Wo Yee Hing Realty Corp. v. Stern
Supreme Court of New York, Appellate Division, First Department
July 31, 2012, Decided; July 31, 2012, Entered
[*60] Saxe, J.P.
[**51] The issue presented in this legal malpractice action is whether plaintiff has offered [****2] sufficient proof to create a triable issue of fact as to whether defendant's alleged malpractice proximately caused its claimed losses.
Plaintiff Wo Yee Hing Realty Corp. is a family-owned real estate holding corporation; its principals are brothers Chun Yee Yung, Chun Hing Yung, and Chun Wo Yung, who sued individually until they voluntarily discontinued their claims in June 2008, leaving the action to proceed in [***2] the name of the corporate plaintiff. Defendant Howard Stern is an attorney who serves as the administrator of a legal services plan offered to landlords by the Rent Stabilization Association since 1994. In 2006, one of plaintiff's principals contacted defendant seeking assistance on several landlord-tenant issues; he also asked defendant to represent plaintiff in the sale of a residential and commercial building it owned, located at 496 Broadway, in Manhattan.
The parties' claims as to the understanding that was reached regarding the corporation's retention of defendant are diametrically opposed. According to plaintiff's principals, defendant assured them that the anticipated sale could be structured as a "like-kind exchange" under ] Internal Revenue Code (26 USC) § 1031, which permits taxes on gains from the sale of real property to be deferred if the seller purchases another property of like kind, within certain parameters (see 26 USC § 1031 [a]). Plaintiff asserts that defendant "held himself out as knowledgeable in [1031 exchanges] and able to effectuate the sale and transfer of real property" to enable it to take advantage of the capital gains tax deferral.
Defendant, however, asserts [***3] that he informed plaintiff's principals that he "had no expertise or experience with structuring Section 1031 like-kind exchanges" and that responsibility for taking advantage of section 1031 would fall to them, and that they assured him that they were familiar with 1031 exchanges and would take care of that aspect of the transaction. Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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99 A.D.3d 58 *; 949 N.Y.S.2d 50 **; 2012 N.Y. App. Div. LEXIS 5719 ***; 2012 NY Slip Op 5792 ****; 2012 WL 3079221
[****1] Wo Yee Hing Realty Corp., Appellant, et al., Plaintiffs, v Howard Stern, Esq., Respondent.
Prior History: Appeal from an order of the Supreme Court, New York County (Debra A. James, J.), entered February 22, 2011. The order, insofar as appealed from as limited by the briefs, granted defendant's motion for summary judgment dismissing the complaint.
Wo Yee Hing Realty Corp. v Stern, 30 Misc 3d 1237(A), 926 NYS2d 348, 2011 NY Slip Op 50378(U), affirmed.
Wo Yee Hing Realty Corp. v Stern, 30 Misc 3d 1237A, 926 NYS2d 348, 2011 N.Y. Misc. LEXIS 994 (2011)
replacement property, like-kind, checks, taxpayer, proceeds of sale, issue of fact, intermediary, malpractice, made payable to, purchaser, acquire, proximate cause, relinquished, financing, handle, summary judgment, exchanges, deferred, losses
Tax Law, Sales & Exchanges, Like Kind Exchanges, General Overview, Torts, Malpractice & Professional Liability, Attorneys, Causation, Proximate Cause, Legal Ethics, Client Relations, Duties to Client, Effective Representation, Requirements, Banking Law, Bank Activities, National Banks, Loans, Real Estate Loans