First Nationwide Bank v. Konecky

Appellate Division of the Supreme Court of New York

First Nationwide Bank v. Konecky

224 A.D.2d 283, 638 N.Y.S.2d 428, 1996 N.Y. App. Div. LEXIS 1091

CourtAppellate Division of the Supreme Court of the State of New York

DecidedFebruary 15, 1996

StatusPublished

Cited by1 cases

This text of 224 A.D.2d 283 (First Nationwide Bank v. Konecky) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

First Nationwide Bank v. Konecky, 224 A.D.2d 283, 638 N.Y.S.2d 428, 1996 N.Y. App. Div. LEXIS 1091 (N.Y. Ct. App. 1996).

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Opinion

—Order, Supreme Court, New York County (Diane Lebedeff, J.), entered July 13, 1995, which, insofar as appealed from, granted defendant’s motion to dismiss plaintiff’s legal malpractice cause of action on the ground of collateral estoppel, unanimously affirmed, with costs.

Plaintiff must allege that defendant’s alleged negligence in failing to investigate the mortgage borrowers’ fraudulent misrepresentations was a proximate cause of its loss (see, Franklin v Winard, 199 AD2d 220, 221). Since the Second Circuit dismissed the plaintiff’s Racketeer Influenced and Corrupt Organizations Act ([RICO] 18 USC § 1962 [c], [d]) and State law claims against the mortgage borrowers for failure to plead proximate cause and injury (First Nationwide Bank v Gelt Funding Corp., 27 F3d 763, cert denied — US —, 115 S Ct 728), plaintiff is collaterally estopped from litigating the issue of whether there is a causal connection between defendant’s alleged negligence and the injury it sustained (see, Schwartz v Public Adm’r of County of Bronx, 24 NY2d 65, 71). That the specific loans alleged in the instant action had not been foreclosed at the time of the Federal action is immaterial, since the Second Circuit’s holding clearly applies to all of the loans on which plaintiff premised its RICO and State law causes of action. Similarly, it is immaterial that the misrepresentations alleged in this action differ from those alleged in the Federal action, since both relate to plaintiff’s overvaluation of the properties, which the Federal court found was not a proximate cause of plaintiff’s loss. Concur — Murphy, P. J., Wallach, Ross, Nardelli and Tom, JJ.

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—Order, Supreme Court, New York County (Diane Lebedeff, J.), entered July 13, 1995, which, insofar as appealed from, granted defendant’s motion to dismiss plaintiff’s legal malpractice cause of action on the ground of collateral estoppel, unanimously affirmed, with costs.

Plaintiff must allege that defendant’s alleged negligence in failing to investigate the mortgage borrowers’ fraudulent misrepresentations was a proximate cause of its loss (see, Franklin v Winard, 199 AD2d 220, 221). Since the Second Circuit dismissed the plaintiff’s Racketeer Influenced and Corrupt Organizations Act ([RICO] 18 USC § 1962 [c], [d]) and State law claims against the mortgage borrowers for failure to plead proximate cause and injury (First Nationwide Bank v Gelt Funding Corp., 27 F3d 763, cert denied — US —, 115 S Ct 728), plaintiff is collaterally estopped from litigating the issue of whether there is a causal connection between defendant’s alleged negligence and the injury it sustained (see, Schwartz v Public Adm’r of County of Bronx, 24 NY2d 65, 71). That the specific loans alleged in the instant action had not been foreclosed at the time of the Federal action is immaterial, since the Second Circuit’s holding clearly applies to all of the loans on which plaintiff premised its RICO and State law causes of action. Similarly, it is immaterial that the misrepresentations alleged in this action differ from those alleged in the Federal action, since both relate to plaintiff’s overvaluation of the properties, which the Federal court found was not a proximate cause of plaintiff’s loss. Concur — Murphy, P. J., Wallach, Ross, Nardelli and Tom, JJ.

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Bluebook (online)

224 A.D.2d 283, 638 N.Y.S.2d 428, 1996 N.Y. App. Div. LEXIS 1091, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-nationwide-bank-v-konecky-nyappdiv-1996.

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