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House-Flipping Scams Are Draining Millions Out of Wannabe Real Estate Investors

Maria D’Avanzo weighs in on house-flipping scams.

A surge in home prices and a rise in high-profile real estate influencers are fueling the promise of easy returns.

Published 01/11/24
Sasha Jones

During the past decade, real estate TV shows documenting luxurious agents and developers have exploded in popularity, from “Property Brothers” to “Million Dollar Listing” and “Selling Sunset” — along with the numerous spinoffs. The home-buying craze, heightened further during the pandemic, brought new attention to the seemingly easy opportunities in residential real estate.

At the same time, however, scams began to proliferate targeting the average investor looking for quick profits, particularly within one sector: house flipping.

High-pressure events and ads are coercing participants to quickly spend thousands to learn the secret sauce behind buying and swiftly rehabbing a house to sell quickly. The events typically are endorsed by a trusted celebrity who has gotten rich quick by doing the same.

But many of these pitches to would-be investors often fail to fulfill any of the promises for returns. Recently, those schemes have caught the eye of the Federal Trade Commission and lawsuits — resulting in a crackdown.

“The complaints that get filed are just the tip of the iceberg, because that’s the nature of the enforcement capacity,” said Sarah Bolling Mancini, co-director of advocacy at the National Consumer Law Center “Any increase in enforcement activity points towards an overall increase in the problem.”

In June, home prices were 44% higher than before the pandemic, according to Redfin data. Looking to capitalize on a surge in sales, more people pursued real estate.

More than 400,000 single-family homes and condos were flipped in 2022, up 14% from 2021 and 58% from 2020 — the largest number of homes since at least 2005, according to real estate data firm ATTOM. House flipping is generally defined as when an investor buys a home or distressed property at a low price, rehabilitates it and then resells for a profit over the course of several months to a year.

To illustrate the mad rush to flip, there’s such an abundance of homeowners flipping now that it’s begun to dilute profits. For example, gross profit margins on flips in 2022 sank to the lowest level since 2008. The typical gross return on investment dipped to 27%, compared with 42% in 2020.

Meanwhile, the FTC has been busy trying to root out scammers.

In May, a $16.7 million judgment against Response Marketing, and the celebrities involved with the company’s training program, led to the ban of six different training programs. The programs took over $400 million from participants, according to a complaint filed in Utah federal court.

Response Marketing would advertise a coaching program that cost up to $30,000. Through the company, students were told that they would have access to a network of buyers who would purchase potential properties for them to flip.

Aspiring house flippers were lured to free events through infomercials and social media advertisements, according to the FTC.

The vast majority of consumers did not become successful in real estate and did not recoup the money that they spent on the programs. The group, and its celebrity endorsers were also involved in burying online customer complaints that reported the scam, according to the FTC.

As part of the case, Scott Yancey, the star of the home-flipping show “Flipping Vegas” on A&E, and Dean Graziosi, the author of “Millionaire Success Habits,” were fined, paying $450,000 and $1.25 million, respectively — the FTC’s first monetary settlements with celebrity endorsers.
Yancey and Graziosi did not respond to The Messenger’s request for comment — nor did the FTC.

“People are more comfortable with residential real estate. It doesn’t seem as complicated as stocks or ETFs,” said Maria D’Avanzo, a partner with law firm Coffey Modica who has worked in the real estate industry for 20 years. “This is an area where people are really vulnerable.”

On April 11, 2018, a group of wannabe real estate entrepreneurs and one wired Federal Trade Commission agent crowded into the Sheraton Pentagon City hotel in Arlington, Virginia, for a free coaching session on home-flipping. It’s one of many events hosted by the now-banned company Zurixx, from which participants have yet to recover tens of thousands of dollars.

On stage, a Zurixx representative boasted about his rags-to-riches story — going from bankrupt to a millionaire — thanks to home-flipping. He shared photos of him with rapper Pitbull and a video of Tarek El Moussa and then-wife Christina Hall, co-stars of HGTV’s “Flip or Flop,” endorsing the program. He told the audience that the TV personalities’  lending partners would “fund all of your purchases, all of your renovation, regardless of your credit or your background,” according to a transcript of the event.

