Reem Contr. v Altschul & Altschul 2024 NY Slip Op 32915(U) August 19, 2024 Supreme Court, New York County Docket Number: Index No. 104202/2011 Judge: David B. Cohen presents the interesting question of whether a party may make a second motion for summary judgment, and if so, under what circumstances. Here, Defendants are denied a second motion and plaintiffs are permitted a second motion. Neither succeeds on summary judgment.

“This is a legal malpractice action brought by plaintiffs Reem Contracting Corp. (Reem Contracting), Jona Szapiro (Szapiro ), Reem Plumbing and Heating Corp. (Reem Plumbing), and the Estate of Steven Stein (Stein) ( collectively, plaintiffs) against defendants Altschul & Altschul, Mark Altschul, Esq. (Altschul), and Cory Dworken, Esq. (Dworken) ( collectively, defendants). Defendants represented plaintiffs in a federal action seeking recovery under section 515 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 USC§ 1145 (the underlying action). Defendants move, pursuant to CPLR 3212, for summary judgment: (1) dismissing the complaint; and (2) granting judgment on their counterclaims for an account stated (motion sequence number 016).”

“Defendants again move for summary judgment, arguing that they have good cause for their second motion for summary judgment, relying on Executive Order No. 202.9 (9 NYCRR 8.202.8), issued during the COVID-19 pandemic, which allegedly prevented them from filing their motion until after the deadline to file motions had already expired. Further, defendants maintain that, as the court previously held that plaintiffs’ expert report was not in admissible form, plaintiffs do not have an expert opinion that they can rely on to prove their case, and plaintiffs previously conceded that the Reem entities were alter egos of each other. In response, plaintiffs contend that defendants have failed to demonstrate good cause for their second motion for summary judgment, as their initial motion for summary judgment was timely filed in compliance with the court’s deadline of February 28, 2020. They assert that defendants should have raised the purported admission that the Reem entities were alter egos in opposition to plaintiffs’ first motion for summary judgment. Finally, plaintiffs maintain that defendants have failed to obtain an expert and cannot serve as their own expert witness, and, thus, are unable to meet their burden of proving that plaintiffs’ legal malpractice claim is without merit.

“‘Successive motions for summary judgment should not be entertained without a showing of newly discovered evidence or other sufficient justification”‘ (Maggio v 24 W 57 APF, LLC, 134 AD3d 621, 625 [1st Dept 2015], quoting Jones v 636 Holding Corp., 73 AD3d 409,409 [1st Dept 2010]; see also Pough v Aegis Prop. Servs. Corp., 186 AD2d 52, 53 [1st Dept 1992] [“[A]s a matter of policy, multiple summary judgment motions are discouraged in the absence of newly discovered evidence or ‘other sufficient cause”‘]).”

“A party seeking summary judgment should anticipate having to lay bare its proof and should not expect that it will readily be granted a second and third chance”] [internal quotation marks omitted]). Accordingly, defendants’ motion for summary judgment is denied.”

“Plaintiffs contend that they have good cause for their second motion, as the court previously denied their motion primarily because their expert report was unswom. They now submit an affidavit from their expert, Bennett J. Wasserman, which annexes his report offered on the prior motion (NYSCEF Doc No. 359, Wasserman aff), and Wasserman opines therein that defendants’ conduct fell below the standard of care in the underlying action in that, among other things: (1) defendants failed to investigate and marshal appropriate lay and expert evidence in a timely fashion; (2) defendants stipulated to the fact that the Reem entities were alter egos, notwithstanding the fact that Stein testified to the contrary; (3) defendants never advised plaintiffs about the existence of potential conflicts of interest; and ( 4) defendants failed to communicate with plaintiffs (id., ,i 10 [c], [d], [e], [f], [k]).”

“Here, plaintiffs have demonstrated good cause for their second motion for summary judgment (see Darwick v Paternoster, 56 AD3d 714, 715 [2d Dept 2008]), as the prior denial was based, in part, on the fact that their expert report was unswom and therefore inadmissible. Now, plaintiffs have, in effect, moved to renew their prior motion for summary judgment to correct a procedural oversight and have submitted their expert’s affidavit in admissible form (see Feuerman v Marriott Intl., 201 AD3d 566, 567 [1st Dept 2022]; Shaw v Looking Glass Assoc., 8 AD3d 100, 102 [1st Dept 2004]). The court, therefore, must determine whether plaintiffs are entitled to summary judgment.”

