Full opinion text
SUR PLEADINGS AND PROOF LUONGO, District Judge. Beginning in 1975, plaintiff Bennett Levin and defendant Howard Garfinkle participated in a series of complicated real estate ventures involving substantial amounts of money. Levin at first held a minority interest in a variety of properties owned by corporations controlled by Garfinkle, but later purchased Garfinkle’s interest in seven large apartment complexes in Charlotte, North Carolina, giving, as part of the purchase price, a sizeable blanket mortgage (deed of trust) to Garfinkle. In October, 1976, Garfinkle alleged that Levin was in default on the mortgage. Rather than risk foreclosure, Levin authorized Garfinkle to sell the properties, both to satisfy Levin’s debt as well as to realize a profit for Levin from appreciation of the properties. When the last property had been sold, the Garfinkle interests asserted that Levin still owed them a sizeable sum on his indebtedness to them, while Levin asserted that the defendants had conspired to defraud him in both the purchase and sale of the Charlotte properties, and in several other real estate ventures. In this suit plaintiff seeks to recover compensatory and punitive damages for fraud, misrepresentation, conversion, and breach of fiduciary duty. He also seeks an accounting for the proceeds from various transactions which he alleges the Garfinkle interests diverted to their use without giving him credit against his indebtedness. The matter was tried over several days from January 7-22, 1980. Testimony comprising over 2,000 pages of transcript was heard, and the parties submitted close to 400 exhibits. Thereafter, the parties submitted requests for findings of fact and conclusions of law, together with briefs on the legal issues. On pleadings, proof, and the written submissions of the parties, I make the following FINDINGS OF FACT A. The Parties 1. Plaintiff Bennett Levin is a professional engineer whose practice is conducted through several corporations. He has performed engineering services in a variety of real estate projects for major builders, although prior to his ventures with defendants he had never invested in real estate. 2. Defendant Howard Garfinkle’s principal occupation is investing in real estate, which he pursues by investing his own capital through corporations which he controls, and by creating partnerships and syndications in which he participates. . 3. Defendant Barbara Garfinkle is Howard Garfinkle’s wife. 4. Defendant Asher Fensterheim is a member of the New York Bar, and in effect serves as Garfinkle’s in-house attorney. He acts as an officer and director of various corporations controlled by Garfinkle, and generally receives a share in the ownership of Garfinkle ventures. 5. Defendant Cyrus West is a Garfinkle employee who handled disbursements and kept financial records for a number of Garfinkle corporations. 6. Defendant K. B. Weissman is a New York financier who has a long-standing business relationship with Howard Garfinkle, and who lent money to both Garfinkle and Levin to finance their various investments. 7. Defendant Edward Breger is a member of the New York Bar in private practice, whose specialty is real estate closings. He represented both Howard Garfinkle and Bennett Levin in connection with some of the properties they owned. 8. Defendant Norman Septimus is an accountant who performed services for one of Levin and Garfinkle’s joint ventures. 9. Defendant Jack Deutschmann was a Garfinkle employee and investor in several Garfinkle real estate ventures. 10. Defendant Huckleberry Farm, Inc. is Garfinkle’s horse farm and personal residence in Albany, New York. 11. Defendants HAW Corporation, TAFU Corporation, and Czar Realty Corporation are all corporations which the parties have stipulated are controlled by Howard Garfinkle (P-364). 12. Defendant Rondi River Realty Corporation is a corporation formed by Howard Garfinkle to hold title to a New York property which he owned jointly with Bennett Levin. The parties have stipulated that this corporation is under the control of Howard Garfinkle. B. Initial Dealings Between Levin and Garfinkle 13. Levin met Garfinkle in June, 1973, (T. 442) and performed professional engineering services for him in 1973 and 1974. (T. 34). He visited Garfinkle at his home in Florida, at which time he learned that Garfinkle was involved in some controversy over his business dealings, and had previously been convicted of criminal charges in connection with one of his ventures. (T. 442 — 446). 14. In February, 1975, Garfinkle filed for bankruptcy, at which time Levin entered a claim for approximately $700,000 for engineering services he had performed for Garfinkle. (T. 448 — 449). 15. To compensate Levin for his services, Garfinkle offered Levin the opportunity to invest $60,000 in a limited partnership, in which Levin would be given a participating share sufficient to cover Garfinkle’s pre-bankruptcy debt to him. (T. 37-38). 16. The limited partnership was never formed, so Garfinkle then offered Levin the opportunity to invest in various real estate ventures. Levin accepted and invested in various properties in which he received an equity share of twenty to fifty percent. (T. 40). C. Purchase and Operation of the Charlotte Properties by Levin and Garfinkle Jointly 17. Between late 1975 and early 1976, Levin and Garfinkle purchased seven large garden-apartment complexes in Charlotte, North Carolina (the Charlotte Properties), in which Garfinkle interests held a seventy-five percent share, and Levin held a twenty-five percent share. Levin paid more than $100,000 to purchase his share. (T. 455). 18. Each of the seven properties had a development name, which in every case but one was changed by the Garfinkle interests when they bought the properties: 19. At the time the properties were purchased, both parties knew that existing mortgages on all of the properties were seriously in default. (T. 459). The purchase seemed advisable, however, because the price per apartment was substantially below the prevailing market replacement cost for similar units. (T. 460). 20. After purchasing the properties, both Levin and Garfinkle received detailed reports about problems with the physical condition of some of the units and the vacancy rate. (T. 475 — 495). 21. In December, 1975, Daryl Greenberg was hired to manage the Charlotte properties. (T. 1471). Although Greenberg was the on-site manager, the rent receipts were forwarded to Garfinkle’s office in New York, and Garfinkle’s employees there disbursed the funds to pay vendors and mortgage lenders. (T. 1474, 1479). 22. In January, 1976, vendors began receiving bad checks from the Garfinkle office. (T. 1474-75). Greenberg kept a ledger of these checks. (P-70). In late January and early February, mortgage holders began to call Greenberg in North Carolina to complain about failures to meet mortgage payments. (T. 1479). 23. In March, 1976, Greenberg sought Levin’s help in securing payment for vendors and mortgage lenders, and Levin was successful in making arrangements with them for paying the bills. (T. 1482-85). 24. In April, 1976, it was agreed by the parties that Levin should assume management of the Charlotte properties. He borrowed $350,000 from Continental Bank (T. 496), and upgraded computer facilities in his Philadelphia office to facilitate rent collection. (T. 426). During April, 1976, Estelle (Sue) Manin, a Garfinkle employee, worked in Levin’s Philadelphia office, to which rent receipts were directed, and from which disbursements were made. 25. Levin also opened two accounts for his signature with Continental Bank, in the names of Charlotte Acquisition Corporation, and Acquisition Management Corporation (T. 108-09), both of which were Garfinkle corporations. (P-364, ¶ 1). 