Jones Law Firm, P.C. v J Synergy Green, Inc. 2024 NY Slip Op 31127(U) April 2, 2024
Supreme Court, New York County Docket Number: Index No. 653730/2023 Judge: Lyle E. Frank illustrates the principle that while there may be a Code of Professional Conduct violation, there must be a proximate connection with pecuniary damages to accompany and be cause by that violation.

“The underlying action arises out of allegations that defendant/third-party plaintiff failed to pay plaintiffs legal fees as required by its engagement agreement. The third-party action and counterclaims arise out of the plaintiffs relationship with third-party defendants PAM and David Treyster, in that defendants/third-party plaintiffs were caused to suffer damages based on the failure to disclose the relationship. It is undisputed that at the time the engagement agreement was signed by plaintiff and defendants, plaintiffs principal had a 100% ownership interest in PAM.”

“The Court finds that here, similar to the plaintiffs in Connaughton, the third-party
complaint and counterclaims fails to specify any compensable damages from PAM’ s alleged fraud. In opposition to P AMs motion the defendants/third-party plaintiffs contend that plaintiff and PAM are agents of one another and thus PAM is vicariously liable for the plaintiffs alleged fraudulent conduct. This argument however misses the mark and is also unsupported by specific factual allegations. The third-party complaint and counterclaims fail to allege a sufficient basis to pierce the corporate veil or any facts sufficient to support defendant/third-party plaintiffs’ contention that any alleged fraud caused any additional damages separate and apart from those incurred by the
alleged fraudulent conduct of plaintiff.”

” Here, the Court finds that allowing defendant/third-party plaintiffs amendment would be futile. The proposed amended complaint fails to cure the deficiencies cited above. Similarly, the Court agrees that because the third-party complaint fails to properly state a claim for an underlying tort there can be no conspiracy cause of action pursuant to Judiciary Law § 487 (Am. Preferred Prescription, Inc. v Health Mgt., 252 AD2d 414,416 [1st Dept 1998]).”