After reading the competing claims in Cotton v Kiperman 2024 NY Slip Op 31435(U)
April 22, 2024 Supreme Court, Kings County Docket Number: Index No. 515660/2023
Judge: Francois A. Rivera we wonder how Surrogate’s Court came to its conclusion. In any event Supreme Court dismisses on res judicata.

“The complaint alleges the following salient facts, among other2. On March 17, 2021, plaintiffs retained the defendants, RI< Law P.C. and Regina Kiperman as counsel for the purpose of assisting the plaintiffs with certain issues relating to the Estate of Angelina A. Ditaranto. Plaintiffs wanted the defendants to help amend the Letters of Administration by removing any limitations, reverse an illegal transfer of5459,shates of AT&T stock by the former Voluntary Administrator Mary L. Banker held by Computershare’s Corp.; institute a turnover proceeding to recover dividends and interest collected by Mary L Banker over a JO-year period; recover certain assets held in HSBC Bank; and institute an action against TD Bank. Plaintiffs sought to sue TD Bank because it allowed the Medallion Stamp on the transfer documents of the 5459shares of AT&T stock and that allowed for the transfer from the plaintiffs·’ Computershare’s Account into the name of Mary L. Banker. Although the plaintiffs had advised the defendants that Keane Legal Claimant Services (hereinafter KLS) needed to be removed from the turnover as a defendant with Mary L Banker, the defendants kept including KLS on the turnover action. The . defendants· kept billing for the work of revising and reviewing their work on the same turnover document for approximately four months (March through August). The defendants still took another three months to get the turnover and evidence and documentation that plaintiff provided filed with the Court Part of the bills for the first four months listed above were adjusted only to have doubled for the next two months (June & July). For the next year Regina Kiperman and ,staff continued revising, reviewing, and modifying the same documents. The plaintiffs constantly emailed and called reminding Regina Kiperman of these discrepancies only to be ignored for months. The defendants kept charging for the documents and revisions and the defendants did not remove KLS for almost a year. The defendants overcharged for making phone calls. Defendant charged for a petition to amend letters of administration that plaintiff had been asking for; for over a year and a half. When it was completed, it was near the end of the case and no longer needed, but the defendants charged for it anyway. The plaintiff wanted TD & HSBC Bank’s to both he considered in the lawsuit with Computershares and Mary Banker. TD Bank illegally gave Mary Banker the Medallion Stamp. That is why TD Bank had to represent Computershares under an Indemnity agreement. Adding to the problem Bruce Goodman, the attorney for TD Bank, wanted money from the Estate to pay for representation When it was a manager of the Bank that illegally gave the Medallion Stamp for an illegal transfer of the deceased assets that caused this action and the action that plaintiff has been working on sin<::e March 2017.”

The Surrogate order of Judge Graham established the following. Regina
Kiperman, Esq. commenced a miscellaneous proceeding (hereinafter the miscellaneous
proceeding) seeking a deten11ination pursuant to SCPA § 2110, of legal fees, costs and
disbursements incurred in connection with her representation on behalf of the Joseph A, Costello, the Administrator, since her retention on or about March 17, 2021, through through July 2022. The Administrator objected to the attorney’s fees requested. The parties consented to the issues being decided by the Court on their submissions. Judge Graham found the following facts. A review of petitioner’s affirmation of legal services reveals that the firm reviewed the documents presented by the respondent and engaged with discussions with Computershare and counsel for Computershare. Thereafter, the firm filed the petition for turnover of assets and sought a restraining order against Computershare to prevent Computershare from transferring the assets to Mary in her individual capacify. Upon the signing of the order to show cause, the firm served the documents to the interested parties and then engaged in negotiations with Computershare, negotiations with TD Bank, attended multiple Court conferences, conducted conference calls with counsel, and conducted conference calls with respondent explaining the next steps in the matter, including the possibility of filing a judicial accounting. In respondent1 s objections, respondent alleges “overbilling” and that the firm worked on the 11 same turnover document for approx. four months (March thru Aug) and still took another three months” to file the documents with the Court. However, the Finn’s hours indicate that the Firm was drafting the petition on or about May 11, 2021, and the petition, along with the attorney affirmation and order to show cause were filed with the Court on or about July 21,.2021. This was a complex petition, which included multiple unauthorized stock transfers and eight years·. of improper dividends.”

