Monday, August 11, 2008

Atomic Bomb Fizzles

In litigation against an attorney sued for attempted deceit of the New York Supreme Court and successful deceit of the Appellate Division, First Department, the United States Court of Appeals for the Second Circuit certified two questions of law to the New York Court of Appeals:

1. Can a successful lawsuit for treble damages brought under N.Y. Jud. Law section 487 be based on a attempted but unsuccessful deceit upon a court by the defendant?

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?

The case involved one brother who "undertook a series of personal business transactions that ultimately resulted in the loss of four of five buildings owned by the family, and eleven of their twelve restaurants." The brother used the money for a Central Park "palatial" apartment and to cover his options trading losses. He was sued by two other brothers. The lawyer began representing the accused brother "after these misadventures first came to light."

The District Court had found that the lawyer had engaged in a "persistent pattern of unethical behavior" that included failure to correct statements in his client's deposition, refusal to produce tax returns, and claiming he had "atomic bomb" tape recordings that turned out to be unintelligible. The District Court awarded treble damages of slightly more than $268,000. (Mike Frisch)

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