El Moussa did not respond to The Messenger’s request for comment.

As long as participants paid a discounted rate for continued workshops, they were told they could just sit back and watch the money roll in. Except that wasn’t true.

Zurixx settled with the FTC in 2022 for $12 million, but unanswered complaints with the Better Business Bureau have continued to roll in. One, filed in 2023, documents an instance where a participant paid the group $16,500. Another, filed in 2022, states they paid $29,000 for a year of unlimited coaching — for which they have yet to receive a refund for.

Older Targets

Marcelo Diaz-Cortes, an attorney who specializes in commercial litigation in state and federal courts, compared the rise in such real estate scams to crypto schemes that have emerged in recent years. Both are industries that have become perceived as increasingly lucrative and both use similar advertising techniques with celebrity ties.

“The older generation sees [crypto] with skepticism, because it’s hard to explain after having transacted in tangible things for all their lives,” Diaz-Cortes said. With home flipping, “the audience that may be more susceptible is the older crowd who believes in real estate because for the past 40, 50 years, it’s been a solid investment.”

“There are lots of iterations of these kinds of services that will continue to pop up,” Diaz-Cortes added.

However, it does not take a TV star to entice consumers. In October, New Jersey social media influencer Cesar Humberto Pina, known as “Flipping NJ,” was charged with engaging in a multimillion-dollar Ponzi-like investment fraud scheme.

Pina allegedly partnered with a radio personality to conduct real estate seminars and other appearances, promising 20% to 45% returns within five months on investments into his home-flipping projects. While he did buy properties, most investors did not see any returns, according to a complaint filed in New Jersey federal court. Instead, Pina would continue to grow his social media following and solicit more people, using funds for renovations for personal spending and additional building purchases.

The case remains ongoing. Lawyers for Pina did not respond to requests for comment.

In June 2022, YouTuber Mikki Lynn Fox, known online as both Michaela Pink and Summer Black, was sentenced to five years in prison after pleading guilty to swindling eight investors out of over $136,000.

In the scheme, Fox, who posted lifestyle and dating videos, would use her platform to encourage investments into homes she was planning to renovate. Though she paid victims in bits overtime, she made excuses and eventually stopped responding.

“She was very charming. People would look her up online and say, ‘Oh, she is somebody.’ No, she just created that persona,” Sheila Hansel, who prosecuted the case in Harris County, Texas, said in a statement.

Read the full article on The Messenger.

Stamford Advocate: Coffey Modica Promotes Two

Coffey Modica LLP, a defense litigation firm representing prominent business and insurance companies in liability claims, excess property/casualty, medical malpractice, nursing and other professional industries, has announced that two of the firm’s associates have been promoted to the role of counsel.

Maxwell Bottini practices out of the firm’s New York and Connecticut offices, handling matters involving construction litigation and defects, product liability litigation, transportation, premises liability, domestic and international reinsurance transactions including captive matters, and excess liability and casualty.

A graduate of Brooklyn Law School, Bottini began his career as an Assistant District Attorney in the Kings County District Attorney’s Office and has been with Coffey Modica since the firm’s founding two years ago. Bottini was recently named one of Super Lawyers’ Rising Stars for 2023. He currently lives in Fairfield with his wife and two children.

Joseph Hopkins has handled New York Labor Law, construction defects, professional liability and casualty over the course of his career, which began as the judicial law clerk for Judge John I. Gizzo.

Practicing out of the firm’s New York City office, Hopkins handles all facets of litigation from inception to resolution, achieving favorable results at various stages of litigation and mediation. He is a graduate of Seton Hall University School of Law, and currently lives in Hoboken, NJ.

Coffey Modica LLP is a New York-based defense litigation firm with eight offices in New York, New Jersey, Connecticut and Philadelphia and is among the fastest-growing firms in the nation. The firm represents defendants in high-profile, high exposure matters across many disciplines and industries around the country. Known for being aggressive trial attorneys and litigators.

Read the full announcement in the Stamford Advocate.

Coffey Modica Attorneys Named Super Lawyers

Three Coffey Modica LLP attorneys were honored by Thomson Reuters for their annual Super Lawyers and Rising Stars lists in 2023.