“The Court has carefully reviewed the. services performed which included
drafting the petition for turnover of estate assets, extensive contact with
attorneys and attending multiple court conferences. The petitioner’s Firm was
able to settle the matter by stipulation and the respondent collected over 5,549
shares of ATT stocks,. 1,322 shares of Warner Brothers stock, and the unpaid
dividend checks that Computershare had bee ·accumulating. In addition, the
Court order directed that Mary return misappropriated funds to the Estate, and
if she failed to do so, judgment would be entered against Mary. The Court
notes the complexity of this matter, with the Voluntary Letters of’
Administration initially being issued to Mary 2011 and multiple unauthorized
transactions taking place since that time. It is notable that petitioner succeeded
in turning over the misappropriated assets from Mary to the Estate and raising
the limitations in the Letters from $10,000 to $200,000; this is primarily what
the petitioner was hired to accomplish. I tis therefore without question that
petitioners firm has ably represented the Administrator and increased the
value of the Estate.”

Halperin v Held & Hines, LLP 2024 NY Slip Op 31415(U) April 12, 2024
Supreme Court, New York County Docket Number: Index No. 652124/2019
Judge: Andrea Masley is another in a long line of New York legal malpractice cases arising from real estate troubles. Here, damages were deemed too speculative to proceed on the case.

“This matter arises from plaintiff Stephen R. Halperin3 and Jamie Berman
Halperin’s purchase of a one-bedroom apartment located at 32 West 20th Street,
Apartment 8S, New York, New York (Apartment) for $2,530,000. (NYSCEF 279,
Storgion4 Appraisal Report at 3-4;5 NYSCEF 278, Contract ,m 1.1.1, 1.16.) On March 9,
2017, the Halperins executed a contract of sale for the Apartment. (NYSCEF 278,
Contract.) The transaction closed on May 24, 2017. (NYSCEF 438, Response to Rule
19-a Statement ,I 2.) The HH defendants represented the Halperins in connection with
the transaction. ( See NYSCEF 278, Contract ,I 1.2.2; NYSCEF 273, Held’s 2/8/2017
email to Stephen.) The Douglas Elliman Defendants were the Halperins’ broker.
(NYSCEF 278, Contract ,I 1.5; NYSCEF 246, tr. At 22:5-11 [Stephen Depa].) Douglas
Elliman, by nonparties Matthew George and Michael Moran, was also the broker of the
sellers, Stephan Van Dam and Gail Pellett. (NYSCEF 278, Contract ,I,I 1.1.1, 1.5;
NYSCEF 248, tr. at 178:20-179:3 [Van Dam Depa].)”

“The premises adjacent to the Building7 are owned by Panasia Estate Inc.
(Panasia) and are known as 31-33 West 19th Street, Manhattan. (NYSCEF 383,
Mehta8 aff ,i 1; NYSCEF 424, 3/11/2019 32 West 20th Street Board’s Letter.) On March
11, 2019, the Building’s Board of Directors notified the Halperins that “[l]ast week we
received a letter from Panasia’s lawyers informing us that Panasia intended to construct
the two-story addition, with the penthouse …. Their construction … necessitates the
elimination of the lot line windows on the east side of the 7th and 8th floors.” (NYSCEF
424, 3/11/2019 Board’s Letter.) The Apartment is located on the eighth floor and hasthree easterly windows. (See NYSCEF 339, Briguet drawings at 3.) Thus, the
Apartment would be affected by Panasia’s construction. This action followed.
(NYSCEF 1, Complaint.)”

“On June 1, 2020, the Halperins filed an amended complaint alleging claims for
negligence and professional malpractice against the HH Defendants (third cause of
action), fraudulent misrepresentation (fourth cause of action), fraudulent concealment
(fifth cause of action), negligent misrepresentation (sixth cause of action), negligence
and professional malpractice (seventh cause of action), gross negligence (eighth cause
of action), and breach of fiduciary duty (ninth cause of action) against the Elliman
Defendants, and negligence and professional malpractice (tenth cause of action)
against Briguet.”

