13.  Emigrant Funding Corp. v Nunez   2016 NY Slip Op 32089(U)  May 25, 2016  Supreme Court, Queens County  Docket Number: 16111/2009  Judge: Robert J. McDonald    Our review of the entire year’s cases highlights the large number of foreclosure actions in which (almost as a reflex) JL 487 claims are raised against both the bank’s attorneys and the borrower’s attorney. Emigrant seems to be one of these.  “In opposition, Helmut Borchert, Esq., a partner of BGS and plaintiff’s counsel in this action, submits an affirmation contending that Nunez’s the issues raised by Nunez are barred by the doctrine of res judicata and were waived by Nunez in the forbearance agreement. Regarding that branch of Nunez’s application pursuant to Judiciary Law 487 and for sanctions, Mr. Borchert argues that Nunez cannot show that plaintiff, BGS, or himself has intentionally mislead the court or Nunez. ”

“Regarding that branch of the application to punish and for sanctions against plaintiff, BGS, and Helmut Borchert, Esq., this Court finds that Nunez has not established an intent to deceive (see Judiciary Law 487; Cullin v Spiess, 122 AD3d 792 [2d Dept. 2014]; Dupree v Voorhees, 102 AD3d 912 [2d Dept. 2013]; Boglia v Greenberg, 63 AD3d 973 [2d Dept. 2009]). ”

14.  GE Oil & Gas, Inc. v Turbine Generation Servs., L.L.C.  2016 NY Slip Op 50825(U) [51 Misc 3d 1226(A)]  Decided on May 27, 2016  Supreme Court, New York County  Kornreich, J.  In a case, “thoroughly papered by the counselled, sophisticated parties” one side nevertheless violated the forum-selection clause in a wholehearted way.  The Court suggested: ” The court will direct an inquest on their contempt if it is not purged. While the question of the damages available for breach of a forum selection clause is somewhat of an uncertain issue under New York law,^[FN5] the court’s ability to sanction a party for intentionally violating a court order is not. See Simens v Darwish, 104 AD3d 465, 466 (1st Dept 2013), citing McCormick v Axelrod, 59 NY2d 574, 582-83 (1983); see also Gottlieb, 137 AD3d at 618 (“Legal fees that constitute actual loss or injury as a result of a contempt are routinely awarded as part of the fine. These may include the legal fees incurred in bringing the contempt motion”) (internal citations omitted), accord Judiciary Law § 773 (contemnor may be obligated to pay damages or a fine “sufficient to indemnify the aggrieved party”).^{[FN6]   “Judiciary Law § 487 also prohibits attorneys from making knowingly false statements to deceive the court. As discussed at the May 18 oral argument, the TGS Parties’ claim in this court and in the Louisiana State Court Action that this court sua sponte dismissed their joint venture claim is false. The dismissal on March 30 was not a sua sponte dismissal without consideration of the merits or the allowance of an opportunity to brief the issues. Rather, the March 30 Order was issued because the joint venture claims were previously argued and ruled on, after extensive briefing, in connection with the summary judgment motion, and the claim was expressly rejected in the SJ Decision. Dismissal of the amended counterclaims in the March 30 Order was due to violation of an order contained in the SJ Decision.”}

15.  Pieroni v Phillips Lytle LLP  2016 NY Slip Op 04618 [140 AD3d 1707]  June 10, 2016
Appellate Division, Fourth Department     Not that much different from a foreclosure action, this case involved a Ford dealership.

“Plaintiffs commenced this fraud and Judiciary Law § 487 action against two individual attorneys and their law firm in connection with their representation of Ford Motor Credit Company LLC, formerly known as Ford Motor Credit Company (Ford Credit), in an underlying action (2007 action) commenced by Ford Credit. In the 2007 action, Ford Credit sought damages for breach of a floor plan and security agreement with an automobile dealership. In connection with the 2007 action, Ford Credit obtained an order of seizure with respect to certain vehicles. Ford Credit later amended the complaint therein to add as defendants the plaintiffs in this action, who were the purported buyers or participants in the transfer of those vehicles. In 2010, plaintiffs commenced an action (2010 action) against Ford Credit alleging causes of action for intentional infliction of economic harm, conversion, fraud, and tortious interference with contractual relations. Plaintiffs alleged that Ford Credit knew of the bona fide claims of plaintiffs to the vehicles and submitted false statements in support of its order to show cause to seize the vehicles. Plaintiffs later moved for leave to amend the complaint to add defendants to the 2010 action and to add a cause of action pursuant to Judiciary Law § 487. Supreme Court (Bannister, J.) denied the motion with respect to the individual defendants, and denied the motion with respect to the law firm without prejudice for reconsideration in the event plaintiffs submitted additional proof, as set forth in the court’s bench decision. Plaintiffs did not submit any additional proof, and their subsequent motion for leave to reargue was denied. Although plaintiffs appealed, that appeal was not decided before both the 2007 action and the 2010 action were transferred to federal court.”

