The headline is somewhat misleading. There may have been deceit, but for Judiciary Law § 487 purposes, the deceit did not take place during a litigation. Pszeniczny v Horn
2021 NY Slip Op 02553 [193 AD3d 1091] April 28, 2021 Appellate Division, Second Department is the rare case where a complaint survives against an attorney not in actual privity. That statement, too, is somewhat misleading, The Court found that there was a “privity-like” relationship.
“”Liability to a third party may attach for negligent misrepresentation where there is ‘(1) an awareness by the maker of the statement that it is to be used for a particular purpose; (2) reliance by a known party on the statement in furtherance of that purpose; and (3) some conduct by the maker of the statement linking it to the relying party and evincing its understanding of that reliance’ ” (Rides Unlimited of N.Y., Inc. v Engineered Energy Solutions, LLC, 184 AD3d 695, 696 , quoting Prudential Ins. Co. of Am. v Dewey, Ballantine, Bushby, Palmer & Wood, 80 NY2d 377, 384 ).
Here, the complaint sufficiently pleaded a cause of action to recover damages for negligent misrepresentation. Contrary to the defendant’s contentions, the complaint alleged a privity-like relationship, as it alleged that the defendant knew the plaintiff was relying on the guaranty to enter into the stipulation, delivered the guaranty to the plaintiff, and assured the plaintiff that Serao had signed the guaranty (see Prudential Ins. Co. of Am. v Dewey, Ballantine, Bushby, Palmer & Wood, 80 NY2d at 385; Remediation Capital Funding LLC v Noto, 147 AD3d 469, 469 ; Lyons v Medical Malpractice Ins. Assn., 286 AD2d 711, 711 ). Accordingly, the Supreme Court should have denied those branches of the defendant’s motion which were to dismiss the first and second causes of action.
“ ’The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages. A claim rooted in fraud must be pleaded with the requisite particularity under CPLR 3016 (b)’ ” (Shahid v Ridgewood Bushwick Senior Citizens Council, Inc., 181 AD3d 744, 745 , quoting Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559 ).
Here, contrary to the defendant’s contention, the complaint adequately pleaded a cause of action to recover damages for fraud, as it alleged, in effect, that the defendant misrepresented to the plaintiff that Serao had signed the guaranty in order to persuade the plaintiff to sign the stipulation, that the defendant knew Serao had not signed the guaranty, and that the plaintiff relied on the guaranty in agreeing to execute the stipulation (see e.g. Minico Ins. Agency, LLC v B&M Cleanup Servs., 165 AD3d 776, 777 ; Fox Paine & Co., LLC v Houston Cas. Co., 153 AD3d 673, 677 ).
Accordingly the Supreme Court properly denied that branch of the defendant’s motion which was to dismiss the third cause of action.
However, the Supreme Court should have granted that branch of the defendant’s motion which was to dismiss the fourth cause of action. “[A] Judiciary Law § 487 cause of action requires that the alleged deceit occurred during a judicial proceeding in which the plaintiff was a party” (Gorbatov v Tsirelman, 155 AD3d 836, 840 ). Here, the complaint failed to allege that the deceit occurred during a judicial proceeding or before any court (see US Suite LLC v Baratta, Baratta & Aidala LLP, 171 AD3d 551 ; Henry v Brenner, 271 AD2d 647, 647-648 ; see also Gorbatov v Tsirelman, 155 AD3d at 840).”