Court Opinion

ID: 9810628
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:54:55.621898+00
Date Added: 2024-06-11T13:40:07.550190
License: Public Domain

Duffy, J.,
concurs in part and dissents in part, and votes to modify the judgment by deleting the provision thereof, in effect, dismissing so much of the counterclaim as alleged tortious interference with prospective business relations, reinstate that portion of the counterclaim, deny that branch of the plaintiffs’ motion which was pursuant to CPLR 3211 (a) (7) to dismiss that portion of the counterclaim, modify the order accordingly, and remit the matter to the Supreme Court, Suffolk County, for further proceedings on that portion of the counterclaim, with the following memorandum: I concur with the decision of the majority except to the extent that I would reinstate so much of the defendant’s counterclaim as alleged tortious *587interference with prospective business relations and remit the matter to the Supreme Court, Suffolk County, for further proceedings on that portion of the counterclaim.
Although the Supreme Court correctly determined that the defendant, Landmark Ventures, Inc. (hereinafter Landmark), failed, in its counterclaim, to state a cause of action for tortious interference with its contract rights under the terms of its settlement agreement relating to the second matter, Landmark’s claim for tortious interference with prospective business relations with Landmark’s client, a claim which the court did not reach, should have survived that branch of the plaintiffs’ motion which was pursuant to CPLR 3211 (a) (7) to dismiss the counterclaim.
In determining a motion to dismiss pursuant to CPLR 3211 (a) (7), “the pleadings are ‘to be afforded a liberal construction. [The Court must] accept the facts as alleged in the complaint as true, [and] accord [the nonmovant] the benefit of every possible favorable inference’ ” (Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 178 [2011], quoting Leon v Martinez, 84 NY2d 83, 87 [1994]). “In considering a motion to dismiss pursuant to CPLR 3211 (a) (7), the court should, among other things, ‘determine only whether the facts as alleged fit within any cognizable legal theory’ ” (Micro Tech. Intl., Inc. v Artech Info. Sys., LLC, 62 AD3d 764, 764 [2009], quoting Leon v Martinez, 84 NY2d at 87; see Pincus v Wells, 35 AD3d 569, 570 [2006]). Here, the counterclaim interposed by Landmark set forth facts which meet the criteria for establishing the elements of tortious interference with prospective business relations, including the “more culpable conduct” element of that cause .of action (NBT Bancorp v Fleet / Norstar Fin. Group, 87 NY2d 614, 621 [1996]; see Carvel Corp. v Noonan, 3 NY3d 182, 190 [2004]; Caprer v Nusshaum, 36 AD3d 176, 204 [2006]; Snyder v Sony Music Entertainment, 252 AD2d 294, 299-300 [1999]; see also Lyons v Menoudakos & Menoudakos, P.C., 63 AD3d 801, 802 [2009]; Tabner v Drake, 9 AD3d 606, 610 [2004]). Landmark alleged, among other things, that the individual plaintiff (hereinafter the plaintiff attorney), Landmark’s former counsel, had already been discharged when the plaintiff attorney contacted Landmark’s client. Landmark also alleged that the plaintiff attorney directed Landmark’s client to make the payments that the client owed to Landmark directly to the plaintiffs “as attorney for Landmark Ventures, Inc.,” at a time when the plaintiff attorney no longer represented Landmark.
Although I agree with the majority’s position that the plaintiff attorney was motivated by his desire to ensure that he *588received the fees he contended that Landmark owed him and that, with such motives, the plaintiff attorney’s actions cannot be considered “solely malicious,” the majority appears to require that, absent facts alleging that the plaintiffs engaged in conduct with the sole purpose of harming Landmark, Landmark failed to state a cause of action for tortious interference with prospective business relations. To the extent that the majority requires that, in order to avoid dismissal of this claim, Landmark had to set forth facts alleging that the plaintiffs engaged in conduct with the sole purpose of harming Landmark and that they did so by means that were unlawful or improper, I disagree. Such an analysis is more rigorous than that applied by the Court of Appeals (see Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d 183, 190-194 [1980]), or by this Court in other decisions (see Out of Box Promotions, LLC v Koschitzki, 55 AD3d 575, 577-578 [2008]; BGW Dev. Corp. v Mount Kisco Lodge No. 1552 of Benevolent & Protective Order of Elks of U.S. of Am., 247 AD2d 565, 568 [1998]; Nassau Diagnostic Imaging & Radiation Oncology Assoc. v Winthrop-University Hosp., 197 AD2d 563, 564 [1993]), in evaluating the sufficiency of a cause of action alleging tortious interference with prospective business relations. To make out a claim for tortious interference with business relations where, as here, the alleged interference was with prospective contractual relationships, rather than existing contracts, the proponent must show that the other party interfered with the proponent’s business relationships either with the sole purpose of harming the movant or by means that were unlawful or improper (see Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d at 190-194; see also Out of Box Promotions, LLC v Koschitzki, 55 AD3d at 577-578; BGW Dev. Corp. v Mount Kisco Lodge No. 1552 of Benevolent & Protective Order of Elks of U.S. of Am., 247 AD2d at 568; Nassau Diagnostic Imaging & Radiation Oncology Assoc. v Winthrop-University Hosp., 197 AD2d at 564). Thus, I submit that Landmark’s allegation that the plaintiff attorney interfered with Landmark’s business relationships by means that were unlawful or improper — to wit, that he held himself out as counsel for Landmark when he no longer represented it — was sufficient to withstand that branch of the motion which was to dismiss the counterclaim (see Out of Box Promotions, LLC v Koschitzki, 55 AD3d at 577-578).
