The following papers numbered 1 to 9 read herein:Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1-36-8

Opposing Affidavits (Affirmations)4-5

Reply Affidavits (Affirmations)[*2]9

Other Papers

Upon the foregoing papers, defendant First American Title Insurance Company (s/h/a First American Title Company d/b/a First American Title Insurance Company of New York) (First American) moves for an order, pursuant to CPLR 3211 (a) (1), (5) and (7), dismissing the complaint (motion sequence 1) and the amended complaint (motion sequence 2) of plaintiff, Union Street Tower, LLC (Union), against First American.

This insurance coverage dispute involves title insurance policy No. Y 273444 that First American issued to Union on March 7, 2003 (Title Policy) through its alleged agent, East Coast Abstract, Inc. (East Coast), in connection with Union's acquisition of a fee interest in the property at 225 Fourth Avenue in Brooklyn (Block 955, Lot 4) (Lot 4). Union alleges that First American insured its acquisition of both Lot 4 as well as the air rights to the contiguous property located at 227 Fourth Avenue (Block 955, Lot 1) (Lot 1 Air Rights), but First American contends that it "did not undertake to insure any transfer of air rights."

Union's Acquisition Of Lot 4 And Lot 1 Air Rights

Union acquired Lot 4 and "certain development rights from Lot 1" from Eric Richmond (Richmond), pursuant to a March 7, 2003 purchase agreement between Union, Richmond and Jean G. Miele (Miele), the closing for which took place on March 7, 2003 (Purchase Agreement). The Purchase Agreement provides that Lot 4 shall be conveyed to Union by "duly executed deed" and that the "parties shall execute those documents and instruments necessary to transfer certain development rights from Lot 1 to Lot 4 and Lot 1 will retain a square footage equal to a 2.3 floor area ratio:"^[FN1]

"Richmond shall deliver to [Union] a duly executed deed [which] shall convey to [Union] that part of the Premises designated as Block 955, Lot 4 on the Tax Map of Kings County, State of New York ( Lot 4'), and which is more particularly described in the Deed, and transfer certain development rights from Lot 1 to Lot 4

. . . .

"The parties shall execute those documents and instruments necessary to transfer certain development rights from Lot 1 to Lot 4 and Lot 1 will retain a square footage equal to a 2.3 floor area ratio. Said documents and instruments shall be substantially in the form annexed as Exhibit C' and the parties shall execute any other documents required for the transfer of such development rights (collectively the Zoning Declaration') and . . ." (emphasis added)

The Purchase Agreement collectively defines the zoning documents effectuating the transfer of Lot 1 Air Rights as the "Zoning Declaration" and annexes them as Exhibit C (2003 Zoning Declaration). The 2003 Zoning Declaration consists of: (1) a Certification Pursuant to Zoning Lot Subdivision D of Section 12-10 of the New York City Zoning Resolution of December 15, 1961 (Certification of Interested Parties), declaring that Richmond, Union and Miele were the only [*3]"parties in interest" affected by the transfer;^[FN2] (2) Union's March 7, 2003 Zoning Lot Description and Ownership Statement; (3) Richmond and Union's joint Declaration of Zoning Lot Restrictions, declaring that Lot 4 and Lot 1 are "to be treated as one zoning lot . . ." (emphasis in original); and (4) a March 7, 2003 "Waiver" by Miele as a "Party in Interest."

The Certification of Interested Parties was executed by Stanley E. Levine, Executive Vice President of East Coast, as the authorized agent of Lawyers Title Insurance Corporation and specifically provides:

"LAWYERS TITLE INSURANCE CORPORATION, a title insurance company licensed to do business in the State of New York, by East Cost Abstract, Inc., its authorized agent . . . hereby certifies that as to the land hereinafter described . . . that all the parties in interest constituting a party as defined in Section 12-10, subdivision (d) of the Zoning Resolutions of the City of New York, effective December 15, 1961, as amended are the following:

NAMEADDRESSINTEREST

1. Eric Richmond227 Fourth Avenue (Lot 1)Fee Interest

2. Union Street Tower LLC592 Carroll Street (Lot 4)Fee Interest

3. Jean G. Miele592 Carroll Street (Lot 4)Mortgagee"

Thus, the Certification of Interested Parties in the 2003 Zoning Declaration explicitly states that it was made by East Coast on behalf of Lawyers Title Insurance Corporation.

