Commercial Litigation and Arbitration

Legal Malpractice — Judicial Proceedings Privilege Protects Lawyers from Liability for Statements Made in and Pertinent to Litigation — Applies to All Causes of Action — Not Limited to Defamation Claims

Hadar v. Pierce, 2013 N.Y. App. Div. LEXIS 7376 (1st Dept. Nov. 12, 2013):

The first through fourth causes of action are based on the purportedly false statements made in the complaint in a prior Supreme Court action and the petition in a Surrogate's Court proceeding, both of which were signed by defendants. These statements are absolutely privileged because they were pertinent to the respective litigations    (Pomerance v McTiernan, 51 AD3d 526, 528 [1st Dept 2008]). The allegations that Eric Hadar (a defendant in the prior action and a plaintiff in the instant case) had neglected his management duties and charged inflated fees   were pertinent to a litigation that accused him of breach of fiduciary duty and breach of contract, sought his removal as managing partner, managing member, and general partner, and sought an accounting. Similarly, the allegations in the Surrogate's Court proceeding that Eric had wasted trust assets through self-dealing and mismanagement were pertinent to a litigation that sought to remove him as a trustee.

Contrary to plaintiffs' contention, the prior proceedings -- which, we note, were not commenced by defendants, who were but counsel to the litigants -- were not a sham, i.e., instituted for the sole purpose of defaming Eric (see Sexter & Warmflash, P.C. v Margrabe, 38 AD3d 163, 172 n 5 [1st Dept 2007]). The complaint in the case at bar alleges that Eric's father, Richard Hadar, instigated the prior proceedings to seize control of certain real estate assets and/or gain leverage to extort concessions from Eric.

The judicial proceedings privilege applies to causes of action other than defamation (see e.g. Joseph v Joseph, 107 AD3d 441 [1st Dept 2013]; Fletcher v Dakota, Inc., 99 AD3d 43, 54 [1st Dept 2012]; Casa de Meadows Inc. [Cayman Is.] v Zaman, 76 AD3d 917, 920-921 [1st Dept 2010]).  

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