SUPRINA v. GOODMAN (2026)

DECISION & ORDER

In an action to recover damages for breach of an oral escrow agreement and breach of fiduciary duty, the plaintiff appeals from an order of the Supreme Court, Nassau County (Lisa A. Cairo, J.), dated November 12, 2024.  The order, insofar as appealed from, granted that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the complaint.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the complaint is denied.

The plaintiff commenced this action against Fredric Goodman and Marin Goodman, LLP, alleging breach of an oral escrow agreement and breach of fiduciary duty.  The defendants moved, inter alia, pursuant to CPLR 3211(a) to dismiss the complaint.  In an order dated November 12, 2024, the Supreme Court, among other things, granted that branch of the defendants' motion.  The plaintiff appeals.

“Pursuant to CPLR 3211(a)(1), a party may move to dismiss a cause of action where the movant has a defense founded on documentary evidence” (Stamp Rite Tool & Die Corp. v. Branded Leather, Inc., 236 A.D.3d 1076, 1079, 230 N.Y.S.3d 640;  see Sunset Café, Inc. v. Mett's Surf & Sports Corp., 103 A.D.3d 707, 708, 959 N.Y.S.2d 700).  “A motion to dismiss a complaint pursuant to CPLR 3211(a)(1) may be granted only if the documentary evidence submitted by the moving party utterly refutes the factual allegations of the complaint and conclusively establishes a defense to the claims as a matter of law” (Silber Inv. Props., Ltd. v. BJG Islandia Realty, LLC, 236 A.D.3d 953, 954, 230 N.Y.S.3d 612 [internal quotation mark omitted];  see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190;  Katsorhis v. 718 W. Beech St, LLC, 234 A.D.3d 744, 746, 226 N.Y.S.3d 249).

“On a motion to dismiss for failure to state a cause of action pursuant to CPLR 3211(a)(7), a court must ‘accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory’ ” (Acala v. Mintz Levin Cohn Ferris Glovsky & Popeo, P.C., 222 A.D.3d 706, 707, 201 N.Y.S.3d 202, quoting Leon v. Martinez, 84 N.Y.2d 83, 87–88, 614 N.Y.S.2d 972, 638 N.E.2d 511;  see New York State Div. of Human Rights v. Town of Oyster Bay, 177 A.D.3d 893, 894, 113 N.Y.S.3d 153).  “Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one and, unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal shall not eventuate” (166–20 Union Turnpike, LLC v. Tavak, LLC, 241 A.D.3d 1505, 1506, 243 N.Y.S.3d 101 [internal quotation marks omitted];  see GLD3, LLC v. Albra, 241 A.D.3d 1288, 1290, 241 N.Y.S.3d 743).

“The elements of an escrow agreement are an agreement as to the subject matter of the escrow, delivery of the funds to a third-party depository conditioned upon the performance of some act or the occurrence of some event, and relinquishment of the funds by the grantor” (Gargano v. Morey, 165 A.D.3d 889, 891, 86 N.Y.S.3d 595;  see Brassell v. Harbourview Abstract, Inc., 163 A.D.3d 908, 910, 82 N.Y.S.3d 483).  There is no requirement that an escrow agreement be in writing (see Johnson v. Optometrix, Inc., 75 A.D.3d 1073, 1073, 903 N.Y.S.2d 294;  Sienna Capital Group, Inc. v. Rosen, 44 A.D.3d 742, 743–744, 843 N.Y.S.2d 188).

“[T]he elements of a cause of action to recover damages for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) misconduct by the defendant, and (3) damages directly caused by the defendant[']s misconduct” (J.D. v. Roman Catholic Diocese of Brooklyn, 203 A.D.3d 880, 882, 161 N.Y.S.3d 786 [internal quotation marks omitted];  see Mann v. Sasson, 186 A.D.3d 823, 824, 127 N.Y.S.3d 791).  An attorney holding funds in escrow owes a fiduciary duty to anyone with a beneficial interest in the trust (see Hosannah v. Millennium Abstract Corp., 231 A.D.3d 715, 717, 217 N.Y.S.3d 661;  Zi Kuo Zhang v. Lau, 210 A.D.3d 829, 831, 178 N.Y.S.3d 545).  An attorney owes this fiduciary duty even in the absence of an attorney-client relationship (see Zi Kuo Zhang v. Lau, 210 A.D.3d at 831, 178 N.Y.S.3d 545;  Shan Yun Lin v. Lau, 210 A.D.3d 817, 819, 178 N.Y.S.3d 538).  “[A]n escrow agent can be held liable for breach of the escrow agreement and breach of fiduciary duty as escrowee” (Sasidharan v. Piverger, 145 A.D.3d 814, 815, 44 N.Y.S.3d 85;  see Hosannah v. Millennium Abstract Corp., 231 A.D.3d at 717, 217 N.Y.S.3d 661).

Here, the complaint set forth cognizable causes of action to recover damages for breach of the oral escrow agreement and breach of fiduciary duty.  Contrary to the determination of the Supreme Court, the evidence submitted by the defendants in support of their motion did not demonstrate that a material fact as claimed by the plaintiff was not a fact at all and did not utterly refute the plaintiff's factual allegations, conclusively establishing a defense as a matter of law (see Esposito v. Weiner, 160 A.D.3d 930, 930–931, 72 N.Y.S.3d 475;  Sasidharan v. Piverger, 145 A.D.3d at 816, 44 N.Y.S.3d 85).

Accordingly, the Supreme Court erred in granting that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the complaint.

IANNACCI, J.P., FORD, LANDICINO and QUIRK, JJ., concur.