“Even considering Wasserman’s affidavit, the court finds that plaintiffs are still not entitled to summary judgment. First, there are issues of fact as to proximate cause (see Birnbuam v Misiano, 52 AD3d 632, 634 [2d Dept 2008]). Plaintiffs argue that by conducting their own informal audit, they “met the proximate cause element of this litigation, through the ‘case within a case’ standard, as they successfully refuted the Funds’ audit and refuted the uncontested judgment against Plaintiffs” (NYSCEF Doc No. 360 at 28). However, they concede that the audit is inadmissible at trial, and thus, as previously held on plaintiffs’ first summary judgment motion, the audit is insufficient to demonstrate proximate cause (see CPLR 4547; CNP Mech., Inc. v Allied Bldrs., Inc., 66 AD3d 1340, 1340 [4th Dept 2009] [subcontract summary prepared by defendants’ counsel “was prepared for the purpose of settlement negotiations and was therefore inadmissible as proof of the amount of damages”]). “

Csutkai v Baisley 2024 NY Slip Op 32884(U) August 15, 2024 Supreme Court, New York County Docket Number: Index No. 151083/2020 Judge: Debra A. James is an odd example of blaming the attorney where the attorney never agreed to take on certain work.

“This action arises out of a promissory note, dated August 17, 2007, executed by non-party Donald Baechler (“Baechler”) to memorialize a debt of $250,0000 owed by Baechler to Edit Deak, now deceased ( the “Note”) . (NYSCEF Doc. No. 004.) Non-party Baechler does not deny the existence of the Note, and it is undisputed that the Note was not paid. The plaintiff Daniel Csutkai, as Administrator of the Estate of Edit Deak (“Csutkai”), commenced this action against the defendants Margaret Baisley and Baisley Law Group, P.C. (collectively, “Baisley”) seeking damages arising from the nonpayment of the Note. Baisley represented both Baechler and Deak on the Note transaction. Despite the conflict, Deak agreed to the representation, pursuant to a conflict waiver executed by Deak (the “Waiver”). (NYSCEF Document Number 013). Prior to his filing of the instant action, Csutkai commenced an action entitled Csutkai v Baechler, Index No. 651615/2018, in which he sought payment of the Note (the “Baechler Action”). The Baechler Action was discontinued, with prejudice, by stipulation dated March 26, 2021. (Csutkai v Baechler, Index No. 651615/2018, NYSCEF Document Number 032.)”

“The allegations of legal malpractice fail to identify how Baisley was negligent. Cstukai fails to allege that Baisley was ever instructed by Deak to enforce the Note or to seek recovery of the amount due thereunder, or that Baisley otherwise had a duty to do so under the legal engagement. Furthermore, to the extent that Cstukai alleges that Baisley willfully allowed the statute of limitations to expire, this court ruled in the Baechler Action, by Order dated November 1, 2019, that the claim for payment of the Note was still viable and not time-barred under General Obligations Law§ 17-101. (Csutkai v Baechler, Index No. 651615/2018, NYSCEF Document Number 016.) Thus, Cstukai fails to allege any factual basis for tort liability against Baisley. Accordingly, the first cause of action for legal malpractice must be dismissed. Gopstein v Bellinson Law, LLC, 227 AD3d 465 (1st Dept 2024).”

In Jobar Holding Corp. v Halio 2024 NY Slip Op 32650(U) July 10, 2024 Supreme Court, New York County Docket Number: Index No. 655689/2017 Judge: Joel M. Cohen, plaintiff attempted to use a subsequent case decision to revive a dismissed case via amendment, The attempt failed.

“By order dated September 23, 2019, the Court (Scarpulla, J.) dismissed without prejudice Plaintiffs Complaint as against T &E for aiding and abetting fraud, aiding and abetting breach of fiduciary duty, accountant malpractice, fraud, and negligent misrepresentation due to the “mixing of derivative and individual claims … ” (Johar Holding Corp. v Halio, 2019 N.Y. Slip Op. 32813[U], 7 [N.Y. Sup Ct, New York County 2019]). Plaintiffs subsequently filed an Amended Complaint asserting claims against T &E for Civil RICO, fraud, aiding and abetting fraud, aiding and abetting breach of fiduciary duty and breach of the covenant of good faith and fair dealing. By order dated October 7, 2020, the Amended Complaint was dismissed as against T &E on the grounds that the RICO claims were conclusory; that Plaintiffs continued to mix derivative and individual claims; and because certain claims were untimely (NYSCEF 184, NYSCEF 235 [Transcript at 41-466). Plaintiffs now move for leave to amend on based on the First Department’s decision in 1650 Broadway Assoc., Inc. v Sturm, 210 NYS3d 19 [1st Dept 2024] [“1650 Broadway”]). In 1650 Broadway, the First Department reinstated claims for accounting malpractice and aiding and abetting fraud based on allegations that the defendant did not comply with the “standard of a reasonable accountant under similar circumstances … ” (id.). Plaintiffs argue that their Third Amended Complaint (NYSCEF 280) seeking to re-assert claims from their previously dismissed Complaint and Amended Complaint should be accepted because it pleads claims consistent with those in 1650 Broadway. T &E was not served with a copy of the motion to amend. However, T &E learned of the motion in connection with Plaintiffs request for an extension of time to perfect an appeal. T &E subsequently submitted a letter dated July 1, 2024, in opposition to Plaintiffs motion.