“In March 2013, plaintiffs commenced the present action. The complaint is essentially identical to the proposed amended complaint they submitted in support of their motion for leave to amend the complaint in the 2010 action. Supreme Court (Caruso, J.) granted defendants’ motion to dismiss the complaint, and we now affirm.”

” The Judiciary Law § 487 cause of action must also be pleaded with particularity (see Briarpatch Ltd., L.P. v Frankfurt Garbus Klein & Selz, P.C., 13 AD3d 296, 297 [2004], lv denied 4 NY3d 707 [2005]), and plaintiffs failed to do so here (see Savitt v Greenberg Traurig, LLP, 126 AD3d 506, 507 [2015]; Schiller v Bender, Burrows & Rosenthal, LLP, 116 AD3d 756, 758-759 [2014])”

Continuing on our survey of all the JL 487 cases last year we move on to the spring:

10.  Little Rest Twelve, Inc. v Zajic
2016 NY Slip Op 01767 [137 AD3d 540]
March 15, 2016
Appellate Division, First Department discusses a concept that we will see further refined later:

“As discussed below, the motion to dismiss the third-party complaint was correctly granted. However, since it is based on a failure to state a cause of action, the dismissal should be without prejudice to apply upon a proper showing for leave to plead again (Morpheus Capital Advisors LLC v UBS AG, 105 AD3d 145, 154 [1st Dept 2013], revd on other grounds 23 NY3d 528 [2014]).

Third-party plaintiffs fail to allege a duty owed them by third-party defendants that would support a claim for contribution or indemnification (see Raquet v Braun, 90 NY2d 177, 183 [1997]; Garrett v Holiday Inns, 86 AD2d 469, 471 [4th Dept 1982], mod on other grounds 58 NY2d 253 [1983]).

In support of the claim alleging a violation of Judiciary Law § 487, the third-party complaint contains no nonconclusory allegations that the alleged misconduct was “merely a means to the accomplishment of a larger fraudulent scheme” (Newin Corp. v Hartford Acc. & Indem. Co., 37 NY2d 211, 217 [1975]) “greater in scope than the issues determined in the prior proceeding” (Specialized Indus. Servs. Corp. v Carter, 68 AD3d 750, 752 [2d Dept 2009] [internal quotation marks omitted]). Thus, the claim is not properly asserted in this action but would be appropriately raised in the still pending underlying action, where the alleged [*2]misconduct occurred (see Seldon v Spinnell, 95 AD3d 779 [1st Dept 2012], lv denied 20 NY3d 857 [2013]; Melnitzky v Owen, 19 AD3d 201 [1st Dept 2005]).

11.  Katz v Landsman  2016 NY Slip Op 30533(U)  March 30, 2016  Supreme Court, New York County  Docket Number: 161147/14  Judge: Carol R. Edmead

“This case arises from Landsman’s representation of Katz in a proceeding in Surrogate’s Court in a matter involving a trust created by Katz’s grandmother. While the complaint is short on dates, it is clear that the representation ended when Katz fired Landsman in November 2008. On November 19, 2008, Landsman sent Katz an email notifying him that he would not spend any more time on the matter until Katz paid an outstanding bill, and Katz responded, on the same day, stating that “[w]e concur that you are not to proceed any further on this case until the matter of your presented bill is resolved” (emphasis in original). Landsman, in an affidavit submitted with the motion to dismiss, stated that “[t]he fee issue was not resolved and I did nothing further on Plaintiffs behalf’ (Katz aff, if 3). There is no dispute as to whether Katz’s email constituted termination. Landsman subsequently, in September 2014, brought an action in this court, entitled Landsman v Katz, index No. 652770/14, to recover his fees. That action was before Judge Reed, who granted dismissal without prejudice because Landsman failed to satisfy 22 NYCRR 137. Specifically, Judge Reed held that while Landsman initiated an arbitration in December 2008, he failed “to submit documentary evidence or other proof that a hearing was held before an arbitrator as mandated by 22 NYCRR 137”

In an effort to avoid this result, Katz turiis to a line of cases that holds that violation of the Judiciary Law§ 487, and other intentional torts; are not subsumed by legal malpractice claims !· ii when they arise from the same set of facts (see e.g. Sabalza v Salgado, 85 AD3d 436, 438 [1st Dept 2011] [holding that dismissal of a claim under Judiciary Law§ 487 was “not duplicative of causes of action alleging legal malpractice, since the statutory claim requires an intent to deceive, 1i whereas a legal malpractice claim is based on negligent conduct”]). Katz argues this despite the ii i! fact that the complaint does not contain a claim for violation of Judiciary Law § 487. Instead, Katz claims that he could have brought such a claim.

12.  Sanko v Roth 2016 NY Slip Op 30930(U) May 17, 2016 Supreme Court, New York County Docket Number: 650025/14 Judge: Gerald Lebovits  did not allow amendment of the claim to add a JL 487 claim.