26. To induce Continental to lend the $350,000 to Levin and to service the accounts, Garfinkle persuaded defendant K. B. Weissman to deposit $240,000 in time accounts at the bank. 27. For a period of time, all of the rents were flown directly to Levin’s office in Philadelphia. Thereafter, Garfinkle directed that the rents be flown to his office in New York, ostensibly so that his office could make duplicate rent records. (T. 872). Garfinkle employees then deducted a portion of the rent, instructed the Garfinkle employee in Levin’s office, Sue Manin, to record a lower rent figure than was actually received, and forwarded the balance to Levin’s office. (T. 872-874). 28. In May, 1976, Garfinkle forged Levin’s name to certain checks on the Continental accounts, overdrawing them in the amount of approximately $136,000. (T. 109; 875); (P-66). Subsequently, collection of the rents was transferred back to Garfinkle’s New York office. 29. Shortly after Garfinkle overdrew Levin’s account, K. B. Weissman withdrew the $240,000 he had deposited in Continental Bank and closed his account. (T. 110-111); (P-62). 30. By the end of June, 1976, Levin owed Continental Bank approximately $526,000 as a result of his borrowings and overdrafts. (T. 111). 31. In late spring, 1976, because of the bad checks issued to vendors, and because of complaints by tenants about fraudulent promotions and misapplied security deposits, the Charlotte properties came under investigation by local newspapers and television, as well as the Fraud Division of the Charlotte Police Department. (T. 111-112). In May, 1976, Levin read an article which had been published the previous November in Florida Trend magazine, revealing in detail Garfinkle’s prior criminal record, his history of issuing bad checks, and a fraud investigation of him by the Securities and Exchange Commission. (T. 467-470). 32. Because of growing unfavorable publicity due to Garfinkle’s reputation, irregularities in property management, and the series of bad checks issued to vendors, Garfinkle and Levin feared the collapse of the properties. (T. 1175). They were particularly concerned about a report that the Charlotte Observer was preparing a major expose on the properties. (T. 1487-1488). 33. Garfinkle warned Levin that there was a threat that the senior lienholders would foreclose because of various defaults and the unfavorable publicity, and proposed that Levin become the sole owner of the properties, thus removing the taint of Garfinkle’s involvement. (T. 112). Levin agreed to purchase the properties. D. Levin’s Purchase of the Charlotte Properties 34. Levin bought all seven Charlotte properties from Garfinkle in a series of transactions during June, 1976. (T. 113). 35. Levin paid approximately $50,000 in cash; transferred to Garfinkle ownership of his stock in various joint ventures with Garfinkle (worth an undetermined amount); and executed a note and purchase money mortgage in the amount of $3,050,000 to a Garfinkle corporation. (T.. 113); (D-3; D-8; D-9; D-10). Levin had no personal liability under the note. (T. 551). 36. The $3,050,000 figure for the purchase money mortgage was calculated by Garfinkle, based upon projected rental income from the properties. (T. 115). 37. In addition to the basic documents necessary to transfer title to the property, the parties executed a series of collateral agreements and instruments at the time of Levin’s purchase of the Charlotte properties. 38. Levin and Garfinkle executed mutual releases, whereby each released, with some limited exceptions, any claim he might have against the other up to that time. (T. 579-581); (D-6; D-7). 39. Levin agreed to pay delinquent mortgage payments on some of the properties. (P-77). Garfinkle made oral representations to Levin from a sheet in Garfinkle’s handwriting, (P-78), about the amounts past due on the various mortgages. (T. 119). Levin subsequently learned that Garfinkle understated the amounts overdue. See Findings 114, 220, infra. 40. Garfinkle agreed, subject to certain conditions, to indemnify Levin for any losses arising out of two real estate ventures known as Sutton at Collingswood, and Bromley Estates. (T. 575); (D-4). 41. Garfinkle agreed to give Levin a share of the proceeds from the sale of a Garfinkle property known as Tiffany Apartments, if Garfinkle consummated a pending sale of the property to Newton Heller, a prospective buyer. (T. 576); (D-5). 42. Garfinkle agreed to lend to Levin, or cause to be lent, by August 15, 1976, the sum of $100,000, repayable without interest one year after the date of making the loan. (T. 575); (D-5). 43. Levin executed a letter, dated June 29, 1976, to Czar Realty Corporation, a Garfinkle corporation, and Asher Fensterheim, in which he acknowledged that he was aware of Garfinkle’s criminal record, and of certain improprieties in connection with the management of the Charlotte properties. These included: commingling of assets; improper record-keeping and accounting procedures; the issuance of bad checks; the draining of funds from the properties, without repayment, for the personal use of Garfinkle and his associates; the forging of Levin’s name to checks by Garfinkle; substantial defaults on senior liens on the property; and litigation against the properties brought by creditors. Levin also acknowledged that he had investigated the purchase before taking title, and was represented by counsel throughout. (D-2). 44. Levin and his personal attorney, Howard Creskoff, discussed the June 29, 1976 letter for almost one hour before Levin signed it. (T. 559). Levin was advised that the letter might work against his interests if a dispute arose with Garfinkle. (T. 1168). Levin signed the letter because he wanted to help Garfinkle, who was being investigated by the SEC; because Levin had already wired $115,000 to senior lien-holders on the properties to forestall threatened foreclosures; and because he was physically tired and wanted to bring the deal to a close. (T. 147). 45. Although Levin objected to signing the June 29th estoppel letter, he admitted at trial that, as the letter avers, he knew all of the facts stated therein at the time he purchased the Charlotte properties from Garfinkle. (T. 552-559). E. Garfinkle’s Oral Representations to Levin With Respect to the Sale 46. Garfinkle made a series of oral representations and promises to Levin at the time Levin purchased the Charlotte properties in June, 1976. 47. Garfinkle promised that he would assist Levin in syndicating one of the Charlotte properties immediately after Levin’s purchase of them. (T. 142). 48. Garfinkle represented that he was about to close a deal for the sale of Rondi River, a Levin-Garfinkle venture in New York, from which Levin would obtain substantial working capital. 49. Levin also testified that Garfinkle promised to forbear collecting interest on the deed of trust for a period of time, (T-142), but there is insufficient evidence to establish that Garfinkle did anything more than give Levin general assurances not to worry about timely payments or possible default. In either case, Levin paid the interest when it came due without protest or request for forbearance. (T. 646-648). 