We continue to review Judiciary Law §487 cases frp 2016:

19.  Kaplan v Valley Natl. Bank  2016 NY Slip Op 51108(U) [52 Misc 3d 1210(A)]  Decided on July 20, 2016  Supreme Court, Suffolk County  Emerson, J.

“The plaintiff’s mother, Marilyn Kaplan, executed a will in 1994, leaving her interest in the home that she shared with her husband, Donald, in trust to him and giving him a life estate therein (the “Jericho property”). She also left approximately $250,000 in cash and securities (the “Family Part Sum”) in trust to Donald to be used for his benefit. She appointed Donald and their two sons, Bruce and Daniel, as the trustees. Bruce and Daniel were also the remaindermen of the trust. The trust allowed Donald to withdraw up to 5% of the principal each year and allowed Bruce and Daniel to make discretionary withdrawals to ensure that Donald enjoyed the same standard of living that he enjoyed when Marilyn’s will was executed in 1994. Marilyn died shortly after executing the will. By 2005, the Family Part Sum was depleted and, except for the real property, there was no principal remaining in the trust.

The Jericho property was sold in 1997, and the trust used the proceeds of the sale to purchase a home in Melville, New York, which was sold in 2003. The trust used the proceeds of the second sale to purchase a two-thirds interest in another home in Melville (the “Altessa property”), the one-third owner of which was Donald’s second wife, Elaine Britvan. Elaine died in 2012, and the Altessa property was sold in 2013 for $1.33 million. Bruce was not advised of the sale. After the closing costs were paid, the proceeds of the sale were divided as follows: $174,310.28 to Bank of America to satisfy a mortgage on the property, $670,494.39 to the trust, and $422,410.33 to the Britvan estate. Donald and Daniel then opened a new trust account at Valley National Bank (the “Valley National account” or “trust account”) without making Bruce a signatory thereon and without disclosing to the bank that Bruce was a beneficiary and trustee of Marilyn’s trust. They deposited $670,494.39 into that account.^[FN1] In January 2014, $83,500 was transferred from the Valley National account to Donald’s personal account. When Donald died in September 2014, there was approximately $588,000 remaining in the Valley National account. The balance was distributed to Bruce and Daniel pursuant to the terms of Marilyn’s will. On [*2]December 5, 2014, Bruce and Daniel executed a mutual release acknowledging their receipt of $212,500 and $360,500, respectively, and releasing each other from any and all claims with respect to the trust’s principal and accumulated interest. $15,000 was held in escrow to pay, inter alia, legal fees and other expenses. After the escrow was released, Bruce received another $6,500 for a total of $219,000.^[FN2]

Bruce, individually and as a trustee of Marilyn’s trust, (the “plaintiff”), commenced this action in 2015 against Valley National Bank (“Valley National”); Fidelity National Title Insurance Company (“Fidelity”), the underwriter of the title insurance policy issued to the purchasers of the Altessa property; and Martin Bodian and, his law firm, Bodian and Bodian, LLP (the “Bodian defendants”), who represented the sellers of the Altessa property (i.e, the trust and the Britvan estate). The plaintiff seeks to hold the defendants liable for assisting Donald and Daniel’s purported diversion of the proceeds of the sale of the Altessa property to Bank of America and to the Valley National account under a variety of legal theories. Valley National moves to dismiss the complaint pursuant to CPLR 3211 (a) (1), (7), and (10); the Bodian defendants pursuant to CPLR 3211 (a) (1), (3), (5), (7) and (10); and Fidelity pursuant to CPLR 3211 (a) (1).”

“Absent a showing of fraud or collusion or of a malicious or tortious act, an attorney is not liable to third parties for purported injuries caused by services performed on behalf of a client or advice offered to that client (Four Finger Art Factory, Inc. v Dinicola, US Dist Ct, SDNY, Jan. 9, 2001, Koeltl, J. [2001 WL 21248] at *7 [and cases cited therein]). Liberally construing the complaint, accepting the alleged facts as true, and giving the plaintiff the benefit of every possible favorable inference (Leon v Martinez, 84 NY2d 83, 87-88), the court finds that the plaintiff’s allegations do not support an inference that the Bodian defendants acted in bad faith, committed fraud, or acted in an otherwise tortious or malicious way. The plaintiff’s allegations that the Bodian defendants colluded with Donald and Daniel to divert the proceeds of the sale of the Altessa property are conclusory and unsupported by the evidence. The record does not support an inference that the Bodian defendants acted other than in their capacity as attorneys for the trust and the Britvan estate. As previously discussed, Donald and Daniel, as two of the three trustees, had the power act on behalf of the trust and to sell its two-thirds share of the Altessa property. Moreover, the documentary evidence reflects that the proceeds of the sale were used to pay the expenses of the sale, the mortgage on the property, and the Britvan estate. The remaining funds were deposited into the Valley National trust account. There is no evidence in the record to suggest that the Bodian defendants retained any of the proceeds of the sale. When, as here, an attorney acts within the scope of an agency relationship and is not motivated by personal gain, the attorney is not liable to third parties (Four Finger Art Factory, supra, citing Kartiganer Assoc. v Town of New Windsor, 108 AD2d 898; see also Pancake v Franzoni, 149 AD2d 575). Accordingly, the eighth cause of action for malpractice is dismissed.