“The proposed amended complaint also alleges that defendant violated Judiciary Law§ 487 by fraudulently commencing the underlying holdover and nonpayment proceedings with the intent to deceive the court, plaintiff, and the adverse parties in the proceedings. The twelfth proposed amendment is devoid of merit. Judicial Law§ 487 allows an injured party to recover treble damages from an attorney if the latter “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.” To state a cause of action for violating Judicial Law§ 487, a plaintiff must demonstrate that a nexus exists between defendant’s alleged conduct and any judicial determination. (Weisman, Celler, Spell & Modlin v Chadbourne & Parke, 271 AD2d 329, 330-331 [I st Dept:2000], Iv denied 95 NY2d 760 [2000].) In its order dismissing the petition, Hon. Mark Finkelstein noted that plaintiff notified the court that he had not authorized defendant to commence the Gyllenhaal holdover proceeding on his behalf and represent him in the proceeding. Thus, in the Gyllenhaal holdover proceeding, the court was aware of defendant’s possibly unauthorized commencement of the proceeding. Defendant’s alleged deceit was not a cause of the dismissal of the Gyllenhaal holdover proceeding. And no judicial determination was made in the Albert holdover proceeding and the Albert nonpayment proceeding. The matters were not adjudicated. The Albert holdover proceeding was marked off calendar and the Albert nonpayment proceeding was settled by stipulation on the record. No nexus exists between defendant’s conduct and any judicial determination in the proceedings. Plaintiff is not entitled to leave to amend the complaint. “

McDowell v HSBC Bank, USA, N.A.  2016 NY Slip Op 32493(U)  December 20, 2016  Supreme Court, New York County  Docket Number: 154900/13  Judge: Shlomo S. Hagler is a footnote to “The Big Short” and illustrates how the sub-prime mortgage market operated at a retail level.

“McDowell was an “elderly person of color” who owned premises located at 530 West 142nd Street, in Harlem, New York City (the “Property”) (Second Amended Verified Complaint, ~ 3). The Property was registered as a single room occupancy dwelling, but was used primarily for McDowell’s residence and that of her daughter, Nicholas, and her grandson, Gordon Gardner (“Gardner”). At the relevant times, McDowell suffered from recurrent eye problems that interfered with her ability to read. Gardner was primarily a resident at Syracuse University from 2002 to 2006. Before that time, McDowell frequently asked him to read documents to her (Id., ¶3, 4). Gardner advanced funds to his grandmother to make monthly mortgage payments, -and began to investigate the circumstances leading his grandmother to incur debt. McDowell passed away on October 13, 2007 (Id., § 15, 19). ”

“Plaintiff alleges that Ocwen solicited McDowell for new financing on behalf of Delta when McDowell was in default on her existing mortgage payments. McDowell entered into the following mortgage transactions, which plaintiff alleges, were consummated “through the instrumentality of Perri Funding”: a. June 1, 2001: Mortgage from Delta securing a loan in the amount of $170,000. Ocweri was the servicing agent. b. April 24, 2002: Mortgage from Delta securing a loan in the amount of $260,000. Ocwen was the servicing agent~ c. September 19, 2003: Mortgage from MERS, as nominee for Delta, securing a loan in the amount of $330,000. Ocwen was the servicing agent. d. June 11, 2004: Mortgage from MERS, as nominee of Accredited Home Lenders, Inc., securing a loan in the amount of $440,000 (“2004 Mortgage”) . 6 e. March 21, 2005: Mortgage from MERS, as nominee of Delta, securing a loan in the amount of $540,000. Ocwen was the servicing agent. f. April 28, 2006: Mortgage from MERS, as nominee of Delta, securing a loan in the amount of $116,365. Ocwen was the servicing agent. g. 4/28/2006: Consolidation Agreement with MERS, as nominee of Delta, securing a loan in the amount of $650,000. Ocwen was the servicing agent (Id., ~ 67). The last three transactions are at issue in this litigation: the March 21, 2005 note and mortgage for $540,000 (“2005 Mortgage”); the April 28 2006 note and mortgage for $116,365 (“2006 Mortgage”); and the April 28, 2006 consolidated mortgage in the amount of $650,000 (“Consolidated Mortgage”) pursuant to the “Mortgage Consolidation and Extension Agreement” (“CEMA”) (Id., ~ 68). Plaintiff alleges that “when Ms. McDowell inevitably defaulted on her monthly payments, Perri Funding on behalf of Delta [r]eadily obtained new mortgage financing by flipping her old mortgage into a new one that allowed her to payoff the defaulted mortgage. ”

“The Shapiro Firm represented HSBC in the prior Foreclosure Action. There is no allegation,~hat it was ever involved in the application, origination and/or closings of the underlying mortgage loan transactions. Plaintiff has failed to plead the required elements of a fraud cause of action against the Shapiro Firm. The Second Amended Verified Complaint specifically refers to the Shapiro Firm only six times (Second Amended Verified Complaint, ¶ 30, 93, 98, 99, 104, 108). Plaintiff alleges that the assignment of the note submitted by the Shapiro Firm in the Foreclosure Action was executed while McDowell was in default, the Shapiro Firm submitted a note in the Foreclosure Action which differed from other copies of the notes, the Shapiro Firm submitted a loan application form which demonstrated that McDowell was in good financial condition when she was already in default, and in an unrelated case, the Shapiro Firm was found to have submitted false notes. Such allegations do not constitute a viable action for fraud. Plaintiff has failed to plead with particularity the necessary elements of a cause of action sounding in fraud as against the Shapiro Firm. Accordingly, the motion by the Shapiro Firm to dismiss the Second Amended Verified Complaint as to it is granted.”