50. None of these promises were put in writing, (T. 656), even though the agreement of sale for the properties contained an integration clause stating that no agreements between the parties existed outside of the written contract, (D-8, ¶ 25), and Levin’s attorney Howard Creskoff was aware of the existence of the clause and its legal effect. (T. 1199-1200). 51. Levin admitted at trial that Garfinkle’s oral promises to him at the time of the sale were not an important inducement leading him to purchase the properties. (T. 655). F. Performance of Garfinkle’s Promise to Syndicate one of the Properties 52. When Levin sought Garfinkle’s assistance in syndicating the Hope Valley property, (later known as Sheffield Farms), Garfinkle and Fensterheim demanded a $150,000 fee for separating the mortgage on this property from the overall $3,050,000 deed of trust. Levin paid $75,000 in cash, and the aggregate indebtedness under the overall deed of trust was increased to $3,125,000. (T. 152-153); (P-205). 53. Garfinkle and Fensterheim also required Levin to prepay one full year’s interest on the deed of trust, approximately $56,000. (T. 153). 54. Garfinkle performed all of the mathematical calculations as to the price at which the syndication was to be offered, projected rates of return, and the like. (T. 150-151); (P-100; P-101). 55. Based upon Garfinkle’s calculations, Levin offered shares in the syndication to potential investors. When he discovered that Garfinkle had seriously misrepresented rental income in the offering, he withdrew it and refunded the money to those who had already invested. (T. 151-152). 56. In spite of the failure of the syndication, Levin never received back from Garfinkle and Fensterheim the consideration he had paid for separating the mortgage on the property, or the amount he had paid as prepaid interest. (T. 153). G. The Predicted Sale of the Rondi River Property 57. Levin did not inquire of Garfinkle as to the likelihood that the Rondi River sale would occur immediately after his purchase of the Charlotte properties. (T. 652-653). 58. In fact, Rondi River was sold in September, 1976, (T. Ill), although Levin did not learn of the sale until late October, at which time he was informed by a Garfinkle employee who knew that Levin was a part owner of the property. (T. 98-99). See Findings 276 to 281, infra. H. Garfinkle’s Misrepresentation of Rental Income from the Properties 59. At the time Levin was negotiating to buy the Charlotte properties from Garfinkle, in late June, 1976, Garfinkle represented that the total rental income of the properties was increasing at the rate of $5,000 per month. (T. 142-143). He also showed Levin a rent projection, (P-76), indicating that Levin could expect to realize $311,000 in rents during the month of July, 1976, consisting of $281,000 in current rental payments, and $30,000 in advance rental and security deposits. (T. 115). 60. Rent rolls from the properties show that at the time Garfinkle was making these representations to Levin, the rents were in fact much lower. Gross collections for June, 1976, including advance rental and security deposits, amounted to $264,231.82. (P-76 D); (T. 1495; 1498). Collections for current rentals only totalled $240,085.21. (Id.) 61. According to Daryl Greenberg, manager of the Charlotte properties during the ownership of both Levin and Garfinkle, collections for current rentals in July, 1976, Levin’s first month as owner, totalled approximately $243,000. (T. 1497). 62. Upon learning that July collections were not keeping pace with Garfinkle’s projections, Levin telephoned Garfinkle in New York for an explanation. Garfinkle consulted his rent records on the properties, but a Garfinkle employee observed that the purported rent figures which he read to Levin over the phone were higher than the actual rent figures in the records before him. (T. 881-882). 63. Garfinkle made it a practice to keep duplicate records, one. set of which accurately reflected the income and expenses of a property, and one set which presented the property in a more favorable light, used to attract investors. (T. 859-862). I. Dealings Between Levin and Garfinkle after Levin’s Purchase of the Charlotte Properties 64. Levin had the Charlotte properties appraised after he purchased them. (T. 600-601). On the basis of the appraisal, Levin concluded that he had made a good investment, (T. 597-598), and he caused a financial statement to be prepared showing his equity in the Charlotte properties to be $7,766,000. (D-63B). 65. During the month of July, 1976, Levin paid to Garfinkle or his interests a total of $80,496.44, (P-365, ¶ 1), an amount far in excess of his obligations under the deed of trust. 66. Levin and Fensterheim agreed that Levin owed the Garfinkle interests a total of $88,687.50 for the month of August, 1976, (P-103), and Levin paid to Garfinkle or his interests a total of $146,093. (P-365, ¶ 1); (P-346 A); (T. 165-174). 67. During August, Levin made the September payment on the deed of trust in advance, in order to help Garfinkle with a cash shortage. (T. 182-183). This payment created a cash shortage for Levin in mid-August, (T. 183), and Levin then turned to Garfinkle for a loan. Garfinkle sent Levin a check for $50,000, but the check was returned to Levin’s bank unpaid, (P-108), (T. 186) , resulting in a temporary freeze on all of Levin’s accounts at Continental Bank (T. 187) . 68. In September, to ease his continuing cash shortage, Levin sought a loan from defendant K. B. Weissman in the amount of $305,000 secured by the Charlotte properties. Weissman refused to close the loan when he learned that Levin had permitted back taxes and liens on the properties to accumulate. (T. 1047-1049). 69. Garfinkle offered to borrow $100,000 from Weissman, by pledging the mortgage on the Hope Valley property, and to use the proceeds of the loan to make mortgage payments to senior lienholders on the Charlotte properties on Levin’s behalf, (T. 192-193), thus fulfilling Garfinkle’s promise to lend Levin $100,000. (D-5). See Finding 42, supra. 70. Garfinkle also suggested that Levin travel to North Carolina to meet with the senior lienholders directly, and to negotiate payment schedules. (T. 193). 71. As a condition of Garfinkle’s payment of the lienholders, Levin’s attorney, Howard Creskoff, agreed to assume certain duties with respect to the Charlotte properties. He agreed, inter alia, to set up a special account into which all rent receipts would be directed, and from which Creskoff would ensure all liens and bills were paid. (P-131). 72. On September 15, 1976, Garfinkle borrowed $125,000 from K. B. Weissman. He used all of the proceeds for his benefit. (P-123); (T. 201-202). 73. Levin proceeded to arrange accommodations with the senior lienholders in North Carolina, (T. 132), and to assure them that payment was forthcoming. Five days after Levin left for North Carolina, Garfinkle employees forwarded checks to the lien-holders, drawn on a bank account which had been closed for over six months. (T. 201-203). See (P-160). There was no agreement between Levin and Garfinkle that Garfinkle was to forward bad checks in order to “buy time” with the senior lien-holders. See (T. 1890). 74. On September 28, 1976, Levin executed an affidavit stating that he had extensive knowledge of Garfinkle’s criminal record before investing with him, and that he had purchased the Charlotte properties because they were a good business investment. (D-25). At trial, Levin testified that he lied when he swore to this affidavit. (T. 667). 