Giovanni Baquerizo, et al., appellants, v. Viviana Monasterio, respondent. (2011)

Argued—November 4, 2011

DECISION & ORDER

In an action, inter alia, to recover damages for breach of an escrow agreement, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Warshawsky, J.), entered October 26, 2010, which granted the defendant's motion pursuant to CPLR 3211(a) to dismiss the complaint.

ORDERED that the order is affirmed, with costs.

An escrow agent “not only has a contractual duty to follow the escrow agreement, but additionally becomes a trustee of anyone with a beneficial interest in the trust” (Takayama v. Schaefer, 240 A.D.2d 21, 25).   Accordingly, the escrow agent has a duty not to deliver the property held in escrow to anyone except upon “strict compliance with the conditions imposed” in the escrow agreement (id. at 25 [internal quotation marks omitted] ).   “Thus, an escrow agent can be held liable for breach of the escrow agreement and breach of fiduciary duty as escrowee” (id. at 25;  see Grinblat v. Taubenblat, 107 A.D.2d 735).   An attorney holding funds in escrow owes a fiduciary duty “to ‘anyone with a beneficial interest in the trust’ ” (Levit v. Allstate Ins. Co., 308 A.D.2d 475, 477, quoting Takayama v. Schaefer, 240 A.D.2d at 25).

While we disagree with the Supreme Court's reliance upon lack of privity as a basis for dismissing the causes of action sounding in breach of the subject escrow agreement, breach of the duty of good faith and fair dealing, and breach of fiduciary duty, the defendant's motion to dismiss those causes of action was properly granted, pursuant to CPLR 3211(a)(1).   The documentary evidence submitted on the motion included the escrow agreement, which contained an exculpatory clause that bound the plaintiffs and waived any liability against the defendant except for gross negligence or willful misconduct (see Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 553).   Furthermore, the complaint did not contain any factual allegations of gross negligence or willful misconduct, and the documentary evidence “conclusively establishe[d]” (Leon v. Martinez, 84 N.Y.2d 83, 88) that the defendant was not grossly negligent, did not engage in willful misconduct, and did not breach the escrow agreement, but instead properly disbursed the escrow funds upon receipt of notification from the plaintiffs specifically authorizing their release (see generally Abrahams v Commonwealth Land Tit. Ins. Co., 81 AD3d 759).

MASTRO, A.P.J., FLORIO, LOTT and COHEN, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court