“”An action for legal malpractice requires proof of three elements: ( 1) that the
attorney was negligent; (2) that such negligence was a proximate cause of plaintiff’s
loss; and (3) proof of actual damages.” (Brooks v Lewin, 21 AD3d 731, 734 [1st Dept
2005] [citation omitted], Iv denied 6 NY3d 713 [2006].) The third element requires proof
of “actual and ascertainable” damages that are “clearly calculable.” (Gallet, Dreyer &
Berkey, LLP v Basile, 141 AD3d 405, 406 [1st Dept 2016] [internal quotation marks and
citation omitted].) A plaintiff cannot recover in tort for “for potential harm in the absence of actual injury.” (Niagara Mohawk Power Corp. v Ferranti-Packard Transformers, 201 AD2d 902, 903 [4th Dept 1994], Iv dismissed 83 NY2d 953 [1994].) Indeed, “it is upon injury that a legal right to relief arises in a tort action.” (Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994] [citations omitted].) “The threat of future harm, not yet realized, is not enough.” (/GEN, Inc. v White, 250 AD2d 463,465 [1st Dept 1998] [ citation omitted].)

The HH Defendants have made a prima facie showing of their entitlement to
judgment as a matter of law dismissing the amended complaint by submitting proof that the Halperins sustained no actual damages. In support of their motion, the HH
defendants proffer Jamie’s deposition testimony where she states that the lot-line
windows have not been blocked. (NYSCEF 247, tr. at 170:20-22 [Jamie depo].)
In response, the Halperins fail to raise an issue of fact as they submit no proof
that they sustained actual damages due to losing the lot-line windows. Any damages
that the Halperins may sustain in the future if the lot-line windows are lost are
speculative, and thus, cannot support legal malpractice claim as a matter of law.
(/GEN, Inc., 250 AD2d at 465; see also Gallet, Dreyer & Berkey, LLP, 141 AD3d at 406

[granting summary judgment dismissing a legal malpractice claim “where the asserted
damages are vague, unclear, or speculative” (citation omitted)].) Plaintiffs concede that
they have not lost the lot-line windows. (NYSCEF 438, Response to Rule 19-a
Statement ,i 10; NYSCEF 247, tr. At 170:20-22 [Jamie depo].) The mere fact that
Panasia spent $4 million dollars towards vertical expansion does not support the
Halperins’ claim of actual damages. (See NYSCEF 253, tr. at 39:16-41 :1 [Mehta
depo].)”

In Apollo Elec., Inc. v Aman Devs. LLC 2023 NY Slip Op 33466(U)
October 5, 2023 Supreme Court, New York County Docket Number: Index No. 155250/2019 Judge Debra A. James surveys the difference between breach of contract by an architect and malpractice by an architect.

The difference can have profound effects on the statute of limitations as well as on the calculation of damages.

” As for the first cause of action sounding in breach of contract against second third-party defendant AT Architects of the second third-party complaint, this court agrees with second third-party plaintiff that his allegations therein sound in breach of contract and not professional malpractice. As in Children’s Corner Learning Ctr v A Miranda Contr. Corp (64 AD3d 318, 324 [1 st Dept 2009]), “the damages sought [by second third-party plaintiff at bar] are economic only.” Second third-party plaintiff does not seek, for example, “the cost to repair the defects or the difference in value between a properly
constructed structure and that which was in fact built”, which is the measure of damages for architectural malpractice (Brushton-Moira Cent. School Dist. v Thomas Assoc., 91 NY2d 256, 262 [1998]). On that basis, second third party plaintiff is correct that the six-year statute of limitations for breach of contract (CPLR § 213) applies to such claim. As the second third party action was commenced on September 15, 2022, any claims against second third-party defendant that accrued before September 14, 2016, are untimely. However, this court agrees with second third party plaintiff that second third-party defendant has not irrefutably established the accrual date of
such claim, i.e., the date of completion of the actual physical work (see State v Lundin, 60 NY2d 987 [1983]). As contended by second third-party plaintiff, this court holds that the invoice dated April 24, 2017, proffered by second third party defendant, does not irrefutably establish the date on which second thirdparty defendant fulfilled its contractual obligations (see Reiver v Burkhart Wexler & Hirschberg, LLP, 73 AD3d 1149, 1150- 1151 [2nd Dept 2010] [invoices sent by defendant law firm to plaintiff did not constitute irrefutable documentary evidence that defeated plaintiff’s claim of breach of fiduciary duty by charge of excessive legal fees]).”