While styled as a motion to amend, Plaintiffs motion is actually a motion to reargue the Court’s prior dismissal order based on new case law (Mears v Chrysler Fin. Corp., 243 AD2d 270,272 [1st Dept 1997] citing George W Collins, Inc. v Olsker-McLain Indus., Inc., 22 AD2d 485,488 [4th Dept 1965] [a motion affecting a prior order must be made pursuant to CPLR 2221 ]). CPLR 2221 ( e )(2) provides, in relevant part, that the Court may grant leave to renew if the movant can “demonstrate there has been a change in the law that would change the prior determination … ” A new decision that applies existing law is not a “change in the law” that warrants renewal (Kreisler v B-U Realty Corp., 198 AD3d 568, 568 [1st Dept 2021]). Similarly, a new decision that is decided on inapposite facts is not sufficient to warrant renewal (Lucente v Riverbay Corp., 58 AD3d 451,452 [1st Dept 2009]). Contrary to Plaintiffs assertions, 1650 Broadway, does not warrant renewal or leave to amend. 1650 Broadway applied the law as it existed at the time of the Court’s dismissal order and does not concern derivative claims or timeliness concerns. Accordingly, leave to renew and leave to amend are not warranted.”

Slifka v Paul, Weiss, Rifkind, Wharton & Garrison, LLP 2024 NY Slip Op 32788(U) August 9, 2024 Supreme Court, New York County Docket Number: Index No. 155742/2023 Judge: Melissa A. Crane is yet another in the vast universe of legal malpractice cases associated with real estate, and in this case in a big way. Joseph Slifka constructed a building at 477 Madison Avenue and in 1954 made provisions for his wife and children through trusts. Today, the trusts and the individuals are mired in litigation over the sale of that building and the ground lease associated with it.

The details are too involved to set forth in this blog post, but here is a short portion of them. “Joseph constructed a commercial office building on land at 4 77 Madison A venue (the Property), and in 1954, he divided the property interests in two – the Fee, comprised of the land and the building, and the Leasehold, which is the ground lease (id.,~ 45). Prior to June 2019, nominal defendant 477 Madave Holdings, LLC (Madave Holdings), a New York limited liability company, held title to the Fee (id., 10, 40 and 48; NYSCEF Doc No. 19, Bardavid affirmation, exhibit 10). 4 77 Madave Management Corp. (Madave Management), a Delaware corporation (NYSCEF Doc No. 20, Bardavid affirmation, exhibit 11), owns a 0.5% membership interest in Madave Holdings (NYSCEF Doc No. 1, ~ 10). Nominal defendant 477 Madave Associates (Madave Associates) (together with Madave Holdings, the Nominal Defendants) (the Nominal Defendants with Madave Management, collectively, the Madave Entities), a New York general partnership, owns a 99.5% interest in Madave Holdings and was the ground lessor for the Property (id., 39 and 49). Joseph, Sylvia, Alan and Barbara were Madave Associates’ original partners (id.,~ 74). Upon his death, Alan’s partnership interest transferred to his children’s trusts and to Alan’s Trust (id.,~ 76). Madave Associates’ present partners and their ownership interests are as follows: Barbara, individually (33.5%); Barbara’s Trust (16.5%); Alan’s Trust (16.5%); Randy’s Trust (11.1667%); Michael’s Trust (11.1667%); and, David’s Trust (11.1667%)1 (id.,~ 50). The partnership agreement dated November 5, 1984, provides that the managing partner shall make the decisions affecting the partnership, including the sale of any assets, the proceeds of which would be distributed in accordance with each partner’s proportionate share (id., 39, 69 and 77). Barbara is Madave Associates’ sole managing partner (id., 2-3 and 70).”

“Defendants contend that plaintiffs are not proper derivative plaintiffs for three reasons. First, defendants assert that Randy is motivated by personal animus. Randy has repeatedly sued, or threatened to sue, Barbara related to the sale of the Property and the allocation of the proceeds. After having recovered the Arbitration A ward, Randy has now sued Hecht with respect to the allocation (NYSCEF Doc No. 12 at 40-45). As recently as July 14, 2023, Randy, through counsel, demanded that Barbara transfer $19,307,649.58 to Barbara’s Trust and $12,871,766.10 to Alan’s Trust to make them “whole” and urged her to “retain counsel . . . so that we can resolve this amicably without the need for further proceedings” (NYSCEF Doc No. 18, Bardavid affirmation, exhibit 9 at 2). Second, defendants contend that plaintiffs are situated differently from the Nominal Defendants’ other owners because Randy’s Trust has been made whole, and therefore, plaintiffs lack an incentive to pursue claims on behalf of the other owners. Third, those other owners have settled their claims with respect to the allocation and have released defendants from liability.”

