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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: April 6, 2021

Release Did Not Bar Judiciary Law 487 Claim

On March 25, 2021, the First Department issued a decision in United States Life Ins. Co. in the City of N.Y. v. Horowitz, 2021 NY Slip Op. 01877, holding that a release did not bar a Judiciary Law Section 487 claim, explaining:

Judiciary Law § 487(1) provides 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 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 does not require a showing of detrimental reliance. Contrary to the holding in Blum v Perlstein (47 AD3d 741 [2d Dept 2008] ) which cited to this Court’s decisions in Berkowitz v Fischbein, Badillo, Wagner & Harding (7 AD3d 385 [1st Dept 2004]) and Argyle Capital Mgt. Corp. v Lowenthal, Landau, Fischer & Bring (261 AD2d 282 [1st Dept 1999]), none of which dealt with a violation of Judiciary Law § 487, a decision we decline to follow because Judiciary Law § 487 is a statute that has its origins in the penal law and its intent is to enforce an attorney’s special obligation to protect the integrity of the courts and foster their truth seeking function, here, the release did not bar plaintiff’s claim under Judiciary Law § 487. Here, the deceit and collusion were in obtaining the settlement and release. Plaintiff’s claim alleges deceitful conduct in the Kings County action where the attorney-defendants purportedly bribed a nonparty witness (by giving him cash and a Rolex watch) to make false statements that they later presented to plaintiff to exact a favorable settlement and obtain a release. Furthermore, the release covers only claims that could have been asserted in connection with the policy and those claims that were known to it at the time. Since it is alleged that the attorney-defendants violated Judiciary Law § 487, and engaged in a separate fraud from the subject of the release, the motion to dismiss plaintiff’s claims against the attorney-defendants for violation of Judiciary Law § 487(1) was properly denied.

(Internal quotations and citations omitted).

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