible and that the debtor was
unable to confirm a plan.”
On November 7, 2016, Judge Lane issued a Decision granting Havens and Excel’s
Motions for Summary Judgment and concluding that the Salman’s debts to them are non-
dischargeable under Section 523(a)(4) of the U.S. Bankruptcy Code. Judge Lane held that
Salman owed both Excel and Havens a fiduciary duty as she was the trustee of the Lien Law 3-A
trust of which Excel and Havens were beneficiaries.
C. The Excel Action And The Order Of Judge Jamieson
Excel filed a mechanic’s lien against the Property, and commenced a lien foreclosure
action on February 19, 2014 in Westchester County Supreme Court, entitled Excel Homes Group,
LLC v. Greg R. Havens, et al., Index No. 52525/2014. On April 18, 2019, Judge Linda Jamieson
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issued an Order [Exhibit “E”] 1, granting Havens’ Motion for Summary Judgment and dismissing
all claims against Havens.
The Order of Judge Jamieson determined that Havens and Excel had no contractual
relationship, therefore Excel’s breach of contract causes of action against Havens were
dismissed. The Order further held that the funds paid to GSM was a trust of which both Excel
and Havens were beneficiaries. Havens was not a trustee of a trust held to the benefit of Excel,
therefore did not have a fiduciary duty to Excel. Hence, all other breach of fiduciary duty and
trust claims against Havens were dismissed.
ARGUMENT
POINT I
NEW EVIDENCE WOULD NOT HAVE CHANGED THE PRIOR DETERMINATION
AS THEY DO NOT CONCLUSIVELY DISPOSE OF THE CLAIMS
Pursuant to CPLR 2221, a motion for leave to renew "shall be based upon new facts not
offered on the prior motion that would change the prior determination" (CPLR 2221[e][2]) and
"shall contain reasonable justification for the failure to present such facts on the prior motion"
(CPLR 2221[e][3]); Okumus v. Living Room Steak House, Inc., 112 A.D.3d at 799 (2d Dept.,
2013). Leave to renew should be denied when the newly submitted evidence would not have
changed the prior determination. Cullin v Lynch, 48 N.Y.S.3d 711 (2 Dept, 2017). Here,
Greenblatt seeks to renew his motion to dismiss pursuant to CPLR 3211(a)(1) based upon the
newly-submitted evidence of the Decision of Judge Lane and the Order of Judge Jamieson.
To succeed on a motion to dismiss pursuant to CPLR 3211(a)(1), “the documentary
evidence that forms the basis of the defense must be such that it resolves all factual issues as a
matter of law, and conclusively disposes of the plaintiff’s claim.” AG Cap. Funding Partners,
1
The Order of Judge Linda Jamieson dated April 9, 2019 annexed as Exhibit “B” to the Plaintiff’s moving papers
(NYSCEF Doc No. 50) lacks certain pages due to a clerical error occurred during electronic filing. A complete and
accurate copy of the Order is annexed hereto as Exhibit “E”.
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L.P., 5 N.Y.3d 582, 590-591 (2005); 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98
N.Y.2d 144, 152, 746 N.Y.S.2d 131 (2002). “Under CPLR 3211(a)(1), a dismissal is warranted
only if the documentary evidence submitted conclusively establishes a defense to the asserted
claims as a matter of law.” Leon v. Martinez, 84 N.Y.2d 83 (1994).
Here, assuming the Decision and the Order are newly-discovered, they would not have
changed the prior decision as they do not conclusively dispose of the claims against Greenblatt as
documentary evidence under CPLR 3211(a)(1). The Decision of Judge Lane and the Order of
Judge Jamieson both concern the relationship among Excel, Havens and Salman, neither of
which considered or mentioned Greenblatt’s duty or liability to Havens. Greenblatt was not even
a party to the bankruptcy proceeding or the Excel Action. Greenblatt owed Havens a separate
duty of care, arising from their attorney-client relationship, to exercise reasonable skill and
knowledge in representing Havens in the construction loan closing. Greenblatt breached his duty
by allowing at least $151,000 above what was due to an incorrect company that handled
unrelated projects in North Dakota. As a result, the funds were diverted to an unrelated project in
North Dakota, Excel was not fully paid and commenced lawsuit to foreclose Havens’ house,
Havens lost funding to complete construction while he was forced to pay bank RBS all the
misappropriated funds with interest.
