There is now a formal split between the First and Second Departments on the appropriate statute of limitations for Judiciary Law 487.  The second department recently determined that if the JL 487 claim is made in a case with a legal malpractice claim, then the statute of limitaitons is 3 years pursuant to CPLR 214(6).  The First Department, citing Melcher v. Greenberg Traurig LLP, holds that it is 6 years, as did the Court of Appeals.  In McDonald v Edelman & Edelman, P.C.  2014 NY Slip Op 04560 [118 AD3d 562]  June 19, 2014  Appellate Division, First Department it wrote:

"The fourth cause of action, which alleges a violation of Judiciary Law § 487, is timely because it was asserted within six years of plaintiff’s receipt of defendants’ June 2008 letter (see CPLR 214 [2]; Melcher v Greenberg Traurig, LLP, 102 AD3d 497 [1st Dept 2013]). However, the complaint nevertheless fails to state a cause of action under the statute, since it does not allege that plaintiff suffered any injury proximately caused by any deceit or collusion on counsel’s part, and no such injury can reasonably be inferred from the allegations (see Bohn v 176 W. 87th St. Owners Corp., 106 AD3d 598, 600 [1st Dept 2013], lv dismissed in part, denied in part 22 NY3d 909 [2013])."

So, which is it?

Police officer is out sick.  Police Department rule is that you must stay in your home, and they go to great lengths to check up on those officers.  In Pannone v Silberstein  2014 NY Slip Op 03944 [118 AD3d 413]  June 3, 2014  Appellate Division, First Department  the officer was subject to a disciplinary hearing and he was fired.  His remedy was an Article 78 challenging whether the decision was arbitrary and capricious.  That article 78 was lost because the attorney did not timely perfect.  Legal malpractice?  Violation of Judiciary Law 487?

No to both.  "To recover damages for legal malpractice, a [*2]plaintiff must demonstrate that the attorney defendant " ’failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession’ and that the attorney’s breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). "To establish causation, a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages, but for the lawyer’s negligence" (id.). The court below granted defendants’ motions for summary judgment, finding the "but for" element lacking because plaintiff would not have prevailed in the underlying article 78 proceeding. We agree.

The giving of false statements in the course of an official investigation has been upheld as a ground for dismissal from municipal employment (see Matter of Duncan v Kelly, 9 Misc 3d 1115[A], 2005 NY Slip Op 51558[U] [Sup Ct, NY County 2005] [also involved a GO-15 interview], affd 43 AD3d 297 [1st Dept 2007], affd 9 NY3d 1024 [2008]; see also Matter of Loscuito v Scoppetta, 50 AD3d 905 [2d Dept 2008], lv denied 13 NY3d 716 [2010]). There is no merit to plaintiff’s argument that the state of the law in 2000, when the article 78 proceeding was brought, would have dictated a different result (see e.g. Matter of Swinton v Safir, 93 NY2d 758, 763 [1999] [dishonest statements to police department investigators constituted an independent basis for dismissal]).

The cause of action based on Judiciary Law § 487 was properly dismissed inasmuch as the record does not establish a "chronic and extreme pattern of legal delinquency" (Kinberg v Opinsky, 51 AD3d 548, 549 [1st Dept 2008] [internal quotation marks omitted]). The breach of contract cause of action, which is based on defendants’ alleged failure to represent plaintiff in a professional manner, was also properly dismissed. A breach of contract claim premised on an attorney’s failure to exercise due care or to abide by general professional standards is nothing more than a malpractice claim (Sage Realty Corp. v Proskauer Rose, 251 AD2d 35, 38-39 [1st Dept 1998]).

"

Courts are loathe to apply Judiciary Law 487, and when they do, the Appellate Division often reverses.  Here,Lifeline Funding, LLC v Ripka  2014 NY Slip Op 01106 [114 AD3d 507]
February 18, 2014  Appellate Division, First Department serves as an example.  Plaintiff succeeded in obtaining a misdemeanor conviction for the common law violation of Judiciary Law 487 along with treble damages.  This is an unheard of accomplishment. Unheard of! 

So, the Appellate Division reverses.  "This Court finds, however, that the motion court erred in finding that defendant violated Judiciary Law § 487. Defendant did not engage in the "extreme pattern of legal delinquency" [*2]required to violate the statute (Gonzalez v Gordon, 233 AD2d 191, 191 [1st Dept 1996], lv denied 90 NY2d 802 [1997] [internal quotation marks omitted] [defendant attorney’s disbursement of $39,000 in escrow funds without plaintiff’s authority did not support an award of treble damages]; Wiggin v Gordon, 115 Misc 2d 1071, 1077 [Civil Ct, Queens County 1982] [defendant attorney who repeatedly told plaintiff he would pay taxes on the estate, never did so and then defaulted on the Judiciary Law § 487 proceedings brought against him engaged in "chronic, extreme pattern of legal delinquency"]). Although we do not condone defendant’s actions, his conduct does not constitute "an extreme case" of attorney misconduct (Wiggin, 115 Misc 2d at 1071)."

