United States District Court, S.D. New York
May 9, 2005.
MARTIN TREPEL, Plaintiff,
KAREN DIPPOLD, an individual, BELDOCK, HOFFMAN AND LEVINE, a New York Co-Partnership; and HODGSON RUSS, a New York Co-Partnership, Defendants.
The opinion of the court was delivered by: DENISE COTE, District Judge
OPINION AND ORDER
The plaintiff, Martin Trepel ("Trepel"),*fn1 was the
plaintiff in a prior federal civil action for fraud in this
District against an African art dealer, Mourtala Diop ("Diop").
Trepel obtained a default judgment against Diop, but has seen
only a fraction of the total judgment satisfied because Diop fled the
District with most of his possessions and has not been located.
Trepel has filed suit against Diop's counsel, Karen Dippold
("Dippold"), Dippold's law firm, Beldock Levine & Hoffman, LLP
("Beldock Firm"),*fn2 and Trepel's own law firm in the Diop
litigation, Hodgson Russ LLP ("Hodgson Firm"), alleging among
other things that Dippold frustrated a restraining order by
intentionally facilitating Diop's removal of his valuable art
possessions from the District and depriving Trepel of the
opportunity to recover his damages. Dippold and the Beldock Firm
have moved to dismiss the action for failure to state a claim
pursuant to Rule 12(b)(6), Fed.R.Civ.P. For the following
reasons, the motion is denied.
The following facts are taken from the allegations contained in
the Complaint, unless otherwise noted. Trepel filed suit against
Diop in 2002 in the United States District Court for the Southern
District of New York for fraud stemming from Diop's sale of fake
antique African tribal artwork to Trepel. The New York District
Attorney subseqently filed criminal charges against Diop. Dippold
and the Beldock Firm represented Diop in both the criminal and
In October 2002, Trepel sought an order of attachment and restraining order to prevent Diop from sequestering his assets
and fleeing the jurisdiction. At that time, Diop was not
permitted to remove his possessions from his apartment without
the permission of an authorized agent of his apartment tower.
Employees of the apartment tower were not to give such permission
without legal assurances that there were no legal impediments to
the removal of Diop's possessions.
The salient portion of the transcript of the October 28, 2002
hearing before the Honorable Gerard E. Lynch indicates that Judge
Lynch expressed a concern that if the civil action were stayed
pending resolution of the criminal action, it would be necessary
"to guarantee . . . that [Trepel] is going to be able to collect
if he wins," particularly as "it could be quite a long time
before plaintiff actually gets any judgment he might be entitled
to." Dippold attempted to allay Judge Lynch's concerns by stating
[t]he district attorney has taken certain steps that
I think provide the plaintiff with protection here.
The passport has been turned over and is being held
by the district attorney. The co-op apartment . . .
is currently the proprietary lease, the original
stock certificate is also held by the district
attorney. There have been three search warrants
executed at the apartment owned by the defendant.
The defendant has been instructed that under no
circumstances is he to remove anything from these
apartments. . . .
(Emphasis supplied.) Trepel's counsel stated that while "we would
be happy with a full attachment on the apartment alone," he would
also require "some sort of restraining order." He continued: We can understand you need to liquidate assets for
living and normal expenses and counsel fees. . . .
What we don't want to happen is liquidating and
disappearing these assets to a foreign country.
Judge Lynch responded to the request for a restraining order,
Yes. I think that seems reasonable. If the order only
restrains the defendant from liquidating assets but
authorizes him to use assets for the payment of
attorneys and for ordinary living expenses, I can't
see how anyone can object to that and the parties
should be able to work out, again, an appropriate
wording for such an order for me to sign.
Once plaintiff and defense counsel created a proposed attachment
and restraining order to memorialize the contents of the
discussion held on the record on October 28, Judge Lynch executed
the order on November 13.*fn3
The order states, among other
things, that Diop is
enjoined and restrained from selling, liquidating,
disposing, conveying, sequestering, . . . or
transferring in any manner whatsoever any of his
other personal assets, except that [he] shall have
leave to expend from his personal assets such sums of
money as may be reasonably necessary to pay basic
living expenses . . . [and] reasonable attorney's
fees. . . .