A. Havens Has Sufficiently Alleged Causation
In an action to recover damages for legal malpractice, a plaintiff must demonstrate that
the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed
by a member of the legal profession and that the attorney's breach of this duty proximately
caused plaintiff to sustain actual and ascertainable damages. McCoy v. Feinman, 99 N.Y.2d 295
(2002). To establish causation, a plaintiff must show that he or she would have prevailed in the
underlying action or would not have incurred any damages, but for the lawyer's negligence.
Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 442 (2007).
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On a motion to dismiss for failure to state a cause of action, the Court must accept the
facts alleged in the complaint as true, accord the Plaintiff the benefit of every possible favorable
inference, and determine only whether the facts as alleged fit within any cognizable legal theory.
Shah v. Exxis, Inc., 138 A.D.3d 970 (2d Dept. 2016). In opposition to such a motion, a plaintiff
may submit affidavits to remedy defects in the complaint and preserve inartfully pleaded, but
potentially meritorious claims. Cron v. Hargro Fabrics, 91 N.Y.2d 362 (1998).
Here, Havens has sufficiently pleaded every element of a cause of action for malpractice.
As set forth in the Complaint and the annexed Affidavit of Havens, Greenblatt owed Havens a
duty of care to exercise reasonable skill and knowledge in representing Havens in the
construction loan closing. It is common knowledge of an attorney retained for construction loan
closing to review the contractor’s contract, review the loan agreement, understand the payment
schedule, obtain lien waivers, and make sure the loan disbursement is made to the correct party
with the correct amount. Greenblatt breached his duty by allowing at least $151,000 above what
was due to GSM to Arch-Mod, Inc., a company that only handled unrelated projects in North
Dakota. Judge Lane found in his Decision that:
Arch-Mod has no involvement in the Havens Project as the Defendant had created Arch-
Mod for a different project in North Dakota. By placing the trust funds in the Arch-Mod
account, the Defendant made the trust funds from the Havens Project available to the
Defendant’s partner in Arch-Mod, who used them for an unrelated purpose. Under these
circumstances, there was a substantial risk of the trust funds being used for non-trust
purposes and the magnitude of the harm was significant.
[Page 17 of the Decision of Judge Lane, Greenblatt Ex. “J”].
Greenblatt contends that Havens failed to allege causation because “It is not possible,
therefore, to allege that the outcome would have been different if the check had been made
payable to GSM rather than Arch-Mod, Inc.” Greenblatt Memo P. 11. However, as alleged by
Havens and found by Judge Lane, GSM was solely owned by Salman, while Arch-Mod Inc. was
a company owned by both Salman and Tim Hourihan, both of whom had access to its bank
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account. By mistakenly issuing the check to Arch-Mod, Inc., it was not only possible, but also
foreseeable that the funds would likely be used to a different project. Had the disbursement been
correctly issued to GSM, the funds would not have been diverted because Tim Hourihan would
not have had the access to Havens’s funds. Therefore, contrary to Greenblatt’s contention, the
outcome of a fund diversion would certainly be different if Greenblatt performed his duty to
ensure that the check was issued to the correct company.
Moreover, if Greenblatt did not issue the overpayment of $151,000, the maximum
amount Tim Hourihan could have possibly misappropriated would have been limited to $46,000.
But for Greenblatt’s negligence, Havens would not have suffered the additional damages of
$151,000. Havens is now required to pay back all the misappropriated funds with interest to
RBS. With this huge amount of loan attached to his Property, it is difficult for Havens to even
sell the Property without taking money out of his own pocket.