The Court of Appeals has enunciated a general rule that, to be sufficiently “culpable” to create liability for tortious interference with prospective business relations, the alleged conduct must amount to a crime or an independent tort (Carvel Corp. v Noonan, 3 NY3d at 190). However, the Court of Appeals did *589not preclude “other instances of conduct which, though not a crime or tort in itself,” are so culpable that they could be the basis of such a claim (id.). Here, the facts alleged by Landmark, that the plaintiff attorney held himself out to be Landmark’s counsel when he no longer represented Landmark, in order to obtain money the plaintiffs contend was owed to him by Landmark, if true, would constitute a breach of fiduciary duty as well as a violation of the ethical rules that govern the conduct of attorneys (see Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.8 [¶] [“A lawyer shall not accept compensation for representing a client, or anything of value related to the lawyer’s representation of the client, from one other than the client unless: (1) the client gives informed consent”]; see generally Matter of Cooperman, 83 NY2d 465, 472 [1994]).
I also disagree with the majority’s assertion that, without a concomitant allegation of actual damages, an allegation that, if true, may constitute a violation of an attorney disciplinary rule cannot meet the culpable conduct element required to plead tortious interference with prospective business relations sufficient to defeat the motion to dismiss in this matter. The analysis adopted by the majority is one applied in the context of determining whether a cause of action for legal malpractice has been established (see Tabner v Drake, 9 AD3d at 610), but is not the analysis this Court already has applied in determining the culpable conduct necessary to establish a claim of tortious interference with prospective business relations. In Lyons v Menoudakos & Menoudakos, P.C. (63 AD3d at 802), this Court held that an attorney’s violation of a disciplinary rule and his professional obligations was sufficient to demonstrate the culpable conduct required for a claim of tortious interference with prospective business relations so as to withstand a motion for summary judgment. In that case, this Court noted that, to constitute “culpable conduct,” the conduct must amount to a crime or an independent tort, and may include “ ‘[wrongful means’ ” defined as “ ‘physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure’ ” (id. at 802, quoting Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d at 191, and citing Carvel Corp. v Noonan, 3 NY3d at 190-193, and Smith v Meridian Tech., Inc., 52 AD3d 685, 687 [2008]). In Lyons, this Court took note of the various ethical obligations of the defendant in that matter, who had been the attorney for the seller in a real estate transaction and allegedly wished to purchase the property for himself (see Lyons v Menoudakos & Menoudakos, P.C., 63 AD3d at 802). This Court held that “[e]vidence of a violation of a *590disciplinary rule is relevant to the question of tort liability,” and concluded that the defendant had failed to eliminate all triable issues of fact as to whether his judgment was affected by his personal interest in the transaction and whether he furthered that interest by making misrepresentations to the seller about the creditworthiness of the plaintiff, thereby wrongfully interfering with the prospective transaction (id.). Here, as in Lyons, the allegations of the plaintiff attorney’s violations of his ethical obligations, if true, would meet the culpable conduct element necessary to state a cause of action for tortious interference with prospective business relations.
Because Landmark alleged facts which, if true, could establish the elements of this tort (see Lyons v Menoudakos & Menoudakos, P.C., 63 AD3d at 802; William Kaufman Org. v Graham & James, 269 AD2d 171, 173 [2000]), I believe that the Supreme Court should have denied that branch of the plaintiffs’ motion which was pursuant to CPLR 3211 (a) (7) to dismiss that portion of counterclaim for failure to state a cause of action.