Judiciary Law 487 is a powerful common law tool for use in legal malpractice and attorney deceit settings.  However, it can be overused.  Overuse dilutes its power, and causes judges to, in effect, roll their eyes at the mere mention. AQ Asset Mgt., LLC v Levine  2014 NY Slip Op 05244 [119  AD3d 457]  July 10, 2014  Appellate Division, First Department  is an example.

"By an amended stock purchase agreement (SPA) effective December 9, 2005, defendants Habsburg and Patrizzi (together the sellers) agreed to sell half of the shares in a group of companies (the Antiquorum entities) to Artist House Holdings, Inc. (Artist House), predecessor to plaintiff AQ Asset Management, LLC (AQ). [FN1]The Antiquorum entities included plaintiffs Antiquorum, S.A. (ASA) and Antiquorum USA, Inc. Defendant Michael Levine, an attorney, provided legal counsel to the sellers, drafted the SPA and other transaction documents, and served as the escrow agent for the deal. Plaintiff Evan Zimmermann, also an attorney, helped broker the  transaction and is alleged by the sellers to have been their legal counsel throughout.
The SPA provided that the sellers would receive $30 million in cash, as well as proceeds from the sale of certain inventory held by the Antiquorum entities. In order to pay the book value of the inventory, the SPA provided that ASA was to execute a promissory note obligating it to pay, to an unspecified third party, the sum of 16 million Swiss Francs (CHF) within six months of the SPA’s execution date. The SPA further provided that, "[a]lternatively, Patrizzi may become personally responsible [for payment of the CHF 16 million] to any Stockholder which is entitled thereto."
The parties agreed that the CHF 16 million was to be paid from the sale of inventory on hand and owned by the Antiquorum entities as of the date of the SPA. The SPA also required Patrizzi to put the inventory up for sale before the due date of the promissory note, and provided that any funds received in excess of the CHF 16 million would belong to Patrizzi or his designees. According to the sellers, Habsburg was entitled to the first CHF 16 million in inventory sale proceeds and Patrizzi was entitled to the remainder. It is undisputed that ASA never executed a promissory note, and the sellers contend that they received no proceeds from the sale of inventory .

The motion court correctly dismissed the ninth and tenth causes of action in the fourth-party complaint alleging legal malpractice against Levine, and the seventeenth counterclaim alleging legal malpractice against Zimmermann, as barred by the three-year statute of limitations (see CPLR 214 [6]; Champlin v Pellegrin, 111 AD3d 411 [1st Dept 2013]). These claims accrued no later than August 2007, when the sellers became aware of Levine’s and Zimmermann’s alleged betrayal and any attorney-client relationship had come to an end. Since the claims were not brought until, at the earliest, December 2010, when this action was commenced, they are untimely.

Contrary to the sellers’ contention, the statute of limitations was not tolled by alleged fraudulent concealment (see Simcuski v Saeli, 44 NY2d 442, 448-449 [1978]). Any improper collaboration between Levine and Zimmermann would have come to light no later than August 2007 and thus, there could be no tolling after that date. Nor was the limitations period tolled by continuous representation (see Matter of Merker, 18 AD3d 332, 332-333 [1st Dept 2005]). Communications dated after August 2007 do not demonstrate that Levine and Zimmermann continued to represent the sellers. In light of the dismissal of the malpractice claims against Levine, the motion court properly dismissed the eleventh cause of action in the fourth-party complaint seeking forfeiture of Levine’s legal fees.

The sixth interpleader counterclaim and seventh cause of action in the fourth-party complaint, which allege that Levine violated Judiciary Law § 487 by bringing his interpleader claims without informing the court of his purported business relationship with Zimmermann, were properly dismissed. The absence of such information in Levine’s interpleader pleading does not rise to the level of "withholding of crucial information from a court" or "conceal[ing] from a court . . . a fact . . . required by law to [be] disclose[d]" (see Melcher v Greenberg Traurig, LLP, 102 AD3d 497, 500 [1st Dept 2013], revd on other grounds 23 NY3d 10 [2014])."

