In this action, plaintiff Tracy Cohen, the administratrix of Malcom S. Cohen's estate, moves pursuant to CPLR 3213 for summary judgment in lieu of complaint upon a "Mortgage Note and Consolidation Agreement" (the "Consolidated Note").

It is undisputed that prior to his death, Malcolm Cohen acted as attorney for Gateway Builders Realty, Inc. ("Gateway"). According to defendants, Gateway retained Cohen to provide legal services in connection with the purchase and financing of property located at 142 22nd Street, Brooklyn, New York (the "Property"). Over the next four years, Cohen represented Gateway in further refinancing transactions involving the Property, whereby Gateway would obtain a loan from a new lender and pay off its existing loan. It appears that Gateway obtained financing from at least four commercial lenders. During the course of his representation, Cohen also issued Gateway a number of loans.

In support of her motion, plaintiff submits the Consolidated Note, which is dated September 1, 2009, and reflects the consolidation of two prior notes given by Gateway to Cohen, dated November 8, 2006, and October 1, 2008, each for $100,000, with an additional loan of [*2]$125,000 from Cohen to Gateway. The Consolidated Note is secured by a mortgage on the Property and is guaranteed by defendant Yildirim, who is Gateway's principal.

Pursuant to CPLR 3213, when an action is based upon an instrument for the payment of money only, a plaintiff may serve with the summons a notice of motion for summary judgment and the supporting papers in lieu of a complaint. "The justification for this expedited procedure is that such obligations are presumptively valid, and holders of them, in the absence of questions of fact as to authenticity or default, should not be subject to the delay occasioned by formal pleading" (Logan v Williamson & Co., 64 AD2d 466 [4th Dept 1978]). The usual standards for summary judgment apply to CPLR 3213 motions (see Gateway State Bank v Shangri-La Private Club for Women, 113 AD2d 791 [2d Dept 1985]).

The Consolidated Note for $325,000, signed by both defendants, is a proper subject of a CPLR 3213 motion. Defendants admit that Cohen loaned Gateway $325,000, but, in opposition, claim that $100,000 of the sum was repaid, and further, that Cohen's estate should be precluded from recovering any part of the sum because of misconduct and malpractice committed by Cohen while representing Gateway.

Defendants submit a copy of a check, dated March 3, 2008, issued by Gateway to Cohen for $100,000 with a notation of "partial loan." Plaintiff claims the payment was made in satisfaction of a note dated November 1, 2006, which she annexes to her papers. Notably, the payment occurred prior to September 1, 2009, when defendants executed the Consolidated Note acknowledging an outstanding debt of $325,000. Accordingly, for purpose of this motion, the Court credits the explanation that the March 3, 2008 payment did not relate to the indebtedness reflected in the Consolidated Note, and, thus, does not raise an issue of fact precluding summary judgment.

Defendants also raise their claims of malpractice and breach of fiduciary duty as defenses to plaintiff's motion. To recover from an attorney under a theory of malpractice, one must prove "(1) the negligence of the attorney; (2) that the negligence was the proximate cause of the loss sustained; and (3) proof of actual damages" (Mendozo v Schlossman, 87 AD2d 606, 607 [2d Dept 1982]).

Defendants argue that Cohen committed malpractice when, in negotiating loan documents with one of Gateway's lenders, he allowed the inclusion of provisions for significant prepayment penalties, in contravention of Gateway's express wishes. Yildirim, who states that he relied heavily on Cohen's legal advice because English is not his first language, claims that Gateway was unaware of the prepayment penalty written in bold-face type in the loan documents and only signed them when he was advised to do so by Cohen, who assured Gateway that the documents were the same as other loan documents Gateway had signed in the past (which did not contain prepayment penalties). As a result of Cohen's negligence, defendants claim, Gateway was responsible for a $819,000 prepayment penalty, a fact it did not become aware of until some unspecified time after Cohen's death in 2009. Although defendants' claim sounds in malpractice, the Court notes that any claim based on legal malpractice would be barred by CPLR 214(6)'s three-year statute of limitations because, even taking into account the possibility of tolling for continuous representation, the claim accrued no later than September 2009 at Cohen's death, more than three years before the commencement of this action (see Shivers v Siegel, 11 AD3d [*3]447 [2d Dept 2004]; Shumsky v Eisenstein, 96 NY2d 164, 167 [2001]).Defendants accuse Cohen of ethical misconduct and breach of fiduciary duty, alleging that Cohen drafted the notes evincing his loans to Gateway, and including 18% interest rates, without disclosing or obtaining Gateway's consent to his conflict of interest, in violation of New York's Code of Professional Responsibility. Defendants also complain that Cohen charged Gateway for these drafting services, and acted out of self interest by recommending that Gateway obtain refinancing so that Gateway could repay the money owed to him.

The Lawyer's Code of Professional Responsibility, DR5-104(A),^[FN1] in effect at the time, prohibits an attorney from entering into a business transaction with a client without making certain disclosures and obtaining written consent from that client, as Cohen is accused of doing. While a violation of the Code of Professional Responsibility does not alone give rise to a private cause of action (see DeStaso v Condon Resnick, LLP, 90 AD3d 809, 814 [2d Dept 2011]), defendants allege facts giving rise to a breach of fiduciary duty claim. "In order to establish a breach of fiduciary duty, a plaintiff must prove the existence of a fiduciary relationship, misconduct by the defendant, and damages that were directly caused by the defendant's misconduct" (Daly v Kochanowicz, 67 AD3d 78 [2d Dept 2009](quoting Kurtzman v Berstol, 40 AD3d 588, 590 [2d Dept 2007]). "It is well established that an attorney owes his client a fiduciary duty (see Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 9 [1st Dept 2008]), and defendants complain of misconduct including Cohen's inclusion of the prepayment penalties and self-interest in lending money to Gateway.

Plaintiff argues that CPLR 4519 (New York's "Dead Man's Statute") precludes the evidence of the purported conversation between Cohen and Gateway, as well as the transactions that are the subject of the fiduciary duty claim. However, the law is established that a court may consider evidence otherwise excluded by CPLR 4519 in the context of a summary judgment motion (see Phillips v Kantor & Co., 31 NY2d 307, 315 [1972]).

The Court notes that defendants' breach of fiduciary duty claim may also be barred by CPLR 214(6)'s three-year statute of limitations. However, "[f]or breach of fiduciary duty claims, the choice of the applicable limitations period depends on the substantive remedy that the plaintiff seeks'" (Access Point Medical, LLC v Mandell, 106 AD3d 40, 43 [1st Dept 2013] quoting IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 139 [2009]). If the remedy sought is monetary damages, the three-year limitations period applies; if the remedy sought is equitable, the six-year limitations period applies (see Access Point, 106 AD3d at 44)(despite use of term "disgorgement," plaintiffs' demand for return of attorneys' fees was a claim for monetary damages and subject to three-year limitations period). Although defendants appear to seek monetary damages in the form of an offset, in light of the fact that defendants have not been afforded an opportunity to answer or raise defenses and counterclaims, summary judgment in this posture is inappropriate. Accordingly, plaintiffs's motion is denied. [*4]

Plaintiff is directed to file a complaint within 30 days of the date of this decision.

The foregoing constitutes the decision and order of this Court.

E N T E R:

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HO N. CAROLYN E. DEMAREST, J.S.C.