The following e-filed documents, listed by NYSCEF document number (Motion 001) 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 40 were read on this motion to/for DISMISSAL.

Defendants Sobers Law Firm PLLC and Vivian Sobers ("moving defendants") motion to dismiss the causes of action and cross-claims against them is denied. Moving defendants' motion for sanctions is denied as is plaintiffs' cross-motion for sanctions.

Plaintiffs are the purported victims of a scam that was allegedly hatched by third-party defendant Korchmar who has not been sued directly by plaintiffs, despite being the person who allegedly has plaintiffs' money. According to the Complaint, plaintiffs and Korchmar sought to enter into a real estate partnership, lease and transaction. Plaintiffs engaged Sergey Mekhtiyev and his law firm to review the deal and manage the transaction and represent them as counsel. Korchmar retained moving defendants as his counsel. The transaction involved the formation of a partnership and the purchase of real estate. The partnership was to purchase a property and lease the building to a car dealership owned by Korchmar on a triple net lease. The terms included that plaintiffs would invest $1,320,000 for an 80% share and Korchmar would invest the other 20%. Moving defendants prepared the final partnership agreement, the real estate closing documents, reviewed any mortgage documents and the triple net lease.The Complaint alleges that as the closing came closer, moving defendants, in a series of emails, sought that the "balance of the funds be put in escrow" and that several days later, moving defendants sent wiring instructions for a Santander bank account. The Santander bank account instructions included a routing number and account number. The name on the account was listed as FTA, LLC d/b/a Denville Kia 3101 Rt. 10 Denville, NJ 07834. Plaintiff alleges that he wired $1,320,000, but rather than being moving defendants' escrow account, the account was controlled by Korchmar. Korchmar allegedly withdrew those funds and plaintiffs brought this action against the [*2]attorneys in this matter. Specifically, plaintiffs have sued both their own attorneys and Korchmar's attorneys.

Plaintiffs' causes of action against moving defendants are for fraud and legal malpractice. Moving defendants seek dismissal of both causes of action arguing that documentary evidence mandates dismissal of the fraud cause of action. Further, since it is undisputed that moving defendants and plaintiffs had no attorney/client relationship, there was no privity and they argue that the cause of action for legal malpractice cannot lie.

When deciding a motion to dismiss pursuant to CPLR §3211, the court should give the pleading a "liberal construction, accept the facts alleged in the complaint to be true and afford the plaintiff the benefit of every possible favorable inference" (Landon v. Kroll Laboratory Specialists, Inc., 22 NY3d 1, 5-6 [2013]; Faison v. Lewis, 25 NY3d 220 [2015]). However, if a complaint fails within its four corners to allege the necessary elements of a cause of action, the claim must be dismissed (Andre Strishak & Associates, P.C. v Hewlett Packard & Co., 300 AD2d 608 [2d Dept 2002]). A motion to dismiss pursuant to CPLR § 3211(a)(1), should not be granted unless the documentary evidence submitted is such that it resolves all factual issues as a matter of law and conclusively disposes of the claims set forth in the pleading (Art & Fashion Grp. Corp. v Cyclops Prod., Inc., 120 AD3d 436, 438 [1st Dept 2014]). Under CPLR § 3211(a)(7), the court "accepts as true the facts as alleged in the complaint and affidavits in opposition to the motion, accords the plaintiff the benefit of every possible favorable inference, and determines only whether the facts as alleged manifest any cognizable legal theory" (Elmaliach v Bank of China Ltd., 110 AD3d 192, 199 [1st Dept 2013] quoting Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414 [2001]).

The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff, and damages (Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553 [2009]). Moving defendants state that the documentary evidence show that plaintiffs' have no claim for fraud. The gravamen of plaintiffs' fraud claim is that the moving defendant deceived plaintiffs by misleading them into believing that were wiring money into an attorney escrow account when in fact they were wiring money into a business operating account controlled by Korchmar, who then stole the money. Moving defendants contend that the money needed to be wired into the business operating account in order to show proof of funds to the mortgage company so that financing could be obtained.

Contrary to moving defendants' arguments, the documentary evidence submitted by them only consists of emails between Sobers and Mekhtiyev dated December 11 and 12, 2017, that show that Mekhtiyev was seeking confirmation that funds had been transferred by Korchmar to moving defendants' escrow account, that Sobers had not received such proof of funds in the escrow account and was awaiting confirmation. Sobers further emailed Mekhtiyev that she was attempting to get further information from Korchmar and later, that Korchmar was trying to get more information from the bank. Moving defendants claim that these emails somehow demonstrate that they did not make a material misrepresentation of fact. However, these emails post-date earlier emails from November 2017, provided by plaintiffs, in which the moving defendants first emailed that their client wanted plaintiffs funds placed in escrow. Several days later, moving defendants sent wiring instructions for what was the business operating account. The emails submitted by moving defendants also post-date the plaintiffs wiring of the funds over a period of a couple of weeks. Moving defendants claim that these wiring instructions were based on an intervening conversation about financing sent subsequent to the escrow email. The documentary evidence does not show that moving defendants apprised plaintiff's attorney that the funds were going into the business operating account, and thus, do not conclusively dispose of this claim as a matter of law. Thus, the motion to dismiss the fraud cause of action is denied.

The general rule applicable to legal malpractice claims is that a relationship of privity or near-privity is required before a party has standing to bring a legal malpractice action. However, the Court of Appeals has held that an exception lies to this rule, and where a plaintiff sets forth a claim of "fraud, collusion, malicious acts or other special circumstances" a cause of action for attorney malpractice exists even absent privity (AG Capital Funding Partners, L.P. v State St. Bank and Tr. Co., 5 NY3d 582 [2005]). Here, as discussed above, plaintiff has properly alleged that moving defendants engaged in fraud. While the complaint does not allege an attorney-client relationship between the plaintiffs and the moving defendants, it sets forth a claim which falls within the narrow exception for "fraud, collusion, malicious acts or other special circumstances" under which a cause of action alleging attorney malpractice may be asserted absent a showing of privity.

Moving defendants' motion to dismiss the cross-claims is denied as premature. No discovery has taken place and dismissal at this juncture is not warranted (CPLR 3212(f)). Accordingly, it is hereby

ORDERED that defendants Sobers Law Firm PLLC and Vivian Sobers' motion to dismiss is denied; and it is further

ORDERED that the motion and cross-motion for sanctions are denied.

This constitutes the decision and order of the Court.