The First American Title Policy

First American issued the Title Policy to Union on March 7, 2003, which specifically insured against:

"loss or damage, not exceeding the Amount of Insurance stated in Schedule A, sustained or incurred by the insured by reason of:

1.Title to the estate or interest described in Schedule A being vested other than as stated therein;

2.Any defect in or lien or encumbrance on the title;

3.Unmarketability of the title;

4.Lack of a right of access to and from the land."

Schedule A to the Title Policy, which was executed by East Coast as First American's authorized [*4]agent, specifically provides that "the estate or interest insured by this policy is FEE SIMPLE" and references Schedule C to the Title Policy for a metes and bounds description of the "land referred to in this policy":

"The estate or interest insured by this policy is FEE SIMPLE vested in the insured by means of DEED made by ERIC RICHMOND to the insured dated 3/7/03 and duly recorded in the office of the REGISTER of the County of KINGS

. . . .

"The land referred to in this policy is described on Schedule C."

The Title Policy, under "EXCLUSIONS FROM COVERAGE" [par. 1 (d)], specifically defines the term "land" as excluding "any property beyond the lines of the area described or referred to in Schedule (A)":

"the land described or referred to in Schedule (A), and improvements affixed thereto which by law constitute real property. The term land' does not include any property beyond the lines of the area described or referred to in Schedule (A), nor any right, title, interest, estate or easement in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall modify or limit the extent to which a right of access to and from the land is insured by this policy" (emphasis added).

According to the plain terms of the Title Policy, title insurance coverage is limited to Union's fee interest in Lot 4 and excludes coverage regarding any property other than Lot 4. Importantly, the Title Policy does not reference Lot 1 Air Rights.

Paragraph 15 of the Title Policy entitled "LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT," provides, in relevant part:

"(a) This policy together with all endorsements, if any, attached hereto by the Company is the entire policy and contract between the insured and the Company. In interpreting any provision of this policy, this policy shall be construed as a whole.

(b) Any claim of loss or damage, whether or not based on negligence, and which arises out of the status of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. . . ."

East Coast Records The Transfers

East Coast recorded the March 7, 2003 deed transferring Lot 4 to Union in the New York City Register's Office, Department of Finance (City Register), on October 21, 2003.East Coast waited nearly four years before it recorded the 2003 Zoning Declaration regarding the Lot 1 Air Rights with the City Register on January 7, 2007.

Union's Building Construction Permit

Three years later, on January 14, 2010, Union obtained a building construction permit from the New York City Department of Buildings (DOB) for the construction of a 40-unit, 12-story building on Lot 4 based, in part, on the 2003 Zoning Declaration and the Certification of Interested Parties.

The DOB subsequently revoked Union's building construction permit by letter dated December 21, 2010 (2010 DOB Letter), which directed that "all work under the permit must stop immediately." According to the 2010 DOB Letter, the DOB received a complaint that there were "parties in interest" who were not identified in the 2003 Zoning Declaration and the Certification of Interested Parties that East Coast recorded with the City Register in 2007:

"The approvals and permits are hereby revoked for failure to demonstrate that the proper zoning lot exhibits created a zoning lot comprised of tax lots 1 and 4 in connection with the permit application to construct a 40-unit 12-story building on Block 955 Lot 4. [*5]

"As you are aware, a complaint was filed . . . that alleged that five parties in interest in the zoning lot did not sign a declaration of zoning lot, or waive their right to sign a declaration of zoning lot, in accordance with the zoning lot' definition of New York City Zoning Resolution Section 12-10 (d)."

The 2010 DOB Letter advised Union that the permit was revoked because "you have not demonstrated that the list of parties in interest in East Coast Abstract's March 7, 2003 certification was still accurate at the time the [2003 Zoning Declaration] was recorded."

The 2010 DOB Letter listed six parties who were not identified in the 2003 Zoning Declaration and the Certification of Interested Parties, including the nature of, and dates on which, they acquired their respective interests in Lot 1 and/or Lot 4: (1) 231 Fourth Avenue Lyceum, LLC (fee owner of Lot 1 as of January 27, 2005); (2) Aaron Sukenik (mortgagee of Lots 1 and 4 as of May 3, 1984 and of Lot 1 as of January 9, 2006); (3) Frank Mannino (mortgagee of Lots 1 and 4 as of May 3, 1984); (4) Kostelanetz & Ritholz, LP (mortgagee of Lot 1 as of November 7, 1986); (5) Sheraff, Friedman, Hoffman & Goodman, LP (mortgagee of Lots 1 and 4 as of April 27, 1987); and (6) Quantum Corporate Funding Ltd. (mortgagee of Lot 1 as of January 27, 2005).

