Manhattan Supreme Court at 60 Centre St. NYLJ/Rick Kopstein

A Manhattan lawyer and his firm have been found liable for legal malpractice because they failed to advise a client about how to correctly make its nearly $1 million deposit on a condominium unit, leading to loss of the money.

Manhattan Supreme Court Justice Lucy Billings ruled that attorney David Ferber and Ferber Chan Essner & Coller had committed malpractice because the “failure to advise plaintiff of the applicable statute and regulation [related to the deposit] departed from the standard of professional care.”

In Riviera Property Holdings v. Ferber Chan Essner & Coller, 104953/2011, Billings was asked to assess defendants’ summary judgment motion and Riviera Property Holdings’ cross-motion for summary judgment, including its request for damages based on alleged malpractice.

Billings wrote that purchase-agreement riders given to Riviera provided for payment of a $985,000 deposit to a condominium unit sponsor, Madison Park Group Owner, and its controlling owners, rather than to the escrow agent.

The judge noted that Ferber Chan didn’t dispute that, “had plaintiff’s deposit complied with” certain state laws directing the deposit be made to the escrow agent, plaintiff would have recouped the money when it “invoked its right to rescind the purchase.” Instead Ferber and his firm “contend[ed] that the statute and regulations were inapplicable.”

Billings disagreed. She wrote that “given the absolute statutory and regulatory prohibition of the arrangement into which plaintiff and the sponsor entered … defendants’ failure to advise plaintiff … departed from the standard of professional care.”

Billings denied the defendants’ summary judgment motion in the July 31 opinion. In granting Riviera’s cross-motion she said a trial is needed to determine the proper damages amount.

Matthew Flanagan, a Catalano Gallardo & Petropoulos partner, represented the defendants. He declined to comment Monday. David Ferber could not be reached.

Guy Halperin, of the Halperin Law Firm, represented Riviera and declined to comment.