Founding Partner Michael W. Coffey and Partner Joseph A. D’Avanzo were selected as 2023 Super Lawyers, which recognizes the top-rated practicing attorneys across America, selected through a rigorous four-step nomination and evaluation process.

Coffey was also ranked as one of the top-rated construction litigation attorneys in White Plains, New York. Over the past 25 years, he has successfully arbitrated and mediated more than 300 cases. Having managed numerous high-profile insurance-related claims and litigated cases in the state of New York, Coffey has also acted as defense counsel in over 175 trial matters, representing various companies and syndicates in state and federal courts across the United States.

D’Avanzo, who serves as Chair of the Complex Litigation team and Senior Member of the Excess Trial team, was also named as one of the top-rated Business Litigation attorneys in White Plains, New York. His extensive legal practice encompasses intricate commercial and civil liability litigation in both state and federal courts. He has represented a diverse clientele, consisting of individuals and businesses from various sectors, such as aerospace, biotechnology, life sciences, construction, entertainment, fashion, sports, product manufacturing, real estate, and technology.

Associate Maxwell Bottini was selected as one of 2023’s Rising Stars, an honor given to attorneys who are under 40 years old or have been in practice for no more than 10 years. He was also named one of the top-rated Construction Litigation attorneys in White Plains, New York. Practicing out of the firm’s New York and Connecticut offices, Bottini has adeptly advocated for clients in intricate cases related to construction disputes and defects, product liability disputes, transportation issues, premises liability claims, both domestic and international reinsurance transactions, including captive insurance matters, as well as excess liability and casualty cases, achieving favorable outcomes.

“It is an honor to have multiple attorneys from Coffey Modica recognized as Super Lawyers across a variety of practice areas and geographic locations. As our firm marks its second anniversary, we are proud that the tireless work and strong results achieved for a wide array of clients has merited such recognition from the legal community. We look forward to continued success and growth in the years ahead,” said Michael W. Coffey.

Paul Golden Explains the Legal Issues Around Real Estate Class Action Ruling

In a recent Money Magazine article, Partner Paul Golden explains some of the legal issues surrounding the ruling on real estate commissions by brokerage firms.

Here’s What’s Next for the Housing Market After a Massive Realtor Lawsuit

By: Leslie Cook Nov 09, 2023

Change is coming to how homes are bought and sold.

The U.S. real estate industry was shocked last week when the jury in a class action lawsuit against the National Association of Realtors and two major brokerage firms, Keller Williams and HomeServices of America, decided they conspired to keep real estate commissions higher than needed. After a two-week trial that ended Oct. 31, jurors awarded the plaintiffs $1.78 billion in damages.

Now, everyone from brokerages to independent agents is trying to figure out what the future will look like once the dust has settled. The decision, says Steve deGuzman, CEO of rehavaPress, a software development company for real estate brokerages, could bring benefits “not only to consumers but to the industry all around.”

The lawsuit, known as Sitzer/Burnett, centered around the NAR’s participation rule and the practice of agent commission sharing. Under the rule, in order to advertise a property on a listing site, the seller’s agent must offer compensation to buyer agents. The aim is to attract more people interested in purchasing a home.

When it sells, the listing agent’s commission, which typically averages between 5% and 6% of the sales price and is paid from the proceeds, is split with the buyer’s agent. But the plaintiffs in the lawsuit alleged — and the jury agreed — that this practice unnecessarily increased the real estate transaction cost for sellers.

What happens next?

The next step in the process is for the judge hearing the case, Stephen Bough, to determine the final damages, which could exceed the amount the jury awarded, says Paul Golden, partner at the Coffey Modica law firm.

Golden says Bough could decide to “issue treble damages — that is, three times the damages” awarded by the jury, which would increase the judgment amount to over $5 billion. He could also grant the plaintiff’s court costs, including attorney’s fees and prejudgment interest.

More broadly, Bough could make changes to the commission sharing rule, ban it altogether on a national level or decide to modify the system. If the judge opts to outlaw commission sharing altogether, home sellers and listing agents would no longer be able to determine how much to offer a buyer’s agent or include the information on a listing site — a change that would drastically alter the industry.

Who qualifies for NAR damages?