The Complaint alleges that while Dippold and Trepel's attorney
were devising language to include in the proposed attachment and
restraining order, Dippold secretly sent a letter to Diop's
apartment tower superintendent, with a copy to Diop, stating that
there was no police interest in Diop's possessions. Indeed,
Dippold sent a letter dated November 1, 2002 to the superintendent of Diop's apartment building on East 54th Street
This letter states:
We are attorneys for Mourtala Diop . . ., and have
been representing him in connection with the matter
involving the search warrant executed at your
premises. In that matter we have represented Mr. Diop
in court and have been in regular communication with
the Assistant District Attorney in charge, Daniel
We provide this letter to assure that we have
consulted with ADA Zambrano and that he has
represented to us that the personal property at Mr.
Diop's apartment has not been seized. Therefore the
search warrant proceedings do not prevent Mr. Diop
from removing such property as he wishes from his
The letter indicates that it was also carbon-copied to Diop.
The Complaint alleges that Dippold wrote and sent this letter
for the express purpose of causing the superintendent to allow
Diop to remove his belongings from the apartment and hide them in
a place known only to himself, thereby frustrating the purposes
of the order contemplated by Judge Lynch at the October 28
hearing and substantially compromising Trepel's ability to
collect any judgment he might obtain against Diop. As a result of
Dippold's letter, the superintendent permitted Diop to remove and
sequester all of Diop's valuable possessions from the apartment
for a number of weeks in violation of Judge Lynch's contemplated
order as stated on October 28 and as executed on November 13.
Diop then fled the District, and despite the issuance of state and federal warrants for his arrest, he has not been
apprehended. None of his sequestered property has been recovered
or located. Judge Lynch entered a default judgment on behalf of
Trepel against Diop in the amount of $940,694.53 plus interest
until paid. Diop's apartment was later sold in a sheriff's sale
for $150,000, leaving a deficiency in Trepel's recovery of
$790,694.53 plus interest until paid. The Complaint alleges that
the valuable artwork in Diop's apartment before Diop removed it
and fled had sufficient value to satisfy this deficiency.
The Complaint contains four causes of action. First, Trepel
alleges intentional misrepresentation by Dippold at the October
28 hearing. Trepel also alleges negligent misrepresentation in
the alternative. Second, Trepel alleges that Dippold aided and
abetted the violation of a federal restraining order. Third,
Trepel alleges a violation of Section 487, New York Judiciary
Law, which prohibits attorney misconduct. Fourth, Trepel alleges
professional negligence against the Hodgson Firm for allegedly
failing to follow Trepel's instructions to notify Diop's
apartment building about the restraining order described at the
October 28 hearing.
A complaint must contain "a short and plain statement of the
claim showing that the pleader is entitled to relief." Rule
8(a)(2), Fed.R.Civ.P. Pleadings are to give "fair notice" of a
claim and "the grounds upon which they rest" in order to enable the opposing party to answer and prepare for trial, and to
identify the nature of the case. Swierkiewicz v. Sorema, N.A.,
534 U.S. 506, 512 (2002). "The federal rules allow simple
pleadings and rely on liberal discovery rules and summary
judgment motions to define disputed facts and issues and to
dispose of unmeritorious claims." Phillip v. Univ. of
Rochester, 316 F.3d 291, 293 (2d Cir. 2003) (citation omitted).
Because Rule 8 is fashioned in the interest of fair and
reasonable notice, not technicality, "extensive pleading of facts
is not required." Wynder v. McMahon, 360 F.3d 73, 77 (2d Cir.
2004) (citation omitted). If it is clear, however, that "no
relief could be granted under any set of facts that could be
proved consistent with the allegations," the complaint should be
dismissed. Swierkiewicz, 534 U.S. at 514. In construing the
complaint, the court must "accept all factual allegations in the
complaint as true and draw inferences from those allegations in
the light most favorable to the plaintiff." Jaghory v. New York
State Dep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997).