75. In October, 1976, Garfinkle was admitted to a hospital with purported heart ailments. (T. 207-208). While he was in the hospital, Levin sent Barbara Garfinkle a total of $9,000 so that she could meet living expenses. (T. 208); (P-365, ¶ 1). J. Levin’s Alleged Default 76. In late October, 1976, Levin, at Garfinkle’s urging, went to Europe for a vacation. (T. 212; 1063-1064). On October 26, 1976, while Levin was out of the country, his attorney, Howard Creskoff, received letters signed by Cyrus West, on behalf of TAFU Corporation, declaring the deed of trust in “default, and accelerating the entire indebtedness. (T. 1062-1064). 77. Creskoff telephoned Garfinkle, who asserted that Levin had not made payments on the mortgage. (T. 1604). Shortly thereafter, Garfinkle sent Creskoff a letter detailing a series of defaults on Levin’s part, such as failure to keep senior mortgages current, and changing payment schedules without TAFU Corporation’s consent. (P-173). 78. Most of the defaults which Garfinkle identified in his letter to Creskoff involved problems with the property which had carried over from Garfinkle’s ownership, which he had assured Levin he would assist in resolving, or defaults such as alterations in payment schedules for the senior mortgages, which had occurred with Garfinkle’s knowledge and consent. (T. 1064 — 1065; 1069-1070). 79. When Creskoff threatened to fight the proposed foreclosure in the North Carolina courts, Garfinkle agreed to stop legal proceedings and meet with Levin and Creskoff in New York. (T. 1070-1071). K. The November 8,1976, Agreement to Sell the Properties to Satisfy the Deed of Trust 80. On November 5, 1976, Levin, Creskoff, Garfinkle, Fensterheim, and Edward Breger met at Garfinkle’s New York apartment. 81. Garfinkle outlined a plan whereby he would become Levin’s agent to sell the properties, and, through a series of complicated agreements, split the proceeds with Levin, with Levin’s share to be applied to reducing his indebtedness under the deed of trust. 82. Creskoff protested his inexperience in negotiating complex real estate transactions, (T. 1080), and Garfinkle suggested that Breger represent Levin. (Id.) 83. Levin, Creskoff, and Breger had lunch together, during which they discussed the details of Garfinkle’s proposal. Neither Levin nor Creskoff knew that Garfinkle had given Breger an $88,000 interest in the deed of trust earlier that week. (P-176); (T. 225). 84. At the lunch meeting, Breger explained Garfinkle’s proposal to Levin and Creskoff, and tried to persuade them that it was a reasonable one. (T. 222-224); (T. 1080-1083). 85. The agreement reached at the November 5, 1976 meeting, was set forth in the form of a letter agreement dated November 8,1976. (P-178). Under the agreement, Garfinkle was to become Levin’s agent, with absolute discretion to sell the properties on Levin’s behalf. (P-178, p. 2, ¶ 1). Cash proceeds from the sales were to be split according to a formula set forth in the agreement, with Garfinkle entitled to priority to cash in some sales, and Levin in others. (P-178, p. 3). Purchase money mortgages received were to be held by Garfinkle or his interests, with Levin holding a forty percent junior interest in the mortgages. (Id.) Garfinkle was to hold Levin’s junior share in the mortgages as collateral for Levin’s indebtedness under the deed of trust. (P-178, p. 4). 86. Breger explained that it was necessary to have a junior/senior relationship in order to allow Garfinkle to foreclose speedily if one of the purchasers defaulted. He also explained the pledge of Levin’s share in the mortgages as collateral as necessary for Garfinkle’s protection against Levin’s stripping the properties of rents during the period of the sale, and allowing senior lienholders to foreclose, thereby wiping out Garfinkle’s interest. (T. 222-224; 1080-1081). 87. Garfinkle represented to Levin that he would earn a profit of one million dollars through the sales. The possibility that there might be a shortfall, such that Levin would remain indebted to Garfinkle under the deed of trust, was dismissed by Garfinkle as totally improbable. (T. 226). Garfinkle’s “promise” of a large profit was not reduced to writing. (T. 1328). 88. All cash and deposits received by Garfinkle, as well as his share of the purchase money mortgages, were to be credited against Levin’s indebtedness under the deed of trust. (P-178, p. 3, ¶ 1H, I, J). 89. As part of the November 8 agreement, Levin was given a credit of $150,000 against the deed of trust indebtedness for Garfinkle’s misrepresentation of the rental income to Levin at the time he purchased the properties. (P-178, p. 6, ¶ C). See Findings 59-63, supra. 90. Levin and Garfinkle reserved the right to have an accounting between TAFU Corporation and Levin for payments up to that time, provided, however, that neither party would be entitled to more than $150,-000 in credit. (P-178, p. 6, ¶ 4B). 91. Levin also acknowledged in the November 8 agreement that, during negotiations for his purchase of the Charlotte properties, during the unsuccessful syndication attempt, and during the negotiation of the November 8 agreement itself, he was represented by Howard Creskoff, and was not subjected to fraud, misrepresentation, or duress of any kind. (P-178, pp. 8-9). 92. In addition to the main agreement of November 8, 1976, the parties also executed three collateral documents. 93. Creskoff executed a letter acknowledging that he represented Levin at the time of the purchase of the Charlotte properties and during negotiation of the November 8 agreement. .(D-31). 94. Levin executed a release relieving Garfinkle of his obligation to lend Levin $100,000. (D-29). See Finding 42, supra ; (D-5). 95. Garfinkle executed a letter acknowledging that Levin owned a twenty-five percent interest in the New York Rondi River venture, notwithstanding that stock certificates had never been issued to Levin for his share. (D-32). 96. Levin signed the November 8 agreement to avoid foreclosure by Garfinkle. However, other options were available to him. Through counsel retained in North Carolina, Levin and Creskoff learned that Levin could assert various defenses at any foreclosure proceeding instituted by Garfinkle; could seek an injunction against the foreclosure; and seek forebearance from senior lienholders while he litigated with Garfinkle. (T. 1311-1314). 97. Levin entered into the November 8 agreement because he concluded that it would be more advantageous to do so than to litigate with Garfinkle because by litigating they risked foreclosure by the senior lienholders on the property. (T. 1314). After making the agreement, Levin believed that he had reached a satisfactory solution to the disputes between himself and Garfinkle. (T. 1341-1342); (D-127, Tabs G and J). L. The January 14,1977, Modification of the November 8 Agreement 98. The Charlotte properties were not sold immediately, with the result that Levin was once again facing a cash flow crisis. (T. 233-234; 240). 99. In accordance with the terms of the November 8 agreement, see Finding 90, supra, Levin sought an accounting from Garfinkle for payments Levin had made to TAFU Corporation or for Garfinkle’s benefit in excess of Levin’s obligations under the deed of trust. Levin estimated that he was entitled to $105,000 from the Garfinkle interests. (T. 240-241). 