Sitzer/Burnett is a class action lawsuit in Missouri representing over 500,000 home sellers in that state. Only members of the class are eligible to receive damages as a result of the lawsuit.

But anyone expecting to get a nice chunk of change has a long time to wait. NAR, Keller Williams and HomeServices of America have all signaled their intent to appeal the verdict. (Re/MAX and Anywhere Real Estate, two other defendants in the case, reached settlements with the plaintiffs before the trial and are not included in this decision.)

“These lawsuits are probably going to take years to work through the court system,” says Laura Ellis, chief strategy officer at brokerage Baird & Warner.

It could take up to two years after all the appeals have run out for the plaintiffs to receive any compensation if the damages are confirmed. The amount paid out will depend on how much the final award is after attorney fees and court costs are subtracted.

But Missouri residents aren’t the only ones in line for a payout. There’s another class action lawsuit against NAR, known as Moerhl, set to go to trial sometime next year. Potential damages in that case, which is also targeting commission sharing, could go as high as $40 billion.

A third lawsuit, known as Gibson, with similar claims against NAR was filed within hours of the Sitzer/Burnett decision, naming other major brokerages, including Redfin, Douglas Elliman and Compass, as co-defendants. The class action lawsuit covers home sellers nationwide and could seek damages of up to $200 billion.

What does the NAR lawsuit ruling mean for buyers?

While the monetary outcome of the jury’s decision is unclear, the future of agent commissions is downright murky — and it all depends on what the judge decides.

If Bough strikes down the commission sharing rules, entirely or partially, it opens up a world of possibilities. Buyer agents would no longer be able to advertise their services as free (though they have never been free because the seller has always paid them). Instead, they’d have to be upfront about their fees, regardless of who pays them.

Buyers will still have the option of omitting the services of a realtor and working directly with a listing agent. But for those who want the expertise of an agent to guide them through the negotiation process, the upfront costs of buying a home could increase.

Ellis says some brokerages, including hers, could require clients to sign a buyer’s agreement specifying the services the agent will provide, their commission and the buyer’s responsibility to pay the fee if the seller doesn’t cover it. If the buyer has to pay their agent, it could add thousands of dollars to the cost of a home purchase — on top of the down payment and closing costs.

In the end, “the market is ultimately going to determine the value of that buyer agent’s services,” says Ellis.

What does the NAR decision mean for sellers?

Home sellers are likely to see a more immediate benefit. If commission sharing is no longer allowed, a seller would negotiate a fee with their agent, and a buyer would do the same with their representative. For sellers, this could be a positive: They would no longer have to pay another agent out of their home sale profits.

Indeed, some brokers are already taking steps to eliminate commission sharing from their listings, says deGuzman of rehavaPress, adding, “that’s going to immediately save the seller anywhere from 3% or more.”

A business model based on fixed-fee compensation, where the seller or buyer pays a flat fee for their respective representative’s services, could also emerge and help keep home selling and buying costs down for both parties.

There’s a lot about the Sitzer/Burnett decision that has yet to be determined. The full effects of not only this lawsuit but also others still working their way through the courts will certainly have an impact on the housing market, but the scope isn’t clear.

In the meantime, deGuzman says, “it’s going to be chaos for about a year.”

Second Department Rules That Cooperative Apartment Owners’ Rights Are Precarious


This article appeared in the September Issue of New York Real Estate Law Reporter

On June 14, 2023, the Second Department decided Walsh v Ocwen Loan Servicing, LLC. The court, with little fanfare, appeared to rule that cooperative apartment owners are saddled with an unavoidable risk of loss.

That is, if a lender alleges that the owners have defaulted, and then conducts a nonjudicial foreclosure sale, the former owners are left with few remedies. Re-gardless of whether the owners were truly in default, and regardless of whether they were notified of the sale, they can lose their home — for good.
A co-op shareholder does not have the same protections that a traditional homeowner has. The owner of a house, for example, who defaults on a mortgage, would not lose the home in a foreclosure sale until and unless the lender con-ducted a judicial foreclosure action, and until and unless the homeowner had the opportunity to present defenses to the court, and then only if the court specified at the end that the foreclosure would take place.