Thus, according to the 2010 DOB Letter, four interested parties not listed in the Certification of Interested Parties were mortgagees of Lot 1 and/or Lot 4 since the 1980s. Two interested parties who were not listed in the Certification of Interested Parties acquired their interests in Lot 1 (a fee owner and a mortgagee) on January 27, 2005 — after the March 7, 2003 closing and before East Coast's belated recording of the 2003 Zoning Declaration and Certification of Interested Parties on January 7, 2007.

The 2010 DOB Letter thus evidences that: (1) the 2003 Zoning Declaration and the Certification of Interest Parties were inaccurate upon their execution on March 7, 2003 because they did not include mortgagees with an interest in Lots 1 and/or 2 since the 1980s and (2) two new parties acquired interests in Lot 1 during East Coast's four-year delay in recording the 2003 Zoning Declaration and the Certification of Interested Parties.

The Instant Action

Union thereafter commenced this action against First American and East Coast by filing a summons and verified complaint with the county clerk's office on April 23, 2013,^[FN3] asserting three causes of action sounding in negligence, breach of contract and breach of fiduciary duty. Under the heading "Nature of Action," Union's complaint alleges:

"[t]his is an action for damages against the Defendants based upon Defendants' negligence, breaches of contract and the breach of their fiduciary obligations due to Plaintiff arising from Plaintiff's contracting with Defendants to obtain title insurance from the Defendants with respect to the premises commonly known as [Lot 4]" (Complaint ¶ 5) (emphasis added)

While Union alleges that its claims arise out of the Title Policy, the complaint does not identify any provision(s) of the Title Policy that were allegedly breached.

Union's complaint alleges that "Defendants had an absolute duty to timely and properly record the documents" evidencing Union's acquisition of Lot 1 Air Rights and "[t]he failure of the Defendants to timely and properly record the documents . . . led directly to the [DOB's] revocation of the Plaintiff's permit . . ." (Complaint ¶¶ 15-16). The complaint alleges that East Coast's belated [*6]recording of the 2003 Zoning Declaration regarding Lot 1 Air Rights caused the DOB to revoke Union's building construction permit because additional parties became "interested parties" during the delay:

"The [DOB] deemed the March 7, 2003, air rights transfer to be improper because by the time the Defendants, years after the closing, finally got around to filing the air rights transfer documents, the fee owner for Lot 1 had changed and there were new interested parties', i.e., new mortgagees, who theoretically had not approved the transfer" (Complaint ¶ 19) (emphasis in original).

Union's complaint alleges that defendants' failure "to timely and properly record" the 2003 Zoning Declaration regarding the transfer of Lot 1 Air Rights "led directly to the [DOB's] revocation of the Plaintiff's permit," "caused the [DOB] to ultimately find the air rights transfer defective" and "deprived Plaintiff of the benefits of [the Purchase Agreement]" (Complaint ¶¶ 15, 18 and 21).

Union's complaint annexes, and incorporates by reference,^[FN4] copies of: (1) the Purchase Agreement with all exhibits; (2) the 2003 Zoning Declaration and the Certification of Interested Parties; and (3) the 2010 DOB Letter.

First American's Motion To Dismiss The Complaint

First American moved to dismiss Union's complaint on or about June 24, 2013, pursuant to CPLR 3211 (a) (1), (5) and (7) and CPLR 3016 (b). Essentially, First American argues that it contracted to insure plaintiff's acquisition of a fee interest in Lot 4 and that "the documentary evidence shows that First American had no further obligations to plaintiff." First American further contends that it "did not undertake to insure any transfer of [Lot 1 Air Rights] or to record any documents . . ." and that "[p]laintiff's case against [it] is based on the mistaken allegation that First American insured the [Lot 1] Air Rights transfer and/or had some other responsibility to record the Lot 1 Zoning Documents."

In addition, First American seeks dismissal of Union's complaint on the grounds that Union's claims are barred by the applicable statute of limitations and that Union's breach of fiduciary duty claim was not pled with sufficient particularity.

Union's Amended Complaint

Union, in response to First American's dismissal motion, timely amended its complaint as of right, pursuant to CPLR 3025 (a), on July 15, 2013, re-asserting its contract and negligence claims and omitting its breach of fiduciary duty claim against First American.

Under the heading "Nature of Action," Union's amended complaint alleges that this action seeks damages for "negligence and contract breaches":

"[t]his is an action for damages and indemnification based upon Defendants' negligence and contract breaches arising from Plaintiff's apparent purchase of insufficient title insurance and payment for the timely recording of certain instruments with respect to [Lot 4] and [Lot 1 Air Rights]" (Amended Complaint ¶ 7).