Standing is a very important issue in legal malpractice.  The public policy reasoning behind this stiff standard is that every case, whether criminal or civil would be followed by a legal malpractice case if standing were not an issue.  So it is in Arnold v Devane  2014 NY Slip Op 08534  Decided on December 4, 2014  Appellate Division, Third Department

The wife’s case: 
"Initially, we agree with defendant’s assertion that Supreme Court should have dismissed Arnold’s claims because there was no attorney-client relationship between her and defendant upon which a legal malpractice claim can be based. A legal malpractice claim requires the existence of an attorney-client relationship (see Huffner v Ziff, Weiermiller, Hayden & Mustico, LLP, 55 AD3d 1009, 1011 [2008]; Peak v Bartlett, Pontiff, Stewart & Rhodes, P.C., 28 AD3d [*2]1028, 1030 [2006]; Tabner v Drake, 9 AD3d 606, 609 [2004]). Here, the complaint alleges that plaintiff retained defendant to act as his attorney to defend him against the criminal charges. It does not allege an attorney-client relationship between Arnold and defendant; the entirety of Arnold’s claim is derivative in nature. "

The Husband’s cased:

"In a legal malpractice claim, proximate cause is established by demonstrating that "but for the attorney’s negligence, [the plaintiff] would have prevailed in the underlying matter or would not have sustained any ascertainable damages" (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 115 AD3d 228, 236-237 [2014] [internal quotation marks and citation omitted]; accord Brooks v Lewin, 21 AD3d 731, 734 [2005], lv denied 6 NY3d 713 [2006]; see Tabner v Drake, 9 AD3d at 610; see also Gioeli v Vlachos, 89 AD3d 984, 985 [2011]; Bishop v Maurer, 33 AD3d 497, 498 [2006], affd 9 NY3d 910 [2007]). Stated differently, "[t]he test is whether a proper defense would have altered the result of the prior action" (Carmel v Lunney, 70 NY2d 169, 173 [1987] [internal quotation marks and citation omitted]) which, in the context of a criminal action, requires proof that the criminal defendant would not have been convicted (see Britt v Legal Aid Socy., 95 NY2d 443, 446 [2000]). Further, "[f]or malpractice actions arising from allegations of negligent representation in a criminal matter, the plaintiff must have at least a colorable claim of actual innocence" (Dombrowski v Bulson, 19 NY3d 347, 350-351 [2012]; see Britt v Legal Aid Socy., 95 NY2d at 446-447). We find that a colorable claim has been demonstrated here based upon plaintiff’s expressed assertions of innocence, together with our reversal of the judgment of conviction, as well as the District Attorney’s decision not to reprosecute plaintiff and the consequent dismissal of the indictment (see generally Carmel v Lunney, 70 NY2d at 173).

Although defendant acknowledges some errors in his representation of plaintiff and offers explanations for his trial strategies and failures, he argues nevertheless that none of his deficiencies caused plaintiff’s conviction. We reject defendant’s assertion that our previous determination that the conviction was in accord with the weight of the evidence precludes a finding that plaintiff would not have been convicted in the absence of defendant’s alleged [*3]deficiencies. Our evaluation of the weight of the evidence was based upon the evidence as it was presented to the jury and does not resolve the question of whether plaintiff would have been convicted had counsel been effective. Similarly, defendant’s argument that plaintiff’s conviction was based on the jury’s finding that the victim was credible, and not on his own failures, ignores the fact that this Court expressly found defendant’s representation to be ineffective, in part, because he did not sufficiently challenge the victim’s credibility or impeach the victim with her prior inconsistent statements — actions that were essential to mount an effective defense precisely because "the People’s case rested almost entirely upon the credibility of the victim" (People v Arnold, 85 AD3d at 1333).

In addition, in reversing the judgment of conviction, we noted, among other things, defendant’s "directionless and largely ineffective" questioning of plaintiff’s own witnesses, as well as the fact that defendant elicited testimony from those witnesses which served to bolster the People’s case (id. at 1334). Defendant’s motion is devoid of competent proof establishing that plaintiff would have been convicted, even in the absence of the multiple deficiencies that were described. Thus, although we recognize that, inasmuch as plaintiff was not retried and acquitted it may be difficult for him to ultimately meet his burden of establishing at trial that he would not have been convicted in the absence of defendant’s negligence (see Britt v Legal Aid Socy., 95 NY2d at 446-447), we find that defendant failed to meet his prima facie burden on this motion of establishing a lack of proximate cause (compare Bixby v Somerville, 62 AD3d 1137, 1139 [2009]). Therefore, the burden never shifted to plaintiff to demonstrate a triable issue of fact.