Incorporated Vil. of Freeport v Albrecht, Viggiano, Zurich & Co., P.C. 2024 NY Slip Op 01800 Decided on April 3, 2024 Appellate Division, Second Department is the one-in-a-million summary judgment for plaintiff in a professional negligence case.

“The plaintiff commenced this action, inter alia, to recover damages for accounting malpractice against the defendants, Albrecht, Viggiano, Zurich & Company, P.C., Robert McGrath, and Patrick Bryan (hereinafter collectively the defendants), an accounting firm and individual accountants at that firm. The defendants provided the plaintiff with certain financial services for more than 10 years and were retained to audit the plaintiff’s financial statements for the year ending February 28, 2013 (hereinafter the 2013 audit). As a result of alleged material errors in the 2013 audit, the plaintiff received a negative outlook from a company providing, among other things, opinions of the relative future credit risk of entities, Moody’s Investor Service (hereinafter Moody’s), which caused the plaintiff to incur increased borrowing costs, hire additional staff to correct the errors, and sell certain property in order to receive an improved Moody’s rating. Following the completion of discovery, the defendants moved for summary judgment dismissing the second amended complaint. The plaintiff opposed the motion and cross-moved, inter alia, for summary judgment on the issue of liability on the first cause of action, alleging accounting malpractice. By order entered June 2, 2020, the Supreme Court, among other things, denied the defendants’ motion for summary judgment dismissing the second amended complaint and granted that branch of the plaintiff’s cross-motion which was for summary judgment on the issue of liability on the first cause [*2]of action. The defendants appeal.”

“

However, the Supreme Court should have granted those branches of the defendants’ motion which were for summary judgment dismissing the third, fourth, and sixth causes of action. The third and fourth causes of action, alleging fraud and conspiracy to commit fraud, respectively, are duplicative of the accounting malpractice and breach of contract causes of action, since they arise from the same facts as those underlying the accounting malpractice and breach of contract causes of action and do not allege distinct damages (see Mackey Reed Elec., Inc. v Morrone & Assoc., P.C., 125 AD3d 822, 823; Biberaj v Acocella, 120 AD3d 1285, 1287; see also Goldner v Possilico, 7 AD3d 666, 669). The sixth cause of action, alleging unjust enrichment, is similarly duplicative (see Philip S. Schwartzman, Inc. v Pliskin, Rubano, Baum & Vitulli, 215 AD3d 699, 702). Further, the unjust enrichment cause of action is subject to dismissal because the conduct at issue was governed by a written contract. As a general rule, the existence of a valid and enforceable contract governing a particular subject matter precludes recovery in quasi-contract on a theory of unjust enrichment for events arising out of the same subject matter (see Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 572; Yenrab, Inc. v 794 Linden Realty, LLC, 68 AD3d 755, 758; see also Donenfeld v Brilliant Tech. Corp., 96 AD3d 616, 617).

The Supreme Court properly granted that branch of the plaintiff’s cross-motion which was for summary judgment on the issue of liability on the first cause of action, alleging accounting malpractice. “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” (Alskom Realty, LLC v Baranik, 189 AD3d 745, 747; see Kristina Denise Enters., Inc. v Arnold, 41 AD3d 788, 788). Although summary judgment is not appropriate in a malpractice action where the parties submit conflicting expert opinions, “expert opinions that are conclusory, speculative, or unsupported by the record are insufficient to raise triable issues of fact” (Longhi v Lewit, 187 AD3d 873, 877 [internal quotation marks omitted]; see Lowe v Japal, 170 AD3d 701, 702). “In order not to be considered speculative or conclusory, expert opinions in opposition should address specific assertions made by the movant’s experts, setting forth an explanation of the reasoning and relying on specifically cited evidence in the record” (Longhi v Lewit, 187 AD3d at 878 [internal quotation marks omitted]; Lowe v Japal, 170 AD3d at 703).

Here, the plaintiff satisfied its prima facie burden by submitting, among other things, the affidavit and report of an accounting expert, Matt Rogers. Specifically, Rogers opined that the defendants departed from the generally accepted auditing standards, generally accepted government auditing standards, and accepted standards of practice during the 2013 audit by failing to date and perform subsequent events procedures with respect to the second and third reissued versions of their audit report; failing to evaluate, audit evidence, and document support relating to the PILOT receivable and related revenue; and failing to perform procedures, obtain sufficient evidence, and [*3]prepare documentation relating to accounts payable. In opposition, the defendants failed to raise a triable issue of fact. The report of the defendants’ accounting expert, Vincent J. Love, did not address the specific assertions made by Rogers (see Longhi v Lewit, 187 AD3d at 878).”

