Legal Updates for Lawyers’ Professional Liability - CASE LAW UPDATE

The Court of Appeals of New York answers the question of whether a plaintiff may bring a claim under Judiciary Law § 487 in a plenary action.
Urias v. Daniel P. Buttafuoco & Assoc., PLLC, 41 NY3d 560, 563 (2024)

The plaintiff previously retained the defendants to represent her and her husband, who was in a coma, in a medical malpractice lawsuit. Because the plaintiff’s husband was in a coma, the defendant obtained a guardianship order to authorize the plaintiff to prosecute four medical malpractice causes of action against four defendants on behalf of her husband “subject to prior court approval of legal fees and settlement.” The plaintiff eventually settled for $3.7 million.

While at a guardianship hearing to obtain court approval, the defendant submitted proposed legal fees and expenses, noting the fees were pursuant to the schedule in Judiciary Law § 474-a, which sets forth a sliding scale for contingency fees. The defendant interpreted Judiciary Law § 474-a to permit an award of legal fees on each individual cause of action. 

However, the guardianship court rejected this interpretation and directed the court presiding over the medical malpractice action to calculate damages. The plaintiff alleged the defendant violated Judiciary Law § 487 through misinterpreting Judiciary Law § 474-a and sought damages representing the difference between the actual fee charged and the alleged permitted amount under her interpretation of § 474-a. 

The Appellate Division held that the plaintiff’s exclusive remedy was to move under CPLR 5015. 

However, the Court of Appeals concluded “that § 487 authorizes a plenary action for attorney deceit under these circumstances.” Urias v. Daniel P. Buttafuoco & Assoc., PLLC, 41 NY3d 560, 568 (2024). The court mainly relied on two propositions to reach its conclusion. 

First, the text of the statute permits a plenary action. The court interpreted “in a civil action” as implying a plenary action. The court further reasoned that permitting a plenary action “where the remedy would not entail undermining a final judgment (for example, when the deceit harms a prevailing party), but deny one where a final judgment could be impaired, would require us to rewrite the statute.” 

Second, the court relied on the history of the statute. A cause under Judiciary Law § 487 descended from the Statute of Westminster and was incorporated into New York’s common law. Later, New York codified this common law principal into a 1787 statute, which “closely tracks” Judiciary Law § 487. Legislative history demonstrates that attorney deceit occurring in litigation warrants criminal and civil liability. In contrast, restitution under an order CPLR 5015 is a discretionary remedy. 

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