Case Title: Vivia Amalfitano and Gerard Amalfitano v. Armand Rosenberg

Citation: 

Docket Number: 

State: new-york

Court: New York Appellate Court

Date: 2009-02-12T00:00:00Z

Document:
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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 3  
Vivia Amalfitano and Gerard 
Amalfitano, 
            Respondents, 
        v. 
Armand Rosenberg, 
            Appellant.
William J. Davis, for appellant.
Richard E. Hahn, for respondents.
James J. Melcher, amicus curiae.
READ, J.:
The United States Court of Appeals for the Second
Circuit has certified two questions to us regarding the
application of section 487 of the Judiciary Law insofar as it
provides that 
"[a]n attorney or counselor who: . . . is guilty of any
deceit or collusion, or consents to any deceit or
collusion, with intent to deceive the court or any
party . . . [i]s guilty of a misdemeanor, and in
addition to the punishment prescribed therefor by the
penal law, he forfeits to the party injured treble
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*The facts and circumstances of the underlying litigation
and Rosenberg's conduct are set out in detail in the District
Court's decision and the Second Circuit's certification opinion.
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damages, to be recovered in a civil action."
The questions arise out of defendant Armand Rosenberg's appeal
from a judgment of the United States District Court for the
Southern District of New York, finding that Rosenberg violated
section 487 and awarding plaintiffs Vivia and Gerard Amalfitano
three times their costs to defeat a lawsuit brought by Rosenberg
on behalf of Peter Costalas (Amalfitano v Rosenberg, 428 F Supp 
2d 196 [SDNY 2006]).  The lawsuit accused the Amalfitanos of
fraudulently purchasing what remained of the Costalas's family
business, a partnership known as 27 Whitehall Street Group.  On
appeal, the Second Circuit concluded that it could affirm the
District Court's judgment "in its entirety" only if, in addition
to Rosenberg's actual deceit of the Appellate Division, his
"attempted deceit" of the trial court -- "the false allegations
in the complaint in the Costalas litigation" representing that
Peter Costalas was a partner in 27 Whitehall Street Group --
would "support[] a cause of action under section 487 and was the
proximate cause of the Amalfitanos' damages in defending the
litigation from its inception" (Amalfitano v Rosenberg, 533 F3d
117, 125 [2d Cir 2008]).* 
I.
Certified Question No. 1  
"Can a successful lawsuit for treble damages brought
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under N.Y. Jud. Law § 487 be based on an attempted but
unsuccessful deceit?" (533 F3d at 126).
Rosenberg equates forfeiture under Judiciary Law § 487
with a tort claim for fraud.  And under New York common law,
"[t]o maintain an action based on fraudulent representations, . .
. in tort for damages, it is sufficient to show that the
defendant knowingly uttered a falsehood intending to deprive the
plaintiff of a benefit and that the plaintiff was thereby
deceived and damaged" (Channel Master Corp. v Aluminum Ltd.
Sales, 4 NY2d 403, 406-407 [1958] [emphasis added]).  Thus,
Rosenberg argues, section 487 does not permit recovery for an
attempted but unsuccessful deceit practiced on a court.  And
here, the trial judge was concededly never fooled by
misrepresentations regarding Peter Costalas's partnership status. 
 