It is also common knowledge of an attorney representing homeowners in construction
projects to obtain lien waivers while issuing payments. This is also required by the Construction
Loan Agreement. Had Greenblatt obtained a lien waiver from Salman, Excel could not have
legitimately filed a mechanic’s lien knowing that there was no lien fund. Even after a mechanic’s
lien was filed by Excel, Havens could have easily discharged the lien and Lis Pendens instead of
waiting for three years for them to expire. Havens would also have prevailed in his claim against
Excel for exaggeration of lien amount. Havens also spent tens of thousands of dollars in
defending the lawsuit.
The issue of proximate cause is a question of fact rather than a matter of law. In
determining proximate cause, an element of foreseeability is also present—the question then is
whether the injury to plaintiff was a foreseeable result of defendant's breach. Gonzales v. City of
New York, 133 A.D.3d 65 (1st Dept. 2015). Here, Havens has sufficiently alleged that
Greenblatt’s breach of his duty of care is a proximate cause to his damages. Greenblatt failed to
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present evidence that utterly rebuts the fact or dispose of the claims. Therefore, Greenblatt’s
motion to renew to dismiss must be denied.
B. Havens Has Sufficiently Pleaded Actual And Ascertainable Damages
A plaintiff bringing a cause of action sounding in legal malpractice must plead actual
ascertainable damages resulting from the attorney's negligence. Dempster v. Liotti, 86 A.D.3d
169, 177, 924 N.Y.S.2d 484). Greenblatt contends that because Judge Land and Judge Jamieson
conclude that Havens is not liable to Excel’s damages, Havens has never incurred any damages.
This is completely incorrect.
None of the initial disbursement of $197,454 was applied to Havens’ project. Havens had
to issue another $34,500 check to GSM, which was endorsed to Excel, in order to have the
modular home delivered to the Property. Despite that Havens did not receive $197,454 worth of
work or material, he had to pay RBS back the misappropriated funds of $197,454 with interest.
Not only did the initial disbursement include a $151,000 overpayment, it was also miscalculated
[Exhibit “D”]. RBS ceased funding the Project after Excel filed the mechanic’s lien and the
construction was forced to stop and was never completed. Havens and his family were forced to
live in a rental unit because their own house was left uninhabitable. Havens and his family have
been paying rent for an average of $3,000 per month for the past six years, plus all the mortgage,
property tax and insurance for an approximate amount of $103,000 on the Property we owned
but they cannot live in. They also spent tens of thousands of dollars in defending the lawsuit. As
set forth earlier in this memorandum, all of these damages could have been prevented if
Greenblatt only allowed the correct amount to be issued to the correct company and secured a
lien waiver.
Therefore, Havens has sufficiently pleaded a cause of action for malpractice. Greenblatt’s
evidence is insufficient to dispose of the claims. Hence, Greenblatt’s cross-motion should be
denied.
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POINT III
HAVENS DID NOT DELAY IN LIFTING THE STAY AND GREENBLATT DID NOT
ALLEGE PREJUDICE
Greenblatt contends that the stay should not be lifted because of doctrine of laches.
Laches is applicable where there has been a considerable delay resulting in a change of position,
intervention of equities, loss of evidence, or other disadvantage. Galarraga v. City of New York,
54 A.D.3d 308 (2d Dept., 2008). A lapse of time, without a showing of prejudice, is insufficient
to sustain claim of laches. In re Linker, 23 A.D.3d 186 (1st Dept., 2005). Here, Greenblatt did not
allege any specific prejudice as a result of Havens’ lift of the stay. Moreover, as set forth in
Havens’ affidavit, while the bankruptcy proceeding ended in or about November 2016, his
summary judgment motion in the Excel Action was not decided until April 2019. Not long after
Havens received the Order of Judge Jamieson, Havens moved to liftthe stay in this action. He
never abandoned this action. It would be inequitable to deny Havens’s stay-lift merely because
there was a six-month lapse of time after both the bankruptcy proceeding and the Excel Action
concluded. Havens and his family suffered a huge financial calamity due to the negligence of
Greenblatt and RBS, and he asserted his rights well within the statute of limitations.
