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On Behalf of Deutsche Bank and Title Company, Adam Leitman Bailey, P.C. Defeats Fraudulent Signature Claim

Sacks v Deutsche Bank
United States District Court for the Eastern District of New York

In 2006, Deutsche Bank National Trust’s (“DBNTC”) predecessor in interest lent over $800,000 to Lois Sacks secured by a mortgage on a property in Sag Harbor, NY, a wealthy community in New York’s storied Hamptons. The mortgage and note were signed under a power of attorney by Robert Sacks, the borrower’s son. After default on the mortgage, a foreclosure proceeding was brought by another law firm in 2009 and discontinued in 2010. Sacks brought a quiet title action in 2012 seeking to declare the mortgage invalid, alleging that Robert Sacks had presented a forged Power of Attorney and had no authority to mortgage the premises. Deutsche Bank, by other counsel, counterclaimed for breach of contract based on the mortgage and note and sued Fidelity National Title Insurance Company (“FNTIC”) and others in a third-party action. A default judgment was entered against Deutsche Bank.

When Adam Leitman Bailey PC was asked to enter and defend, we were able to vacate the default judgment against DBNTC, to dismiss as to FNTIC and to proceed with discovery. Adam Leitman Bailey, P.C. assigned two former prosecutors to the case who conducted a nationwide investigation which revealed a multi-state conspiracy on the part of Robert Sacks and associates to defraud mortgagees and other creditors. During the course of the investigation, it became clear to us, as was ultimately shown at trial, that Lois Sacks was at least cognizant of the conspiracy, if not complicit.

At trial, the plaintiff swore that the signature on the Power of Attorney was not hers. The Florida notary on the Power of Attorney alleged (and had reported to local police) that his notary stamp had been stolen at a time before the Power of Attorney was executed. Robert Sacks refused to testify by invoking his Fifth Amendment rights. Through cross-examination, tracing of the loan proceeds and by introduction of the evidence Adam Leitman Bailey, P.C. had gathered of the conspiracy, Adam Leitman Bailey, P.C. was able to convince the fact-finder that Lois Sacks’ debt to DBNTC was valid.

The case was tried without a jury by Judge Leonard Wexler in August 2017 in the Eastern District of New York. After trial, but before a verdict was rendered, Judge Wexler died. The case was ultimately transferred to Judge Eric Vitaliano who granted judgment in favor of DBNTC on the note and mortgage in the amount of $1,216,304.09 and attorney’s fees in the amount of $474,399.50 in April 2019.

Adam Leitman Bailey, P.C. was represented in the litigation by partner Colin E. Kaufman as lead counsel and trial counsel and by an associate at the firm.

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