Widlitz v Douglas Elliman, LLC  Decided on April 19, 2017  Supreme Court, New York County
Bluth, J. is a quintessential New York City story.  Basically, Plaintiff buys into a newly constructed building, does so long prior to completion of the building,  asks and expects “city views” but gets a view of a brick wall.  Whose fault is it?  Hers, the real estate agents’ or the attorney’s?

“This case arises out of plaintiff’s purchase of an apartment located at 5 Franklin Place (also known as 317 Broadway) in New York, New York. Plaintiff stresses that despite her express wishes to purchase an apartment with city views, and repeated assurances from Elliman and Lee that the apartment would contain these views once completed, the north-facing apartment only had views of the brick wall of a nearby building.

The subject apartment building, called the Franklin Place Condominium, was under construction when plaintiff sought to purchase an apartment in August 2014. Plaintiff claims that her primary requirement was that her apartment have expansive city views. Plaintiff alleges that she retained defendant Elliman, a real estate brokerage firm, to assist her in finding a suitable apartment. Plaintiff insists that Elliman acted as both her, and the seller’s, real estate agent.

Plaintiff argues that because the Franklin Place Condominium was under construction, she relied on Elliman’s representations concerning a potential apartment. Plaintiff acknowledges that she went to the construction site on or about August 19, 2014, but was unable to identify the [*2]specific location of the apartment (12B) within the building or how tall each floor of the condo would be. Plaintiff insists that she had a conversation with an Elliman agent on August 20, 2014 where she noted that she was relying on representations about the subject apartment’s city views and that Elliman’s agent confirmed the apartment had city views. Plaintiff claims she was told to refer to a link on Elliman’s website showing the listing, which contained views from the apartment captured by a drone.

Plaintiff contends that she submitted an offer to purchase the apartment on or about August 21, 2014 and was told by an agent for Elliman to retain defendant Lee (an attorney) to help her conduct due diligence. Plaintiff subsequently retained defendant Lee, and she insists she told him she wanted city views. On September 11, 2014 plaintiff entered into an assignment agreement in which she was assigned the rights, title and interest of Hashem LLC for $1.39 million. Hashem had previously entered into a contract of sale with the sponsor (Broadway 371 LLC) to purchase Unit 12B for $1.1 million in June 2013. Plaintiff contends that the scheduled closing in the original contract of sale (between Hashem and 371 Broadway) was July 2015. Plaintiff insists that she was informed the closing would be delayed until fall 2015. Plaintiff argues that she wanted the right to rescind the contract and claims that defendant Lee failed to inform her that she may have had this right because the first residential unit closing did not occur until after July 1, 2015.”

“Here, plaintiff’s amended complaint states a cause of action for legal malpractice. Plaintiff alleges that she reiterated on numerous instances to Lee that she wanted an apartment with city views (see amended complaint ¶¶ 41, 42). Lee correctly observes that there are discrepancies between plaintiff’s interpretation of email communications between her and Lee that suggest that she was concerned with air rights. But plaintiff refers to verbal assurances from Lee that requires this case to proceed to the discovery stage on this cause of action (see id. ¶ 48).

Although Lee disputes plaintiff’s version of events, this Court is unable to dismiss the amended complaint at the motion to dismiss stage because the plaintiff is afforded every favorable inference.

With respect to the rescission issue, plaintiff has also stated a cause of action. Plaintiff points to an assignment and acceptance agreement (attached to a letter dated September 19, 2014), allegedly separate from the assignment agreement, which states that “Assignor hereby assigns, sets over and transfers to Assignee its interest of Assignor’s rights, title and interest in, to and under the Agreement” (id. exh C). This agreement is signed by Hashem, plaintiff and the sponsor. It does not specify that these rights were to transfer at the time of the closing.

The assignment agreement, dated September 11, 2014 states that Hashem (Assignor) would assign to plaintiff its rights, title and interest at the time of closing (see Lee affirmation exh E ¶ 2). The assignment agreement also notes that at the time of closing, Hashem and plaintiff were to execute and deliver an assignment and assumption agreement (id. ¶ 4). The parties do not explain why an assignment and assumption agreement was executed eight days after the assignment agreement (instead of at the closing) or why the assignment and assumption agreement does not specify that the rights are to transfer at the closing. The letter accompanying the assignment and assumption agreement states that “This letter shall confirm the Sponsor hereby grants its consent to allow Purchaser to assign its rights and obligations under the Purchase Agreement for the captioned Unit. Sponsor shall execute and deliver an assignment of the contract at closing” (amended complaint, exh C).