As the District Court correctly observed, however,
Judiciary Law § 487 does not derive from common law fraud. 
Instead, as the Amalfitanos point out, section 487 descends from
the first Statute of Westminster, which was adopted by the
Parliament summoned by King Edward I of England in 1275.  The
relevant provision of that statute specified that
"if any Serjeant, Pleader, or other, do any manner of
Deceit or Collusion in the King's Court, or consent
[unto it,] in deceit of the Court [or] to beguile the
Court, or the Party, and thereof be attainted, he shall
be imprisoned for a Year and a Day, and from
thenceforth shall not be heard to plead in [that] Court
for any Man; and if he be no Pleader, he shall be
imprisoned in like manner by the Space of a Year and a
Day at least; and if the Trespass require greater
Punishment, it shall be at the King's Pleasure" (3 Edw,
c 29; see generally Thomas Pitt Taswell-Langmead,
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English Constitutional History 153-154 [Theodore F.T.
Plucknett ed, Sweet & Maxwell, 10th ed 1946]).
Five centuries later, in 1787, the Legislature adopted
a law with strikingly similar language, and added an award of
treble damages, as follows:
"And be it further enacted . . . [t]hat if any
counsellor, attorney, solicitor, pleader, advocate,
proctor, or other, do any manner of deceit or
collusion, in any court of justice, or consent unto it
in deceit of the court, or to beguile the court or the
party, and thereof be convicted, he shall be punished
by fine and imprisonment and shall moreover pay to the
party grieved, treble damages, and costs of suit" (L
1787, ch 36, § 5).
In 1836, the Legislature carried forward virtually identical
language in section 69 of the Revised Statutes of New York,
prescribing that
"[a]ny counselor, attorney or solicitor, who shall be
guilty of any deceit or collusion, or shall consent to
any deceit or collusion, with intent to deceive the
court or any party, shall be deemed guilty of a
misdemeanor, and on conviction shall be punished by
fine or imprisonment, or both, at the discretion of the
court.  He shall also forfeit to the party injured by
his deceit or collusion, treble damages to be recovered
in a civil action" (2 Rev Stat of New York, chap III,
art 3, § 69 [1836]).
The Legislature later codified this misdemeanor crime
and the additional civil forfeiture remedy as section 148 of the
Penal Code of 1881, providing that
"[a]n attorney or counselor who, . . . [i]s guilty of
any deceit or collusion, or consents to any deceit or
collusion, with intent to deceive the court or any
party as prohibited by section 70 of the Code of Civil
Procedure; . . . [i]s guilty of a misdemeanor, and in
addition to the punishment prescribed therefor by this
Code, he forfeits to the party injured treble damages,
to be recovered in a civil action" (L 1881, ch 646, §
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148 [1]).
Section 70 of the Code of Civil Procedure, cross-referenced in
section 148, similarly stated that "[a]n attorney or counsellor,
who is guilty of any deceit or collusion, with intent to deceive
the court or a party, forfeits, to the party injured by his
deceit or collusion, treble damages.  He is also guilty of a
misdemeanor."  The derivation note accompanying section 70
includes the following comment: "As to the meaning of the word,
'deceit,' as used in this section, see Looff v Lawton, 14 Hun,
588."
In Looff, the plaintiffs accused their attorney of
gulling them into bringing an unnecessary lawsuit, motivated
solely by his desire to collect a large fee to represent them. 
In discussing the meaning of the word "deceit" in section 70
(and, by extension, section 148), the Appellate Division opined
that the Legislature intended an expansive reading rather than
"confining the term to common law or statutory cheats" (Looff v
Lawton (14 Hun 588, 589 [2d Dept 1878] mod 97 NY 478 [1884]).  To
support this interpretation, the court reasoned that because
there was already a civil action at common law for fraud and
damage that an injured party might pursue, 
"[t]here was no occasion . . . for another statute to
punish, or to give an action for the 'deceit' of
lawyers, unless the Legislature intended that that
class of persons should be liable for acts which would
be insufficient to establish a crime or a cause of
action against citizens generally.  The statute is
limited to a peculiar class of citizens, from whom the
law exacts a reasonable degree of skill, and the utmost
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good faith in the conduct and management of the
business intrusted to them . . . To mislead the court
or a party is to deceive it; and, if knowingly done,
constitutes criminal deceit under the statute cited"
(id. at 590).
 
Section 148 was subsequently recodified as section 273
of the Penal Code of 1909.  In conjunction with the Legislature's 
adoption of the revised Penal Law of 1965, section 148 was
transferred from the Penal Law to the Judiciary Law as section
487 (see L 1965, ch 1031).  There it remains today -- the modern-
day counterpart of a statute dating from the first decades after
Magna Carta; its language virtually (and remarkably) unchanged
from that of a law adopted by New York's Legislature two years
before the United States Constitution was ratified. 
As this history shows, section 487 is not a
codification of a common law cause of action for fraud.  Rather,
section 487 is a unique statute of ancient origin in the criminal
law of England.  The operative language at issue -- "guilty of
any deceit" -- focuses on the attorney's intent to deceive, not
the deceit's success.  And as the District Court pointed out,
section 487 was for many years placed in the state's penal law,
which "supports the argument that the more appropriate context
for analysis is not the law applicable to comparable civil torts
but rather criminal law, where an attempt to commit an underlying
offense is punishable as well as the underlying offense itself"
(Amalfatino, 428 F Supp 2d at 210).  Further, to limit forfeiture
under section 487 to successful deceits would run counter to the
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statute's evident intent to enforce an attorney's special
obligation to protect the integrity of the courts and foster
their truth-seeking function.
II.
Certified Question No. 2
"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?" (533 F3d at 126).
In light of our answer to the first question, recovery
of treble damages under Judiciary Law § 487 does not depend upon
the court's belief in a material misrepresentation of fact in a
complaint.  When a party commences an action grounded in a
material misrepresentation of fact, the opposing party is
obligated to defend or default and necessarily incurs legal
expenses.  Because, in such a case, the lawsuit could not have
gone forward in the absence of the material misrepresentation,
that party's legal expenses in defending the lawsuit may be
treated as the proximate result of the misrepresentation.
Accordingly, the certified questions should be answered
in accordance with this opinion.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   * 
Following certification of questions by the United States Court
of Appeals for the Second Circuit and acceptance of the questions
by this Court pursuant to section 500.27 of the Rules of Practice
of the New York State Court of Appeals, and after hearing
argument by counsel for the parties and consideration of the
briefs and the record submitted, certified questions answered in
accordance with the opinion herein.  Opinion by Judge Read.
Judges Ciparick, Graffeo, Smith, Pigott and Jones concur.
Chief Judge Lippman took no part.
Decided February 12, 2009