Shareholders of co-ops do not have those protections. Shareholders do not use the mortgage system — they obtain loans which are secured by their shares. If a lender deems the shareholder to have defaulted, the lender can ultimately conduct a nonjudicial foreclosure sale. This is just as it sounds — the court is not involved at all.

In any event, Walsh concerned a couple that owned cooperative shares to their home, an apartment, for fifteen years. Their position was that their shares (and corresponding lease) were inexplicably sold at a non-judicial foreclosure sale on Jan. 29, 2019. The closing then took place on July 18, 2019. The couple only found out that their cooperative shares had been sold at a foreclosure sale when the successful bidder arrived at their doorstep and claimed that he was the new owner of those shares. That bidder eventually filed a holdover proceeding to evict the couple from their home.

In September 2019, the couple filed an action against Ocwen Loan Servicing, LLC (Ocwen), the alleged assignee of the underlying note. They claimed they were not in de-fault of their promissory note and security agreement, and that they were not even served with any no-tice about the auction.
In the context of their case, the couple moved for a preliminary in-junction, seeking, among other re-lief, to enjoin the eviction during the pendency of the action. In May 2020, Hon. Jimenez-Salta of the Kings County Supreme Court granted the preliminary injunction, based in part on her ruling that there were serious questions on whether plaintiffs were actually in default of the promissory note and security agreement. The successful bidder then appealed.

On appeal, there were two diametrically opposed ways of viewing property rights. The successful bidder argued that UCC 9-617(b) gave him absolute rights of ownership. Under that statute, after there is a sale, a “good-faith transferee” obtains full rights to the collateral “even if the secured party [i.e. the lender] fails to comply with this article ….” The couple, conversely, argued that UCC 9-617(a) applied – which indicated that a secured par-ty only disposes of collateral after a “default.” The couple argued that the Legislature sought to make sure, when they passed UCC 9- 617(a), that parties such as plaintiffs would have to be in “default” in order for the purchaser to potentially obtain rights. They also argued that, to allow them to lose their home even if they were not in default, would violate the Due Process clause of the New York Constitution.

The court did not explicitly discuss the meaning of “default” in the stat-ute. Instead, the court simply ruled that “Where, as here, a debtor pledg-es cooperative shares and a corre-sponding proprietary lease as secu-rity for a debt, article 9 of the UCC applies to the enforcement of the se-curity interest.” Then the court held that the plaintiffs had not established that “that the relief they seek, in ef-fect, to vacate the sale of the shares and proprietary lease following the closing, is available under article 9 of the UCC.” Therefore, it held that the plaintiffs’ remedy was to seek monetary damages against Ocwen. Finally, it held that plaintiffs were not entitled to a preliminary injunction.

There are several critical issues that arise from this order.

One is that, at least in the Second Department, it appears a potential bidder has relatively few worries about whether he or she will actu-ally obtain viable and enforceable rights, in a nonjudicial foreclosure sale, at least once the closing takes place. Therefore, theoretically, such bidders will be willing to offer clos-er to the full value of the shares in a nonjudicial foreclosure sale. This is potentially beneficial for a de-faulting shareholder; the higher the sales price, the less the debt to the lender. There is even a chance the defaulting shareholder could obtain proceeds, to the degree they exceed the sum owed.

Second, a shareholder’s rights are extremely precarious, especially if dealing with a lender that cannot handle accounting records or notic-es properly. In the lender makes a mistake about: 1) whether there was a default; 2) how and when to serve the borrower with notice about the alleged default; or 3) both, then the borrower may suddenly find he no longer owns the shares at all. In such a case, the borrower apparent-ly has few options except to seek relief against the lender. But the chance to potentially win a money judgment against a lender, years af-ter the sale, will be cold comfort to a person kicked out of his home.

Third, lenders should take ex-tremely strong precautions in mak-ing sure that their accounting re-cords are in order, and that they serve notices on an alleged default-ing debtor perfectly, and that all t’s are crossed and i’s are dotted.

Otherwise, the former debtor may be unable to vacate the sale, and will have no choice but to seek full relief against the lender.

