Try to follow the events in 482 Tompkins Realty LLC v 482 Tompkins Capital LLC 2024 NY Slip Op 34520(U) December 18, 2024 Supreme Court, Kings County Docket Number: Index No. 1322/18 Judge: Larry D. Martin and decide for yourself who might be at fault.
“Plaintiffs commenced this action to recover damages and equitable relief stemming from a transaction where the subject property at 482 Tompkins Avenue in Brooklyn, owned by 482 Realty, was conveyed to defendant 482 Tompkins SME LLC (SME) as part of an alleged fraudulent foreclosure rescue scheme. 482 Realty, a limited liability company held by members Emeli, as to a 90% interest, and Komolafe, as to a 10% interest, assumed title to the subject property by deed dated November 15, 2007. In 2015, a foreclosure action was commenced on the mortgage encumbering the property. Plaintiffs wished to retain ownership of the property, but were unable to obtain the refinancing necessary to pay off the delinquent mortgage. Consequently, plaintiffs came into contact with defendant Eran Silverberg (Silverberg), member of defendant SME Capital Management LLC (SME Capital), who allegedly promised to help plaintiffs obtain refinancing that would save the subject property from foreclosure. According to the complaint, Silverberg represented that title to the property would have to be transferred to a newly formed limited liability company (LLC) due to the poor credit standing of 482 Realty, but that plaintiffs would still retain the majority interest in the new LLC, with Silverberg having a small interest so as to enable him to negotiate with the foreclosing mortgagee. Plaintiffs allege being told that after three months’ worth of payments were made on a hard money loan given by Silverberg’s company, they would be able to obtain an affordable conventional refinancing loan from a banking institution. Plaintiffs allege that Kaminsky’s firm was brought in by Silverberg to act as plaintiffs’ purported counsel in the transaction. 482 Realty, by Komolafe, entered into a retainer agreement with Kaminsky’ s firm, dated April 18, 2017, which provided, in part, the following: “We agree to assist and represent you in settling the mortgage default and resolve a payoff of the loan amount, which will result in discontinuance of the foreclosure, but not to appear in the foreclosure case and litigate the foreclosure defense. *** “Client waives attorney client confidentiality with regard to the proposed new lender and the mortgage broker, and client wants David A. Kaminsky & Associates, P.C. to communicate with them jointly in email threats, and that client waives any conflict of interest in David A. Kaminsky & Associates, P.C. representing her, and client understands that David A. Kaminsky & Associates, P.C. have in the past and continue to represent Evan Silverberg in separate unrelated matters, and he is a principal and/or participant in the new loan being arranged to payoff Client’s existing lender.” On June 8, 2017, plaintiffs entered into a ‘joint venture” with an “option agreement” (as alleged in the complaint) with the newly formed company, SME, whereby the existing mortgage in foreclosure was satisfied. The transaction included a Contract of Sale between 482 Realty and SME, a Bargain and Sale Deed conveying the property from 482 Realty to SME, an Operating Agreement for SME establishing a 90% interest in defendant 482 Tompkins Capital LLC (482 Capital) and a 10% interest in 482 Realty, and an Option Agreement giving 482 Realty the option of purchasing all membership interests held by 482 Capital in SME for an exercise price of $2,150,000.00. The option would be available to 482 Realty so long as monthly payments of $25,083.33 were remitted to 482 Capital. The option was available to 482 Realty from the date of the Option Agreement (June 8, 2017) through June 8, 2018 or the date of an option payment default as defined in the Option Agreement. The aforementioned documents were signed by Komolafe on behalf of 482 Realty as managing member. Also executed at the closing was a stipulation of discontinuance of the foreclosure action with prejudice by the foreclosing plaintiffs attorney and 482 Realty’s foreclosure action counsel. The deed conveying the property from 482 Realty to SME, dated June 8, 2017, was recorded on June 30, 2017. A satisfaction of the mortgage encumbering the property, dated June 8, 2017, was recorded on June 30, 2017. Plaintiffs allege that following the closing, Komolafe was made managing agent to operate and maintain the building and to collect rents, which would be deposited into a joint account with Silverberg to be used toward the monthly payments of $25,083.33, with plaintiffs making up any balance from their own income. Plaintiffs allege that disputes thereafter arose over payment of taxes and other financial issues, and that they were not given access to SME’s bank account and could not substantiate any balance which may be owed on top of the rental income collected. Plaintiffs maintain that when they attempted in January 2018 to make the monthly payment plus additional monies towards the taxes, the payments were rejected and plaintiffs were held in default. After issuing a notice of default, dated January 2018, 482 Capital terminated 482 Realty’s option to purchase its membership interest in SME.”
“In their complaint, filed on June 6, 2018, plaintiffs set forth causes of action for a declaration of rights under Real Property Actions and Proceedings Law [RP APL] article 15 (first), equitable mortgage under Real Property Law [RPL] § 320 (second), fraud in the factum (third), fraudulent inducement (fourth), constructive trust (fifth), civil conspiracy to commit fraud (sixth), specific performance (seventh), breach of contract/anticipatory breach of contract (eighth) and legal malpractice (ninth). Following the commencement of this action, motions were brought by USC, Silverberg and Kaminsky for dismissal of the complaint under CPLR 3211. By order dated February 20, 2019 (Hon. Sylvia Ash, J.), the court denied USC’s motion without prejudice, granted Silverberg’s motion “as to his personal capacity,” denied Kaminsky’s motion “without prejudice as to fraud and conspiracy” and granted Kaminsky’s motion as to “all other causes of action.” Discovery proceeded in this matter, including the examinations before trial (EBTs) of Kaminsky, Silverberg, Emeli and Komolafe. A Note of Issue indicating that discovery was complete was filed on April 9, 2024. Kaminsky brought the instant motion for summary judgment on June 7, 2024.”
“In support of his motion for summary judgment, Kaminsky submits, among other proof, a copy of the retainer agreement stating that his representation was limited to settling the mortgage default and resolving a payoff of the loan amount, copies of the June 8, 2017 closing documents executed by Komolafe on behalf of 482 Realty, including the Contract of Sale, deed, Operating Agreement of SME setting forth, inter alia, the 10% interest of 482 Realty and 90% interest of 482 Capital, the Option Agreement setting forth the monthly payment requirements of 482 Realty with the Option to purchase all interest of SME, and Kaminsky’s own EBT testimony.”
“The proof submitted demonstrates that Kaminsky made no misrepresentations regarding the nature and effect of Komolafe’s execution of the documents at the June 8, 2017 closing, that no questions or reservations were made by Komolafe regarding the documents she signed, or that Kaminsky was privy to any alleged representations made by Silverberg regarding the transaction, or any extrinsic promise Silverberg may have made regarding the joint venture. Accordingly, Kaminsky established prima facie entitlement to summary judgment dismissing plaintiffs’ claims of fraud in the factum, fraudulent inducement, and conspiracy to commit fraud.”