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Villaver v Paglinawan 2024 NY Slip Op 04159 Decided on August 7, 2024
Appellate Division, Second Department concerns a situation where plaintiffs sued defendants who moved to dismiss based upon an arbitration clause. The arbitration was closed when Plaintiff said he could not afford the arbitration and Defendants did not respond.

“Thereafter, the plaintiff commenced this action (hereinafter the present action) against the defendants to recover damages for legal malpractice, breach of fiduciary duty, and intentional infliction of emotional distress, and for a judgment declaring that the defendants waived their right to arbitrate the plaintiff’s claims, that arbitration would be prohibitively expensive, and that requiring the plaintiff to pursue her claims in arbitration would violate her due process rights. The defendants moved, inter alia, to dismiss the complaint pursuant to CPLR 3211(a)(5) on the ground that the doctrine of collateral estoppel precluded the plaintiff from relitigating issues against the defendants that were previously dismissed by the Supreme Court in the prior action. In an order entered May [*2]12, 2021, the Supreme Court, Queens County (Frederick D.R. Sampson, J.), granted that branch of the defendants’ motion. The plaintiff appeals.

Pursuant to CPLR 3211(a)(5), a party may move to dismiss a cause of action based on the doctrine of collateral estoppel (see 23 E. 39th St. Dev., LLC v 23 E. 39th St. Mgt. Corp., 172 AD3d 964, 967). Under the doctrine of collateral estoppel, or issue preclusion, a party is precluded “from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same” (Ryan v New York Tel. Co., 62 NY2d 494, 500; see Cullen v Moschetta, 207 AD3d 699, 700). “This doctrine applies only ‘if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action'” (City of New York v Welsbach Elec. Corp., 9 NY3d 124, 128, quoting Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 349; see Jaber v Elayyan, 191 AD3d 964, 966). “The party seeking to invoke collateral estoppel has the burden to show the identity of the issues, while the party trying to avoid application of the doctrine must establish the lack of a full and fair opportunity to litigate” (Matter of Dunn, 24 NY3d 699, 704; see HSBC Bank USA, N.A. v Pantel, 179 AD3d 650, 651).

Here, the defendants failed to establish that the issue decided in the prior action was identical to the issues raised in the present action (see Simmons v Jones Law Group, LLC, 214 AD3d 835, 837). The only issue decided in the prior action was whether the retainer agreement signed by the parties contained a valid agreement to arbitrate. Although the plaintiff raised the issues of legal malpractice, breach of fiduciary duty, and intentional infliction of emotional distress in both the prior and present actions, the defendants failed to establish that these issues were “actually litigated, squarely addressed, and specifically decided” in the prior action (M. Kaminsky & M. Friedberger v Wilson, 150 AD3d 1094, 1095). Furthermore, the determination in the prior action does not preclude the plaintiff from raising in the present action whether the defendants waived their right to arbitrate and whether the cost of arbitration was prohibitively expensive, since these issues stem from events that occurred after the prior action had been dismissed. Thus, the Supreme Court should not have granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(5) to dismiss the complaint on the ground of collateral estoppel.”

Gordon v Vladislav Tsirkin CPA & Co., LLC 2024 NY Slip Op 03682 Decided on July 3, 2024 Appellate Division, Second Department is one of those appellate cases where the Court basically did not like the complaint. The decision uses the general language of a “failure to sufficiently allege” the claims. No particular facts are set forth or discussed.

“ORDERED that the order is reversed insofar as appealed from, on the law, with one bill of costs, and those branches of the defendants’ motion which were pursuant to CPLR 3211(a) to dismiss the causes of action alleging accounting malpractice and breach of contract are granted.

The plaintiffs commenced this action, inter alia, to recover damages for accounting malpractice and breach of contract against the defendants, who are accountants, alleging that they failed to prepare and file K-1 statements and tax returns for Sapphire Agriculture, LLC, and ONYX, LLC. The defendants moved, among other things, pursuant to CPLR 3211(a) to dismiss the complaint. The Supreme Court, inter alia, denied those branches of the defendants’ motion which were to dismiss the causes of action alleging accounting malpractice and breach of contract. The defendants appeal.