CONCLUSION
For the reasons set forth above, it is respectfully requested that this Court grant Havens’
motion to lift the stay of this action, deny Greenblatt’s motion to renew its prior motion to
dismiss, and grant such other and further relief as the Court deems just and proper.
Dated: Brooklyn, New York
November 27, 2019
MUCHMORE & ASSOCIATES PLLC
Counsel for Plaintiff
By: /s/ Sophie Wang
Sophie Wang
217 Havemeyer Street, 4th Floor
Brooklyn, NY 11211
(917) 932-0299
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FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER ----------------------------------------------------------------------x GREG R. HAVENS, Index No. 68300/2015 Plaintiff, -against- Hon. Charles D. Wood, J.S.C. MATTHEW GREENBLATT, RBS CITIZENS, N.A. and TIM HOURIHAN, Defendants. ----------------------------------------------------------------------x PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT’S CROSS-MOTION TO RENEW AND IN FURTHER SUPPORT OF PLAINTIFF’S MOTION TO LIFT STAY MUCHMORE & ASSOCIATES PLLC 217 Havemeyer Street, 4th Floor Brooklyn, NY 11211 (917) 932-0299 1 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 PRELIMINARY STATEMENT Plaintiff Greg R. Havens (“Havens”), through the undersigned counsel, Muchmore & Associates PLLC, submit this memorandum of law in opposition to Defendant Matthew Greenblatt (“Greenblatt”)’s Cross-Motion to Renew pursuant to CPLR 2221(e) and in further support of Havens’ Motion to Lift Stay. In Greenblatt’s cross-motion, Greenblatt seeks to renew his prior motion to dismiss the Complaint based on two new evidence: (a) the Memorandum of Decision of Judge Sean H. Lane dated November 7, 2016 in Gabrielle Salman (“Salman”)’s Chapter 13 bankruptcy proceeding, and (b) the Order of Hon. Linda Jamieson dated April 9, 2019 issued in the action entitled Excel Home Group, LLC v. Greg Havens, et al., Index No. 52525/2014 (“Excel Action”). However, the newly-submitted evidence would not have changed the prior determination as they do not refute the factual allegations or dispose of the claims as a matter of law. Greenblatt was not a party to either the bankruptcy proceeding or the Excel Action. Neither the Decision of Judge Lane nor the Order of Judge Jamieson considered the liability of Greenblatt. Judge Lane and Judge Jamieson determined the relationship among Havens, Salman and the modular home supplier, Excel Homes Group, LLC (“Excel”). They held that Salman owed fiduciary duty to both Havens and Excel, but Havens did not owe a fiduciary duty to Excel. However, this action arises from a separate duty of care owed by Greenblatt to Havens, as an attorney, to exercise reasonable skill and knowledge in representing Havens in the construction loan closing. Greenblatt breached his duty by allowing at least $151,000 above what was due to an incorrect company that handled unrelated projects in North Dakota. As a result, the funds were diverted to an unrelated project, Excel was not fully paid and commenced a lawsuit to foreclose upon Havens’ house, and Havens lost funding to complete construction while he was forced to pay the bank all the misappropriated funds with interest. 2 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 STATEMENT OF FACTS This Court is respectfully referred to the annexed Affidavit of Greg Havens (“Affidavit”) and the Complaint for the relevant factual background of this action. On or about October 26, 2012, Havens purchased the real property at 14 White Plains Road, Eastchester, New York, County of Westchester, Block 6, Lot 3 (“the Property”), where he planned to construct a dwelling for my family. The construction was to be funded by a construction loan from the Defendant RBS Citizens, N.A. (“RBS”) for $680,000 (“the Construction Loan”). In October 2012, Havens entered into an agreement (“GSM Contract”) with Gabrielle Salman Modular, Inc. (“GSM”) [Exhibit “A”], where GSM agreed to supply the modular units and oversee the construction of the modular home for a total amount of $207,000. Pursuant to the payment schedule of the GSM Contract, $31,000 was to be paid to GSM upon the execution of the GSM Contract, $15,000 was to be paid to GSM at the closing of the Construction Loan, which would be used to cover the closing expenses, and the final payment of $151,000 was to be