It is not the Court’s role, at the motion to dismiss stage, to sort through these apparently conflicting agreements. Discovery may clarify the timeline of events or substantiate Lee’s claim that plaintiff did not have the right to rescind at closing. But Lee did not explain the significance of the assignment and assumption agreement in his papers.”

In what appears to us to be a novel theory of law, Plaintiff in Olabopo v Scola   2017 NY Slip Op 30826(U)   April 21, 2017   Supreme Court,   New York County Docket Number: 157461/2016   Judge: Robert D. Kalish seems to be suing because Defendant attorneys did not take the case.  This is a different situation from (what frequently occurs in Med Mal cases) when the attorney takes the case on “investigation” and then spends 2+ years sitting on the case only to say, “no thanks.”  Here, there is no argument that the statute of limitations was compromised.

“The Plaintiff alleges in Paragraph 5 of his complaint that the Defendants “negligently and discriminatorily failed to prosecute a case 1 for the Plaintiff on account of his race, religion and perceived gender”. The Plaintiff further alleges in Paragraph 6 of his complaint that that based upon the Defendants’ failure to represent Plaintiff in the federal action that the Defendants are liable for “breach of fiduciary duty”, “legal malpractice”, and “violation of section 1981, NYC and NY State Hum an Rights Law”. However the Plaintiff fails to set forth in his complaint any facts to form a basis for his the claims as alleged in in paragraph 6. “”This presumably refers to a federal action brought by the Plaintiff pro se claiming police brutality and other claims, which is presumably presently pending in federal court. This is the basis of the underlying action, wherein the Plaintiff claims that the Defendants refused to represent him in the federal action. ”

“Upon review of the Plaintiff’s pleadings, the Court finds that the Plaintiff has failed to present any factual basis for any of the Plaintiffs claims. In particular, the Plaintiff has not presented any factual basis to show that an attorney client legal relationship existed between the Plaintiff and the Defendants. Further, there are no factual allegations indicating that the Defendants did anything other than refuse to represent the Plaintiff in his federal action. “

Litigation is difficult, and takes a long time.  When snap decisions are made, they often add to the difficulties, not resolve them. Liew v Jeffrey Samel & Partners  2017 NY Slip Op 03165
Decided on April 26, 2017  Appellate Division, Second Department is an example.  While the parties were muddling towards trial, a sudden dismissal threw the case into a tailspin.

“In December 2002, the plaintiff, Kimberly Liew, retained the defendant Jeffrey Samel & Partners (hereinafter the law firm) to represent her as the administrator of the estate of Vincent Liew, and individually, in connection with a medical malpractice action. In November 2010, she commenced this action as administrator and in her individual capacity against the law firm and the defendant Robert Spevack (hereinafter together the defendants), who, at all relevant times, was of counsel to the law firm and allegedly handled the medical malpractice matter. Issue was joined in early 2011. On April 6, 2012, although discovery had not yet been completed, the plaintiff filed a [*2]note of issue and certificate of readiness pursuant to a directive in a compliance conference order dated November 28, 2011. It is undisputed that on November 21, 2012, discovery was outstanding and the Supreme Court (Weinstein, J.) vacated the note of issue. In March 2013, in response to the law firm’s service of a 90-day demand pursuant to CPLR 3216, the plaintiff moved, inter alia, to compel the depositions of the defendants and to restore the matter to active status. On April 1, 2013, the motion was resolved by a so-ordered written stipulation which provided that the motion was withdrawn and that the defendants would appear for depositions on or before May 31, 2013. The court struck a proposed provision which would have restored the matter to active status and directed the filing of a note of issue on or before July 31, 2013. After the completion of discovery, the law firm moved for summary judgment dismissing the complaint insofar as asserted against it, and the plaintiff cross-moved for summary judgment on the issue of liability. In the order appealed from, the court, sua sponte, directed the dismissal of the action pursuant to CPLR 3404 as abandoned and thereupon denied, as academic, the motion and cross motion. The plaintiff appeals.