Like Union's original complaint, Union's amended complaint does not identify any provision(s) of the Title Policy that were allegedly breached.

Union's amended complaint alleges, "[u]pon information and belief," that "the Defendants failed to procure proper insurance for the contemplated transfer of air rights" (Amended Complaint ¶ 17). Union's amended complaint further alleges that "documents effectuating the air rights transfer were duly executed at the March 7, 2003, closing," yet "East Coast as agent for First American . . [*7]. failed to timely record said documents within accepted practices in the title insurance industry" and that defendants "had an absolute duty to timely and properly record the documents" (Amended Complaint ¶¶ 18, 22 and 27). Union's amended complaint alleges that East Coast's belated recording of the 2003 Zoning Declaration "led directly to the [DOB's] revocation of the Plaintiff's permit" and "caused the [DOB] to ultimately find the air rights transfer defective" since "the fee owner of Lot 1 changed and there were new interested parties' . . . who theoretically had not approved the [Lot 1 Air Rights] transfer" (Amended Complaint ¶¶ 26, 29 and 30).

Union's amended complaint annexes, and incorporates by reference, copies of: (1) the Purchase Agreement with all exhibits; (2) the 2003 Zoning Declaration and the Certification of Interested Parties; and (3) the 2010 DOB Letter.

First American's Motion To Dismiss The Amended Complaint

First American moved to dismiss the amended complaint on or about August 5, 2013, pursuant to CPLR 3211 (a) (1), (5) and (7) on the grounds that it "did not undertake to insure the Air Rights Transfer or to record any documents related to the purported Air Rights Transfer." First American contends that Union's allegations regarding the 2003 Zoning Declaration "are belied by documentary evidence" proving that "East Coast was acting as agent for Lawyers Title . . ." First American also seeks dismissal on the grounds that Union's amended complaint fails to state a cause of action and that Union's claims are time-barred.

A motion to dismiss under CPLR 3211(a)(1) on the grounds that a claim is barred by documentary evidence may be granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense to such claim as a matter of law (see Goseh v. Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 [2002]). To be considered "documentary," evidence must be unambiguous and of undisputed authenticity. Mortgages, deeds, contracts, and any other papers, the contents of which are "essentially undeniable," qualify as documentary evidence" (see Sands Point Partners Private Client Group v Fidelity Natl. Title Ins. Co., 99 AD3d 982, 984 [2012] ).

A defendant's dismissal motion under CPLR 3211 (a) (7) requires determining whether the plaintiff has stated a cause of action, but, "[i]f the court considers evidentiary material, the criterion then becomes whether the proponent of the pleading has a cause of action'" (Sokol v Leader, 74 AD3d 1180, 1181-1182 [2010] [emphasis added], quoting Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). Dismissal results only if the movant demonstrates conclusively that the plaintiff has no cause of action, or that "a material fact as claimed by the pleader to be one is not a fact at all" (Sokol, 74 AD3d at 1182, quoting Guggenheimer, 43 NY2d at 275; see also Lawrence v Graubard Miller, 11 NY3d 588, 595 [2008]). A court considering a dismissal motion on the basis of failing to state a claim generally must accept the facts alleged in the complaint as true and make any possible favorable inferences for the plaintiff (Sokol, 74 AD3d at 1181), even when such allegations are "upon information and belief" (see Roldan v Allstate Ins. Co., 149 AD2d 20, 40 [1989]).

However, legal conclusions and factual claims flatly contradicted by the evidence will not be presumed true (see Sweeney v Sweeney, 71 AD3d 989, 991 [2010] Parsippany Constr. Co., Inc. v Clark Patterson Assoc., P.C., 41 AD3d 805, 806 [2007] Meyer v Guinta, 262 AD2d 463, 464 [1999]).

(2)

Dismissal of Union's breach of contract claim against First American is warranted based on the plain terms of the Title Policy, which unambiguously provides coverage for Union's acquisition of a fee interest in Lot 4. The Title Policy specifically states that coverage is limited to the property described in Schedule A to the Title Policy, which describes Lot 4 in metes and bounds. Furthermore, the Title Policy expressly excludes coverage regarding any property other than Lot 4 and does not reference Lot 1 Air Rights. Thus, Union's cause of action for breach of contract regarding the transfer of Lot 1 Air Rights is refuted by the plain terms of the Title Policy.

Union's cause of action for negligence against First American is also subject to dismissal whether based on: (1) the failure to procure title insurance for Lot 1 Air Rights or (2) East Coast's belated recording of the 2003 Zoning Declaration.