“On a motion to dismiss pursuant to CPLR 3211(a)(7), the complaint must be afforded a liberal construction, the facts therein must be accepted as true, and the plaintiff must be accorded the benefit of every possible favorable inference” (Angeli v Barket, 211 AD3d 896, 897; see Leon v Martinez, 84 NY2d 83, 87). “Although the facts pleaded are presumed to be true and are to be accorded every favorable inference, bare legal conclusions as well as factual claims flatly contradicted by the record are not entitled to any such consideration” (Garendean Realty Owner, LLC v Lang, 175 AD3d 653, 653 [internal quotation marks omitted]). “Where evidentiary material is submitted and considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion is not converted into one for summary judgment, the question becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless it has been shown that a material fact as claimed by the plaintiff to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it, dismissal should not eventuate” (Rabos v R & R Bagels & Bakery, Inc., 100 AD3d 849, 851-852; see Guggenheimer v Ginzburg, 43 NY2d 268, 274-275; Nassau Operating Co., LLC v DeSimone, 206 AD3d 920, 926). “Dismissal of the complaint is [*2]warranted if the plaintiff fails to assert facts in support of an element of the claim, or if the factual allegations and inferences to be drawn from them do not allow for an enforceable right of recovery” (Connaughton v Chipotle Mexican Grill, Inc., 29 NY3d 137, 142; see Nassau Operating Co., LLC v DeSimone, 206 AD3d at 925).

In order to succeed on a claim for accounting malpractice, a plaintiff must demonstrate a departure from accepted standards of practice and that the departure was a proximate cause of injury (see Alskom Realty, LLC v Baranik, 189 AD3d 745, 747; Kristina Denise Enters., Inc. v Arnold, 41 AD3d 788, 789). “Injury is an element of the cause of action” (see Alskom Realty, LLC v Baranik, 189 AD3d at 747). Here, the plaintiffs failed to adequately plead a cause of action alleging accounting malpractice. The plaintiffs failed to sufficiently allege that the defendants departed from accepted standards of practice and that the defendants proximately caused the plaintiffs’ injuries (see Kristina Denise Enters., Inc. v Arnold, 41 AD3d at 789; see also Ecker v Zwaik & Bernstein, 240 AD2d 360, 362).”

Peck v Milbank LLP 2024 NY Slip Op 32596(U) July 29, 2024 Supreme Court, New York County Docket Number: Index No. 152290/2022 Judge: Andrew Borrok describes why the claim for violation of Judiciary Law 487 resisted a dismissal motion.

“The defendants are not however entitled to dismissal of the claim sounding in violation of Judiciary Law§ 487. Judiciary Law§ 487 provides that An attorney or counselor who: 1. Is guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party; or, 2. Wilfully delays his client’s suit with a view to his own gain; or, wilfully receives any money or allowance for or on account of any money which he has not laid out, or becomes answerable for, Is guilty of a misdemeanor, and 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. (Judiciary Law § 487). As discussed more fully below, the judicial proceedings privilege does not serve to shield the testimony of Georgiana Slade in the Surrogate Court’s proceeding where she was representing the Estate because, as alleged, this testimony was not given to assist the truth seeking process and she was not merely a fact witness. In fact, as alleged, she was not merely a fact witness and her testimony was given to undermine the truth seeking process ( Oakes v Muka, 56 AD3d 1057, 1058 [3d Dept 2008]). To wit, the First Amended Complaint (the FAC; NYSCEF Doc. No. 59) alleges that defendant Ms. Slade deliberately and vindictively (i) abused her position to have plaintiff Ian Peck cut out of a certain portion of his inheritance and (ii) lied to a tribunal all to get even for her father (Jarvis Slade)’s loss of a $100,000 investment some years ago after entrusting the funds to Ian Peck. Stated differently, at bottom, the F AC alleges that Ms. Slade deceived (and intended to deceive) a court in the State of New York when she was acting as an attorney for the Estate. This is sufficient to make out a Judiciary Law § 487 claim and to articulate why the judicial proceedings privilege does not apply at this stage of the litigation.”