The Supreme Court erred in, sua sponte, directing the dismissal of the action pursuant to CPLR 3404 as abandoned. When the note of issue was vacated, the case reverted to its pre-note of issue status and CPLR 3404 did not apply (see Bank of N.Y. v Arden, 140 AD3d 1099, 1100; Paradiso v St. John’s Episcopal Hosp., 134 AD3d 1002, 1003; Montalvo v Mumpus Restorations, Inc., 110 AD3d 1045, 1046; Pucar v L.H. Charney Assoc., LLC, 79 AD3d 996, 997; Gorski v St. John’s Episcopal Hosp., 36 AD3d 757).”

Does a successfully pleaded Judiciary Law § 487 case require a conviction for a misdemeanor ?  A recent Magistrate’s report in the Western District of New York strikingly says so.  In Bounkhoun v. Barnes, the magistrate determined that no JL 487 case may lay without a misdemeanor conviction.

The First Department may not think the same way.  in  O’Neal v Muchnick Golieb & Golieb, P.C.  2017 NY Slip Op 03125  Decided on April 25, 2017  Appellate Division, First Department they found that Supreme Court had erred in dismissing the 487 claim.  No misdemeanor prosecution, conviction, or even a mention.

“Order, Supreme Court, New York County (Shlomo S. Hagler, J.), entered on or about February 17, 2016, which, to the extent appealed from as limited by the briefs, granted defendants’ motion pursuant to CPLR 3211 to dismiss the legal malpractice claims based on the assumption of a lease and the failure to oppose summary judgment in an underlying action, the breach of fiduciary duty claims, and the Judiciary Law § 487 claims, and denied plaintiff’s application for leave to amend the complaint to add the Good Service Company, Inc. as a nominal defendant, unanimously modified, on the law, to deny defendants’ motion as to the fiduciary duty and Judiciary Law § 487 claims and so much of the malpractice claim as arose in connection with the assignment of a lease, and to grant plaintiff’s application to amend, and otherwise affirmed, without costs.

The allegation that, while representing plaintiff in the assignment-of-lease negotiations, counsel secretly represented the counterparty so as to obtain favorable terms for the counterparty, which resulted in a lower-than-market price for the assignment, states a claim for legal malpractice (see Leggiadro, Ltd. v Winston & Strawn, LLP, 119 AD3d 442 [1st Dept 2014]).”

“The allegation that defendants advised plaintiff to transfer her assets, in violation of a court order about which they had not informed her, to draw the ire of creditors so that they would seek collection against her before pursuing her co-defendants is sufficient to state a claim under Judiciary Law § 487 (see generally Kurman v Schnapp, 73 AD3d 435 [1st Dept 2010]).”

Chandy Bounkhoun, Plaintiff,  v.  Steven E. Barnes, Esq. et al., Defendants. No. 15-CV-631A.
United States District Court, W.D. New York.  April 11, 2017 is a stunning new decision from the Western District of New York.  Magistrate Scott takes us from Medieval England to colonial times to look at the the criminal law underpinnings of Judiciary Law § 487.

“Here is what the Appellate Division said about how the predecessor in question operated to expand the concept of attorney deceit beyond the bounds of the common law:

The common law, as well the statute, relating to the offense of obtaining property by false pretenses, were adequate to the punishment of all such offenses, whether committed by lawyers or laymen. Moreover such an offense being punishable by imprisonment in a State prison, comes under the statutory definition of a felony. At common law, also, fraud and damage gave a civil action to the party injured. There was no occasion, therefore, for another statute to punish, or to give an action for the `deceit’ of lawyers, unless the Legislature intended that that class of persons should be liable for acts which would be insufficient to establish a crime or a cause of action against citizens generally. The statute is limited to a peculiar class of citizens, from whom the law exacts a reasonable degree of skill, and the utmost good faith in the conduct and management of the business intrusted to them. An attorney or counsellor who advises ignorant adult owners of land that they are not competent to convey it, and thereby induces them to employ him to institute a suit in partition, and incur the expense thereof, for the purpose of effecting a sale of the [land] gives them erroneous advice, and thereby misleads them to their injury, and if he is qualified to perform the functions of an attorney, he does it knowingly. To mislead the court or [a] party is to deceive it; and, if knowingly done, constitutes criminal deceit under the statute cited.