paid to GSM upon the delivery of the modular home at the Property. Havens retained Greenblatt to represent him at the closing of the Construction Loan. The closing took place on November 27, 2012. At the closing, Havens signed the Residential Construction Loan Agreement (“Construction Loan Agreement”) [Exhibit “B”]. Article 5 of the Construction Loan Agreement requires that lien releases shall be obtained before RBS’s disbursement of loan proceeds, and each disbursement will be made based upon the percentage of construction completed. Despite the fact that the modular home had apparently not been delivered at the time of the closing, Greenblatt and RBS made a disbursement in the amount of $197,454 to Arch-Mod Inc., an entity owned by Salman and Tim Hourihan for construction projects in North Dakota. This disbursement utterly contradicts the payment schedule of the GSM Contract. At least 3 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 $151,000 above what was due at the closing was disbursed by mistake. Greenblatt also failed to secure a lien release while issuing a full lump sum payment to the contractor. Soon after the closing, Tim Hourihan took $120,000 from the bank account of Arch-Mod Inc. and applied the funds to an unrelated project in North Dakota. As a result, Excel was not paid, and filed a mechanic’s lien and a foreclosure action against the Property. RBS ceased funding the Project and required Havens to pay back the misappropriated funds with interest. The construction was forced to stop and was never complete. Havens and his family were forced to live in a rental unit because their own house was left uninhabitable. Havens and his family have been paying rent for an average of $3,000 per month for the past six years, plus all the mortgage, property tax and insurance for an approximate amount of $103,000 on the Property we owned but they cannot live in. They also spent tens of thousands of dollars in defending the lawsuit. PROCEDURAL HISTORY AND RELATED ACTIONS A. The Stay of This Action This action was commenced by Havens on October 16, 2015 by filing of a Summons and Complaint. The Complaint alleged eleven causes of action against Defendants Greenblatt, RBS, and Tim Hourihan for, inter alia, malpractice, negligence and conversion. On January 14, 2016, Greenblatt filed a motion to dismiss the Complaint pursuant to CPLR 3211(a)(1) and (7), or in the alternative, to stay the action pending resolution of the Bankruptcy Case. Havens opposed the dismissal, but did not oppose the stay, and informed the Court that a Note of Issue had been filed in the Excel Action and Havens intended to file a summary judgment motion in the Excel Action [Exhibit “F”]. This Court issued an Order dated May 31, 2016, denied Greenblatt’s relief sought to dismiss the Complaint, stating that “the court has considered the remainder of the factual and legal contentions of the parties and to the extent not specifically addressed herein, finds them to be either without merit or rendered moot by other aspects of this decision.” The Order granted 4 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 the alternative relief pursuant to CPLR 2201 is granted to stay this action pending the resolution of the Bankruptcy Case. The Order further provided that “any of the parties to this action may make an application by order to show cause to vacate, modify or lift this stay in accordance with this order.” By an Order to Show Cause filed on October 18, 2019, Havens now moves to lift the stay of this action. Greenblatt cross-moved to renew its motion to dismiss the Complaint pursuant to CPLR 2221(e). B. Salman’s Bankruptcy Proceeding And The Decision Of Judge Lane Salman commenced a Chapter 13 bankruptcy proceeding on January 7, 2014 in the United States Bankruptcy Court for the Southern District of New York, Case No. 14-22017-shl. Both Havens and Excel filed adversary proceedings in relation to the Bankruptcy Case, entitled Havens v. Salman, Case No. 14-08219-shl, and Excel Homes Group, LLC v. Salman, Case No. 14-08220-shl. On July 5, 2016, Bankruptcy Judge Robert D. Drain dismissed the bankruptcy proceeding, holding that “the debtor’s chapter 13 plan was not feasible and that the debtor was unable to confirm a plan.” On November 7, 2016, Judge Lane issued a Decision granting