Nor has defendant met his initial burden of establishing plaintiff’s inability to prove damages. Contrary to defendant’s argument, plaintiff has sufficiently alleged pecuniary damages (see Dombrowski v Bulson, 19 NY3d at 350-351; Brownell v LeClaire, 96 AD3d 1336, 1338 [2012]), i.e., damages that "compensate the victim for the economic consequences of the injury" (Wilson v City of New York, 294 AD2d 290, 292 [2002] [internal quotation marks and citation omitted]). We have examined defendant’s remaining contentions and find them to be lacking in merit."

The overwhelming effect of an attorney fee award on legal malpractice cannot be overstated.  The general understanding is that no fee may be awarded to an attorney if there has been malpractice, hence, if an award is made, there could have been no malpractice.  So, when the attorney gets his awarded fees, that wipes out the legal malpractice case. 

This principal was the basis of Raghavendra v Brill  2014 NY Slip Op 33035(U)  November 26, 2014 Supreme Court, New York County Docket Number: 600002/2011 Judge: Lucy Billings.

"Plaintiff seeks reargument, C.P.L.R. § 2221(d) (2), insisting he court erroneously held that the United States District Court’s decision entitling defendants Stober and the Law Office of Louis D. Stober to attorneys’ fees for representing plaintiff, Raghavendra v. Trustees of Columbia Univ., 686 F. Supp. 2d 332, 336 (S.D.N.Y. 2010), aff’d in part and vacated in part, 434 F. App’x 31 (2d Cir. 2011), barred his legal malpractice claims against the Stober defendants under the doctrine of res judicata.  C.P.L.R. § 3211{a) (5). Plaintiff seeks renewal, C.P.L.R. § 2221(e) (2), claiming new facts that constitute defendants’ continuing violation of his rights. The only claims that the court dismissed in this action based on the applicable statute of limitations, C.P.L.R. §§ 215(3), 3211(a) (5), however, were plaintiff’s claims of intentional infliction of emotional distress and abuse of judicial process by the Stober defendants, Spinale v. 10 West 66th St. Corp., 291 A.D.2d 234, 235 (1st Dep’t 2002), and his claim of intentional wrongdoing, which the court construed as a claim for a prima facie tort. Casa de Meadows Inc. (Cayman Is.) v. Zaman, 76 A.D.3d 917, 921 (1st Dep’t 2010).

Plaintiff’s reiteration of a lack of opportunity to litigate the Stober defendants’ misconduct and malpractice in the federal district court’s adjudication of the parties’ attorneys’ fees dispute does not point to any facts that this court overlooked. Instead, he claims that the authority the court relied on, Finkel v. New York City Hous. Auth., 89 A.D.3d 492 (1st Dep’t 2011); Bettis v. Kelly, 68 A.D.3d 578 (1st Dep’t 2009).; Urlic v. Insurance Co. of State of Penn., 259 A.D.2d 1 (1st Dep’t 1999);
and Uzamere v. Uzamere, 89 A.D.3d 1013 (2d Dep’t 2011), was inapposite because the plaintiffs in those actions had an opportunity to litigate the merits of their claims in a prior action. See Bisk v. Manhattan Club Timeshare Ass’n, Inc., 118 A.D.3d 585, 585 (1st Dep’t 2014). His argument completely ignores this court’s analysis and determination that the federal district court’s conclusion regarding the Stober defendants’ entitlement to fees was on the merits and arose from the same transactions and occurrences as his malpractice claims in this action. RM 18 Corp v. Bank of N.Y. Mellon Trust Co., N.A.,  104 A.D.3d 752, 756 (2d Dep’t 2013); Uzamere v. Uzamere, 89 A.D.3d at 1014. See Insurance Co. of State of Pa. v. HSBC Bank of USA, 10 N.Y.3d 32, 39 (2008). "

Judiciary Law 487, the attorney-deceit rule, applies when an attorney attempts or succeeds at deceit of the court or to a party. That broad rule was undercut in Wailes v Tel Networks USA, LLC, 2014 NY Slip Op 02861 [116 AD3d 625], April 24, 2014 Appellate Division, First Department which discounted any application of JL 487 to settlement negotiations