Rothman v Sandra Radna, P.C. 2024 NY Slip Op 02102 Decided on April 18, 2024
Appellate Division, First Department demonstrates that there are many procedural traps which can doom a later legal malpractice claim. In this setting, a stipulation collaterally estopped Plaintiff from suing the attorneys later.

“Plaintiff previously litigated whether defendants were entitled to a fee in her matrimonial action. As one basis for her motion to vacate defendants’ charging lien, plaintiff asserted that the failure of defendants to present expert evidence regarding domestic abuse and the valuation of the family’s closely held company constituted malpractice. An evidentiary hearing was directed on the motion, during which plaintiff agreed by stipulation to withdraw her motion to vacate the charging lien with prejudice and to authorize the fee at issue to be withdrawn from counsel’s Divorce IOLA account. However, in her amended complaint in this action, plaintiff reasserted that same claim for malpractice. Where a client has challenged and lost on the issue of whether counsel is entitled to a fee, that determination collaterally estops a subsequent claim for legal malpractice (Koppelman v Liddle, O’Connor, Finkelstein & Robinson, 246 AD2d 365, 366 [1st Dept 1998]). That the matter was resolved by stipulation does not make a difference. It is generally presumed that a withdrawal made “with prejudice” has preclusive effect (see North Shore-Long Is. Jewish Health Sys., Inc. v Aetna US Healthcare, Inc., 27 AD3d 439, 440 [2d Dept 2006]).”

A common thread to legal malpractice litigation in New York is real estate, and not coincidentally, landlord-tenant issues. Often these cases involve multi-million dollar losses. SJB RE Holdings, LLC v Gifford 2024 NY Slip Op 30924(U) March 21, 2024
Supreme Court, Saratoga County Docket Number: Index No. EF20233420 Judge: Richard A. Kupferman is an upstate cousin to the more familiar downstate real estate legal malpractice cases. It involves 3M hooks on the wall, changing light fixtures and flushing “feminine hygiene products down the toilet.”

“Plaintiffs filed a verified complaint against Defendants on December 5, 2023. The first
four causes of action in the complaint are against Defendants Ryan Gifford and Gabrielle Gifford (the “Giffords”) for breach of contract, negligence, gross negligence, and tortious interference. These claims allege that the Giffords (tenants) breached a lease agreement by engaging in conduct prohibited under the terms of the lease and that they further caused damage by flushing feminine hygiene products down the toilet.

The remaining two claims in the complaint (the fifth and sixth causes of action) are asserted against the Giffords and their litigation counsel, Defendant, Terence J. Devine (“Devine”). These claims are based on statements that Devine made on the record during a court proceeding in the Waterford Town Court. The fifth cause of action is for defamation and seeks $1,000,000 in punitive damages, while the sixth cause of action seeks to recover monetary damages under Judiciary Law§ 487.”

“As is readily apparent, the statements complained of were made in open court and
challenged the basis for Better’s retention of the security deposit and the charges for repairs. Such statements were absolutely pertinent to the litigation and, as such, are privileged (see id.; Gill v Dougherty, 188 AD3d 1008, 1010 [2d Dept 2020] [“The cause of action alleging defamation failed because the challenged statements were absolutely privileged as a matter of law and cannot be the basis for a defamation action”]).

The allegations in the pleading and opposition papers similarly fail to allege sufficient facts to state a cause of action under Judiciary Law § 487. 1 Even when viewed in the light most favorable to the Plaintiffs, the statements made by Devine were not deceitful in any manner at all (see Gill, 188 AD3d at 1009). In fact, it is readily apparent that under no circumstances could a reasonable person conclude that Devine accused Better of any crime or engaged in any attorney misconduct.

Accordingly, the Court finds that the complaint ( even as amended) fails to state a cause of action for defamation, slander, and/or a violation of the Judiciary Law. The fifth and sixth causes of action are therefore DISMISSED.”

1650 Broadway Assoc., Inc. v Sturm 2024 NY Slip Op 01864 Decided on April 04, 2024
Appellate Division, First Department Renwick, P.J. is the story of a Diner, a Family and Fraud.