100. Garfinkle met with Levin in early January, 1977. He informed Levin that he was not in a position to make a cash settlement with him at that time, but that he would adjust the terms of the November 8 agreement in Levin’s favor. (T. 241). 101. The parties executed a letter agreement dated January 14, 1977, whereby Garfinkle waived his right of priority to cash proceeds from the sales of the Charlotte properties, and Levin’s share in any purchase money mortgages received was increased from forty to fifty percent. (P-294). 102. The January 14, 1977 agreement also states that an accounting between the parties had occurred and that as of December 31, 1976, by virtue of the agreement they had reached, no balance was due from Levin to TAFU Corporation, or from TAFU Corporation to Levin. (Id.) 103. Howard Creskoff represented Levin in the negotiation of the January 14 agreement, and understood that it ratified the November 8 agreement between the parties. (T. 1344-1345). M. The Sale of the Charlotte Properties 104. The seven apartment complexes were sold at various times between March 1, 1977, and July 29, 1977. 105. At' each sale, in accordance with the November 8 and January 14 agreements, see Findings 80-102, supra, Garfinkle and Levin split the cash proceeds, and Levin assigned to HAW Corporation the purchase money mortgages received, with HAW Corporation in turn granting Levin a fifty percent junior participation in the mortgages. 106. Garfinkle agreed with Levin to assume fifty percent of the legal fees and brokerage commissions incurred in the sale of the properties. (T. 1664-1665; 1677). 107. At some of the closings, Levin and Garfinkle had serious disputes because of the amount of unpaid taxes or other liens on the properties. (T. 728). 108. Howard Creskoff attended six out of the seven closings, although Edward Breger was Levin’s counsel of record in most of the transactions. 109. At each of the closings, Levin executed an account stated letter, acknowledging the amounts credited to him and to the Garfinkle interests respectively, and setting forth the balance of his indebtedness to Garfinkle under the deed of trust. Each letter also reconfirmed the November 8 and January 14 agreements. (P-206, pp. 1-7). 110. Levin was present at each closing when the proceeds of the sale were being distributed. Obligations of Levin such as liens and back taxes were satisfied out of the proceeds of the sale. Levin and Garfinkle then negotiated the figure to be inserted in the account stated letters as Levin’s outstanding indebtedness under the deed of trust. 111. Because of the adjustments negotiated by Levin and Garfinkle, the amount of credit against his indebtedness Levin was given in the account stated letters is not consistent with the actual amounts received at the closings. 1) Southgate Closing 112. The first property sold was South-gate, on March 1, 1977. 113. At the time of the first sale, Levin’s indebtedness under the deed of trust was $2,975,000. 114. During preparation for the transfer of title, the parties learned that a payment to one of the senior mortgage holders on the property, City Federal Savings and Loan, was past due. (T. 128). The bank had failed to discover the delinquency until the time of sale. Levin paid approximately $24,000 to the bank to satisfy the lien. See Finding 39, supra; (P-77). 115. At the time of the closing, K. B. Weissman was owed $165,705.61 on a second mortgage he held on the property. To satisfy this mortgage, Weissman was paid $45,705.61 in cash from the proceeds of the sale. In addition, a new note in the amount of $120,000 was created. The cash was paid from Levin’s share of the proceeds. (T. 295-296). 116. On April 1,1977, Levin forwarded a check to Weissman in the amount of $5,400 on account of the note. (P-363, ¶A.38). On that same date, Garfinkle also forwarded a check to Weissman, on which was noted in Garfinkle’s handwriting “5,000.00 amount Southgate 400 interest 4/1/77 Payment.” (P-360). 117. At the Southgate closing, Levin brought with him a ledger of disbursements he had made for Garfinkle, (D-124), on which he made some calculations which correspond in part to the figures on the account stated letter he signed after the closing. The account stated letter signed by Levin after the Southgate closing reflects an arithmetical discrepancy of $60,-000, in that, taking the cash and mortgages assigned to HAW Corporation into account, Levin’s indebtedness under the deed of trust should have been reduced to $2,530,-481, whereas the balance remaining in the letter is stated as $2,590,481. (P-206, p. 1); (T. 297; 1687). I find that the $60,000 adjustment was made as security for Levin’s obligation under the $120,000 note to K. B. Weissman. (T. 1688). 118. Prior to the Southgate sale, the purchaser had paid deposits toward the sale price. On January 14, 1977, Garfinkle received $37,500 in deposits. (P-294). On February 7, 1977, Garfinkle received $50,-000 in deposits. (P-365, ¶ 16). At settlement, $154,829 was paid to Garfinkle or his interests. (P-365, ¶ 18). Edward Breger, who disbursed the funds at the closing, also disbursed $4,000 to himself for attorney’s fees. (P-365, ¶ 57b). One-half of this $4,000 was Garfinkle’s obligation. See Finding 106, supra. Assuming there were no private adjustments between Levin and Garfinkle, the total credit due Levin at the Southgate closing was $244,329. Levin in fact was given credit for $168,173. (P — 206, p. 1). 119. Garfinkle testified that only part of the deposit moneys that had been received up until March 1, 1977, were credited to that sale, and that $75,000, of which $37,500 was Garfinkle’s share, was rolled over to a subsequent sale involving the same purchaser, in order to induce that purchaser to close the subsequent transaction. See (P-296). Assuming that this is true, there is nonetheless a discrepancy between the amounts actually received by Garfinkle at the time of the closing and the amount credited against Levin’s indebtedness under the deed of trust. 2)- Hunt Club and Timberline 120. The Hunt Club and Timberline sales were closed on April 1, 1977. 121. Garfinkle and Fensterheim purchased the Hunt Club and Timberline properties through corporate entities which they established for that purpose. (T. 1741-1742); (P-206A, 206B). 122. Fensterheim made an adjustment in the account stated letter for the Timberline property, which diminished Levin’s credit in the amount of $15,136.52. (P-206, p. 2). Fensterheim testified that this adjustment represented a compromise of certain disputes between Levin and Garfinkle over amounts they owed to each other, and that he simply inserted the figure Levin and Garfinkle asked him to insert. (T. 1691-1963). I reject this testimony in light of Finding 123. 123. A document from Fensterheim’s files (P-296) which I accept as reliable, reveals that Fensterheim himself made the calculations that resulted in the $15,136.52 deduction from Levin’s credit in the account stated letter. The document reflects that he charged the full brokerage commission against Levin’s share, notwithstanding Levin and Garfinkle’s agreement to split brokerage fees. See Finding 106, supra. 124. Fensterheim’s explanation that exhibit P-296 reflects an attempt by him to reconcile the account between the parties after the first four sales, (T. 1696), and does not represent calculations used to arrive at the balance in the Timberline letter, is rejected. 