Judiciary Law 487 is the ancient deceit statute concerning attorneys. It is not “lightly given” and remains a rarely successful remedy. Lavelle-Tomko v Aswad & Ingraham 2021 NY Slip Op 01112 [191 AD3d 1142]
February 18, 2021 Appellate Division, Third Department is an example.
“After plaintiff was terminated by her former employer (hereinafter Century 21) from her position as a real estate agent in 2004, she allegedly used her access to Century 21’s voicemail to steal business, among other things. Century 21’s owners, Thomas A. Sbarra and Deborah J. Sbarra, discovered plaintiff’s activity in 2007 and commenced a civil action against her (hereinafter the first action). The Department of State’s Division of Licensing Services Enforcement Unit (hereinafter the Department) then began an investigation into plaintiff’s conduct. Plaintiff hired defendant Richard N. Aswad and his law firm, defendant Aswad & Ingraham (hereinafter A&I), to represent her in the first action, signing a letter of engagement on July 27, 2007 and providing A&I a retainer. Aswad represented plaintiff in the negotiation of a settlement agreement with Century 21 and the Sbarras, which was executed on August 19, 2007. The settlement agreement required plaintiff to, among other things, surrender her real estate license to the Department and cease working as a real estate agent or broker by September 1, 2007. Aswad timely delivered plaintiff’s license to the Department. Pursuant to plaintiff’s request to cancel her retainer agreements, on October 8, 2007, A&I sent plaintiff the balance of her retainer. In March 2008, after some negotiation involving Aswad and other attorneys, plaintiff’s license surrender was accepted by the Department.
In September 2009, plaintiff reapplied for and received her real estate license, and she resumed employment as a real estate broker in January 2010. On February 24, 2010, the attorney for Century 21 and the Sbarras wrote to Aswad asserting that plaintiff had violated the settlement agreement, as it had permanently barred plaintiff from reacquiring her license or resuming work as a broker or agent. Aswad responded that his representation of plaintiff had ended and he had not been retained on a continuing basis, and he forwarded the attorney’s letter to plaintiff. Plaintiff then asked Aswad to respond to the letter, which he did. When Century 21 and the Sbarras commenced an action for breach of the settlement agreement (hereinafter the second action), Aswad became attorney of record. Century 21 and the Sbarras prevailed at trial, obtaining a judgment requiring plaintiff to permanently surrender her real estate license, along with nominal damages (see Thomas A. Sbarra Real Estate, Inc. v Lavelle-Tomko, 117 AD3d 1210, 1210 , lv denied 26 NY3d 907 ). Aswad’s representation ended on September 24, 2015, after exhausting all appeals in the second action.”
“We also deny the portion of plaintiff’s cross motion seeking to amend her amended complaint to add a cause of action under Judiciary Law § 487. “[I]n the absence of prejudice or surprise resulting directly from the delay in seeking leave [to amend a pleading], such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit” (Lakeview Outlets Inc. v Town of Malta, 166 AD3d 1445, 1446  [internal quotation marks and citations omitted]). Judiciary Law § 487 permits recovery of treble damages in a civil action against an attorney who intentionally deceives the court or a party during the pendency of a judicial proceeding (see Beshara v Little, 215 AD2d 823, 823 ; see generally Amalfitano v Rosenberg, 12 NY3d 8, 14 ). The claim must be pleaded with particularity and allege “intentional deceit and damages proximately caused by the deceit” (Jean v Chinitz, 163 AD3d 497, 497 ). The proposed third amended complaint is palpably insufficient; it fails to plead the cause of action with particularity, as plaintiff pleaded no facts tending to prove [*6]that Aswad intended to deceive her. Moreover, plaintiff was aware of the facts allegedly supporting her proposed amendment before she filed the note of issue and certificate of readiness, yet she waited more than six months after such filing before seeking to add the Judiciary Law § 487 cause of action. Defendants plausibly assert prejudice related to this delay, as they intend to seek discovery on this new claim, but discovery is otherwise complete. Under the circumstances, plaintiff may not amend her amended complaint to add this new cause of action.”