The Appellate Division, Second Department has specifically held that a title insurer's liability is "based on contract law and not negligence law" and is therefore limited to the terms of the title insurance policy:

" The liability of the insurer to the insured is essentially based on contract law and not negligence law. As such, it is governed and limited by agreements, terms, conditions and provisions contained in the title insurance policy . . . the title insurer will be liable for hidden defects and all matters affecting title within the policy coverage not excluded or specifically excepted from said coverage'" (Citibank, N.A. v Commonwealth Land Title Insur. Co., 228 AD2d 635, 637 [1996] [citations omitted] [emphasis added]).

"In the case of a title insurance policy, the insurer undertakes to indemnify the insured if the title turns out to be defective . . . The doctrine of skill or negligence has no application to a contract of title insurance (Maggio v Abstract Title & Mortgage Corp., 277 AD 940, 940 [1950]).

The Title Policy at issue here, which only provides coverage for Union's acquisition of a fee interest in Lot 4 and does not mention Lot 1 Air Rights, specifically provides that it "is the entire policy and contract between the insured and the Company" and that "[a]ny claim of loss or damage, whether or not based on negligence, and which arises out of the status of the title to the estate or interest covered hereby or by any action asserting such claim, shall be restricted to this policy. . . ." Thus, the Title Policy is the only contract between Union and First American and Union's claims against First American are "restricted" to an action thereunder.

Dismissal of Union's negligence claim(s) is also warranted under the principle that "[a] simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated" (Clark-Fitzpatrick, Inc. v Long Island R. Co., 70 NY2d 382, 389 [1987]). Union opposes First American's dismissal motions by arguing that the amended complaint "has a facially valid cause of action for the Defendants' failure to timely record the [Lot 1 Air Rights] transfer documents" because First American had a duty distinct from the Title Policy based on the holding in Choudhary v. First Option Title Agency (107 AD3d 657 [2013]).

In Choudhary, the Appellate Division, Second Department upheld a negligence claim against a title insurer for failing to timely record a deed, explicitly holding that "the complaint sufficiently stated a cause of action to recover damages for the negligent failure to timely record the . . . deed that was independent of the parties' contract for insurance" (107 AD3d at 658-659 [emphasis added]). [*9]Union's reliance on Choudhary is misplaced because the court's holding is only applicable where a title insurer specifically undertook to perform recording services (see Cruz v Commonwealth Land Title Insur. Co., 157 AD2d 333, 336 [1990] [holding that "having undertaken to perform this service, defendant was under a duty to perform it with due care, and should be liable for any losses proximately caused by its failure to do so"] see also Lucas v Kensington Abstract LLC, 30 Misc 3d 1135 (A) [Sup Ct, Nassau County 2008); Crupi v Newell & Talarico Tit. Agency, Inc., 14 Misc 3d 1225 (A) [Sup Ct, Richmond County 2007]).

Even assuming, arguendo, that First American agreed to perform recording services, and thereby undertook a duty that is separate and distinct from those under the Title Policy, documentary evidence (i.e., the 2010 DOB Letter) proves that the timing of the recording was not the proximate cause of the revocation of Union's building construction permit.

The 2010 DOB Letter advised Union that the permit was revoked because "you have not demonstrated that the list of parties in interest in East Coast Abstract's March 7, 2003 certification was still accurate at the time the [2003 Zoning Declaration] was recorded." Regardless of when the document was recorded, and by whom, the information contained in the 2010 DOB Letter proves that the 2003 Zoning Declaration and the Certification of Interested Parties prepared by East Coast on behalf of Lawyers Title Insurance Corporation omitted several mortgagees with interests in Lot 1 since the 1980s, warranting the DOB's revocation of Union's building construction permit at any time.

In any event, documentary evidence (i.e., the 2003 Zoning Declaration and the Certification of Interested Parties) proves that East Coast did not execute the zoning documents effectuating the transfer of Lot 1 Air Rights on behalf of First American. Rather, the Certification of Interested Parties in the 2003 Zoning Declaration reflects, on its face, that it was executed by East Coast as authorized agent for Lawyers Title Insurance Corporation. Indeed, Union's amended complaint consistently alleges, upon information and belief, that "East Coast initially obtained the Zoning Lot Certificate from Lawyers Title Insurance Corp." (Amended Complaint ¶ 13). Accordingly, it is

ORDERED that First American's CPLR 3211 motions to dismiss Union's complaint (motion sequence 1) and Union's amended complaint (motion sequence 2) are granted.

This constitutes the decision, order and judgment of the court.

E N T E R,

________________________J. S. C