Hillary Developer, LLC v. Sec. Title Guarantee Corp.

2023 NY Slip Op 04370

Hillary Developer, LLC, plaintiff, v. Security Title Guarantee Corp. of Baltimore, et al., defendants, Naomi Cohen-Tsedek, defendant third-party plaintiff-respondent; SSS Settlement Services, LLC, third-party defendant-appellant, et al., third-party defendant.

No. 2021-03186, Index No. 719962/19

Supreme Court of New York, Second Department

August 23, 2023

Skarzynski Marick & Black, LLP, New York, NY (Juan Luis Garcia and Alexis J. Rogoski of counsel), for third-party defendant-appellant.

Houslanger & Associates, PLLC, Huntington, NY (Todd E Houslanger of counsel), for defendant third-party plaintiff-respondent.

VALERIE BRATHWAITE NELSON, J.P. JOSEPH J. MALTESE PAUL WOOTEN LILLIAN WAN, J.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the third-party defendant SSS Settlement Services, LLC, appeals from an order of the Supreme Court, Queens County (Carmen R. Velasquez, J.), dated March 30, 2021. The order denied the motion of that third-party defendant pursuant to CPLR 3211(a) to dismiss the third-party causes of action to recover damages for fraudulent concealment and prima facie tort insofar as asserted against it.

ORDERED that the order is reversed, on the law, with costs, and the motion of the third-party defendant SSS Settlement Services, LLC, pursuant to CPLR 3211(a) to dismiss the third-party causes of action to recover damages for fraudulent concealment and prima facie tort insofar as asserted against it is granted.

On November 18, 2014, Naomi Cohen-Tsedek obtained a judgment from the Supreme Court, Queens County, against Steven Browd (hereinafter Browd) in the sum of $269,145 (hereinafter the subject judgment). The subject judgment was docketed with the Queens County Clerk on the same date. At that time, Browd, also known as "Shraga Browd," together with his wife, Sheyna Browd (hereinafter Sheyna), owned certain real property located in Queens (hereinafter the subject premises).

In 2019, Browd, under the name Shraga Browd, and Sheyna sold the subject premises to Hillary Developer, LLC (hereinafter Hillary). The subject judgment was not satisfied from the proceeds of the sale.

Subsequently, upon learning that the subject premises had since been sold to a different buyer at a sheriff's auction to satisfy the subject judgment, Hillary commenced this action against, among others, Browd, Sheyna, and Cohen-Tsedek, as well as Security Title Guarantee Corporation of Baltimore (hereinafter Security Title), the company which had issued Hillary a title insurance policy with regard to its purchase of the subject premises. Hillary alleged that, at the time it purchased the subject premises, it did not know about the subject judgment.

Cohen-Tsedek interposed an answer that included, inter alia, third-party causes of action to recover damages for fraudulent concealment and prima facie tort asserted against SSS Settlement Services, LLC (hereinafter SSS Settlement), which had acted as Security Title's agent with regard to Security Title's issuance of the title insurance policy. Cohen-Tsedek alleged that SSS Settlement had concealed the existence of the subject judgment and that Browd is also known as Shraga Browd.

SSS Settlement moved pursuant to CPLR 3211(a) to dismiss the third-party causes of action to recover damages for fraudulent concealment and prima facie tort insofar as asserted against it. Cohen-Tsedek opposed the motion. In an order dated March 30, 2021, the Supreme Court denied SSS Settlement's motion. SSS Settlement appeals.

To state a cause of action to recover damages for fraud, a plaintiff must allege, with the requisite particularity, the following elements: (1) a misrepresentation or a material omission of fact that was false and that the defendant knew to be false, (2) the misrepresentation was made for the purpose of inducing the plaintiff to rely upon it, (3) the plaintiff justifiably relied upon the misrepresentation or material omission, and (4) injury (see CPLR 3016[b]; Bannister v Agard, 125 A.D.3d 797, 798; Northeast Steel Prods., Inc. v John Little Designs Inc., 80 A.D.3d 585, 585). To sufficiently plead a cause of action to recover damages for fraudulent concealment, a plaintiff must further allege "that the defendant had a duty to disclose the material information" (Bannister v Agard, 125 A.D.3d at 798; see E.B. v Liberation Publs., 7 A.D.3d...