We continue the year 2016 survey of Judiciary Law § 487 cases. Be sure to see Prof. Anita Bernstein’s article in today’s NYLJ on vicarious liability and JL § 487.
18. TSR Group, LLC v Levitin 2016 NY Slip Op 31322(U) July 13, 2016 Supreme Court, New York County Docket Number: 651356/2015 Judge: Eileen A. Rakower JL § 487 is dismissed without any discussion in this escrow-real estate-failure to file mortgages case.
19. Lewis, Brisbois, Bisgaard & Smith, LLP v Law Firm of Howard Mann 2016 NY Slip Op 05487 [141 AD3d 574] July 13, 2016 Appellate Division, Second Department “The ninth counterclaim and the fourth cause of action in the third-party complaint, alleging a violation of Judiciary Law § 487, stated cognizable claims and, thus, the Supreme Court did not err in declining to direct that they be dismissed pursuant to CPLR 3211 (a) (7) (see Palmieri v Biggiani, 108 AD3d 604 ; Sabalza v Salgado, 85 AD3d 436 ; Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534 ; cf. Schiller v Bender, Burrows & Rosenthal, LLP, 116 AD3d 756 ). For the same reason, the court also properly denied dismissal of the seventh counterclaim and the second cause of action in the third-party complaint, which alleged that the plaintiff and the third-party defendants improperly withheld portions of the defendants’ litigation file in the underlying action (see Matter of Sage Realty Corp. v Proskauer Rose Goetz & Mendelsohn, 91 NY2d 30 ).”
20. Kaplan v Valley Natl. Bank 2016 NY Slip Op 51108(U) [52 Misc 3d 1210(A)] Decided on July 20, 2016 Supreme Court, Suffolk County Emerson, J. “The plaintiff’s theory of the case is as follows: Marilyn’s will created two trusts, i.e, the Family Part Sum Trust, consisting of cash and securities worth approximately $250,00, and the House Trust, consisting of the marital home in Jericho, New York, worth approximately $325,000. Upon Marilyn’s death, title to the marital home passed to the House Trust, and Donald was granted a life-estate in the home. Marilyn’s will directed that the Family Part Sum Trust be used for Donald’s benefit. By the time of Donald and Elaine’s wedding in 2005, there was no principal remaining in the Family Part Sum Trust. In mid-2008, Martin Bodian approached the plaintiff about taking out a reverse mortgage on the Altessa property in order to obtain cash for Donald from the House Trust. The plaintiff contends that, when he rejected Bodian’s plan, the Bodian defendants began a campaign on Donald’s behalf to siphon equity from the Altessa property for Donald’s personal use, culminating in the undisclosed sale of the property and diversion of the proceeds of the sale to Bank of America (to pay off the mortgage) and to the Valley National account. That account was opened by Donald and Daniel as the “Family Part Sum Trust under Will of Marilyn Kaplan” without naming the plaintiff as either a trustee or a beneficiary, putting the proceeds of the sale of the Altessa property beyond the reach of the House Trust. The plaintiff seeks to recover an additional $203,702.33 from the sale, which he calculates as follows: $844,404.67 for the trust’s two-thirds share of the proceeds of the sale of the Altessa property, half of which is $422,202.33, minus the $218,500 that he received.”
“Absent a showing of fraud or collusion or of a malicious or tortious act, an attorney is not liable to third parties for purported injuries caused by services performed on behalf of a client or advice offered to that client (Four Finger Art Factory, Inc. v Dinicola, US Dist Ct, SDNY, Jan. 9, 2001, Koeltl, J. [2001 WL 21248] at *7 [and cases cited therein]). Liberally construing the complaint, accepting the alleged facts as true, and giving the plaintiff the benefit of every possible favorable inference (Leon v Martinez, 84 NY2d 83, 87-88), the court finds that the plaintiff’s allegations do not support an inference that the Bodian defendants acted in bad faith, committed fraud, or acted in an otherwise tortious or malicious way. The plaintiff’s allegations that the Bodian defendants colluded with Donald and Daniel to divert the proceeds of the sale of the Altessa property are conclusory and unsupported by the evidence. The record does not support an inference that the Bodian defendants acted other than in their capacity as attorneys for the trust and the Britvan estate. As previously discussed, Donald and Daniel, as two of the three trustees, had the power act on behalf of the trust and to sell its two-thirds share of the Altessa property. Moreover, the documentary evidence reflects that the proceeds of the sale were used to pay the expenses of the sale, the mortgage on the property, and the Britvan estate. The remaining funds were deposited into the Valley National trust account. There is no evidence in the record to suggest that the Bodian defendants retained any of the proceeds of the sale. When, as here, an attorney acts within the scope of an agency relationship and is not motivated by personal gain, the attorney is not liable to third parties (Four Finger Art Factory, supra, citing Kartiganer Assoc. v Town of New Windsor, 108 AD2d 898; see also Pancake v Franzoni, 149 AD2d 575). Accordingly, the eighth cause of action for malpractice is dismissed.
In view of the foregoing, the plaintiff’s remaining claims against the Bodian defendants, which arise from the same facts and allege the same damages, are also dismissed. Accordingly, the ninth cause of action is dismissed, and the fourth through seventh causes of action are dismissed insofar as they are asserted against the Bodian defendants.”