Hsiung v Zhang Jiang Lin 2025 NY Slip Op 34306(U) November 7, 2025 Supreme Court, New York County Docket Number: Index No. 650855/2025 Judge: Mary V. Rosado is a situation where an interpleaded plaintiff attorney is holding escrowed funds and was potentially subject to a legal malpractice claim. The attorney proposed to deposit the escrowed funds into the Court, and sought immunity from any liability. The Court agreed, but put off the question of attorney fees due for her defense until later.

“Upon the foregoing documents, and after a final submission date of September 10, 2025, Interpleader Plaintiff Ann Hsiung, Esq.’ s (“Plaintiff’) motion to deposit the sum of $90,000 with the Clerk of the Court, discharging Plaintiff from any and all liability with respect to said funds to any and all Interpleader Defendants, dismissing with prejudice Plaintiff from this action following deposit of the $90,000 with the Registry of this Court, and awarding Plaintiff reasonable attorneys’ fees, costs and disbursements incurred in this action to be paid from the $90,000 is granted in part and denied in part.”

“The Court has considered Wu’s argument in opposition to releasing Plaintiff from liability m this action and finds it unavailing. To the extent Wu alleges Plaintiff committed legal malpractice, the statute of limitations on that cause of action has long since expired. Interpleader Plaintiff is incorrect that her dismissal requires immediate disbursement of her attorneys’ fees. CPLR 1006(f) provides that once the interpleader plaintiff is dismissed from the case “[t]he court shall impose such terms relating to payment of expenses, costs and disbursements as may be just and which may be charged against the subject matter of the action.” Thus, CPLR 1006(f) provides the Court with discretion to fashion the terms of the payment of the interpleader plaintiff’s expenses, costs, and disbursements (see also Fischbein, Badillo, Wagner v Tova Realty, Co., 193 AD2d 442, 445 [ 1993] [ finding expenses may be assessed against interpleader defendants in Court’s discretion]). The Court finds Plaintiff’s request to recoup $19,369.35 in attorneys’ fees, costs, and disbursements purportedly incurred since the filing of this action from the $90,000 to be deposited into the Court to be excessive and unjust. First, the sum requested constitutes a significant portion ( over 20%) of the funds to be deposited. These funds may ultimately be used to satisfy multiple judgments already obtained by certain interpleader defendants against Wu, and the Court finds it would be unjust to deprive those judgment creditors of access to those funds because of Plaintiff’s claimed legal bills. Second, depending on the outcome of parallel litigation (see People of the State of New York v. Wu, et al., Index No. 452904/2022) the Court may find it more appropriate to assess attorneys’ fees and costs against one or several of the Interpleader Defendants as opposed to assessing Plaintiff’s costs against the $90,000 to be deposited into the Court. To be clear, the Court is not denying Plaintiff’s right to costs, fees, and disbursements in this action – but it is reserving judgment on the amount of costs, fees, and disbursements to be awarded until the conclusion of this action and/or People of the State of New York v. Wu, et al., Index No. 452904/2022, because depending on certain findings and determinations in this case or the ongoing action between the Attorney General and Wu, the Court may find it more appropriate to award Plaintiff her costs, fees, and expenses against certain Interpleader Defendants as opposed to assessing it against the $90,000 in funds which may be used to satisfy judgments already held by various Interpleader Defendants against Wu. Therefore, Plaintiff’s motion is granted except with respect to her request for costs, fees and expenses to be drawn from the $90,000 in funds which are the subject of this action. That branch of the motion is denied, without prejudice, with leave to renew upon the conclusion of this action and/or People of the State of New York v. Wu, et al., Index No. 452904/2022.”