A New York federal judge ruled that a lawyer and his firm may be sued under the state’s attorney deceit statute. Allegedly, false statements were made during the lawsuit.
According to U.S. District Judge Paul Crotty, such a suit could go forward. The suit may proceed even if there was no pattern of misrepresentation on the part of the attorney. Under New York’s Judiciary Law Statute §487, it is a misdemeanor for an attorney to intend to deceive.
In this case, Canon USA alleges that an attorney and his firm helped their clients defraud Canon. They obtained a business equipment dealership after Canon refused due to prior arrests for fraud. Specifically, the lawyer filed the corporation’s nominal president’s affidavit. The affidavit denied that the lawyer prepared papers revealing corporate stock was being held for those clients.
Judge Crotty’s ruling allows for potential §487 lawsuits alleging the attorney committed “sufficiently egregious” to deceive the court.
This ruling opens the door to more retaliatory lawsuits by litigants against their adversary’s counsel. Injured parties can be entitled to treble damages under civil actions brought under the statute. Attorneys now face huge financial costs because malpractice insurance does not cover violations of §487. This means that attorneys will be motivated to quickly settle with injured parties.