Where else in this fair country could a dispute over replacement of a washing machine escalate to litigation over Judiciary Law 487, treble damages, attorney fees and the business judgment rule?  Only in Manhattan and probably only in a coop.  Plaintiff had to get permission to put in the washer/dryer and then when it broke down, bristled at the co-op house rule that the replacement had to be one of three brands.  Unaccetapable!

Siller v Third Brevoort Corp. 2016 NY Slip Op 08603 Decided on December 22, 2016 Appellate Division, First Department also shows us that JL 487 has definitely hit the mainsteam, and may be seen as an additional cause of action to be used all the time.

“The gravamen of the complaint is that defendants Third Brevoort Corporation and Diane C. Nardone, the president of the coop board, breached plaintiff’s proprietary lease and a 1990 agreement under which plaintiff built a laundry room in her apartment by refusing to allow her to replace her broken washer and dryer with machines of her choice rather than any of the three brands that the coop’s house rules, as amended in 2010, allow for replacement machines.

The governing agreements flatly contradict plaintiff’s allegations of breach of contract (see Leon v Martinez, 84 NY2d 83, 88 [1994]). Plaintiff has not identified a single term or provision that gives her a contractual right in perpetuity to install any replacement laundry machine she chooses. She relies generally upon the board’s approval of her plans to construct the laundry room in 1990 and the lease provision making her solely responsible for repairing her appliances, but nothing in those agreements gives her a right to repair the appliances in a manner that conflicts with the house rules. In fact, plaintiff concedes that she is required by the agreements to seek the board’s approval before replacing her machines.

Plaintiff’s reliance upon the provision of the lease requiring that any house rules be “reasonable” is unavailing (Braun v 941 Park Ave., Inc., 32 AD3d 21, 24 [1st Dept 2006], lv denied 7 NY3d 717 [2006]). Even under a standard of reasonableness, rather than the less stringent business judgment rule, plaintiff has not established a breach, since the house rule at issue is reasonable on its face and was not unfairly targeted at plaintiff.”

“The claim that Nardone violated Judiciary Law § 487 by making false and misleading statements in an affirmation fails to state a cause of action, because Nardone is a party to this action who is represented by counsel and not acting in her capacity as an attorney (see e.g. Seldon [*2]v Spinell, 95 AD3d 779, 779 [1st Dept 2012], lv denied 20 NY3d 857 [2013]).”

Plaintiff agrees to buy a newly constructed home, so long as the builder can produce a Certificate of Occupancy.  Of course, there is no C of O at the closing, and everyone goes into a song and dance.  Escrows, title insurance promises and monies paid to the attorneys cloud the story.  Now, after a slew of litigation the case is essentially starting over, with sanctions against plaintiff.      Johnson v Law Off. of Kenneth B. Schwartz  2016 NY Slip Op 08931  Decided on December 29, 2016  Appellate Division, First Department describes a hectic litigation setting.   “In December 2006, plaintiff entered into a contract with defendant Giles whereby plaintiff agreed to buy, for $995,000, a house built by Giles. The contract provided, inter alia, that closing would occur on or about February 7, 2007, provided that Giles obtained a final certificate of [*2]occupancy from the Department of Buildings. It also stated that “title will not close without purchaser’s consent until a final certificate of occupancy has been issued.” Plaintiff retained defendant Law Office of Kenneth Schwartz to act as his attorney in the proposed purchase. The firm assigned defendant attorney Helene Stetch to the matter.”   ”

The allegations that Mr. Diaz is the sole owner of Giles and that he also used Diaz Group Design Build Corp., “another corporate alter ego,” in his dealings with plaintiff are far too conclusory to support piercing Giles’s corporate veil to reach Mr. Diaz and then impute his liability to Diaz Group Design Build Corp. (see e.g. East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 16 NY3d 775 [2011]). Plaintiff’s plea that he needs discovery is unavailing (see e.g. East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 66 AD3d 122, 128-129 [2d Dept 2009], affd 16 NY3d 775 [2011]).

To the extent the fourth cause of action can be read as alleging civil conspiracy, it must be dismissed as well, since conspiracy to commit a tort is not a cause of action (see Alexander & Alexander of N.Y. v Fritzen, 68 NY2d 968 [1986]).

To the extent the fourth cause of action can be read as alleging fraudulent inducement, it is insufficiently pleaded; it does not allege that the Diaz defendants or Builders Mutual made any misrepresentations to induce plaintiff to sign the document that supposedly released Builders Mutual in exchange for $45,000. Plaintiff’s affidavit indicates that he dealt only with his former attorneys regarding the release.