Havens and Excel’s Motions for Summary Judgment and concluding that the Salman’s debts to them are non- dischargeable under Section 523(a)(4) of the U.S. Bankruptcy Code. Judge Lane held that Salman owed both Excel and Havens a fiduciary duty as she was the trustee of the Lien Law 3-A trust of which Excel and Havens were beneficiaries. C. The Excel Action And The Order Of Judge Jamieson Excel filed a mechanic’s lien against the Property, and commenced a lien foreclosure action on February 19, 2014 in Westchester County Supreme Court, entitled Excel Homes Group, LLC v. Greg R. Havens, et al., Index No. 52525/2014. On April 18, 2019, Judge Linda Jamieson 5 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 issued an Order [Exhibit “E”] 1, granting Havens’ Motion for Summary Judgment and dismissing all claims against Havens. The Order of Judge Jamieson determined that Havens and Excel had no contractual relationship, therefore Excel’s breach of contract causes of action against Havens were dismissed. The Order further held that the funds paid to GSM was a trust of which both Excel and Havens were beneficiaries. Havens was not a trustee of a trust held to the benefit of Excel, therefore did not have a fiduciary duty to Excel. Hence, all other breach of fiduciary duty and trust claims against Havens were dismissed. ARGUMENT POINT I NEW EVIDENCE WOULD NOT HAVE CHANGED THE PRIOR DETERMINATION AS THEY DO NOT CONCLUSIVELY DISPOSE OF THE CLAIMS Pursuant to CPLR 2221, a motion for leave to renew "shall be based upon new facts not offered on the prior motion that would change the prior determination" (CPLR 2221[e][2]) and "shall contain reasonable justification for the failure to present such facts on the prior motion" (CPLR 2221[e][3]); Okumus v. Living Room Steak House, Inc., 112 A.D.3d at 799 (2d Dept., 2013). Leave to renew should be denied when the newly submitted evidence would not have changed the prior determination. Cullin v Lynch, 48 N.Y.S.3d 711 (2 Dept, 2017). Here, Greenblatt seeks to renew his motion to dismiss pursuant to CPLR 3211(a)(1) based upon the newly-submitted evidence of the Decision of Judge Lane and the Order of Judge Jamieson. To succeed on a motion to dismiss pursuant to CPLR 3211(a)(1), “the documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff’s claim.” AG Cap. Funding Partners, 1 The Order of Judge Linda Jamieson dated April 9, 2019 annexed as Exhibit “B” to the Plaintiff’s moving papers (NYSCEF Doc No. 50) lacks certain pages due to a clerical error occurred during electronic filing. A complete and accurate copy of the Order is annexed hereto as Exhibit “E”. 6 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 L.P., 5 N.Y.3d 582, 590-591 (2005); 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 152, 746 N.Y.S.2d 131 (2002). “Under CPLR 3211(a)(1), a dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law.” Leon v. Martinez, 84 N.Y.2d 83 (1994). Here, assuming the Decision and the Order are newly-discovered, they would not have changed the prior decision as they do not conclusively dispose of the claims against Greenblatt as documentary evidence under CPLR 3211(a)(1). The Decision of Judge Lane and the Order of Judge Jamieson both concern the relationship among Excel, Havens and Salman, neither of which considered or mentioned Greenblatt’s duty or liability to Havens. Greenblatt was not even a party to the bankruptcy proceeding or the Excel Action. Greenblatt owed Havens a separate duty of care, arising from their attorney-client relationship, to exercise reasonable skill and knowledge in representing Havens in the construction loan closing. Greenblatt breached his duty by allowing at least $151,000 above what was due to an incorrect company that handled unrelated projects in North Dakota. As a result, the funds were diverted to an unrelated project in North Dakota, Excel was not fully paid and commenced lawsuit to foreclose Havens’ house, Havens lost funding to complete construction while he was forced to pay bank RBS all the misappropriated funds with interest. A. Havens Has Sufficiently Alleged Causation In an action to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession and that the attorney's breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages. McCoy v. Feinman, 99 N.Y.2d 295 (2002). To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer's negligence. Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 N.Y.3d 442 (2007). 7 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 On a motion to dismiss for failure to state a cause of action, the Court must accept the facts alleged in the complaint as true, accord the Plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory. Shah v. Exxis, Inc., 138 A.D.3d 970 (2d Dept. 2016). In opposition to such a motion, a plaintiff may submit affidavits to remedy defects in the complaint and preserve inartfully pleaded, but potentially meritorious claims. Cron v. Hargro Fabrics, 91 N.Y.2d 362 (1998). Here, Havens has sufficiently pleaded every element of a cause of action for malpractice. As set forth in the Complaint and the annexed Affidavit of Havens, Greenblatt owed Havens a duty of care to exercise reasonable skill and knowledge in representing Havens in the construction loan closing. It is common knowledge of an attorney retained for construction loan closing to review the contractor’s contract, review the loan agreement, understand the payment schedule, obtain lien waivers, and make sure the loan disbursement is made to the correct party with the correct amount. Greenblatt breached his duty by allowing at least $151,000 above what was due to GSM to Arch-Mod, Inc., a company that only handled unrelated projects in North Dakota. Judge Lane found in his Decision that: Arch-Mod has no involvement in the Havens Project as the Defendant had created Arch- Mod for a different project in North Dakota. By placing the trust funds in the Arch-Mod account, the Defendant made the trust funds from the Havens Project available to the Defendant’s partner in Arch-Mod, who used them for an unrelated purpose. Under these circumstances, there was a substantial risk of the trust funds being used for non-trust purposes and the magnitude of the harm was significant. [Page 17 of the Decision of Judge Lane, Greenblatt Ex. “J”]. Greenblatt contends that Havens failed to allege causation because “It is not possible, therefore, to allege that the outcome would have been different if the check had been made payable to GSM rather than Arch-Mod, Inc.” Greenblatt Memo P. 11. However, as alleged by Havens and found by Judge Lane, GSM was solely owned by Salman, while Arch-Mod Inc. was a company owned by both Salman and Tim Hourihan, both of whom had access to its bank 8 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 account. By mistakenly issuing the check to Arch-Mod, Inc., it was not only possible, but also foreseeable that the funds would likely be used to a different project. Had the disbursement been correctly issued to GSM, the funds would not have been diverted because Tim Hourihan would not have had the access to Havens’s funds. Therefore, contrary to Greenblatt’s contention, the outcome of a fund diversion would certainly be different if Greenblatt performed his duty to ensure that the check was issued to the correct company. Moreover, if Greenblatt did not issue the overpayment of $151,000, the maximum amount Tim Hourihan could have possibly misappropriated would have been limited to $46,000. But for Greenblatt’s negligence, Havens would not have suffered the additional damages of $151,000. Havens is now required to pay back all the misappropriated funds with interest to RBS. With this huge amount of loan attached to his Property, it is difficult for Havens to even sell the Property without taking money out of his own pocket. It is also common knowledge of an attorney representing homeowners in construction projects to obtain lien waivers while issuing payments. This is also required by the Construction Loan Agreement. Had Greenblatt obtained a lien waiver from Salman, Excel could not have legitimately filed a mechanic’s lien knowing that there was no lien fund. Even after a mechanic’s lien was filed by Excel, Havens could have easily discharged the lien and Lis Pendens instead of waiting for three years for them to expire. Havens would also have prevailed in his claim against Excel for exaggeration of lien amount. Havens also spent tens of thousands of dollars in defending the lawsuit. The issue of proximate cause is a question of fact rather than a matter of law. In determining proximate cause, an element of