Peck v Milbank LLP 2024 NY Slip Op 32596(U) July 29, 2024 Supreme Court, New York County Docket Number: Index No. 152290/2022 Judge: Andrew Borrok describes why the claim for violation of Judiciary Law 487 resisted a dismissal motion.

“The defendants are not however entitled to dismissal of the claim sounding in violation of Judiciary Law§ 487. Judiciary Law§ 487 provides that An attorney or counselor who: 1. Is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party; or, 2. Wilfully delays his client’s suit with a view to his own gain; or, wilfully receives any money or allowance for or on account of any money which he has not laid out, or becomes answerable for, Is guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action. (Judiciary Law § 487). As discussed more fully below, the judicial proceedings privilege does not serve to shield the testimony of Georgiana Slade in the Surrogate Court’s proceeding where she was representing the Estate because, as alleged, this testimony was not given to assist the truth seeking process and she was not merely a fact witness. In fact, as alleged, she was not merely a fact witness and her testimony was given to undermine the truth seeking process ( Oakes v Muka, 56 AD3d 1057, 1058 [3d Dept 2008]). To wit, the First Amended Complaint (the FAC; NYSCEF Doc. No. 59) alleges that defendant Ms. Slade deliberately and vindictively (i) abused her position to have plaintiff Ian Peck cut out of a certain portion of his inheritance and (ii) lied to a tribunal all to get even for her father (Jarvis Slade)’s loss of a $100,000 investment some years ago after entrusting the funds to Ian Peck. Stated differently, at bottom, the F AC alleges that Ms. Slade deceived (and intended to deceive) a court in the State of New York when she was acting as an attorney for the Estate. This is sufficient to make out a Judiciary Law § 487 claim and to articulate why the judicial proceedings privilege does not apply at this stage of the litigation.”

“Ms. Slade’s father, Jarvis Slade, and Ian Peck’s father, Norman Peck, were business partners (NYSCEF Doc. No. 59, ,i,i 23-27). One of their co-investments involved an investment in an Ian Peck venture. In that venture, Jarvis Slade lost $100,000. When Mr. Slade requested “special treatment” as to the return of his money, Ian Peck refused. (Id., ,i,i 30-31.) Mr. Slade apparently became angry and never wanted his family to do business with Ian Peck again (id., ,i 32). Ms. Slade was a trust and estates attorney who represented Norman Peck. In 2006, as alleged, Ms. Slade recommended changes to one of Norman Peck’s trusts that held certain co-investment interests with Mr. Slade (i.e., the Horseneck Trust). As a result of these recommended changes to the revocable Horseneck Trust, Ian Peck was removed as a beneficiary. (Id., ,i,i 42-43, 49-50.) According to the PAC, Ms. Slade did not disclose to Norman Peck her father’s alleged animus or her potential personal contingent interest in the same assets (id., ,i,i 45-47). Separate from the co-investments, and as relevant to the instant dispute, Norman Peck also lent Ian Pack various sums of money over the years. In connection with those loans, Ian Peck executed a number of notes (the Notes) evidencing his obligation for repayment. The plaintiffs allege that Norman Peck’s intent (as embodied in certain estate planning) was that the Notes would be forgiven at his death, rather than repaid out of Ian Peck’s inheritance (id., ,i,i 59-71). Norman Peck passed away on April 16, 2016. He left a Will, the Horseneck Trust, and The Norman L. Peck Revocable Trust (the Peck Trust). After Norman Peck’s death, the Peck Trust also became irrevocable and Ian Peck’s interest in it vested (id., ,i 71). Within two weeks of Norman Peck’s death, the defendants filed a probate petition in the Surrogate’s Court of New York County (id., ,i,i 75-76). Ms. Slade and Milbank (hereinafter defined) represented the Estate in the proceeding before that court. Ms. Slade did not disclose (i) the alleged animus her father (and she) held against Ian Peck, (ii) that she had allegedly abused her position as Norman Peck’s attorney to have Ian Peck cut out of the revocable Horseneck Trust, or (iii) that a 2016 amendment executed by Norman Peck impacted (i.e., impaired) the estate’s ability to collect on the Notes (id., ,i,i 71-79, 126-131). Ms. Slade submitted an affidavit in the Surrogate’s Court action on April 27, 2016 (id., ,i 74-75, 90; NYSCEF Doc. No. 88). Ian Peck maintained that the Notes were intended to be forgiven under his late father’s testamentary plan. The Estate however brought two separate actions to collect on the Notes on the Estate’s behalf pursuant to CPLR § 3213 which the Surrogate’s Court granted (NYSCEF Doc. No. 59, ,i,i 80117.) On appeal, the Appellate Division reversed holding that (i) the Notes were not the type of instrument that was subject to CPLR § 3213 and (ii) there are issues of fact as to whether the Notes are inconsistent with the estate plan (In the Matter of the Estate of Norman L. Peck v Ian S. Peck, Case No. 2019-04713 [1st Dept, February 16, 2021]; NYSCEF Doc. No. 93). On February 15, 2022, the defendants filed a notice in the Surrogate’s Court formally withdrawing as counsel of record (NYSCEF Doc. No. 59, ,i 123).”

“The defendants are not correct that they are entitled to dismissal of the Judiciary Law § 487 cause of action based on the judicial proceedings privilege. To further the public policy goal of permitting persons involved in a judicial proceeding to write and speak about it freely among themselves, pertinent statements made in the course of such proceedings are protected by the judicial proceedings privilege (Front, Inc. v Khalil, 24 NY3d 713 [2015]). Whether a statement is at all pertinent to the litigation is determined by an extremely liberal test, and any doubts are to be resolved in favor of pertinence (Casa de Meadows Inc. [Cayman Is.] v Zaman, 76 AD3d 917, 920 [1st Dept 2010]). The privilege is chiefly directed at protecting allegedly defamatory statements. Allowing such statements to be a basis for a defamation action “would be an impediment to justice, because it would hamper the search for truth and prevent making inquiries with that freedom and boldness which the welfare of society requires.” (Front, Inc. v Khalil, 24 NY3d 713, 718 [2015], citing Youmans v Smith, 153 NY 214,220 [1897].) The privilege does apply to causes of action other than defamation, but it does not apply to malpractice or malicious prosecution (Hadar v Pierce, 111 AD3d 439,440 [1 st Dept 2013]). The privilege may apply to a cause of action for breach of fiduciary duty that is based on allegations of defamation, but it does not apply when such cause of action does not exclusively rely on allegedly defamatory statements made in the course oflitigation (Fletcher v Dakota, Inc., 99 AD3d 43, 54-55 [1st Dept 2012]) or when the actions giving rise to the claim take place before the statement in question (Toaspern v LaDuca Law Firm LLP, 154 AD3d 1149, 1152 [3d Dept 2017]).”