Although the sixth cause of action purports to be against the Diaz defendants, it in fact alleges a cause of action against the attorney defendants for converting the $45,000.

The December 2006 contract between Giles and plaintiff merged into the September 2007 deed (see e.g. TIAA Global Invs., LLC v One Astoria Sq. LLC, 127 AD3d 75, 85 [1st Dept 2015]). Plaintiff alleges that Giles breached the contract because the property did not have a final certificate of occupancy (C of O) and was deficiently constructed. However, the provisions of the contract regarding those items did not survive delivery of the deed.

The fourth cause of action appears, based on the demand for damages, to relate to plaintiff’s supposed agreement to release Builders Mutual in exchange for $45,000. Since this agreement is between Builders Mutual and plaintiff, any claim that Giles breached the covenant of good faith and fair dealing implied in the release fails (see Duration Mun. Fund, 77 AD3d at 474-475).

As to Builders Mutual, accepted as true, the complaint and its exhibits indicate that plaintiff agreed to release Builders Mutual in return for $45,000. However, plaintiff does not allege that Builders Mutual failed to pay the money; instead, he alleges that the money was paid to the attorney defendants, who refused to remit it to him.

The fifth cause of action fails to state a claim against Builders Mutual (see Harris v Seward Park Hous. Corp., 79 AD3d 425, 426 [1st Dept 2010]). Although it alleges that Builders Mutual breached its “contract with Plaintiff,” Builders Mutual had no such contract. The [*4]allegations show that the fifth cause of action refers to Giles’s breach of its December 2006 contract with plaintiff. Even if, arguendo, Builders Mutual insured Giles, its contract was with Giles, not plaintiff.

As to defendant Stetch, she contends that all claims against her are time-barred. Although couched as contract claims, the first and second causes of action are essentially malpractice claims, and they are not time-barred. Plaintiff alleges that the attorney defendants should not have allowed him “to purchase the premises without a Final C of O” or to enter into the escrow agreement. Since plaintiff purchased the premises on or about September 24, 2007, and entered into the escrow agreement on that date, the first and second causes of action accrued at that time (see Glamm v Allen, 57 NY2d 87, 93 [1982]). Absent the continuous representation doctrine, the statute of limitations would have run in September 2010 (CPLR 214[6]; see also Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d 538, 539, 541-543 [2004]). Plaintiff did not sue until March 2013. However, in opposition to Stetch’s motion to dismiss, plaintiff submitted an affidavit saying that he was continually represented by Stetch up to and including February 2012. The only matter for which plaintiff retained the attorney defendants was the purchase of his home. Thus, as required for the application of the doctrine, Stetch’s continuous representation related “to the matter upon which the allegations of malpractice are predicated” (Serino v Lipper, 47 AD3d 70, 76 [1st Dept 2007] [internal quotation marks omitted], lv dismissed 10 NY3d 930 [2008]).

The gravamen of the sixth cause of action is that the attorney defendants converted the $45,000 that plaintiff was slated to receive from Builders Mutual. The three-year statute of limitations runs from the date that the conversion takes place (see Vigilant Ins. Co. of Am. v Housing Auth. of City of El Paso, Tex., 87 NY2d 36, 44-45 [1995]). “[I]t is well settled that, where the original possession is lawful, a conversion does not occur until after a demand and refusal to return the property” (D’Amico v First Union Natl. Bank, 285 AD2d 166, 172 [1st Dept 2001], lv denied 99 NY2d 501 [2002]). Stetch argues that the conversion occurred before February 23, 2010, so the statute of limitations would have run on or about February 22, 2013. According to Stetch, plaintiff’s $45,000 conversion claim is time-barred because plaintiff sued on or around March 15, 2013, nearly one month after the supposed statute of limitations had run. However, there is nothing in the record to support this contention. The email from plaintiff’s current counsel indicating that the $45,000 was released to plaintiff’s former attorneys, including Stetch, before February 23, 2010 is insufficient to establish when plaintiff actually demanded the $45,000 from the attorney defendants and when the attorney defendants refused to remit the money to plaintiff. Therefore, the precise date of conversion is unclear.

Similarly, the gravamen of the third cause of action, which is couched as a fraud claim, is that the attorney defendants stole the $100,000 escrow. However, this cause of action is not subject to CPLR 3211 dismissal as time-barred, as there is no clear indication in the record when the supposed $100,000 escrow was released. If discovery establishes that the $100,000 was converted more than three years before March 15, 2013, then Stetch may move for summary judgment based on the statute of limitations.

Stetch is correct that the first and second causes of action fail to state a claim for breach of contract. However, as they can be construed as legal malpractice claims, they need not be dismissed (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]).

The complaint says the fourth cause of action is for breach of the duty of good faith and fair dealing, presumably in connection with the $45,000 that plaintiff was supposed to get from [*5]Builders Mutual. As Stetch is not a party to the alleged agreement to pay $45,000, she cannot be sued for breach of the implied covenant of good faith and fair dealing (see Duration Mun. Fund, 77 AD3d at 474-475).

