Commercial Litigation and Arbitration

New York Judiciary Law § 487 Not Limited to Attorney Misconduct in Courts within the State of New York — Second Circuit Limitation Rejected by Bronx Supreme

From Cinao v. Reers, 2010 NY Slip Op 20006, 2010 N.Y. Misc. LEXIS 30 (Jan. 14, 2010):

Judiciary Law § 487 "descends from the first Statute of Westminster, which was adopted by the Parliament summoned by King Edward I of England in 1275." (See Amalfitano v Rosenberg, 12 NY3d 8, 12 [2009].) The statute reads in its entirety:

§ 487. Misconduct by Attorneys

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.

"A violation of Judiciary Law § 487 (1) may be established either by the defendant's alleged deceit or by an alleged chronic, extreme pattern of legal delinquency by the defendant'." (Boglia v Greenberg, 63 AD3d 973, 975 [2d Dept 2009] [quoting Knecht v Tusa, 15 AD3d 626, 627 (2d Dept 2005)].) ***

In the absence of prejudice or surprise, the complaint in an action for legal malpractice may be amended unless the amendment is "patently devoid of merit." (See McCluskey v Gabor & Gabor, 61 AD3d 646, 648 [2d Dept 2009].) "This means that . . . the motion for leave to amend will be denied, in the absence of prejudice or surprise, only if the new cause of action would not withstand a motion to dismiss under CPLR 3211 (a) (7)." (Lucido v Mancuso, 49 AD3d 220, 242 [2d Dept 2008].)

Although Defendant asserts prejudice and surprise, the only specific offered is that the proposed Judiciary Law § 487 claim is "a transparent attempt to gain leverage for the purpose of settlement" *** But that is not the type of prejudice or "surprise" that would warrant denial of leave to amend.

*** The possibility of treble damage liability alone is not sufficient to warrant denial of leave to amend.

Defendant also contends, however, that *** "such claim is patently devoid of merit as Judiciary Law § 487 applies only to actions by an attorney in matters pending in the courts of New York." ***

Based as it is on a line of judicial decisions, beginning with the Second Circuit's decision in Schertenleib v Traum (589 F2d 1156 [2d Cir 1978]), Defendant's most serious objection to Plaintiff's motion is that Judiciary Law § 487 applies only to misconduct by attorneys in connection with proceedings pending in New York courts. As stated by the Second Circuit:

"[S]ection 487 . . . is . . . intended to regulate, through criminal and civil sanctions, the conduct of litigation before the New York courts. We doubt it was the purpose of the New York legislature to fasten on its attorneys criminal liability and punitive damages for acts occurring outside the state. It seems more likely that the concern is for the integrity of the truth-seeking processes of the New York courts, not for injury to foreign litigants." (Id. at 1166.)

No authority or other source is cited by the court for its understanding of the New York Legislature's intent as to the scope of Judiciary Law § 487. Schertenleib was relied upon by a federal district court in dismissing a § 487 claim based upon a restraining order obtained from a federal district court in Florida, stating that "Section 487 only applies to conduct within the borders of New York State" (see Papworth v Steel Hector & Davis, 2007 US Dist LEXIS 72864, * 33 [NDNY 2007]; see also Nardella v Braff, 621 F Supp 1170, 1172 [SDNY 1985].) The subsequent decisions by federal courts have not added to Schertenleib's rationale.

Schertenleib has been relied upon in one New York state court decision. Civil Court held in Southern Blvd. Sound v Felix Storch Inc. (165 Misc 2d 341 [Civ Ct, NY County 1995], mod. on other grounds 167 Misc 2d 731 [App Term, 1st Dept 1996]) that "Judiciary Law § 487 (1) does not apply to acts committed in courts of States other than the State of New York" (see id. at 344), offering the following rationale:

"If the Legislature wanted to regulate the behavior of New York State attorneys in courts other than those of our State, it would have had to have been more specific or have stated any court' in Judiciary Law § 487 (1). The use of the term the court' means a court of the State of New York." (Id.)

Civil Court's reading may be even narrower that the Second Circuit's if understood as precluding applicability of the statute to deceit on a federal court sitting in New York. In any event, this Court respectfully disagrees if either court would refuse to apply the statute here for the sole reason that the allegations relate to proceedings pending in a Hawaii court and not a court sitting in New York.