Looff, 14 Hun 588, 1878 N.Y. App. Div. LEXIS 1, at *4-5, aff’d, 97 N.Y. 478, 480 (1884). Bringing the principles from Looff back to Section 487, by way of NY Amalfitano, the meaning of “deceit” in the statute now can be understood. As used in Section 487, “deceit” by an attorney means misleading a court or a party by saying or doing anything that exploits the trust that courts and parties place in attorneys as officers of the legal system. Looff and NY Amalfitano addressed affirmative conduct, but there does not appear to be any reason to exclude the absence or omission of something said or done if the absence or omission would result in the same exploitation of trust. Including absences and omissions is important to plaintiff’s case here. Plaintiff’s allegations have an element of affirmative conduct with respect to some conduct at trial and the inducement to sign the high-low agreement. The weight of plaintiff’s allegations, however, lie in defendants’ omission of information from plaintiff to the insurer about the possibility of settling the case for $150,000; and in the omission of information from the insurer to plaintiff about a willingness to continue negotiations. If those omissions caused the same misleading and the same exploitation of trust as affirmative conduct then their status as omissions by itself should make no difference.

Looff also addresses another term in the operative language of Section 487: “intent.” Simply put, when attorneys exploit the trust that courts and parties place at them and wind up misleading those courts or parties, as long as the attorneys are licensed and in good standing— “qualified to perform the functions of an attorney”—the conduct is done knowingly. The treatment of “intent” that the New York Court of Appeals has endorsed by embracing Looff again demonstrates the desire to expand the reach of Section 487 beyond what might have been available under the common law to address deceitful conduct from attorneys.

The last term to assess from the operative language of Section 487 is “guilty.” The word appears twice in Section 487, once in Section 487(1) as a condition of determining “deceit”; and once at the end of Section 487, when a finding of deceit with the requisite intent—among other conditions not relevant to this case—authorizes a factfinder to pronounce a misdemeanor conviction. The Judiciary Law does not give the term “guilty” any definition peculiar to that statute or to Section 487 in particular. Four other sources of information offer some guidance instead. In ordinary parlance, people use the word “guilty” literally to mean criminal guilt, whether they have an exact burden of proof in mind or not; they also use the word more generally to mean that someone is confirmed to have committed some kind of transgression against someone else. The more general understanding of the word “guilty” is not persuasive here, considering the consequences to an attorney’s reputation that would follow from a finding of deceit and a misdemeanor conviction. Black’s Law Dictionary offers some guidance as well, defining “guilty” as either “having committed a crime; responsible for a crime” or “responsible for a civil wrong, such as a tort or breach of contract.” Guilty, Black’s Law Dictionary (10th ed. 2014). The former definition carries more weight in this circumstance because the direct consequence for guilt under Section 487 is a misdemeanor conviction. Appendix A shows that Section 487, in all substantive respects, has not changed at all since it rested in the Penal Law, adding to the Court’s sense that “guilty” there means what it usually means in criminal prosecutions. See also Neroni v. Becker, No. 3:12-CV-1226 GLS/DEP, 2014 WL 2532479, at *4 (N.D.N.Y. June 5, 2014) (“Furthermore, in addition to the fact that the plain language of § 487 criminalizes deceitful or fraudulent conduct by attorneys, New York state courts have consistently recognized that § 487 is rooted in criminal law. Accordingly, the state could have sought to commence criminal proceedings under § 487.”) (citations omitted). Finally, a strong source of guidance comes from the widespread convention in statutes and common law that guilt refers to criminal wrongdoing while “liable” or something similar refers to civil wrongdoing. See, e.g., Elonis v. United States, ___ U.S. ___, 135 S. Ct. 2001, 2011 (2015) (“Elonis’s conviction, however, was premised solely on how his posts would be understood by a reasonable person. Such a `reasonable person’ standard is a familiar feature of civil liability in tort law, but is inconsistent with the conventional requirement for criminal conduct—awareness of some wrongdoing.”) (citation omitted); Resnick v. Resnick, 722 F. Supp. 27, 37 (S.D.N.Y. 1989) (“New York law provides, however, that a defendant may be held liable for a [civil] conspiracy to do an unlawful thing, or to do a lawful thing in an unlawful manner.”) (citations omitted); N.Y. Gen. Bus. Law § 815 (using the phrase “shall be liable” when assessing civil penalties); N.Y. Envtl. Conserv. Law § 71-2729 (same); N.Y. Workers’ Comp. Law Appx. § 316.5 (same). The above guidance persuades the Court to conclude that, for purposes of Section 487, “guilty” refers to establishing misdemeanor criminal liability beyond a reasonable doubt. Section 487, at its core, then, is a criminal statute like its immediate predecessor—former Penal Law section 273—and like its ancestor statutes dating back centuries.^[4] That the term “guilty” appears twice in the statute seems a little repetitive, but given that the statute operates to assess misdemeanors, the repetition simply is an explicit rendering of the principle in criminal law that every individual element of an offense must be established beyond a reasonable doubt. See, e.g., United States v. Viafara-Rodriguez, 729 F.2d 912, 913 (2d Cir. 1984)(citations omitted).”