“Ms. Slade’s father, Jarvis Slade, and Ian Peck’s father, Norman Peck, were business partners (NYSCEF Doc. No. 59, ,i,i 23-27). One of their co-investments involved an investment in an Ian Peck venture. In that venture, Jarvis Slade lost $100,000. When Mr. Slade requested “special treatment” as to the return of his money, Ian Peck refused. (Id., ,i,i 30-31.) Mr. Slade apparently became angry and never wanted his family to do business with Ian Peck again (id., ,i 32). Ms. Slade was a trust and estates attorney who represented Norman Peck. In 2006, as alleged, Ms. Slade recommended changes to one of Norman Peck’s trusts that held certain co-investment interests with Mr. Slade (i.e., the Horseneck Trust). As a result of these recommended changes to the revocable Horseneck Trust, Ian Peck was removed as a beneficiary. (Id., ,i,i 42-43, 49-50.) According to the PAC, Ms. Slade did not disclose to Norman Peck her father’s alleged animus or her potential personal contingent interest in the same assets (id., ,i,i 45-47). Separate from the co-investments, and as relevant to the instant dispute, Norman Peck also lent Ian Pack various sums of money over the years. In connection with those loans, Ian Peck executed a number of notes (the Notes) evidencing his obligation for repayment. The plaintiffs allege that Norman Peck’s intent (as embodied in certain estate planning) was that the Notes would be forgiven at his death, rather than repaid out of Ian Peck’s inheritance (id., ,i,i 59-71). Norman Peck passed away on April 16, 2016. He left a Will, the Horseneck Trust, and The Norman L. Peck Revocable Trust (the Peck Trust). After Norman Peck’s death, the Peck Trust also became irrevocable and Ian Peck’s interest in it vested (id., ,i 71). Within two weeks of Norman Peck’s death, the defendants filed a probate petition in the Surrogate’s Court of New York County (id., ,i,i 75-76). Ms. Slade and Milbank (hereinafter defined) represented the Estate in the proceeding before that court. Ms. Slade did not disclose (i) the alleged animus her father (and she) held against Ian Peck, (ii) that she had allegedly abused her position as Norman Peck’s attorney to have Ian Peck cut out of the revocable Horseneck Trust, or (iii) that a 2016 amendment executed by Norman Peck impacted (i.e., impaired) the estate’s ability to collect on the Notes (id., ,i,i 71-79, 126-131). Ms. Slade submitted an affidavit in the Surrogate’s Court action on April 27, 2016 (id., ,i 74-75, 90; NYSCEF Doc. No. 88). Ian Peck maintained that the Notes were intended to be forgiven under his late father’s testamentary plan. The Estate however brought two separate actions to collect on the Notes on the Estate’s behalf pursuant to CPLR § 3213 which the Surrogate’s Court granted (NYSCEF Doc. No. 59, ,i,i 80117.) On appeal, the Appellate Division reversed holding that (i) the Notes were not the type of instrument that was subject to CPLR § 3213 and (ii) there are issues of fact as to whether the Notes are inconsistent with the estate plan (In the Matter of the Estate of Norman L. Peck v Ian S. Peck, Case No. 2019-04713 [1st Dept, February 16, 2021]; NYSCEF Doc. No. 93). On February 15, 2022, the defendants filed a notice in the Surrogate’s Court formally withdrawing as counsel of record (NYSCEF Doc. No. 59, ,i 123).”

“The defendants are not correct that they are entitled to dismissal of the Judiciary Law § 487 cause of action based on the judicial proceedings privilege. To further the public policy goal of permitting persons involved in a judicial proceeding to write and speak about it freely among themselves, pertinent statements made in the course of such proceedings are protected by the judicial proceedings privilege (Front, Inc. v Khalil, 24 NY3d 713 [2015]). Whether a statement is at all pertinent to the litigation is determined by an extremely liberal test, and any doubts are to be resolved in favor of pertinence (Casa de Meadows Inc. [Cayman Is.] v Zaman, 76 AD3d 917, 920 [1st Dept 2010]). The privilege is chiefly directed at protecting allegedly defamatory statements. Allowing such statements to be a basis for a defamation action “would be an impediment to justice, because it would hamper the search for truth and prevent making inquiries with that freedom and boldness which the welfare of society requires.” (Front, Inc. v Khalil, 24 NY3d 713, 718 [2015], citing Youmans v Smith, 153 NY 214,220 [1897].) The privilege does apply to causes of action other than defamation, but it does not apply to malpractice or malicious prosecution (Hadar v Pierce, 111 AD3d 439,440 [1 st Dept 2013]). The privilege may apply to a cause of action for breach of fiduciary duty that is based on allegations of defamation, but it does not apply when such cause of action does not exclusively rely on allegedly defamatory statements made in the course oflitigation (Fletcher v Dakota, Inc., 99 AD3d 43, 54-55 [1st Dept 2012]) or when the actions giving rise to the claim take place before the statement in question (Toaspern v LaDuca Law Firm LLP, 154 AD3d 1149, 1152 [3d Dept 2017]).”

Jones Law Firm, P.C. v Keep Healthy, Inc. 2024 NY Slip Op 32519(U) July 15, 2024 Supreme Court, New York County Docket Number: Index No. 653385/2023 Judge: Kathleen Waterman-Marshall is the story of a law firm which has a captive arbitration firm and requires arbitrations for attorney fee claims to be arbitrated before the captive arbitrator. Supreme Court permits this arrangement.

“Petitioner Jones Law Firm, P.C. (“Jones Law Firm”) seeks to confirm the arbitration award dated July 7, 2023 (the “Award”) (NYSCEF Doc. No. 5) and for costs associated with the underlying arbitration proceeding and this motion. Respondents Keep Healthy, Inc, FMF Corp, Harbor Park Realty, LLC, and Jacob Adoni (“Respondents”)1 oppose and cross-move to vacate the Award on the bases that: the arbitrator engaged in misconduct, the arbitrator was partial, the arbitrator exceeded her authority, and the Respondents were not notified of the arbitration proceeding. Alternatively, Respondents seek to modify the Award on the basis that there was a miscalculation of figures and a mistake in the corporate entities referred to in the Award.”