3) Greenhouse 125. The Greenhouse sale was also closed on April 1, 1977. 126. The purchaser of the Southgate property also purchased Greenhouse. Before the Greenhouse closing, Levin and Garfinkle received further deposit moneys from the purchaser. On March 11, 1977, Levin and Garfinkle each received $30,000 in deposits. (P-365, ¶ 19). On March 21, 1977, Breger received $75,000 in deposits, of which he distributed $52,187 to Garfinkle, and $22,812 to Levin. (P-346-c); (P-365, ¶ 20). 127. As of April 1,1977, a total of $210,-000 in deposits had not yet been accounted for as between the buyer of the properties, and the sellers, Levin and Garfinkle: $75,-000 rolled over from the first sale, and $135,000 received in March. (T. 315). 128. Only $135,000 in deposits was credited toward the Greenhouse sale closed on April 1,' 1977. (P-350). Accordingly, the $75,000 rolled over from the Southgate sale was still not accounted for as between the buyer and seller on that date. 129. At the closing, Breger disbursed $80,021 to Garfinkle or his interests. (P-365, ¶¶ 21, 23). 130. Levin testified that he and Garfinkle agreed at the closing to split a number of costs, and that Fensterheim listed the items to be split on a document, (P-301). (T. 322-326). Exhibit P-301 contains three columns, one with the initials HG, for Howard Garfinkle, one with the initials BL, for Bennett Levin, and one labeled “HG & BL.” Id. The total of the liabilities in the joint column was $137,606, which, if split by Levin and Garfinkle, would result in an obligation of $68,803 to each. See (P-301). 131. Assuming there were no private adjustments between Levin and Garfinkle, the total credit due to Levin at the Greenhouse closing was $231,011, reflecting $80,021 in cash paid to the Garfinkle interests, $82,187 in deposits, and $68,803 in liabilities assumed by Garfinkle. Levin in fact was given credit for $142,056 at the Greenhouse closing. (P-206, p. 4). 132. At the Greenhouse closing, Breger also received $30,000 in deposit moneys on a future sale, of which he disbursed $15,000 to Garfinkle. (T. 1618); (P-287). These funds were not considered in calculating Levin’s credit under the deed of trust at the Greenhouse closing. (P-365, ¶ 23). 4) Chatham Square 133. The Chatham Square sale was closed on May 19, 1977. 134. Prior to the sale, the parties received further deposit moneys. On April 14, 1977, Breger received $75,000 in deposits, and disbursed $37,500 each to Levin and Garfinkle. (P-365, ¶ 24). In late April and early May, Breger received $50,000 more in deposits, (P-365, ¶¶ 26-27), which he disbursed at Garfinkle’s direction. (T. 1826-1828). 135. At the closing, Breger disbursed to Garfinkle $26,384 from the cash proceeds. (P-365, ¶ 28). 136. Breger also disbursed $4,000 to himself as a legal fee, (P-365, ¶ 61d), and $3,500 as a brokerage commission, (P-365, ¶ 61c). Garfinkle was obligated for one-half of these fees. See Finding 106, supra. 137. Assuming there were no private adjustments between Levin and Garfinkle, the total credit due to Levin at the Chatham Square closing was $117,634, representing $26,384 in cash, $87,500 in deposits, and $3,750 in split obligations. Levin in fact was given credit for $75,000. (P-206, p. 5). 138. At the Chatham Square closing, after certain adjustments were made, the purchasers discovered that they lacked $32,-000 in cash necessary to close the transaction. Rather than abandon the deal, the purchasers executed an additional note and mortgage in favor of HAW Corporation for $32,000. No part of this note was credited against Levin’s indebtedness under the deed of trust, and no credit is reflected in the account stated letter executed at the Chat-ham Square closing. (T. 1678-1680). Levin was never given a share agreement reflecting his participation in this note. (T. 1717— 1718). 139. Subsequently, Garfinkle and Fensterheim started foreclosure proceedings on the $32,000 note and mortgage without naming Levin as a party, as they were required to do by the general share agreement between the parties. See (P-178); (T. 1719-1720; 1724). 140. Garfinkle and Fensterheim abandoned their foreclosure attempts on the $32,000 mortgage because the obligor went bankrupt and senior lienholders liquidated all of the assets. (T. 1719). 5) Sheffield Farms 141. The Sheffield Farms sale was closed on May 25, 1977. 142. Garfinkle received a total of $11,-750 in deposit money for the Sheffield Farms property. (P-365, ¶ 25). 143. At the closing, Breger disbursed $47,546 to Garfinkle or his interests. (P— 365, ¶ 29). 144. Breger also disbursed $6,000 to himself as repayment of a loan from Breger to Garfinkle. (T. 378-383); (P-210); (P-346B). 145. Breger also paid $4,000 to himself for legal services, and $200 to the title clerk (P-365, ¶ 63d, 63f). One-half of both payments was Garfinkle’s obligation. See Finding 106, supra. 146. Assuming there were no private adjustments between Levin and Garfinkle, the total credit due to Levin at the Sheffield Farms closing was $67,396, representing $47,546 in cash, an additional $6,000 paid for Garfinkle’s obligation to Breger, $11,750 in deposits, and $2,100 in split obligations. Levin in fact was given credit for $33,250. (P-206, p. 6). 6) Cobblestones 147. The Cobblestones sale was closed on July 29, 1977. 148. Prior to the closing, Garfinkle received $5,087 in deposit moneys. (P-365, ¶ 30). 149. After the closing, Fensterheim disbursed $72,749 to Garfinkle or his interests. (P-365, ¶ 31). 150. Out of the proceeds of the sale, Fensterheim also paid $12,500 in brokerage fees (P-262), $6,250 of which was Garfinkle’s obligation. See Finding 106, supra. 151. Assuming there were no private adjustments by Levin and Garfinkle, the total credit due to Levin at the Cobblestones closing was $84,087, representing $5,087 in deposits, $72,749 in cash, and $6,250 in split items. Levin in fact was given credit for $65,000. (P-206, p. 7). 152. Cobblestones was the last property sold. None of the account stated letters reflects that Levin was given credit for Garfinkle’s share of the $75,000 in deposit moneys that were rolled over from one sale to another. See Findings 119,127,128,137, 142, supra. Likewise, none of the account stated letters reflects that Levin was given credit for Garfinkle’s share of the $30,000 in deposits received on April 1, 1977. See Finding 132, supra. 153. As part of the adjustments against Levin at the Cobblestones closing, $20,000 was deducted from his share to compensate the buyer of the Sheffield Farms property, Anthony Scioli, for damage to some of the units and missing appliances. (T. 417); (P-267). Scioli was never paid or given credit for this amount. (T. 1227; 1255). 154. Levin and Garfinkle had serious disputes at the Cobblestones closing. (T. 751). Levin had been unable to make payments to senior mortgage holders for three months prior to the closing.' (T. 2217). 155. Numerous disbursements ' were made at the Cobblestones closing, which Levin authorized. (D-127, Tab S). 156. Levin and Garfinkle negotiated a number of items at the Cobblestones closing, with Garfinkle agreeing to assume one-half of some of the outstanding obligations. (P-266); (T. 411-418). 