Judiciary Law 487, which is “not lightly” applied to attorneys resulted in a finite set of cases during 2015. Over the next month we will review all of the cases, and try to determine the trends. Today, we look at Armstrong v Blank Rome LLP; 2015 NY Slip Op 01755 [126 AD3d 427]
Decided on March 3, 2015 Appellate Division, First Department.
Although the AD decision does not state the acts of deceit, a review of Supreme Court’s decision and order indicates that Blank Rome was representing Morgan Stanley in “lucrative transactional representation in Pennsylvania.” Her husband was “so exalted at Goldman Sachs and that his interests and his company’s were so intertwined” that Blank Rome “threw her under the bus.” She claims that Blank Rome advised her to give up her share of the marital asset valued at $ 16,167,000. Wow!
The AD affirmed Supreme Court’s denial of the motion to dismiss. “The complaint states a claim for violation of Judiciary Law § 487 with sufficient particularity (see Flycell, Inc. v Schlossberg LLC, __ F Supp 2d __, 2011 WL 5130159, *5, 2011 US Dist LEXIS 126024 [SDNY 2011]; Greene v Greene, 47 NY2d 447, 451 [1979]). Specifically, the complaint alleges that defendants concealed a conflict of interest that stemmed from defendant law firm’s attorney-client relationship with Morgan Stanley while simultaneously representing plaintiff in divorce proceedings against her ex-husband, a senior Morgan Stanley executive, who participated in Morgan Stanley’s decisions to hire outside counsel (see New York Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.7[a]). Contrary to defendants’ argument, applying a liberal construction to the allegations in the complaint (see e.g. Leon v Martinez, 84 NY2d 83, 87-88 [1994]), plaintiff identifies the nature of the conflict as stemming from defendants’ interest in maintaining and encouraging its lucrative relationship with Morgan Stanley and the impact of that interest on defendants’ judgement in its representation of plaintiff in the divorce proceedings (see New York Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.7[a]).
Further, the complaint alleges numerous acts of deceit by defendants, committed in the course of their representation of plaintiff in her matrimonial action. Additionally, the complaint sufficiently alleges that the individual defendants knew of but did not disclose defendant law firm’s representation of Morgan Stanley to plaintiff, and it details the calculations of her damages.”