“The retainer agreements (“Retainer Agreements”) between Jones Law Firm and Respondents provide, in relevant part:

In the event a dispute should arise under this contract, including but not limited to disputes over payment fees [sic], malpractice claims, or defamation claims relating to representation, the Firm and Clients agree to resolve the dispute by binding arbitration through Professional Arbitration and Mediation LLC (“PAM”). (NYSCEF Doc. No. 3 at pp. 4-5 and 13-14).”

“Respondents contend that the arbitration proceeding was marred by partiality and improper conduct. Respondents allege that the professional relationship between Mr. Porges and Mr. Jones of Jones Law Firm tainted the proceedings. As evidence of this claim, Respondents cite Jones Law Firm’s offer to “front” the costs of arbitration as an improper payment to the arbitrator. Similarly, Respondents allege that the second arbitrator also engaged in improper conduct, as Respondents contend they never received any communication from PAM following Mr. Porges’ recusal, including notice that a second arbitrator had been assigned, that the second arbitrator “rushed, at light speed” to render the Award, and the second arbitrator committed numerous errors of law and fact in calculating the award.”

“Respondents have failed to establish any of the limited grounds for vacating the Award, as provided by CPLR 7 511. At bottom, Respondents were aware of the arbitration proceedings, defaulted in these proceedings, and were not entitled to additional notice prior to the issuance of the arbitration award. Contrary to Respondent’s claims, there is no evidence of improper conduct by the arbitrators, nor was the Award issued against improper or omitted parties. Finally, to the extent that Respondents allege the arbitrator committed errors in calculating the award, Respondent’s should have raised arguments surrounding appropriate credits and calculation before the arbitrator, as errors of fact are not a sufficient basis to vacate or modify the award. Accordingly, the cross-motion is denied and Court turns to Jones Law Firm’s petition to confirm the Award.”

Jones Law Firm, P.C. v J Synergy Green, Inc. 2024 NY Slip Op 31127(U) April 2, 2024 Supreme Court, New York County Docket Number: Index No. 653730/2023 Judge: Lyle E. Frank is a familiar attorney fee claim with a legal malpractice defense and counterclaim. More novel is the Judiciary Law 487 claim against Professional Arbitration and Mediation, LLC claiming a relationship between Plaintiff and the arbitration company. A Judiciary Law 487 third-party action is dismissed.

” The underlying action arises out of allegations that defendant/third-party plaintiff failed to pay plaintiffs legal fees as required by its engagement agreement. The third-party action and counterclaims arise out of the plaintiffs relationship with third-party defendants PAM and David Treyster, in that defendants/third-party plaintiffs were caused to suffer damages based on the failure to disclose the relationship. It is undisputed that at the time the engagement agreement was signed by plaintiff and defendants, plaintiffs principal had a 100% ownership interest in PAM. Prior to filing the instant motion, the defendants/third-party plaintiffs and PAM entered into a stipulation that withdrew all causes of action as against PAM with the exception of the first cause of action of fraud and fifth Counterclaim alleging conspiracy to violate Judiciary Law § 487.”

“The Court finds that here, similar to the plaintiffs in Connaughton, the third-party complaint and counterclaims fails to specify any compensable damages from PAM’ s alleged fraud. In opposition to P AMs motion the defendants/third-party plaintiffs contend that plaintiff and PAM are agents of one another and thus PAM is vicariously liable for the plaintiffs alleged fraudulent conduct. This argument however misses the mark and is also unsupported by specific factual allegations. The third-party complaint and counterclaims fail to allege a sufficient basis to pierce the corporate veil or any facts sufficient to support defendant/third-party plaintiffs’ contention that any alleged fraud caused any additional damages separate and apart from those incurred by the alleged fraudulent conduct of plaintiff.”

“Similarly, the Court agrees that because the third-party complaint fails to properly state a claim for an underlying tort there can be no conspiracy cause of action pursuant to Judiciary Law § 487 (Am. Preferred Prescription, Inc. v Health Mgt., 252 AD2d 414,416 [1st Dept 1998]).”

Morris v Zimmer 2024 NY Slip Op 02314 [227 AD3d 696] May 1, 2024
Appellate Division, Second Department appears to be a pro se litigation over unauthorized trading in a brokerage account. The case wended its way to US District Court, to the Second Circuit, to a certiorari request to the US Supreme Court, and thence back to state Supreme Courts in New York and Westchester.

The case ended with judgments, but claims for Judiciary Law 487 were denied and then lost.

