Successful claims under Judiciary Law 487 are rare. In recent years they have been applied widely and with diminishing success. Here, the claim is essentially that the corporation’s attorneys defended a law suit and in doing so engaged in deceit. In Dial Car Inc. v Tuch & Cohen, LLP 2021 NY Slip Op 30407(U) February 10, 2021 Supreme Court, Kings County
Docket Number: 514138/20 Judge: Leon Ruchelsman the court dismissed.
“The plaintiff is a black car livery service catering to high end clients in Brooklyn. In 2015 Yakov Guzman initiated a shareholder derivative action against Michael Kordonsky and Jeffrey Goldberg, members of the corporation on the grounds they wasted corporate assets. The defendants represented Dial in that proceeding. The complaint alleges the defendants, who should have championed the allegations of Guzman instead acted in ways which benefitted Kordonsky and Goldberg to the detriment of Dial. Specifically, the defendants agreed with a motion to dismiss that was filed by Kordonsky and Goldberg. Further, the defendants unsuccessfully opposed Guzman’s motion to replead the complaint and a further motion to dismiss the amended complaint.
Further, the complaint alleges the defendants negotiated retirement payments to Goldberg in violation of the By-Laws which require a shareholder vote. Moreover, the complaint alleges the defendants negotiated a general release in favor of Goldberg following the service of the Guzman complaint in violation of the By-Laws. ”
“Concerning Judiciary Law §487, it is well settled that to establish such a cause of action the plaintiff must present evidence an attorney acted “with intent to deceive” either the court or any party (see, Moormann v. Perini Hoerger, 65 AD3d 1106, 886 NYS2d 49 [2d Dept., 2009]). The allegations concerning the deception must be pled with particularity (Betz v. Blatt, 160 AD3d 696, 74 NYS3d 75 [2d Dept., 2018]). Moreover, the cause of action is only applicable if the conduct alleges took place in a proceeding where the plaintiff was a party (Barouh v. Law offices
of Jason L. Abelove, 131 AD3d 988, 17 NYS3d 144 [2d Dept., 2015]). First, it must be noted that the Second Department no longer maintains a cause of action pursuant to Judiciary Law §487
based upon an attorney’s egregious, extreme or chronic delinquent
activities. Rather, “the only liability standard recognized in
Judiciary Law §487 is that of an intent to deceive” (Dupree v.
Vorhees, 102 AD3d 912, 959 NYS2d 235 [2d Dept., 2013]). Second,
considering the intent to deceive, such intent can hardly be
demonstrated. The complaint merely alleges in conclusory fashion
that the defendants “have continuously consented to deceit or
collusion, with the intent to deceive and harm Dial” (see, Complaint, ¶157) without elaborating upon those allegations. The mere pursuant of the dismissal of the Guzman lawsuit can hardly be considered an intent to deceive the plaintiff. Further, since that is the only conduct alleged wherein Dial was a party in a pending action all of the other allegations of the complaint cannot sustain a cause of action in this regard.”