Fourth, the courts may eventually need to further clarify how far the law goes. In an extreme case, one could have borrowed funds, but fully paid them back to the lender. In such a case, if the lender makes an incredible error, and “sells” these same shares to a high bidder, which were formerly a security for the debt, how would the court handle it? A bidder would point to the Walsh case and argue that there is no way to seek to vacate a sale of shares under article 9 of the UCC. But presumably, even an extremely cold-hearted court would not go that far.

Read the full September 2023 issue of New York Real Estate Law Reporter.

New York Owners Must Go Beyond a New Law to Prevent E-Bike Fires


On any given night, a hungry New Yorker will pull up their favorite food delivery app and place an order.

Within minutes, a delivery driver will arrive with the food and a miracle of modern technology will have satisfied one person’s hunger for at least one more night.

But what the hungry New Yorker perhaps does not fully appreciate is that the same technology powering their phone also powered the delivery driver’s e-bike: a lithium-ion battery. And they may also be unaware that lithium-ion batteries are a leading cause of fatal fires in New York City.

In 2022, there were 220 fires started by lithium-ion batteries in New York City, causing six deaths. So far this year, we’ve seen 87 injuries and 13 deaths in Manhattan, including four deaths and two injuries in a Chinatown apartment fire when an e-bike battery purportedly exploded in the repair store below.

In an effort to contain the scourge of deadly e-bike fires, New York’s Local Law 39 will go into effect on Sept. 16, 2023, prohibiting the sale, lease or rental of e-bikes, and their batteries, that do not meet standards set forth by the Underwriters Laboratories or other standards established in consultation with the Fire Department of the City of New York.

While landlords may welcome any legislative action aimed at curbing these deadly blazes, they cannot rely on Local Law 39 alone to prevent all property damage or injuries associated with such fires.

The law may put parameters on the new stock of e-bikes being sold in New York City shops, but there are an estimated 65,000 e-bikes already traversing the five boroughs. Rounding up the old bikes that may thereafter fall below the new standards is impractical.

In August, several major international e-bike manufacturers either filed for bankruptcy or issued warnings about their ability to remain in business. This can result in greater opportunity for older, vintage bikes to fall into disrepair, as warranties evaporate and sources for replacement parts dry up.

Without access to proper customer support, someone who spent valuable money on such a bike, only to find that the battery is just not holding a charge, may have no choice but to log onto the Internet to buy what they think is a replacement battery that fits. What few understand is that while it might fit the device, the voltage may not be compatible. The result may eventually set a home or building ablaze.

And with many lithium-ion batteries being imported, it is also important to note that obtaining jurisdiction over the battery manufacturers is far from a sure thing.

As FDNY Commissioner Laura Kavanagh explained in the spring, lithium-ion fires are “not a slow burn; there’s not a small amount of fire, it literally explodes.” In addition, the fires are “very difficult to extinguish” and therefore “particularly dangerous.”

When deliveries became an essential service during COVID, this spurred the city’s legalization of e-bikes and scooters. Outside of relying on Local Law 39 or waiting for the state legislature to institute a wholesale prohibition on owning or using e-bikes, property owners have limited means to protect their buildings or their occupants from these devices.

Until a more comprehensive solution is reached, building owners would be wise to pay attention to the storage and charging of e-bikes inside their facilities, and some have even decided to ban e-bikes or their batteries within residential and commercial buildings. The New York City Public Housing Authority initially proposed a complete ban on battery-powered bikes because of the fire risk, but reconsidered after residents who use the devices for work and as a method of transportation complained.

To strike a balance between these competing interests, Mayor Eric Adams and U.S. Sen. Chuck Schumer secured a $25 million grant to install electric charging hubs at several housing facilities.

An estimated 112 million Americans reported using food delivery in 2020, and the industry is still going strong today, with food delivery expected to be a $32 billion industry by 2024. Those deliveries in a metropolitan region like our own will happen using e-bikes. Landlords and property owners must be aware of this ongoing threat that appears not to be going away.

Larry Luppi is a litigator and a partner at Coffey Modica representing insurers and their insureds.

Deeper Investigation Will Determine Cause of Manhattan Crane Collapse

Fire and insurance attorney Michael Mezzacappa weighs in on what, “at first blush, does not appear to be a typical crane collapse accident.”