“If the core of Section 487 operates as a criminal statute then what should the Court make of the civil clause attached at the very end? After pronouncing an attorney with the necessary elements guilty of a misdemeanor, Section 487 says that “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” (emphasis added). “In addition to” suggests newer options that are layered or that open up alongside older, pre-existing ones. See, e.g., Medtronic, Inc. v. Lohr, 518 U.S. 470, 500 (1996) (finding that 21 U.S.C. § 360k(a) does not preempt common-law state tort claims because they are not state requirements for medical devices that are “different from, or in addition to” federal regulations); Leist v. Simplot, 638 F.2d 283, 313 (2d Cir. 1980) (holding that a private right of action under the Commodity Exchange Act was a new remedy in addition to older remedies); In re Roberts, 514 B.R. 358, 362 (Bankr. E.D.N.Y. 2014) (interpreting the definition of a bankruptcy estate in 11 U.S.C. § 1306(a) to add property “in addition to” property described in 11 U.S.C. § 541(a)(5)); Anemone v. Metro. Transp. Auth., 410 F. Supp. 2d 255, 269 (S.D.N.Y. 2006) (describing how the alteration of a plaintiff’s rights in “stigma plus” litigation—that is, the “plus”—”must be in addition to the stigmatizing statements”) (emphasis added). People who are wronged by a deceitful attorney thus have the option or pursuing criminal or civil redress, or both, but only after misdemeanor guilt is established. The plain language of the statute says that any civil penalty of treble damages comes on top of whatever the New York Penal Law authorizes as a punishment for misdemeanors. See Amalfitano v. Rosenberg (“SDNY Amalfitano“), 428 F. Supp. 2d 196, 210-11 (S.D.N.Y. 2006) (“The wording of the statute thus makes it clear that the civil remedy is in addition to the criminal sanction for the same conduct.”). If the statute does not allow a factfinder to reach criminal or civil remedies before first reaching a misdemeanor conviction then any civil remedies under Section 487 must require a misdemeanor conviction as a prerequisite. See Melcher v. Greenberg Traurig, LLP, 11 N.E.3d 174, 175 (N.Y. 2014) (“Judiciary Law § 487 exposes 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 to criminal (misdemeanor) liability and treble damages, to be recovered by the injured party in a civil action.”) (internal quotation and editorial marks omitted) (emphasis added). No particular criminal penalty would be required, just the conviction itself. The New York Court of Appeals in NY Amalfitano implicitly recognized the dependence of the civil penalty on the criminal conviction when it assessed the history of Section 487 and wrote that, in the late 19th century, “[t]he Legislature later codified this misdemeanor crime and the additional civil forfeiture remedy as section 148 of the Penal Code of 1881.” NY Amalfitano, 903 N.E.2d at 268 (emphasis added). Layering a civil penalty on top of a criminal conviction and penalty is not unheard of— federal asset forfeiture upon conviction is just one example—and is consistent with the idea that the New York Legislature considered attorney deceit especially repugnant.”

“Where does all of the above analysis leave plaintiff? Plaintiff has pled that defendants ignored her desire to settle her case, and walked away from ongoing negotiations without her knowledge. Plaintiff has pled further that defendants engineered a high-low agreement at trial that essentially gave their costs higher priority than her permanent loss of an eye. Whatever proof might emerge at discovery, the claim of legal malpractice in the amended complaint—Count IV, which defendants have not moved to dismiss—would appear to cover the full range of plaintiff’s allegations. The Court is not aware of any prosecution of defendants under Section 487, and plaintiff in any event has not pled nearly enough detail to show that defendants might have fulfilled all of the elements of Section 487 and might be guilty of a misdemeanor. Without fulfillment of the elements of a criminal offense under Section 487, and a resulting conviction, this case presents no criminal prerequisite that treble damages can be “in addition to.”

Under these circumstances, Count III of the amended complaint fails, and the Court thus recommends granting defendants’ motion with respect to Count III. Since Count III fails as a matter of law, the Court need not address plaintiff’s arguments about the need to obtain discovery.”