It’s rare to see a Judiciary Law § 487 Claim; even rarer to see one that survives motion practice. Gerard Fox Law, P.C. v Vortex Group, LLC 2019 NY Slip Op 32065(U) July 9, 2019
Supreme Court, New York County Docket Number: 654794/2018 Judge: Andrew Borrok is a case which makes the successful leap.
“This is an action for breach of fiduciary duty, fraud, negligent misrepresentation, and professional negligence brought by Gerard Fox Law, P.C. (Gerard Fox) against its former real
estate broker, the Vortex Group, LLC (Vortex). Vortex asserts counterclaims for fraud and
violation of Judiciary Law§ 487. Gerard Fox moves pursuant to CPLR §§ 3016 and 3211 (a) (7)
to dismiss Vortex’s counterclaims in their entirety. For the reasons set forth below, the motion is granted. ” [But read below]
“Second Counterclaim: Judiciary Law § 487
To state a cause of action for violation of Judiciary Law § 487, a party must plead intentional
deceit and damages proximately caused by the deceit (Judiciary Law§ 487; Jean v Chinitz, 163
AD3d 497, 497 [1st Dept 2018]). To be actionable, the alleged deceit must have occurred during a pending judicial proceeding (US Suite LLC v Baratta, Baratta &Aidala LLP, 171AD3d551, 551 [1st Dept 2019]). Allegations of deceit or an intent to deceive must be stated with particularity (CPLR § 3016 [b]; Facebookv DLA Piper LLP (US), 134 AD3d 610, 615 [1st Dept
2015]). Where a cause of action under Judiciary Law§ 487 is based on allegations of false
statements in pleadings, a party may prevail by establishing that “the lawsuit could not have gone forward in the absence of the material misrepresentation, [and] that party’s legal expenses … may be treated as the proximate result of the misrepresentation” (Amaltifano v Rosenberg, 12 NY3d 8, 15 ).
This counterclaim is based on Gerard Fox’s statements made in its complaint and in its
opposition to Kato’s motion for summary judgment in a related action (Answer, iJ 196). Vortex
asserts that Gerard Fox knowingly made several false statements concerning the underlying
events in this matter as contrived predicates for its claims with the intent to deceive the Court.
For example, Paragraph 2 of the Complaint provides:
Specifically, in the Fall of 2015, [Gerard Fox] sought to lease space with room for
five to six offices and a conference room, within its monthly budget of $28,000-
$30,000. [Gerard Fox] spelled out its needs and budget in writing, and reinforced
those points during lengthy face-to-face meetings. Vortex, however, had a
difference agenda. Viewing [Gerard Fox] as an out-of-town “yokel” it could work
for a fat commission, Vortex upsold [Gerard Fox] from the get-go. Vortex
exclusively presented options far outside of [Gerard Fox’s] price range, including
a space in “Tower 49,” located at 12 East 49th Street, New York, New York. To
encourage [Gerard Fox] to rent office space beyond its budget, Vortex represented
falsely that the rent was below-market and a great deal.
The documentary evidence reveals that these statements, which reflect the gravamen of Gerard Fox’s allegations, are not only misleading, but also demonstrably false. Vortex’s space report, which sets forth the properties that Vortex presented to Gerard Fox, illustrates that 10 of the 12 properties were within Gerard Fox’s stated budget (NYSCEF Doc. Nos. 28, 29). Therefore, this lawsuit is premised on material misrepresentations of fact and, as a proximate result of those misrepresentations, Vortex was compelled to defend the action and incur legal fees. Assuming Vortex’s allegations to be true and affording Vortex every favorable inference, the counterclaim for violation of§ 487 is adequately pled to survive dismissal. “