By Michael P. Mezzacappa

The calm on Manhattan’s west side was shattered in the early morning hours of July 26 when a 45-story tall construction crane collapsed onto the streets below.

The crane was working on an under-construction 54-story, mixed-use skyscraper located between 41st and 42nd streets, a few blocks west of Broadway’s ‘Great White Way’ and a few streets north of the Jacob Javits Convention Center.

The crane was holding 16 tons of concrete at the time of the accident, according to city officials. Twelve people were reported as being injured and, on the way down, a part of the crane hit another nearby occupied tower.

Initial reports indicated that a fire started in the cab of the crane due to hydraulic fluid leaking onto a heated metal plate. When incidents like these occur, there is no shortage of whispers and speculation as fingers quickly point to who or what companies could be to blame.

After more than 35 years litigating high profile cases, especially catastrophic New York fires for major corporate defendants and on behalf of underwriters, at first blush, this does not appear to be a typical crane collapse accident.

It also does not initially appear that the rigging of the crane was done in a faulty manner. Instead, this accident appears to have resulted because of a fire that, in turn, caused failure of mechanical systems and devices that normally keep the crane operational and erect.

What was exceptionally-different here from any other crane collapse or accident was that the mechanical section of the crane was on fire 45 flights up.

Video and photos from the scene show that the mechanical section of the crane was heavily ablaze as FDNY companies arrived to tame the flames and the prevent the possible spread of any falling debris that might ignite other surrounding properties or vehicles below. 200 FDNY personnel were on the scene, according to FDNY Deputy Commissioner Joseph W. Pfeifer.

Reportedly, the boom of the crane was fine the days and weeks prior. Instead, it is highly likely that the high temperature within the mechanical section, specifically as result of the flames, caused degradation of the cables and other mechanical systems, compromising their ability to continue controlling crane operation and stability.

As was seen in the World Trade Center terrorist attack, high heat and flames often result in gradually weakening the strength and integrity of any metal—including, in this instance, those devices that control movement and action of a construction crane.

In any metropolitan area, and especially in the City of New York, there are very stringent testing, compliance and permitting protocols for construction sites and the safe operation of cranes. What’s more, there are always fail safes built in.

In a vertical city like New York, towering construction cranes regularly dot our landscape. They are essential to the city’s real estate ecosystem and their safety and operations are highly necessary.

In the end, the investigation of this accident is going to be conducted by multiple agencies, including the FDNY, the New York City Department of Buildings, OSHA and likely other agencies.

From years of experience in dealing with major investigations that involve fires, the forensics and laboratory reports alone can take a year or more in a jurisdiction like New York City.

In the end, it is highly likely that standards established by the National Fire Protection Association (NFPA) 921: Guide for Fire and Explosion Investigations will be used for the determining factors in this incident, to get to the root cause of how the first fuel ignited, which eventually led to the demise of control over the crane and part of its ultimate collapse to the construction site below.

Michael P. Mezzacappa is a partner & general counsel with Coffey Modica LLP. based in New York. He is a trial attorney who represents clients including insurers, property owners and managing agents, manufacturers, construction companies and trucking companies.

Coffey Modica O’Meara LLP Changes Its Name To Coffey Modica LLP

White Plains, NY (August 4, 2023) –Since launching in 2021, rapid growing insurance defense firm Coffey Modica O’Meara LLP has become Coffey Modica LLP, reflecting continued growth and appellate success.

Michael Coffey, who is known for defending insureds in catastrophic, high-exposure cases, has set a high bar for the firm with the recent addition of partners Joseph D’AvanzoPaul Golden, and Michael Mezzacappa.

“Our litigation and appellate practice,” said Mezzacappa. “sets a high standard in a unique niche practice that delivers results on the highest exposure cases in the country. We provide strategic litigation and trial support, monitoring, consulting and drafting as needed from start to finish, from discovery onward.  This early intervention ‘full-court press’ provides our clients and their counsel added-value services that improve their ability to evaluate legal issues and liability exposure, implement tactics and arguments to craft compelling summary judgment motions, and position themselves for a successful appeal or favorable negotiation.”