To the extent the fourth cause of action can be construed as a claim that Stetch fraudulently induced plaintiff to release Builders Mutual, it is inadequately pleaded. However, in his affidavit, plaintiff says he accepted Builders Mutual’s supposed offer upon the advice of his attorneys. As this indicates that plaintiff might be able to allege a specific misrepresentation by Stetch, the dismissal of the fourth cause of action as against her is without prejudice.

On the fifth cause of action, plaintiff requests legal fees in addition to damages. Stetch correctly points out that plaintiff is not entitled to attorneys’ fees due to the American rule (see e.g. Hooper Assoc. v AGS Computers, 74 NY2d 487, 491 [1989]).

The complaint must be dismissed as against Stewart Title. It is undisputed that Stewart Title did not issue title insurance when plaintiff purchased his property. The issues of fact that plaintiff tried to create in opposition to Stewart Title’s motion for summary judgment are not genuine, but feigned; they are speculative and contradicted by documentary evidence (see e.g. Cillo v Resjefal Corp., 16 AD3d 339, 340-341 [1st Dept 2005]).

Plaintiff’s plea that he needed discovery is unavailing, especially since there is no evidence in the record that he served any discovery requests (see e.g. Meath v Mishrick, 68 NY2d 992, 994 [1986]).

Moreover, Stewart Title’s motion for costs against plaintiff due to his frivolous conduct should be granted (see Borstein v Henneberry, 132 AD3d 447 [1st Dept 2015]). In his affidavit in opposition to Stewart Title’s motion, which was sworn to on January 7, 2015, plaintiff asserted a material factual statement that was false (see 22 NYCRR 130-1.1[c][3]). He said that, with the exception of various documents — none of which was the title insurance policy for the purchase of his home — “I do NOT have any other documents.” However, on or about December 23, 2014, plaintiff had produced nonparty First American Title Insurance Company’s policy for said purchase.

Moreover, plaintiff should have known that Stewart Title did not issue the title insurance policy for the purchase of his home. The contract whereby plaintiff agreed to buy a house from Giles said, “Purchaser . . . acknowledges that [nonparty] Judicial Title Insurance Agency has issued or will issue a policy of title insurance insuring title to the land upon which the subject premises are to be built” (emphasis added). The deed for plaintiff’s property was presented for recording by Judicial Title Insurance Agency as agent for First American Title; in addition, the metes and bounds description of the property is on a page headed “The Judicial Title Insurance Agency LLC — Title Number: 93163FA-B.” Both the contract and the deed are exhibits to the complaint.

Plaintiff’s conduct is also frivolous under 22 NYCRR 130-1.1(c)(1), because, even if Stewart Title had issued a title insurance policy for plaintiff’s house, it would not have been liable for the lack of a final C of O, as Stewart Title’s attorney pointed out to plaintiff’s counsel in an attempt to have him withdraw the claims against Stewart Title (see Voorheesville Rod & Gun Club v Tompkins Co., 82 NY2d 564, 571 [1993]). Voorheesville was one of the cases that Stewart Title’s attorney sent to plaintiff’s attorney. “In determining whether the conduct undertaken was frivolous, the court shall consider . . . whether or not the conduct was continued [*6]when its lack of legal or factual basis . . . was brought to the attention of counsel or the party” (22 NYCRR 130-1.1[c]; see also Borstein, 132 AD3d at 452).”

Arbor Realty Funding, LLC v Herrick, Feinstein LLP  2016 NY Slip Op 08935  Decided on December 29, 2016  Appellate Division, First Department is certainly a case about money.  Note the level of defense attorney players here…Davis Polk & Wardwell LLP, Steptoe & Johnson LLP, Blank Rome, LLP, Paul, Weiss, Rifkind, Wharton and Garrison LLP, New York.

Were these guys just playing around in discovery?  We don’t know, but it will cost someone $ 10,000 to keep this case in play.

“Order, Supreme Court, New York County (Carol R. Edmead, J.), entered on or about October 14, 2014, amending order (same court and Justice), entered on or about October 6, 2014, which denied plaintiffs East 51st Street Development, LLC, 968 Kingsman, LLC, and 964 Associates, LLC’s application to reinstate their complaint and dismissed the complaint with prejudice, unanimously reversed, on the law, the facts, and in the exercise of discretion, without [*2]costs, the complaint reinstated, and plaintiffs directed to, within 30 days, respond to defendants’ discovery requests in the form requested and pay defendants a fine of $10,000 for their willful failure to comply with the trial court’s discovery.