foreseeability is also present—the question then is whether the injury to plaintiff was a foreseeable result of defendant's breach. Gonzales v. City of New York, 133 A.D.3d 65 (1st Dept. 2015). Here, Havens has sufficiently alleged that Greenblatt’s breach of his duty of care is a proximate cause to his damages. Greenblatt failed to 9 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 present evidence that utterly rebuts the fact or dispose of the claims. Therefore, Greenblatt’s motion to renew to dismiss must be denied. B. Havens Has Sufficiently Pleaded Actual And Ascertainable Damages A plaintiff bringing a cause of action sounding in legal malpractice must plead actual ascertainable damages resulting from the attorney's negligence. Dempster v. Liotti, 86 A.D.3d 169, 177, 924 N.Y.S.2d 484). Greenblatt contends that because Judge Land and Judge Jamieson conclude that Havens is not liable to Excel’s damages, Havens has never incurred any damages. This is completely incorrect. None of the initial disbursement of $197,454 was applied to Havens’ project. Havens had to issue another $34,500 check to GSM, which was endorsed to Excel, in order to have the modular home delivered to the Property. Despite that Havens did not receive $197,454 worth of work or material, he had to pay RBS back the misappropriated funds of $197,454 with interest. Not only did the initial disbursement include a $151,000 overpayment, it was also miscalculated [Exhibit “D”]. RBS ceased funding the Project after Excel filed the mechanic’s lien and the construction was forced to stop and was never completed. Havens and his family were forced to live in a rental unit because their own house was left uninhabitable. Havens and his family have been paying rent for an average of $3,000 per month for the past six years, plus all the mortgage, property tax and insurance for an approximate amount of $103,000 on the Property we owned but they cannot live in. They also spent tens of thousands of dollars in defending the lawsuit. As set forth earlier in this memorandum, all of these damages could have been prevented if Greenblatt only allowed the correct amount to be issued to the correct company and secured a lien waiver. Therefore, Havens has sufficiently pleaded a cause of action for malpractice. Greenblatt’s evidence is insufficient to dispose of the claims. Hence, Greenblatt’s cross-motion should be denied. 10 of 11 FILED: WESTCHESTER COUNTY CLERK 11/28/2019 11:53 AM INDEX NO. 68300/2015 NYSCEF DOC. NO. 96 RECEIVED NYSCEF: 11/28/2019 POINT III HAVENS DID NOT DELAY IN LIFTING THE STAY AND GREENBLATT DID NOT ALLEGE PREJUDICE Greenblatt contends that the stay should not be lifted because of doctrine of laches. Laches is applicable where there has been a considerable delay resulting in a change of position, intervention of equities, loss of evidence, or other disadvantage. Galarraga v. City of New York, 54 A.D.3d 308 (2d Dept., 2008). A lapse of time, without a showing of prejudice, is insufficient to sustain claim of laches. In re Linker, 23 A.D.3d 186 (1st Dept., 2005). Here, Greenblatt did not allege any specific prejudice as a result of Havens’ lift of the stay. Moreover, as set forth in Havens’ affidavit, while the bankruptcy proceeding ended in or about November 2016, his summary judgment motion in the Excel Action was not decided until April 2019. Not long after Havens received the Order of Judge Jamieson, Havens moved to liftthe stay in this action. He never abandoned this action. It would be inequitable to deny Havens’s stay-lift merely because there was a six-month lapse of time after both the bankruptcy proceeding and the Excel Action concluded. Havens and his family suffered a huge financial calamity due to the negligence of Greenblatt and RBS, and he asserted his rights well within the statute of limitations. CONCLUSION For the reasons set forth above, it is respectfully requested that this Court grant Havens’ motion to lift the stay of this action, deny Greenblatt’s motion to renew its prior motion to dismiss, and grant such other and further relief as the Court deems just and proper. Dated: Brooklyn, New York November 27, 2019 MUCHMORE & ASSOCIATES PLLC Counsel for Plaintiff By: /s/ Sophie Wang Sophie Wang 217 Havemeyer Street, 4th Floor Brooklyn, NY 11211 (917) 932-0299 11 of 11