Working with Coffey Modica’s strategic framework for trial litigation, the entire process of the trial team through appellate risk. The firm’s teams have an enviable success record in dealing with international and national excess insurers and private clients in a wide variety of fields. Clients rely on the team to identify, evaluate, monitor, mitigate, and defend their risk in catastrophic property and casualty matters including claims of catastrophic personal injury, construction defect, product liability, subrogation, professional liability, premises liability, labor law, employment law, mass torts, complex torts, toxic torts, insurance coverage, and general commercial litigation.

“In today’s climate, nuclear verdicts are a real threat to insurers,” said Michael Coffey, founding partner of Coffey Modica LLP. “Joe, Paul and Michael bring a strong record of attention to detail and successfully minimize their clients’ risk by not only accurately evaluating legal issues and liability exposure. They totally understand the insurance industry and how the judiciary addresses these cases.  This directly informs how they counsel clients.”

Coffey Modica opened its doors in September of 2021 with its three founders and the firm now boasts a roster of 35 attorneys. In addition to top-tier client service, the firm prides itself on a positive, creative, and collaborative culture.

Coffey Modica represents numerous private clients and all major insurers, as well as Lloyd’s of London syndicates and leading self-insured companies with the following primary practice areas: Property & Casualty; Community & Homeowners’ Association Law; Construction & Construction Defect; Cyber, Technology, & Media; Directors and Officers; Employment Law; Medical Malpractice; Professional Liability and Trucking &Transportation.  It services a wide range of industries.

“We are moving full steam ahead,” explained Coffey. “We are busy servicing clients, litigating and trying cases, and onboarding laterals. We are thrilled to close out 2023 with a new name and such an accomplished team.”

About Coffey Modica LLP

Coffey Modica LLP is a New York-based defense litigation firm with offices in Manhattan, White Plains, Buffalo, New Jersey, and Connecticut. The firm represents defendants in high-profile, high-exposure matters across many disciplines and industries. Known for being aggressive trial attorneys and litigators, Coffey Modica resolves matters on behalf of its clients with the most cost-effective resolutions that are aligned with their short- and long-term business goals and culture.

Coffey Modica Welcomes Counsel Jeffrey Gasbarro to the Firm

WHITE PLAINS, N.Y., May 16, 2023 /PRNewswire/ — Coffey Modica, a leading law firm specializing in insurance defense, is excited to announce Jeffrey Gasbarro has joined the firm as Counsel and will be based in the firm’s White Plains office. A renowned lawyer known for his legal skills and high aptitude, he will be part of the Appellate and Litigation Strategy Group and assist in the firm’s National Excess Trial Team with motions in limine and litigation. He has a particularized knowledge and insight into the NY Labor Law and brings a wealth of experience and background to the firm.

Coffey Modica is one of the fastest-growing law firms in the tri-state area specializing in insurance defense.

Jeffrey Gasbarro, Counsel, Coffey Modica LLP
Jeffrey Gasbarro

“We couldn’t be happier to welcome Jeffrey to our team,” Michael Coffey, founding partner of Coffey Modica. “Gasbarro’s depth of experience will be a valuable addition to our existing and future clients.”

In addition to his law practice, Jeffrey serves as a Reporter to the committee comprised of New York Judges that publishes the New York Pattern Jury Instructions–Civil. Known by practicing attorneys and judges simply as the “PJI”, it is a four-volume treatise containing jury instructions and commentaries that is used in every civil jury trial in the State of New York.

Previously, Jeff worked as a court attorney and law clerk for a total of ten years at the Appellate Division, Second Department, where he handled all types of civil, criminal, matrimonial, and family court matters. Jeff’s experience working behind the scenes at one of the busiest appellate courts in the country gives him a unique perspective to craft the best approach to successfully defend the client’s interests that will be an asset to the firm.

About Coffey Modica LLP

Coffey Modica LLP is a New York-based defense litigation firm with eight offices in New York, New Jersey, Connecticut, and Pennsylvania and is among the fastest-growing firms in the nation. The firm represents defendants in high-profile, high-exposure matters across many disciplines and industries around the country. Known for being aggressive trial attorneys and litigators, Coffey Modica resolves matters on behalf of its clients with the most cost-effective resolutions aligned with their short- and long-term business goals and culture.