“Plaintiff 1650 Broadway Associates, Inc. is the owner of the iconic Stardust Diner, a family business originally owned by Irving Sturm and plaintiff Ellen Sturm, and then in part by their son, defendant Kenneth Sturm. At all relevant times, Ellen, along with the two trust plaintiffs, together owned 89% of the Diner, and Kenneth owned 11%. After Irving’s death in 2010, Kenneth assumed day-to-day managerial responsibility for the Diner. Ellen was vice-president of the Diner, while Kenneth served as secretary and treasurer.

Plaintiffs allege that when Ellen stepped back from active operations of the Diner, Kenneth began looting the Diner. In particular, he gave himself large salary increases and, most damaging, he began to take unauthorized loans from the Diner. Over the course of several years, these loans amounted to some $12 million. Plaintiffs also allege that in 2016 and 2017, Kenneth obtained a $2.5 million line of credit from Citibank. Kenneth forged Ellen’s signature on loan documents that made Ellen the personal guarantor on the loans. The books and records of the Diner reflected the loans. They also reflected certain “reductions” in the amounts of the loans. Plaintiffs, however, allege that the records purporting to show the reductions were manufactured after the fact by Kenneth.

Defendant Getzel, Schiff & Pesce, LLP (defendant) is a public accounting firm. For a period including 2012 through 2019, defendant performed certain accounting services for plaintiffs, the Diner, and Kenneth. It provided these services through a series of year-after-year engagement letters. Under the terms of these letters, for each of the relevant years, defendant agreed to provide “compilation services” and to prepare the local, state, and federal tax returns for the clients. Between 2002 and 2008, defendant’s managing partner had annual meetings with Ellen at her home, during which the partner provided her only broad summary of the Diner’s finances but never disclosed any details about the Diner’s accounting, books and records.

In 2019, Ellen hired new personal accountants who uncovered the loans to Kenneth. Apparently, in addition to taking the money for himself, Kenneth also used the “loan” proceeds to finance various other business ventures. Plaintiffs allege that defendant was the accountant to these other businesses.”

“Plaintiffs sufficiently pleaded causes of action for accounting malpractice and aiding and abetting fraud, which are not utterly refuted by the documentary evidence.

“A party alleging a claim of accountant malpractice must show that there was a departure from the accepted standards of practice and that the departure was a proximate cause of the injury” (KBL, LLP v Community Counseling & Mediation Servs., 123 AD3d 488, 488 [1st Dept 2014]). A plaintiff alleging an aiding and abetting fraud claim must allege the existence of the underlying fraud, actual knowledge, and substantial assistance (see Oster v Kirschner, 77 AD3d 51, 55 [1st Dept 2010]).

Defendant makes no contention that the claims of accounting malpractice and aiding and abetting fraud by Kenneth are not sufficiently pleaded. Instead, defendant primarily argues that the malpractice and fraud claims are refuted by the fact that the accounting firm was hired to prepare tax returns and other financial statements that documented the loans at issue, and thus that investigating and reporting Kenneth’s alleged fraud were beyond its duties.

Plaintiffs’ claims, however, are not that defendant was hired to discover Kenneth’s wrongdoing, but rather [*3]that information obtained by defendant during its business interactions with Kenneth and information used by defendant in order to prepare tax returns and financial statements put defendant on notice about the impropriety of Kenneth’s loans to himself such that defendant had a duty to inform plaintiffs of the questionable payments. The law is very clear that an agreement to perform unaudited services does not shield an accountant from liability because an accountant must perform all services in accordance with the standard of a reasonable accountant under similar circumstances, which includes reporting fraud that is or should be apparent (see 1136 Tenants’ Corp. v Rothenberg & Co., 36 AD2d 804 [1st Dept 1971], affd 30 NY2d 585 [1972]; see also William Iselin & Co., Inc. v Mann Judd Landau, 71 NY2d 420, 424-425 [1988]; United States v Natelli, 527 F2d 311, 320-321 [2d Cir 1975], cert denied 425 US 934 [1976]; Blakely v Lisac, 357 F Supp 255, 265-266 [D Or 1972]; Robert Wooler Co. v Fidelity Bank, 330 Pa Super 523, 531-535, 479 A2d 1027, 1031-1033 [1984]).