In view of the foregoing, the plaintiff’s remaining claims against the Bodian defendants, which arise from the same facts and allege the same damages, are also dismissed. Accordingly, the ninth cause of action is dismissed, and the fourth through seventh causes of action are dismissed insofar as they are asserted against the Bodian defendants.”

20.  Galasso, Langione, & Botter, LLP v Galasso 2016 NY Slip Op 51308(U) [53 Misc 3d 1202(A)] Decided on September 19, 2016 Supreme Court, Nassau County DeStefano, J.

“In December 1988, Peter Galasso (“Peter”) and James Langione (“Langione”) established the law firm, Galasso, Langione & Goidell. In 2000, Goidell left the law firm, at which time it [*2]became Galasso Langione, LLP. In 2003, Alan Botter, Esq. joined the law firm, the name of which again changed to Galasso, Langione & Botter, LLP. In 2008, Alan Botter withdrew as a partner and the law firm changed again to Galasso, Langione, Catterson & LoFrumento, LLP. In 2013, following Peter Galasso’s suspension from the practice of law due to circumstances which will be discussed herein, the law firm changed to Langione, Catterson & LoFrumento, LLP (the various firm partnerships shall be hereinafter be referred to as the “Firm”) (Affirmation in Support at ¶¶ 4-6 [Motion Seq. No. 6]; Ex. “36” at pp 18- 20 [Motion Seq. No. 21]).

In 1993, the Firm hired Peter’s brother, Anthony Galasso (“Anthony”), as a “gofer”. Within a few years, Anthony became the Firm’s office manager and bookkeeper, “responsible for all accounting and financial aspects” therefor (Affidavit in Support at ¶ 4 [Motion Seq. No. 20]).”

“According to Peter, both he and Langione executed the Baron escrow application in order to open the Baron escrow account because Anthony purportedly advised Peter that “Signature required that [Langione] be a designated signator on the Baron Escrow Account” (Affirmation in Support of Motion at ¶ 35 [Motion Seq. No. 6]).^[FN10] The “original” Baron escrow account application was not produced in this litigation because it was supposedly destroyed by Anthony.^[FN11] In its stead, Anthony allegedly substituted a forged Baron escrow account application. The allegedly forged application submitted to Signature allowed internet transfers, listed Post Office Box 721 in Mineola, New York as the address to where bank statements were to be mailed, and designated Anthony as an authorized signatory and primary contact on the account. Reinhardt, Signature’s Executive Vice President, testified that the Baron account application should have been rejected because it violated Signature’s rules that govern the establishment of attorney escrow accounts. Amongst other things, such rules prohibit non-attorneys from being authorized signatories on a law firm’s attorney escrow account (Affirmation in Support at ¶ 29 [Motion Seq. No. 21]).”

“According to the thirteenth cause of action, a claim based upon Judiciary Law § 487, the Firm engaged in a course of conduct to deceive and defraud the Barons of their monies inasmuch [*42]as it retained the Baron escrow funds and misappropriated the funds for its own benefits and hid the true facts regarding the misappropriation over a period of years (Ex “F” to Motion Seq. No. 5 at ¶¶ 122-124).

Pursuant to Judiciary Law § 487, an attorney who is “guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party; 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.

A violation of Judiciary Law § 487 requires, among other things, an act of deceit by an attorney, with the intent to deceive the court or any party (Curry v Dollard, 52 AD3d 642, 644 [2d Dept 2008]). The Barons’ allegations regarding an act of deceit or intent to deceive are conclusory and factually insufficient and, therefore, the branch of their motion seeking judgment on their thirteenth cause of action is denied.” “The thirteenth cause of action, a claim based upon Judiciary Law § 487, requires, among other things, an act of deceit by an attorney, with the intent to deceive the court or any party (Curry v Dollard, 52 AD3d 642, 644 [2d Dept 2008]). The evidentiary material submitted by the Firm Defendants demonstrates the absence of any intent to deceive the Barons (Shaffer v Gilberg, 125 AD3d 632 [2d Dept 2015]; Cullin v Spiess, 122 AD3d 792 [2d Dept 2014]). The thirteenth cause of action is, accordingly, dismissed.