We’re continuing to review last years JL 487 cases. Del-Star Jewelry Corp. v Davidov
2015 NY Slip Op 31106(U) June 25, 2015 Supreme Court, New York County Docket Number: 160690/2013 Judge: Ellen M. Coin is next. Here, third-party defendant attorneys represented opposing parties and deceitfully told the bankruptcy trustee that “any judgment against [Davidoff] would be uncollectible” because he had limited assets, when in fact he had significant assets.
“The Second Third-Party Complaint (Complaint) pleads one cause of action: for violation of Judiciary Law§ 487. Its allegations of wrongdoing as against the Schillers are: (1) that defendants Rafael Davidov, Leyla Baybulatova and RD Precious Metals, Inc. (collectively, Defendants) “by their attorneys, falsely claim that by December 2012, Second ThirdParty Defendant Eduardo Delgado owed Defendant RD Precious Metals more than $193,000.00”, and that the Schillers have submitted false documentation in this case and colluded with their clients to deceive the court (Second Third-Party Complaint, ~~ 9, 32; emphasis added); (2) that the Schillers represented defendant Rafael Davidov (Davidov) in an Involuntary Chapter 7 proceeding against Debtor Diamond Depot, Inc. in the United States Bankruptcy Court for the Southern District of New York; that in the course of that proceeding the Schillers represented that Davidov had limited resources and that any judgment against him would be uncollectible; that in reliance on that representation, the trustee in bankruptcy agreed to accept a reduced off er to settle claims of two creditors; that at the time the Schillers made that representation, Davidov owned and operated at least three other lucrative entities, including defendant RD Precious Metals, Inc.; and that the Schillers intended to deceive the bankruptcy court in order to obtain approval of the reduced settlement amount (Second Third-Party Complaint, ~~ 11, 19-21).
The Schillers argue that the Delgados lack standing to bring this action pursuant to Judiciary Law§ 487, contending that this statute applies only to a pending judicial proceeding in which the plaintiff was a party (Bankers Trust Co. v Cerrato, Sweeney, Cohn, Stahl & Vaccaro, 187 AD2d 384, 386 [Pt Dept 1992]). However, where, as is alleged here, the deception is directed against a court, a pending judicial proceeding is not required; it is sufficient if the deception relates to a prior judicial proceeding (Singer v Whitman & Ransom, 83 AD2d 862 [2d Dept 1981]). Accordingly, the Schillers’ contention falls of its own weight.
However, the case was still dismissed. “The Second Third-Party Complaint contains no allegation that the Schillers’ deception of the bankruptcy court and trustee caused any injury to the Delgados. Thus, this aspect of the Second Third-Party Complaint fails to state a cause of action for violation of Judiciary Law§ 487 (See Bohn v 176 W.87th St. Owners Corp., 106 AD3d 598, 600 [1st Dept 2013]; Seldon v Spinnell, 95 AD3d 779 [1 5T Dept 2012]). ”