In this legal malpractice action, consolidated with two other actions, although plaintiffs produced responsive material, it was imbedded in large amounts of otherwise irrelevant documents. Over 30,000 documents were produced. The trial court then gave plaintiffs ample time and opportunity to further produce the documents in an electronically searchable format and to organize its responses in the form that defendant requested them. Plaintiffs failed to comply with the court’s directions. Under these circumstances, the trial court properly concluded that plaintiffs’ failure to comply with its orders was willful (Merrill Lynch, Pierce, Fenner & Smith v Global Strat Inc., 94 AD3d 491 [1st Dept 2012], mod 22 NY3d 877 [2013]). Given, however, plaintiffs’ partial compliance and the strong public policy in favor of disposing of cases on the merits, we find that dismissal of the action is too severe a sanction at this time and that a less severe sanction, of a monetary fine in the amount of $10,000 plus costs is appropriate, along with a final 30-day opportunity for plaintiffs to provide the discovery in the format ordered by the trial court on February 19, 2014.”

It’s our last blog for the year, and it is a classic situation.  We leave you ’till January with this story.

Copeny v George T. Peters, PLLC  2016 NY Slip Op 32501(U)  December 16, 2016  Supreme Court, Kings County  Docket Number: 501818/14  Judge: Larry D. Martin is all about a car accident, and the selection of the absolutely wrong court, coupled with what appears to be a poor application to get into the right court.  Note how current plaintiff’s attorney deftly stayed out of the mess, and then came in to sweep up.

“This action arises from defendants’ representation of plaintiff Tarsheema M. Copeny (“plaintiff’) in an underlying personal injury action. On or about July 17, 2012, plaintiff was in an automobile accident involving a vehicle operated by plaintiff and a vehicle owned by New York Office of Children and Family Services (“OCFS”) and operated by Michael Jackson (“Jackson”), an OCFS employee.  Plaintiff then retained defendants to represent her.  On or about May 7, 2013 defendants filed a summons and complaint, on behalf of plaintiff, against OCFS and Jackson under Index No. 502376 in the Kings County Supreme Court (the “underlying personal injury action”). Subsequently, defendants learned that claims against OCFS had to be made in the Court of Claims. Thereafter, on or about, June 6, 2013, defendants filed a stipulation of discontinuance dated May 31, 2013 with the Kings County Supreme Court for the discontinuance of the underlying personal injury action. On or about August 12,2013, defendants, on behalf of plaintiff, filed a motion for permission to file a late claim against OCFS in the Court of Claims. By letter dated August 20,2013, plaintiff, among other things, terminated defendants’ services on her behalf and advised that she had retained the law firm Sinel & Associates, PLLC to represent her. By decision and order (Soto, J.) dated October 7,2013, the motion for permission to file a late claim against OCFS was denied in the Court of Claims. By letter dated February 27, 2015, Sinel & Associates, PLLC advised defendants that they would not be substituting in as counsel in the underlying personal injury action. On or about March 3, 2014, plaintiff commenced the instant action against defendants asserting causes of action sounding in legal malpractice. Defendants now move for the relief requested herein.”

“The Court notes that plaintiff’s current counsel, Sinel & Associates, PLLC, treats the instant motion as one for dismissal pursuant to CPLR 3212 rather than dismissal pursuant to CPLR 3211. Plaintiff also requests that the instant motion be converted into one for summary judgment and, upon conversion, she be granted judgment as a matter of law on her claims in the complaint. Pursuant to CPLR 3211, the Court, upon adequate notice to the parties, may treat a CPLR 3211 (a) motion to dismiss as a motion for summary judgment where the parties deliberately chart a summary judgment course (see CPLR 3211 [c]; see Mihlovan v Grozavu, 72 NY2d 506, 508 [1988]; compare Kaplan v Roberts, 91 AD3d 827, 828 [2d Dept 2012]). The Court declines to grant plaintiff’s request to convert the instant motion to one for summary judgment and, upon conversion, granting judgment as a matter of law in her favor. Nevertheless, based upon a review of the record submitted by the parties and the relevant law, the Court denies defendants’ motion to dismiss. Here, plaintiff alleges in the complaint that defendants breached the duty of care by, among other things, (1) failing to file a notice of intention to file a claim with the Court of Claims within the statutory 90-day time period, (2) failing to timely move for permission to file a late notice of claim pursuant to Court of Claims Act Article II, Section 10 (6) and (3) failing to submit an affidavit from plaintiff establishing that she has a valid cause of action or to submit any medical records regarding her claims pursuant to Insurance Law 9 5102 (d) (Complaint, ¶ 27). As a result, plaintiff claims that she would have been able to “prove[]a case of liability” against OCFS and Jackson and also that her claims in the Court of Claims would not have been dismissed leaving her “no remedy at law for her personal injuries” (Complaint, ~ 28). The Court finds that these claims are sufficient to state a cause of action for legal malpractice (see CPLR 32 I I [a][7]). As such, that branch of defendants’ motion to dismiss the complaint for failure to state a cause of action is denied. Moreover, the documents submitted by defendants did not conclusively establish a defense as a matter of law. Defendants’ submissions fail to utterly refute plaintiffs allegations so as to warrant dismissal of the complaint herein (see CPLR 321 I [a][I]; see also Randazzo, 128 AD3d at 937). Plaintiff correctly points out that Jackson was never served with the summons and complaint in the underlying personal injury action. In addition, a review of the Court’s record indicates that a request for judicial intervention was never filed in the underlying personal injury action. In this regard, that branch of defendants’ motion to dismiss the complaint on the grounds of documentary evidence is denied.”

