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Posted: May 26, 2015

Judiciary Law s. 487 Claim Can be Brought in Subsequent Action

On May 18, 2015, Justice Sherwood of the New York County Commercial Division issued a decision in Melcher v. Greenberg Traurig LLP, 2015 NY Slip Op. 30855(U), holding that a Judiciary Law s. 487 claim could be brought in an action other than the one in which the alleged misconduct occurred.

In Melcher, the plaintiff brought an action against the defendant law firm alleging violations of Judiciary Law Section 487. The law firm moved for summary judgment, arguing, among other things, that the plaintiff could not bring a Section 487 claim in a separate action. The court acknowledged that the courts have issued inconsistent decisions on this question, but ultimately refused to grant summary judgment based on this explaining:

Defendants argue that this action is barred by New York’s rule against claim splitting, citing Alliance Network LLC v Sidley Austin LLP, 43 Misc 3d 848 (Sup Ct, New York County 2014) (“The First Department has held that a party’s remedy for a violation of Section 487 stemming from an attorney’s actions in a litigation ‘lies exclusively in that lawsuit itself, . . . not a second plenary action”‘) quoting Yalkowsky v Century Apartments Assoc., 215 AD2d 214, 215 (1st Dept 1995). [The plaintiff] argues otherwise, relying on Amalfitano v Rosenberg, 12 NY3d 8 (2009) and Melcher v Greenberg Traurig, LLP, 23 NY3d 10, 15 (2014) (allowing this litigation to proceed and reversing the First Department decision granting a motion to dismiss on statute of limitations grounds).

In Alliance Network, Justice Bransten noted that the plaintiffs were filing motions for contempt, seeking to enforce an allegedly breached stipulation and raising allegations of deceit, and so should have sought their remedies in the cases in which the wrongdoing allegedly was committed. In reaching her decision, Justice Bransten relied on Yalkowsky, a case in which the plaintiff was seeking to collaterally attack an order of eviction issued by the Civil Court. In reaching its decision, the First Department explained that if the plaintiffs allegations were true, and the defendant attorney had made the false statements to the Civil Court, plaintiffs remedy lies exclusively in that lawsuit itself, i.e., by moving pursuant to CPLR 5015 to vacate the civil judgment due to its fraudulent procurement, not a second plenary action collaterally attacking the judgment in the original action. Justice Bransten also relied on Chibcha Restaurant Inc. v David A. Kaminsky & Assoc., P.C. (102 AD 3d 544 [1st Dept 2013]), and Seldon v Spinnell (95 AD3d 779 [1st Dept 2012]). The former case, like Yalkowsky, involved a collateral attack on a Civil Court Judgment. In the latter, the defendant was a party in the underlying action, rather than counsel, and Judiciary Law § 487 applies only to attorneys acting as such. It does not apply to parties in an action who also happen to be attorneys. Thus, none of the cases on which the decision in Alliance Network relies applies. Here, [the plaintiff] is not seeking to attack the judgment in the original action. He won that case. Now, [the plaintiff] is seeking damages for injuries he allegedly suffered due to alleged deceits committed in the Apollo Action. He is not seeking to collaterally attack the judgment in the Apollo Action. His claim in this case is not barred (see Kurman v. Schnapp, 73 AD3d 435 [1st Dept 2010]; Barrows v. Alexander, 78 AD3d 1693 [4th Dept 2010] [recognizing Judiciary Law § 487 cause of action in Kurman because the record in that case establishes that the defendant was acting in his capacity as an attorney when he engaged in the alleged deceitful conduct]; Pomerance v. McGrath, 124 AD3d 481, 485 [1st Dept 2015] [not improper for plaintiff to bring a Judiciary Law § 487 claim in this action even though it is based on alleged deceit in a prior action]; Chevron Corp. v. Danziger, 871 F Supp 2d 229, 261 [SDNY 2012] [denying motion to dismiss subsequent Judiciary Law § 487 claim for damages]; and Dupree v. Voorhees, 24 Misc 3d 396, 402 [Sup Ct, Suffolk County 2009].

(Some internal quotations and citations omitted). The decision here tries to reconcile conflicting decisions. This seems like a conflict that should be resolved by the Court of Appeals.

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