The allegations of Snyder’s conduct in his representation of defendant Tel Networks USA, LLC during settlement discussions with plaintiff, which plaintiff characterizes as "overzealous and intimidating," do not state a cause of action under Judiciary Law § 487. The complaint alleges neither an intent to deceive nor "a chronic and extreme pattern of legal delinquency" that caused plaintiff a loss (Kaminsky v Herrick, Feinstein LLP, 59 AD3d 1, 13 [1st Dept 2008] [internal quotation marks omitted], lv denied 12 NY3d 715 [2009] Nason v Fisher, 36 AD3d 486, 487 [1st Dept 2007]). Moreover, the only allegations of wrongdoing refer to a settlement discussion had after Tel Networks commenced a legal proceeding, and that communication is absolutely privileged (see Wiener v Weintraub, 22 NY2d 330 [1968] Mosesson v Jacob D. Fuchsberg Law Firm, 257 AD2d 381, 382 [1st Dept 1999], lv denied 93 NY2d 808 [1999]). Concur—Sweeny, J.P., Acosta, Saxe, Manzanet-Daniels and Clark, JJ.

Plaintiff was sued for fees and defended the case.  Plaintiff lost.  Plaintiff then sued the attorney and learned the lessons of res judicata and collateral estoppel. Both were employed in the dismissal of this second case.  Her one chance was to raise all of these defenses at the first trial, and now, in Robert v Stephanie R. Cooper, P.C. 2014 NY Slip Op 00741 [114 AD3d 456]
February 6, 2014 Appellate Division, First Department it was too late.

"At issue is the second of two actions between the parties stemming from a former attorney-client relationship. In the first action, plaintiff’s attorney sued her for breach of contract and account stated, seeking attorneys’ fees. In the second action, plaintiff asserts claims of fraud and a violation of Judiciary Law § 487, based on allegations that the underlying retainer agreement was fraudulent and forged, that fraudulent invoices were presented to the court and jury in the first action, that she was at times double-billed for legal services by defendants, and that her attorney committed perjury in the first action. Thus, plaintiff’s claims arose from the same transaction as that underlying the first action. As the motion court noted, plaintiff’s claims regarding the retainer agreement and invoices address the "core" of the litigation in the first action for attorney’s fees and thus should have been raised in that action. They are thus barred by res judicata principles (see Matter of Josey v Goord, 9 NY3d 386, 389-390 [2007]; Marinelli Assoc. v Helmsley-Noyes Co., 265 AD2d 1, 5-6 [1st Dept 2000]; see also Smith v Russell Sage Coll., 54 NY2d 185, 192 [1981]).

Moreover, with the sole exception of the alleged forgery of one of the retainer agreements, which plaintiff had a full and fair opportunity to litigate but due to her own oversight did not litigate, the issue of fraud was litigated and was necessarily decided by the jury in reaching its damages calculation. Plaintiff is thus collaterally estopped to re-litigate those claims (Buechel v Bain, 97 NY2d 295, 303 [2001], cert denied 535 US 1096 [2002]).

While the trial in the first action was limited to damages, contrary to plaintiff’s contentions, the jury’s calculation was not merely "mathematical" in light of the evidence that she was permitted to present. In calculating the total damages, the jury necessarily had to consider and reject plaintiff’s arguments that certain invoices were manufactured or altered and had to make a determination as to the credibility of her former attorney, defendant Stephanie [*2]Cooper, in connection with any perjury allegation.

While plaintiff claims that the court’s in limine ruling at trial, which on its face prohibited her from impugning Cooper’s character at trial or challenging her own liability to pay for the legal services rendered, the complaint in the second action belies her claim, since it contains no other allegations than those she fully litigated in the trial of the first action. Furthermore, the transcript makes clear that she was able to present extensive evidence of these claims in her defense.

Moreover, it is apparent that plaintiff’s complaint stems entirely from fraud allegedly committed in connection with the first action, and thus amounts to an impermissible collateral attack on the first judgment (Matter of New York Diet Drug Litig., 47 AD3d 586 [1st Dept 2008]; Rivero v Ordman, 277 App Div 231 [1st Dept 1950]).

Contrary to plaintiff’s assertions, the motion court cited and applied the correct standard of review, and properly rejected as incredible plaintiff’s claims that she did not scrutinize the retainer agreement and discover the forgery and any related fraudulent conduct during the trial in the first action. As the court noted, that retainer agreement was the entire basis of the first action. Furthermore, plaintiff’s claim that she did not scrutinize the agreement sooner due to her wholesale trust of Cooper, a former long-time friend, seems to us similarly incredible, given that plaintiff’s purported long-time friend had by that time withdrawn as counsel from her case, had, by plaintiff’s allegations, betrayed confidences in the underlying litigation, had sued plaintiff, and had affirmatively sought to prevent plaintiff from attacking her character. Concur—Sweeny, J.P., Andrias, Freedman, Richter and Clark, JJ."