This case mentions legal malpractice, and is a variant of the classic “you did me wrong, so I’m suing” trope.  Here, an international investor, is accused of defamation of a well-regarded law firm and its principal.

Morelli v Wey  2016 NY Slip Op 32487(U)  December 16, 2016  Supreme Court, New York County
Docket Number: 153011/16  Judge: Carol R. Edmead.  “In this defamation action, plaintiffs Benedict P. Morelli,(Morelli), Arlene B. Morelli (Mrs. Morelli), and The Morelli Law Firm, PLLC f/k/a Morelli Alters Ratner, LLP (Morelli Law Firm) allege that defendants Benjamin Wey (Wey), FNL Media LLC (FNL), and NYGG Capital  LLC d/b/a New York Global Group (NYGG) have waged a campaign to defame them through the publication of numerous false and defamatory statements in their online magazine, blogs, and  social media, in order to injure their professional reputations. Plaintiffs allege that these attacks were prompted by the Morelli  Law Firm’s representation of a former NYGG employee, Hanna Bouveng (Bouveng), in a federal action asserting sexual harassment, retaliation, and defamation claims against defendants herein (see: Bouveng v NYGG Capital LLC, 175 F Supp 3d 280 [SD NY 2016]). Defendants now move, pursuant to CPLR 3211 (a) (1), (5), and (7), to dismiss the complaint in its entirety. ”

“Beginning in 2015 and continuing through the present, defendants allegedly repeatedly published over 600 separate false and defamatory statements and images about plaintiffs (id.,¶s 20, 26-72; appendix A to verified complaint). Specifically, defendants accused plaintiffs of numerous criminal or repugnant: acts, including but not limited to, extortion, bank fraud, falsifying evidence, witness intimidation, conspiracy to commit fraud, sexual harassment, and professional misconduct (id.). According to plaintiffs, defendants perpetrated these attacks in order to injure plaintiffs in their profession, business, and livelihoods, though defendants were initially motivated to compromise plaintiffs’ representation of Bouveng (id.,¶¶21, 30, 73). To maximize the damage to plaintiffs’ reputations and livelihoods, defendants or their agents performed internet search engine “optimization” to increase the exposure of their false and defamatory .articles to users of Google and other internet search engines (id, if 23). ”

“Here, contrary to defendants’ contention, as alleged by plaintiffs, defendants did not merely make “a statement that there is an investigation.” Rather, the complaint alleges that defendants published an article entitled “The FBI investigation targets BENEDICT MORELLI [and] ARLENE MORELLI” (verified complaint,¶ 39 [b]), stated that plaintiffs committed “bank fraud” and “massive bank fraud” (id.,¶¶40; 42, 43 [a]), and made statements indicating that plaintiffs are “law violators” with a “long history of committing fraud” (appendix A to verified complaint). 1 In addition, in light of plaintiffs’ allegations that defendants stated that Morelli, a partner of the law firm, was a member of the Ku Klux Klan (verified complaint, irir 4, 72 [c], [d]), plaintiffs have sufficiently stated a cause of action for defamation per se (see Sheridan v Carter, 48 AD3d 444, 446-447 [2d Dept 2008] [domestic worker’s published statements which depicted couple that formerly employer her as racists were defamatory per se]; Herlihy v Metropolitan Museum of Art, 214 AD2d 250, 261 [1st Dept 1995] [complaint stated cause of action for slander per se where it stated that volunteers made statements that former coordinator was anti-Semitic and was biased in her treatment of Jewish,volunteers]): Moreover, plaintiffs’ allegations that defendants stated that plaintiffs.were members of the Mafia or a “gang” and were guilty of a serious crime are sufficient to state a cause of action for defamation per se (see Harris v Queens County Dist. Atty’s Office, 2012 WL 832837, *9 [ED NY 2012] [statement that attorney was security threat to the courthouse was defamatory per se]). For example, defendants allegedly stated that “[t]he court accuses the Morelli mafia of fabricating evidence that resulted in extortion of a Texas based chemical company,” “City National Bank charges the Morelli ‘gang’ members with orchestrating a multi-year money laundering scheme and massive loan frauds,” “Benedict Morelli and his fellow ‘gang members at Morelli Alters Ratner conspired with Morelli’ s wife, Arlene B. Morelli and David Ratner to swindle City National Bank; Batik: United and the Esquire Bank,” “Benedict Morelli and, the con man’s wife Arlene were sued for money laundering,  bank fraud and suspected mafia affiliation,” “[t]he gang at Morelli Alters Ratner is wantonly defrauding City National out of millions of dollars,” “shady lawyers Benedict Morelli, David Ratner, Martha McBrayer extortion ‘mob’ members were finally captured” (verified complaint,¶ 28 [b], 31 [a], 33 [c], 35 [a], 37 [b], 43[c]). Therefore, plaintiffs’ allegations are sufficient to state a cause of action for defamation per se.”