Judiciary Law 487 in the Second Circuit and the Court of Appeals

Judiciary Law 487 is a statute which defines a misdemeanor and creates a private cause of action, with treble damages, §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.

In Amalfitano v. Rosenberg the Second Circuit has certified several questions to the New York Court of Appeals.  The case is well worth reading, not only for the telenovela aspects of brother v. brother, and the unraveling of a family fortune through corruption and self-dealing, but for the discussion of Judiciary Law 487 litigation in New York.  

For the most part, liability under this statue is nor covered by insurance, and while pro missing significant awards, has been the stepchild of legal malpractice here.  

The two questions are "Can a successful lawsuit for treble damages brought under N.Y. Jud. Law 487 be based on an attempted but unsuccessful deceit upon a court by the defendant?" and
"In the course of such a lawsuit, may the costs of defending litigation instituted by a complaint containing a material misrepresentation of fact be treated as the proximate result of the misrepresentation if the court upon which the deceit was attempted at no time acted on the belief that the misrepresentation was true?"

An Amusing Way out of Legal Malpractice Litigation

The California Blog of Appeal discusses this amusing attempt by a target attorney to get out from under a legal malpractice case. Styles v. Mumbert is a California case in which...well, let Greg May describe it:
"You represent the defendant in a lawsuit. You don’t have time to handle his case — indeed, you admit as much on the record — and the court imposes terminating sanctions against your client for failing to respond to discovery. Because of your admission, your client is allowed to obtain new counsel, but new counsel is unsuccessful in getting the sanctions order vacated, and a default judgment of $730,000 is entered aganist your client, who then promptly sues you for malpractice and, while that suit is pending, appeals the default judgment. What do you do, besides give notice to your malpractice carrier? 

If you’re the defendant’s first attorney in Styles v. Mumbert, you get the plaintiff in the original case (Styles) to assign her default judgment to you (for some undisclosed consideration), then, represented by another lawyer in your firm, you move the court of appeal to substitute you in as respondent in your former client’s (Mumbert’s) appeal from that judgment. The court of appeal resists the invitation, concluding the opening paragraph of its opinion thus: ”Finding that the proposed substitution violates multiple rules of Professional Conduct as well as the Business and Professions Code, we will deny the motion.” 

The absurdity of the possible outcomes! The court says it much better than I could: 

If we allowed [attorney] Pagkas to substitute himself as respondent, in place of Styles, on appeal Pakgas would have to argue that the default judgment, for which he may be professionally responsible, should be reversed. He would argue that the appeal should fail, so that he could collect on the default judgment. This is directly contrary to Mumbert’s interest. While a reversal here would be to Pagkas’s absolute benefit in the legal malpractice action, reducing any potential damages for professional negligence owed to Mumbert, Pagkas appears to prefer the prospect of collecting the large default judgment from Mumbert. In fact, if the substitution were allowed, it is conceivable that Pagkas could prevail in both the malpractice action and in this appeal, leaving him with huge windfall at the expense of his former client. Pagkas’s disregard for his ongoing fiduciary duties to his former client in favor of his own personal gain is without precedent. 

Unsurprisingly, Mumbert asked for sanctions for having to oppose the motion, and got them.

Ethical Violations Doom Attorney's Fee in Legal Malpractice

Plaintiff retained a big name matrimonial firm to represent her.  Then she hired a legal malpractice firm to sue the matrimonial firm.  The legal malpractice case was dismissed.  Apparently she did not want to pay the legal malpractice firm who moved for a quantum meruit fee hearing.

In 2008 NY Slip Op 5647,  Eileen DeGregorio, appellant, v Joel C. Bender, et al., defendants; Curtis & Associates, P.C., nonparty-respondent. (Index No. 993/02) 

"Plaintiff client appealed a judgment by the Westchester County Supreme Court (New York) that awarded nonparty law firm an attorney's fee based on quantum meruit. 

In an action to recover damages for legal malpractice, the plaintiff appeals from a judgment of the Supreme Court, Westchester County (Friedman, J.H.O.), entered October 20, 2006, which, after a hearing, and upon a decision of the same court dated September 28, 2006, awarding the nonparty, Curtis & Associates, P.C., an attorney's fee based on quantum meruit, is in favor of Curtis & Associates, P.C., and against her in the total sum of $ 94,017.70. 

ORDERED that the judgment is reversed, on the law, with costs, and the matter is remitted to the Supreme Court, Westchester County, for further proceedings consistent herewith, including a new hearing and determination before a different Judicial Hearing Officer. 

In December 2001 the appellant retained the nonparty, Curtis & Associates, P.C. (hereinafter Curtis), to represent her in the instant legal malpractice action against her former matrimonial [**2] attorney. In February 2004 the underlying complaint in the legal malpractice action was dismissed by decision and order of this Court (see DeGregorio v Bender, 4 AD3d 384, 772 N.Y.S.2d 89). Thereafter, the Supreme Court granted Curtis' motion for a quantum meruit hearing to determine the fair and reasonable value of the legal services rendered to the appellant. Following the hearing, the court awarded Curtis legal fees in the sum of $ 94,017.70. We reverse. 

HN1In fixing an award of legal fees in quantum meruit, the court should consider "evidence of [*2] the time and skill required in that case, the complexity of the matter, the attorney's experience, ability, and reputation, the client's benefit from the services, and the fee usually charged by other attorneys for similar services" (Rosenzweig v Gomez, 250 AD2d 664, 672 N.Y.S.2d 907; see DR 2-106[B] [22 NYCRR 1200.11(b)]). HN2An award in quantum meruit should be made after weighing all the relevant factors (see Padilla v Sansivieri, 31 AD3d 64, 65, 815 N.Y.S.2d 173). Here, the hearing court failed to consider and give appropriate weight to all the relevant factors involved in valuing legal services, including the court's own finding of ethical violations committed by Curtis. "