Attorneys file a complaint and represent clients.  Opposing parties are unhappy and eventually claim JL 487 violations.  Events continue in two cases at once.  The original case goes to trial and appeal.  The Court finds for plaintiffs, which undercuts defendants JL 487 claims.  What is the effect?

Ehrenkranz v 58 MHR, LLC  2015 NY Slip Op 50859(U) [47 Misc 3d 1226(A)]  Decided on May 27, 2015  Supreme Court, Suffolk County  Pines, J. is an example of how events can overtake pleadings.  It’s a very complicated fact pattern, but involves two commercial parties that have litigated a loan/construction/assets case through the AD.

“In the first action, John Ehrenkranz and Andra Ehrenkranz (“the Ehrenkranzs” or “the Ehrenkranz Plaintiffs”) have sued 58 MHR, LLC (“MHR”), Dimitri Boylan and Julian Boylan for conversion, unjust enrichment and fraudulent conveyances and aiding and abetting the same under the New York Debtor and Creditor Law, based upon allegations that the Boylans and a company allegedly owned by them, MHR, were dissipating the assets of another corporation, Opus Vivir, Inc (“Opus”), against which the Ehrenkranzs asserted claims in another lawsuit. The Ehrenkranzs have also asserted the right to a Notice of Pendency on real property owned by MHR and sought punitive damages against the Defendants. The Ehrenkranzs commenced the current action in an effort to preserve the assets of Opus and to prevent it from essentially becoming judgment proof in the other action, a breach of contract action arising out of competing claims between Opus and the Ehrenkranzs following the construction by Opus of a residence for the Ehrenkranzs. Following a trial of that action in 2013, the jury rendered a verdict in favor of the Ehrenkranzs in the amount of $2,2111,000 and this Court subsequently denied Opus’ motion pursuant to CPLR 4404 to set aside the verdict. The resulting judgment in that action was recently affirmed by the Appellate Division, Second Department, after the motions currently before the Court were submitted, see, Vivir v Ehrenkranz, 127 AD3d 962 (2d Dep’t 2015).”

“In addition to these claims and counterclaims, MHR and Julian Boylan assert third-party claims against, as herein relevant, the law firm of LePatner & Associates, LLP ( “LePatner” or “LePatner Firm”), the former attorneys for the Ehrenkranz Plaintiffs. These include claims for: 1) defamation; 2) tortious interference with prospective business relations; 3) business disparagement; 4) inducing the breach of fiduciary duties; 5) a violation of the federal computer fraud and abuse action under 18 USC § 1030; 6) tortious interference with contract; 7) conversion; 8) violation of Judiciary Law §487; and 9) abuse of process.”

“In support of its motion to dismiss the third-party complaint as asserted against it, the LePatner Firm asserts that the third-party claims asserted against it fail to constitute any proper “claim over” as required under CPLR 1007. They review the claims asserted by the Ehrenkranzs and 624 BL against the Boylans and MHR which are for conversion of the monies paid by the Ehrenkranzs to Opus, unjust enrichment based upon the use of such funds by the Defendants to pay for development of different properties, fraudulent conveyance through the use of such funds by Defendants for the development of different property, and aiding and abetting Opus and 58 MHR in engaging in such activities. The LePatner Firm argues that none of such causes of action are stated either to arise from or are conditioned upon the third-party claims asserted against it.

The LePatner Firm also argues that these claims must fail under CPLR 3211. With regard to the claim for defamation, the LePatner firm argues that in no instance does the purported claim particularize or point to any specific words, time, place or manner nor person making such statements as required by law. In addition, they must arguably fail as they were made in the context of a judicial preceding and are privileged. The LePatner Firm argues that the disparagement claims as set forth are merely duplicative of the defamation claim, that again they lack any specificity like the defamation claim, and that special damages are not pled.”

“The LePatner Firm contends that the claim against it under the Judiciary Law for allegedly filing false claims in the Opus action has now been vitiated by the verdict against Opus [*4]in the breach of contract action, as well as by the now affirmed order of attachment.”

“To state a claim for abuse of process, the claimant must allege: 1) the issuance of regularly issued civil or criminal process, compelling performance or forbearance of some act; 2) the existence of an ulterior motive to do harm, without economic or social justification; 3) the seeking of some collateral advantage outside the legitimate ends of such process; and 4) actual or special damages, Board of Educ. of Farmingdale Union Free School Dist. v Farmingdale Classroom Teacher’s Ass’n, Inc. Local 1889 AFT AFL-CIO, 38 NY2d 397 (1975). The institution of a civil action is not considered process capable of being abused even where such is done with malicious intent, Muro-Light v Farley, 95 AD3d 846 (2d Dep’t 2012). No abuse of process lies as a result of the accused party or entity obtaining provisional orders of attachment [*14]enjoining the claimants from transferring assets, Daniel J. Edelman, Inc. v Korn, 231 AD2d 405 (1st Dep’t 1996); Park v State of NY, 226 AD2d 153 (1st Dep’t 1996). This is supported in the case at bar by the Appellate Division’s recent affirmance of the Supreme Court’s issuance of the very provisional remedy issued herein following the Third-Party Defendants’ raising of the same issues. Thus, the abuse of process counterclaim fails as a matter of law and is dismissed.

Third-Party Plaintiffs assert that devious court filings and deliberate lies by the LePatner Firm in these litigations constitute a violation of Judiciary Law § 487. However, in this matter, the claims by the Ehrenkranzs in the Opus case were resolved in favor of the Ehrenkranzs by a jury, the motion to set aside the verdict was denied by this Court, and the subsequent judgment entered thereon was affirmed by the Appellate Division. The “[a]ssertion of unfounded allegations in a pleading, even if made for improper purposes, does not provide a basis for liability under Judiciary Law § 487]”, Ticketmaster Corp. v Lidsky, 245 AD2d 142 (1st Dep’t 1997).”