157. Levin brought to the closing a list of claims against Garfinkle (P-267), and added to the list the various adjustments made against Levin at the closing. The figure “$65,000”, the same figure inserted in exhibit P-206, p. 7, as the credit due Levin, appears on exhibit P — 267. It is not clear, however, whether the figure $65,000 was reached through calculations done by Levin and Garfinkle on exhibit P-267, as the defendants contend, or whether Levin simply listed it on the sheet with the other figures. 158. When Levin signed the account stated letter after the Cobblestones closing, it indicated that he had an indebtedness of $777,935.04 under the deed of trust. (P— 206, p. 7). Levin discussed with Creskoff the advisability of signing the letter before doing so, (T. 735), and Creskoff advised him not to do so before a final accounting. (T. 1361). 159. Levin signed the account stated letter because HAW Corporation would not release its mortgage unless he did so, (T. 765), and because he was afraid that if the sale was delayed the senior lienholders would foreclose, and Garfinkle would execute upon Levin’s share of the purchase money mortgages. (T. 766). 160. Levin admitted at trial that he did not consider himself under duress at the time he signed the Cobblestones account stated letter, (T. 729), and I find that he was not under duress. 161. Levin and Creskoff both testified that they believed that the $777,935 balance shown on the Cobblestones account stated letter did not reflect Levin’s true account with Garfinkle, but was subject to a final adjustment between the parties with respect to all their dealings. (T. 1361). I reject that testimony as not credible. N. The U.C.C. Sale of Levin’s Interest in the Mortgages 162. At a meeting between Garfinkle, Levin and Creskoff several days after the last closing, Garfinkle informed Levin that he considered Levin liable for the $777,935 in the last account stated letter, and that no further accounting had been agreed to, although he was willing to give Levin a credit of $183,125 because of Garfinkle’s loss of the Timberline property. See Findings 183-190, infra. (T. 842; 1105; 1906). 163. Shortly thereafter, Levin renounced his indebtedness under the deed of trust, (T. 1731), and Garfinkle instructed Fensterheim not to disburse any further moneys to Levin from payments made to HAW Corporation by the buyers under the purchase money mortgages on the properties. (T. 1792). 164. Levin had paid no interest under the deed of trust from April 1, 1977, to the time of the U.C.C. sale of his interest in the purchase money mortgages on the Charlotte properties. In correspondence with Fensterheim, Levin advised that he and Garfinkle had reached an agreement at the Greenhouse closing that no more interest would be due under the deed of trust. (P— 326; P-329; P-331). Although Fensterheim disputed the alleged agreement, Levin stopped making payments. When Levin, at a later date, renounced further liability under the deed of trust, Garfinkle declared a default, with the result that interest became due at a penalty rate of $11,655 per month. 165. When Levin made no further payments, Garfinkle instructed Fensterheim to proceed to sell Levin’s share in the purchase money mortgages on the Charlotte properties which Levin had pledged as collateral for his debt under the deed of trust, in accordance with the Uniform Commercial Code. 166. The sale took place on November 15, 1977. Levin’s counsel stipulated that they would not challenge the adequacy of notice for the sale, but read a prepared statement at the sale announcing their intention to contest the sale. (T. 785-786); (D-126, ¶ 39). 167. HAW Corporation purchased Levin’s share in the mortgagees at the sale for $500,000. O. Other Alleged Frauds in Connection with Sale of Charlotte Properties 1) Garfinkle’s Refusal of the Wraparound Mortgage on the Chatham Square Property 168. Under the November 8 agreement, Garfinkle was Levin’s agent in the sale of the Charlotte properties. (P-365, ¶ 51); see Finding 86, supra. 169. In December, 1976, the Chatham Square property was placed under agreement of sale with Investors Economic Systems (IES), a real estate syndication firm headquartered in New Jersey. (T. 943). 170. Virtually all of the negotiations for the property, including negotiation of the agreement of sale, and financing for the property, were conducted by Garfinkle. (T. 937-939; 941; 946). 171. The property was to be sold for cash and a purchase money mortgage. After signing the agreement of sale, IES decided to use a wraparound mortgage in financing the sale. 172. A wraparound mortgage encompasses all existing liens on a property in one package, and the face amount of a wraparound reflects the total indebtedness on the property. The holder of the wraparound mortgage receives level payments calculated on the basis of the aggregate indebtedness at the time the mortgage is created, and he in turn makes payments to all holders of the underlying mortgages on the property. Over time, the underlying mortgages are satisfied, while the holder of the wraparound continues to receive the same payments, thus realizing a substantial profit because he need not funnel the payments he receives on the wraparound into payments on the underlying liens. (T. 951-952). 173. A wraparound mortgage is particularly advantageous from a tax standpoint to someone who has substantial losses to offset the interest income received from the mortgagors during the early years of the wraparound. (T. 953). Levin had substantial losses to offset the income. (T. 376). 174. The value of the wraparound mortgage proposed by IES had a net face value (value in excess of the underlying mortgages) of $1.2 million, (T. 955), and the holder of the mortgage would have received $3,000,000 in payments in excess of what he would pay out on the underlying mortgages. (T. 956). 175. Under Pennsylvania Securities Commission regulations, IES could not hold the wraparound mortgage itself. (T. 954). It therefore offered the wraparound to Levin through Garfinkle, his agent in the transaction. (T. 954, 959). 176. Garfinkle agreed to accept the wraparound mortgage, but then demanded that stringent conditions be met as the price for acceptance. (T. 961, 962). Several times Garfinkle accepted the wraparound mortgage, only to reject it later. (Id.) 177. Strict SEC rules required that IES prepare a lengthy disclosure statement for its investors. (T. 963 — 965). Without receiving a final answer from Garfinkle, IES could not prepare the necessary documents. See (P-252). 178. Garfinkle refused to make a firm commitment on the wraparound mortgage. Finally, so much time passed that IES could not complete its offering documents if it waited any longer for a firm answer. (T. 965). - Garfinkle was aware of IES’ deadline, and knew that it would have to offer the wraparound to another party if Garfinkle would not accept it. (Id.) Nonetheless, Garfinkle refused to give a definite answer to accept the wraparound mortgage, with the result that IES offered it to a third party. 179. Garfinkle informed- Levin that he would receive the wraparound mortgage at the closing of the property. (T. 374-375). It was at the closing that Levin learned for the first time that he would not receive the wraparound. (T. 375-376). At closing, Garfinkle told Levin that IES had chosen to give the mortgage to another party. (T. 376). 180. During the closing, Garfinkle telephoned Creskoff and told him that the recipient of the wraparound mortgage was “making the score of a lifetime and he was not paying a dime for it.” (T. 1108). 