“n or about 2000, the plaintiffs, Daniel Morris and Lucille Morris, retained the defendant, David Zimmer, an attorney then admitted to practice in Maryland, to represent them in a dispute regarding alleged unauthorized trading in their brokerage accounts. In 2004, a settlement was reached, and the defendant, as the plaintiffs’ attorney, received the settlement funds on their behalf. However, he failed to deliver those funds to the plaintiffs, in addition to other funds owed to them. In 2007, Daniel Morris filed a grievance complaint against the defendant with the Attorney Grievance Commission of Maryland. By order of the Court of Appeals of Maryland dated May 5, 2009, the defendant was disbarred by consent (see Attorney Grievance Commn. of Md. v Zimmer, 408 Md 486, 970 A2d 891 [2009]). The plaintiffs also alerted various law enforcement authorities of the defendant’s conduct. In 2009, the New York County District Attorney’s Office commenced a criminal action against the defendant, charging him with grand larceny in the second degree in violation of Penal Law § 155.40 (1). In May 2010, pursuant to the terms of a plea agreement, the defendant pleaded guilty to petit larceny in violation of Penal Law § 155.25 and was afforded the opportunity to replead to a lesser charge upon payment to the plaintiffs of the full amount owed. Although the defendant subsequently made a partial payment, he failed to pay the full amount owed and instead executed an affidavit of confession of judgment in the plaintiffs’ favor in the amount of $77,625.

In May 2010, days after the defendant pleaded guilty in the criminal action, the plaintiffs commenced an action against him, among others, in the United States District Court for the Southern District of New York (hereinafter the federal action). In the second amended complaint, the plaintiffs asserted causes of action alleging breach of contract, breach of fiduciary duty, fraud, conversion, and fraudulent misappropriation of funds stemming from the defendant’s failure to pay the plaintiffs the amount owed (see Morris v Zimmer, 2011 WL 5533339, *1, *6-8, 2011 US Dist LEXIS 130919, *1, *15-20 [SD NY, Nov. 10, 2011, No. 10 Civ 4146 (VB)]). The plaintiffs subsequently sought leave to amend the second amended complaint, inter alia, to add a cause of action pursuant to Judiciary Law § 487, but the District Court denied their request. The plaintiffs then moved for summary judgment on the second amended complaint insofar as asserted against the defendant. By memorandum decision dated March 21, 2014, the District Court, among other things, adopted a magistrate judge’s report and recommendation in its entirety and granted that branch of the plaintiffs’ motion which was for summary judgment on the issue of liability against the defendant, while also making certain determinations with regard to damages (see Morris v Zimmer, 2014 US Dist LEXIS 38640, *2-5 [SD NY, Mar. 21, 2014, No. 10 Civ 4146 (VB)], affd 637 Fed Appx 654 [2d Cir 2016]; see also Morris v Zimmer, 2014 WL 7474770, *5-6, 2014 US Dist LEXIS 39608, *14-19 [SD NY, Feb. 11, 2014, No. 10 Civ 4146 (VB) (LMS)]). On June 9, 2014, a judgment was entered, inter alia, in favor of the plaintiffs and against the defendant awarding damages in the principal sum of $92,625. The plaintiffs appealed from the judgment. By summary order dated February 5, 2016, the United States Court of Appeals for the Second Circuit affirmed the judgment (see Morris v Zimmer, 637 Fed Appx 654 [2d Cir 2016]). On October 3, 2016, the United States Supreme Court denied the plaintiffs’ petition for writ of certiorari (see Morris v Zimmer, 580 US 873 [2016]).”

“The plaintiffs’ various arguments in support of their contention that this action was not barred by the doctrine of res judicata are without merit. They assert, for example, that the judgment in the federal action did not have a preclusive effect on this action because federal courts lack jurisdiction over applications made pursuant to CPLR 3218. Putting aside the question of whether this fact, if true, would affect the res judicata analysis, no such jurisdictional impediment exists (see Alland v Consumers Credit Corp., 476 F2d 951, 952-955 [2d Cir 1973]; Xerox Corp. v West Coast Litho, Inc., 251 F Supp 3d 534, 537-538 [WD NY 2017]). Moreover, the plaintiffs’ assertion that the judgment in the federal action had no preclusive effect on the Judiciary Law § 487 cause of action, in particular, is without merit. Although the District Court denied their request for leave to amend their second amended complaint, inter alia, to assert such a cause of action, the doctrine of res judicata is nonetheless applicable. The plaintiffs chose the federal court as the forum to litigate their claims against the defendant, and they could have litigated the Judiciary Law § 487 cause of action in that forum if they had asserted it earlier (see Incredible Invs. Ltd. v Grenga, 125 AD3d 1362, 1363-1364 [2015]; Syncora Guar. Inc. v J.P. Morgan Sec. LLC, 110 AD3d 87, 91-92, 95 [2013]). Their contention that this cause of action was not yet ripe at the time they commenced the federal action because the defendant had not yet pleaded guilty is factually inaccurate, as he pleaded guilty days before they filed their original complaint. Regardless, a criminal conviction is not a condition precedent to a Judiciary Law § 487 cause of action (see Papa v 24 Caryl Ave. Realty Co., 23 AD3d 361, 362 [2005]; Laing v Cantor, 280 AD2d 519, 519 [2001]; Schindler v Issler & Schrage, 262 AD2d 226, 228 [1999]).“