The statute itself states no such limitation. "The statutory text is the clearest indicator of legislative intent." (Maraia v Orange Regional Med. Ctr.,63 AD3d 1113, 1116 [2d Dept 2009] [internal quotation marks and citations omitted].) "[A] court cannot amend a statute by inserting words that are not there, nor will a court read into a statute a provision which the Legislature did not see fit to enact." (Matter of Charles S., 60 AD3d 954, 955 [2d Dept 2009] [internal quotation marks and citations omitted].)

"[T]he statute's evident intent [is] to enforce an attorney's special obligation to protect the integrity of the courts and foster their truth-seeking function" (see Amalfitano v Rosenberg, 12 NY3d at 14), with a related "concern for curbing and providing redress for attorney overreaching vis-a-vis clients" (see Liddle & Robinson v Shoemaker, 276 AD2d 335, 336 [1st Dept 2000].) The first New York statute on the subject, adopted in 1787, provided redress for attorney deceit or collusion "in any court of justice." (See Amalfitano v Rosenberg, 12 NY3d at 12 [quoting L 1787, ch 36, § 5] [emphasis added].)

Generally, Judiciary Law § 487 "applies only to wrongful conduct by an attorney in an action that is actually pending." (See Mahler v Campagna, 60 AD2d 1009, 1012 [2d Dept 2009].) "Where the deception is directed against a court, a pending judicial proceeding is not required; it is sufficient if the deception relates to a prior judicial proceeding or one which may be commenced in the future." (Singer v Whitman & Ransom, 82 AD2d 862, 863 [2d Dept 1981]; see also Costalas v Amalfitano, 305 AD2d 202, 204 [1st Dept 2003]; Hansen v Caffry, 280 AD2d 704, 705 [3d Dept 2001].) "Deception of a court is not confined to the actual appearance in court but has reference to any statement, oral or written, made with regard to a proceeding brought or to be brought therein and communicated to the court with intent to deceive." (Fields v Turner, 1 Misc 2d 679, 681 [Sup Ct, NY County 1955]; see also Amalfitano v Rosenberg, 533 F3d 117, 123 [2d Cir 2008].)

The limitation, in the case of deceit of a party, to a pending proceeding was first articulated by the Court of Appeals more than a century ago in Loof v Lawton (97 NY 478 [1884].) "The party' referred to is clearly a party to an action pending in a court in reference to which the deceit is practiced, and not a person outside, not connected with the same at the time or with the court." (Id. at 482.) "In placing a construction upon the section cited," a predecessor to Judiciary Law § 487, "we should consider its provisions in connection with others which relate to the same general subject, and in view of the object to be attained." (Id. at 481-82.)

With respect to Supreme Court's ruling in Southern Blvd. Sound (165 Misc 3d 341), there is nothing in Judiciary Law § 487 that would limit its applicability to deceit practiced on a court sitting in New York, and a limitation cannot be fairly implied from the use of the definite article "the," rather than the indefinite article "a." Section 487 appears as part of Article 15 of the Judiciary Law, "Attorneys and Counselors," with statutory provisions governing the admission and supervision of attorneys. The "integrity of the courts and . . . their truth-seeking function" (see Amalfitano v Rosenberg, 12 NY3d at 14) is no less worthy of protection because the court sits in a sister state, and, in any event, the statutory purpose extends to "curbing and providing redress for attorney overreaching vis-a-vis clients" (see Liddle & Robinson v Shomaker, 276 AD2d at 336.)

This Court is not bound by the federal court decisions in Schertenlieb and its progeny, nor is it bound by Supreme Court's and Appellate Term's decision in Southern Blvd. Sound. (See Cox v Microsoft Corp. , 290 AD2d 206, 207 [1st Dept 2002]; People v Gundarev, 2009 NY Slip Op 51972 [U], * 1- * 2 [Crim Ct, Kings County 2009]; King Transp. Servs. v State, 185 Misc 2d 684, 687 [Ct Cl 2000].) Nonetheless, a court should be reluctant to divert from an accepted view of the law, particularly where interpretation of a statute is at issue. Here, however, only the Schertenleib and Southern Blvd. Sound courts offered any reasoning to support the implied limitation on the applicability of Judiciary Law § 487, and neither cited any authority or other support for its reading of the statute.

In light of the statutory language and purposes, this Court sees no basis for limiting the applicability of Judiciary Law § 487 to judicial proceedings pending in New York courts. A New York court has sufficient interest in supervising the conduct of attorneys admitted before its bar, and protecting resident clients who have been harmed by the deceit of an admitted attorney, to apply Judiciary Law § 487 to the attorney's conduct no matter where the action is pending.

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