March 31, 2020 – A Boon To The Bar: NYS Court of Appeals Limits Scope of Judiciary Law § 487 In Lawsuits Against Counsel
In Bill Birds, Inc. v. Stein Law Firm, P.C. (__ NY3d __ [March 31, 2020]; 2020 NY Slip Op 02125), the Court of Appeals recently affirmed the Second Department’s unanimous reversal and dismissal of plaintiffs’ claim under Judiciary Law § 487(1) against their former attorneys who allegedly induced them to bring a merit-less lawsuit in order to generate a legal fee.
The Second Department’s decision was rendered by Presiding Justice Scheinkman, and Associate Justices Balkin, Austin, and Hinds-Radix (see, 164 AD3d 635).
The Court of Appeals’ determination was authored by Chief Judge DiFiore, with Judge Rivera writing a lengthy dissent.
In rendering its recent determination, the Court of Appeals embraced an exceedingly limited application of the statute, and thereby reaffirmed an earlier precedent which had narrowly construed and applied a predecessor statute (see, Loof v. Lawton, 97 NY 478 ). In particular, the Court of Appeals explicitly instructed that allegations of deceit occurring before a judicial action is commenced – e.g., providing misleading advice which preceded the commencement of an action – do not constitute a violation of Judiciary Law § 487 and cannot support a claim under the statute. Likewise, Chief Judge DiFiore’s Opinion further determined that allegations of a months-long delay in forming Plaintiffs that their lawsuit had been dismissed “occurred after the litigation had ended and therefore falls outside the scope of Judiciary Law § 487(1).” Having thusly rejected allegations of attorney malfeasance which both preceded and post-dated the active litigation, the Court of Appeals spoke clearly in limiting actionable claims under Judiciary Law § 487 to only those allegations of wrongful conduct which occur during the actual pendency of litigation.
The import of the Bill Birds Inc. decision is unquestionably significant for attorneys who find themselves on the wrong end of a client lawsuit alleging malfeasance. The violation of Judiciary Law § 487 is often pleaded as a standalone cause of action in legal malpractice cases, and a viable claim under the statute represents a significant weapon in a plaintiffs’ arsenal. Indeed, the statute allows for treble damages for a successful claim and, further, a proven violation of Judiciary Law § 487 represents a criminal act. In addition, unlike a common-law fraud cause of action, there is no showing of justifiable reliance required to successfully establish a claim under the statute. Simply stated, to the extent that a pleaded claim under Judiciary Law § 487 remains viable, the defendant remains uncomfortably on the back foot in the context of legal malpractice litigation.
Given the foregoing, the Court of Appeals’ recent narrow application of Judiciary Law § 487 represents a noteworthy development in the common law of this State. As with the Loof case which it reaffirmed, the Bill Birds Inc. decision is likely to be invoked time and time again by courts tasked with the application of this potent statute.