A Greek restaurant in Port Chester claims that a law firm mishandled its application for federal Covid relief funds, costing it $505,155.
Telly’s Taverna of Port Chester Ltd. accused The Yerman Group, of Manhattan, and managing partner Gary Yerman, of legal malpractice and breach of contract, in a complaint filed Jan. 27 in Westchester Supreme Court.
“Telly’s did not receive the much needed funding — still needed to this day due to the long-lasting impact of the Covid epidemic,” the complaint states, “as a direct result of Yerman’s error.”
Yerman did not reply to an email asking for his side of the story.
Telly Vagianderis and Joanna “Nana” Loiselle opened the original Telly’s Taverna in Astoria, Queens in 1990. Vagianderis died in 2006, “Nana” retired in 2009, and the business was passed to her daughter, Dianna Loiselle.
Telly’s Taverna of Port Chester opened in 2019.
In March 2021, the complaint explains, Congress appropriated $28.6 billion to the U.S. Small Business Administration, as part of the American Rescue Plan Act, to assist the food service industry during the Covid-19 pandemic.
The first round of money from the Restaurant Revitalization Fund was earmarked for small businesses owned primarily by women, veterans and economically disadvantaged people. Loiselle owns both Telly’s, according to the complaint, so both were eligible for priority funding.
Gary Yerman has focused primarily on immigration law over the past 30 years, according to his firm’s website, and The Yerman Group, established in 2002, handles a variety of legal practices including business law.
Gary Yerman solicited Telly’s to handle its applications for government funds, the complaint states. He claimed expertise in preparing and submitting the applications and he ensured Loiselle that all T’s would be crossed and all I’s would be dotted.
Loiselle hired the firm in April 2021 and agreed to pay it 5% of the funds received.
“It was Telly’s understanding that Gary Yerman would personally handle and oversee the work,” according to the complaint filed by Mount Kisco attorney Joel R. Dichter.
But the task was assigned to a clerk with no formal paralegal training, the complaint states, and the clerk made a critical mistake on one of the applications.
She correctly answered “Yes” on the Astoria application that it had an affiliate, but incorrectly answered “No” on the Port Chester application.
She pointed out the error to the SBA, but the agency responded that the application had already been sent to the Internal Revenue Service for verification and could not be corrected for several days.
The application for the Astoria Telly’s was approved in May 2021 and the restaurant received about $573,000. The Yerman Group was paid $28,683.
The Port Chester Telly’s was approved for $516,155 but never received the funds.
While the application was delayed for correction, the priority funding scheme was challenged.
Due to adverse federal court rulings against the SBA, the agency said in a June 2021 notice to the restaurant, “The SBA is not able to pay 2,968 priority applications — including yourself — who were previously approved.”
Meanwhile, the entire Restaurant Revitalization Fund has been awarded.
“If not for the error of the defendants,” the complaint states, “Telly’s would have received the award of over $500,000.”
