Commercial Division Blog

Posted: January 29, 2016 / Categories Commercial, Law Firms and Professional Ethics, Sanctions

Judiciary Law Section 487 Claims Allowed in Separate Action

On January 19, 2016, the First Department issued a decision in Melcher v. Greenberg Traurig LLP, 2016 NY Slip Op. 00274, holding that a Judiciary Law Section 487 claim may be brought in a separate action.

In Melcher, the plaintiff brought a Judiciary Law Section 487 claim "alleging that defendants had engaged in deceitful and collusive conduct during their representation of" parties adverse to the plaintiff in an earlier action. The trial court rejected the defendants' argument that the claim must be dismissed because a Section 487 claim must be brought in the action in which the misconduct allegedly occurred. The First Department affirmed, explaining:

Judiciary Law § 487(1) provides, among other things, that 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 forfeits to the party injured treble damages, to be recovered in a civil action. A plaintiff may bring an action to recover damages for attorney deceit regardless of whether the attorney's deceit was successful. Further, the plaintiff in a section 487 case may recover the legal expenses incurred as a proximate result of a material misrepresentation in a prior action.

. . .

In contrast to the situations in the cases on which defendants rely, [the plaintiff] does not, in fact, seek by this action to collaterally attack any prior adverse judgment or order on the ground that it was procured by fraud; if that were the case, the appropriate remedy generally would be to seek vacatur under CPLR 5015. Instead, plaintiff here seeks to recover lost time value of money and the excess legal expenses incurred in the Apollo action as a proximate result of defendants' alleged deceit; this course of action is permissible in a separate action under the Judiciary Law.

The language of section 487 supports this conclusion, because that section does not require that the claim be asserted in the same action in which the violation occurred. Rather, the section simply provides that an attorney who has practiced a deception will be liable for treble damages to be recovered in a civil action. In fact, a court may not grant a motion for leave to amend a complaint to add a section 487 claim in the action in which the violation occurs, particularly if adding that claim would require the disqualification of counsel and prejudice the defendant's right to be represented by attorneys of its choice. Those very concerns would, in fact, have been present in this case.

(Internal quotations and citations omitted).