In addition, “[o]ne who aids and abets a breach of a fiduciary duty is liable for that breach as well, even if he or she had no independent fiduciary obligation to the allegedly injured party, if the alleged aider and abettor rendered ‘substantial assistance’ to the fiduciary in the course of effecting the alleged breaches of duty” (Caprer v Nussbaum, 36 AD3d 176, 193 [2d Dept 2006] [Where “the accountants had complete knowledge of the misuse of condominium funds, and were indispensable to the board-member defendants in their efforts to conceal the misuse of those funds, the accountants may be held liable for aiding and abetting the breach of fiduciary duty by the board-member defendants”]; see also Operative Cake Corp. v Nassour, 21 AD3d 1020 [2d Dept 2005]). In this case, it is alleged not only that the accountant had knowledge of Kenneth’s alleged improper transactions but that he participated in the alleged breaches.”

“Accordingly, the order of the Supreme Court, [*4]New York County (Andrew Borrok, J.), entered April 26, 2023, which, insofar as appealed from, granted defendant Getzel Schiff & Pesce, LLP’s motion to dismiss, should be reversed, on the law, without costs, and the motion denied.”

Now that Urias v. Buttafuoco, has been decided by the Court of Appeals would Gelwan v De Ratafia 2023 NY Slip Op 32953(U) August 25, 2023 Supreme Court, New York County
Docket Number: Index No. 654525/2016 Judge: David B. Cohen have been decided differently as to the Judiciary Law 487 claim?

In Urias, the Court of Appeals held ” Not only does the text of the provision suggest that a plenary action is available in all instances of attorney deceit, but section 487’s long lineage also confirms that conclusion. The cause of action was descended from the first Statute of Westminster adopted in England in 1275, incorporated in New York’s earliest common law, and first codified in this State in a 1787 statute that closely tracks the current provision (see Melcher v Greenberg Traurig, LLP, 23 NY3d 10, 14-15 [2014]; Amalfitano, 12 NY3d at 12). Its legislative history reflects a consistent view, taken over centuries, that attorney deceit in the course of litigation warrants substantial penalties—both criminal liability and treble damages. By comparison, CPLR 5015 offers a discretionary remedy that includes “restitution in like manner and subject to the same conditions as where a judgment is reversed or modified on appeal” (CPLR 5015 [d]). Such relief is markedly different from that authorized by section 487, and we decline to confine a plaintiff alleging attorney deceit to the sole option of proceeding under CPLR 5015.

We appreciate that it might be more efficient to require a plaintiff who either directly or effectively challenges a judgment to return to the court that issued it and seek vacatur under CPLR 5015, and we note that transfer of a plenary action to the court that handled the underlying proceedings may be desirable where consistent with the CPLR’s venue provisions. Nor do we take lightly the interest in preserving the finality of judgments. But the legislature has singled out the specific type of claim here—an allegation of attorney deceit on the court or a party—and determined that recovery of treble damages should be available in a civil action. We conclude that section 487 must be read to allow a plenary action for deceit, even where success on that claim might undermine a separate final judgment.”

In Gelwan, the court held:

“This action arises out of an incident which took place in 2011, the specific details of
which are not directly relevant to these motions. Plaintiffs Gelwan and Backer were retained by defendants De Ratafia and Ackroyd (De Ratafia parties) to represent them in a federal civil rights action in the Northern District of New York arising out of the incident (De Ratafia v Hyson, US Dist Ct, ND NY, 13 Civ 174, Mordue, J., 2014 [federal action]).
The retainer agreement is written on Backer’s letterhead, and provides that the De Ratafia parties have retained Backer’s firm, as well as Gelwan as “of counsel,” to commence and prosecute the federal lawsuit, and that they have agreed to pay a 40 percent contingency fee, which Backer would share equally with Gelwan (NYSCEF 18).”

“Judiciary Law § 487(1) provides that it is a misdemeanor for, and creates liability for
treble damages against, an attorney who is “guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.”
As Gelwan was not a party in the federal action ( Gelmin v Quicke, 224 AD2d 481 [2d Dept 1996] [“party” refers to party in action]), and as the alleged misconduct occurred during the federal action and not here ( Chibcha Rest., Inc. v David A. Kaminsky & Assoc., P.C., 102 AD3d 544 [1st Dept 2013] [claim must be brought in action in which alleged misconduct occurred]), Gelwan does not state a claim for a violation of Judiciary
Law§ 487.”