181. Garfinkle contended at his deposition that he refused the wraparound mortgage because the particular one offered them was a “tax scam” that he would not be a party to, (T. 1013), although in at least four prior transactions Garfinkle had proposed or utilized wraparound mortgages to finance sales. (T. 996). 182. If Garfinkle had accepted the wraparound mortgage Levin would have acquired an asset with a face value of $1.2 million, without any expenditure on his part. 2) Garfinkle’s Performance Under the Hunt Club and Timberline Mortgages 183. As noted above, Finding 121, supra, Garfinkle and Fensterheim purchased the Hunt Club and Timberline properties from Levin through corporations established specifically for that purpose. 184. Under the terms of the Hunt Club mortgage, interest payments of $1,395.27 were due every month from May 1, 1977, to April 1, 1978. (P-365, ¶ 7). 185. Under the terms of the Timberline mortgage, interest payments of $1,526.04 were due every month for the same period of time. (P-365, ¶ 9). 186. None of the payments due under the mortgages (which were assigned to HAW Corporation) were ever made, (P-365, ¶ 8, ¶ 10), and thus Levin never received his participating share from those mortgage payments either in money or credit against his indebtedness under the deed of trust. 187. At some point, Garfinkle stopped making payments on the senior mortgages on the Timberline apartments, with the result that the senior mortgagees commenced a foreclosure action. (T. 1521 — 1522). Garfinkle told Daryl Greenberg, manager of the property, that he was going to force the banks to foreclose so that the liens behind the senior mortgages would be wiped out. It was Garfinkle’s plan to buy the properties back from the banks on foreclosure. 188. While Garfinkle was permitting the banks to foreclose, he was stripping the property of rents. During April, 1977, Garfinkle had Greenberg wire $37,241.63 from the Timberline property to New York. (T. 1507-1508); (P-324; P-325). During May, June, and July of 1977, Garfinkle had Greenberg wire at least $31,000 from the Timberline property to New York. (T. 1509); (P-234; P-235). 189. The banks ultimately foreclosed on the property, destroying the junior mortgage in which Levin had an interest. Garfinkle offered Levin a credit of $183,125 because of this foreclosure. See Finding 162, supra. 190. Levin neither accepted nor rejected Garfinkle’s offer of a credit, but in lieu of a direct response filed this lawsuit. (T. 1906). 191. Garfinkle and Fensterheim also received rents from the Hunt Club property, during the period in which they were not paying to Levin any of his Share under the mortgage. In May, June, and July, 1977, Daryl Greenberg wired approximately $9,000 from the Hunt Club property in accordance with directions supplied by Garfinkle and Fensterheim in New York. (P-325); (T. 1509-1510). 3) Garfinkle’s Retention of Extra Proceeds from the Sheffield Farms Sale 192. Shortly after they purchased the Sheffield Farms property from Levin in May, 1977, the purchasers discovered that they had made an error in their offering memorandum concerning the timing of interest payments under the mortgage. (T. 1208-1212). 193. Because the terms of the mortgage with HAW Corporation did not correspond to the terms outlined in their offering document the purchasers faced potential problems with their investors. (T. 1210). Accordingly, they contacted Garfinkle to negotiate a modification of the mortgage. (Id.) 194. The purchasers met with Garfinkle, K. B. Weissman, and Edward Breger in Breger’s office in New York, on June 15, 1977. (T. 1212). 195. Garfinkle approved the modification of the mortgage, on the condition that the purchasers increase the principal amount of their indebtedness by $50,000, and pay immediately $30,000 as an interest penalty. (T. 1213-1214); (P-244). The $50,000 increase in indebtedness took the form of a note payable directly to K. B. Weissman. (P-209, p. 4). 196. When the parties executed the modification of the mortgage, in addition to the $30,000 penalty paid on that date, the purchasers also paid $50,000 in advance amortization under the original mortgage, which was not due until August 15, 1977. (T. 1214); (P-244, p. 2). 197. At the June 15 meeting to modify the mortgage, the purchasers asked why Levin was not present. (T. 1218-1219). The purchasers were informed that Levin no longer had an interest in the transaction, notwithstanding that the checks for the additional proceeds, as well as for the amortization payment, were made out to “Edward Breger as attorney for Bennett Levin.” (T. 1217-1219); (P-336). 198. On the advice of their attorneys, the purchasers asked for and received a letter from Breger certifying that Levin’s consent to the transaction was not necessary. (P-208, p. 2). 199. Of the $80,000 received from the Sheffield Farms purchasers at the June 15, 1977 meeting, Breger deposited $65,000 in his attorney’s account. Breger disbursed the funds to Weissman, Garfinkle, and himself. (T. 1835-1836); (P-346E). The remaining $15,000 received on June 15, 1977, was endorsed to a third party to satisfy an obligation of Garfinkle’s. (T. 1214; 1217). 200. Levin did not learn of the negotiation of additional proceeds for the Sheffield Farms property until the discovery proceedings in this lawsuit. 201. Defendants have introduced no credible evidence that Levin was ever given credit for his share of the $50,000 in additional proceeds, the $30,000 interest penalty, or the $50,000 in prepaid interest paid at the time of the mortgage modification. I find that he was not given such credit. 4) Interest Payments Received by Defendants After the Sale of the Charlotte Properties 202. After the sale of the Charlotte properties, Asher Fensterheim received payments under the purchase money mortgages assigned to HAW Corporation. In some instances, Fensterheim failed to pay or to credit to Levin his share. Fensterheim’s failure to do so after Levin’s renunciation of his indebtedness, in August, 1977, was the result of Garfinkle’s instructions to him not to pay Levin any more of his share. See Finding 165, supra. 203. On July 18, 1977, Asher Fensterheim received $2,255.05 in amortization from the purchasers of the Chatham Square Property. (T. 1762-1763). Fensterheim did not distribute or credit any of this money to Levin. (T. 1764). 204. On August 2, 1977, Fensterheim received $2,200 in amortization payments from the purchasers of the Southgate property. (T. 1769). Fensterheim did not disburse any of this money to Levin, nor did he give Levin credit for it under the deed of trust. (T. 1770; 1783). Fensterheim disbursed part of the money to HAW Corporation, K. B. Weissman’s son, Allan Weiss-man, Edward Breger, and himself. (T. 1772) . Fensterheim disbursed Levin’s share, $1,100, to HAW Corporation, (T. 1773) , and did not give Levin credit under the deed of trust. (T. 1783). 205. On August 2, 1977, Fensterheim received $2,255 in amortization payments from the purchasers of the Chatham Square property. (T. 1774). Fensterheim did not disburse any of this money to Bennett, Levin, {id.), and did not give him any credit for it under the deed of trust. (T. 1783). 206. After the sale of the Sheffield Farms (Hope Valley) property, Levin assigned the mortgage to HAW Corporation, which subsequently assigned it to K. B. Weissman. (T. 1221). On August 15, 1977, the purchasers of the Sheffield Farms property paid $25,000 in amortization to K. B. Weissman, and between August 29 and September 15, 1977, paid an additi