A Surprisingly Successful Judiciary Law 487 Pleading
Its becoming harder to discern when a Judiciary Law 487 pleading will withstand a motion to dismiss on the pleadings. In Cohen v Kachroo 2013 NY Slip Op 30416(U) February 22, 2013
Supreme Court, New York County Docket Number: 111735/10 Judge: Eileen A. Rakower the motion to dismiss was denied, unfortunately without significant comment by the Judge.
"As set forth in the Verified Second Amended Complaint, Plaintiff entered into a retainer agreement with Defendants on January 5,20 10, wherein Defendants agreed to represent Plaintiff in prosecuting her claims against her husband in federal court, and to defend any claims brought by the attorney who previously represented her in the federal action. Pursuant to the retainer agreement, Plaintiff was to pay a $25,000 initial retainer, and to supplement that amount in order “to cover minimal costs of litigation.” The agreement further states:
We shall be compensated upon recovery, whether by settlement or judgment. . . compensation shall be in the amount awarded by the Court, but, in no event, shall We seek contingency compensation in excess of 30% . . , of any recovery plus reasonable expenses less the
retainer amounts received , . , Plaintiff paid the retainer amount. On June 7,20 10, Defendant KLS resigned as Plaintiff’s attorney in the federal action allegedly due to Plaintiff’s inability to meet
her financial obligations, Plaintiff alleges that Defendants threatened to abandon her action if she not did pay additional money to them, and that they tried to coerce her into adding payment terms to the retainer agreement. Plaintiff alleges that, as she was only required to pay the initial $25,000, and a percentage of any recovery made in the federal action, Defendants misrepresented to the federal court judge that she failed to pay her legal fees when they sought withdrawal, and that they subsequently abandoned the action without cause. Defendants now move to dismiss certain causes of action contained in Plaintiffs Verified Second Amended Complaint pursuant to CPLR 321 1 (a)(7).
Defendants seek to dismiss Plaintiffs claims for legal malpractice, breach of fiduciary duty, breach of the New York Rules of Professional Conduct, Breach of New York Judiciary Law 487 for failure to state a claim, and punitive damages. Defendants contend that “this matter does not constitute anything more than a fee dispute.”
Plaintiff‘s sixth cause of action alleges that Defendants breached Judiciary law, Section 487. Judiciary Law, Section 487 permits a party to recover treble damages against an attorney who:
1. Is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party; or, 2. Willfully delays his client’s suit with a view to his own gain; or, willfully
receives any money or allowance for or on account of any money which he has not laid out, or becomes answerable for. Plaintiff’s allegations concerning the alleged deceit by Defendants to Plaintiff and to the Courts are sufficient to establish a violation of Judiciary law 487( 1). “Because damages for breach of a contract are allowed as compensation for the injury or damage resulting from such breach rather than by way of punishment, the general rule in actions for breach of contract is that the damages are limited to the pecuniary loss sustained, and that exemplary damages are not recoverable. However, punitive damages are recoverable in an action to recover for breach of contract upon a showing of gross, wanton, or willful fraud or of high moral culpability of the defendant.” (36 N.Y, Jur. 2d Damages Section 188). Here, Plaintiff‘s allegations of alleged coercion by Defendants are sufficient to support Plaintiffs prayer of relief for punitive damages."