In addition to the pleadings, the court may consider "documents
attached to the complaint as an exhibit or incorporated in it by
reference, matters of which judicial notice may be taken, or
documents either in plaintiffs' possession or of which plaintiffs
had knowledge and relied on in bringing suit." Chambers v. Time
Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (citation
omitted). A court may take judicial notice of a public record
pursuant to Rule 201(b), Fed.R. Evid. Rothman v. Gregor, 220 F.3d 81, 92 (2d Cir. 2000).
New York Judiciary Law § 487
Trepel's third cause of action is based on New York Judiciary
Law § 487, which provides that
An attorney or counselor who:
1. Is guilty of any deceit or collusion, or consents
to any deceit or collusion, with intent to deceive
the court or any party; or,
2. Wilfully delays his client's suit with a view to
his own gain; or, wilfully receives any money or
allowance for or on account of any money which he has
not laid out, or becomes answerable for,
Is guilty of a misdemeanor, and in addition to the
punishment prescribed therefor by the penal law, he
forfeits to the party injured treble damages, to be
recovered in a civil action.
N.Y. Jud. Law § 487 (McKinney 2005) (emphasis supplied).
Judiciary Law § 487 was passed in its present form in 1965, and
replaced former Penal Law of 1909 Section 273. Lazer Elec. Corp.
v. Cecchi, No. 97 Civ. 130 (DLC), 1997 WL 311925, at *3
(S.D.N.Y. June 10, 1997). Judiciary Law § 487 supports a civil
action by a party to a litigation against the attorneys
representing parties in the litigation, for any deceit or
collusion practiced within New York's territorial borders on
either the court or "any" party, and provides for a treble damage
award in such an action. Schertenleib v. Traum, 589 F.2d 1156
1166 (2d Cir. 1978); Lazer, 1997 WL 311925, at *3.
While decisions applying Section 487 frequently repeat the
observation that a violation requires proof that the defendant
attorney "engaged in a chronic, extreme pattern of legal delinquency," Schindler v. Issler & Schrage, P.C.,
692 N.Y.S.2d 361, 362 (1st Dep't 1999) (citation omitted),*fn5 neither
the language of the statute nor the holdings of several decisions
applying Section 487 impose any such requirement. A single act or
decision, if sufficiently egregious and accompanied by an intent
to deceive, is sufficient to support liability. But see Savitsky
v. Mazzella, No. 98 Civ. 9051 (RWS), 2004 WL 2454120, at *5
(S.D.N.Y. Nov. 1, 2004); Havell v. Islam, 739 N.Y.S.2d 371, 372
(1st Dep't 2002); Gonzalez v. Gordon, 649 N.Y.S.2d 701, 702
(1st Dep't 1996). For instance, in Schindler, the attorney
requested and received a declaratory judgment that his client was
the sole owner of funds in a bank account without advising the
New York court of the existence of an Arizona court order that
restricted access to those funds. Schindler,
692 N.Y.S.2d at 362-63. Similarly, in Guardian Life Ins. Co. of America v.
Handel, 596 N.Y.S.2d 804 (1st Dep't 1993), the plaintiff's
attorney withheld from the court the fact that an embalming
certificate was a fraud, even though that certificate was
critical to his request for a declaratory judgment that the
insurance carrier's autopsy demand was unreasonable. Id. at
806. In Fields v. Turner, 147 N.Y.S.2d 542 (N.Y. Sup. Ct.
1955), procuring an arrest warrant from the domestic relations
court through the submission of an affidavit with fake
information was sufficient to state a claim. Id. at 544. Finally, in Olshansky
v. Sutton, No. 00 Civ. 3539 (LAP), 2001 WL 99857 (S.D.N.Y. Feb.
6, 2001), an attorney petitioned for permission to sell stock
without revealing to the court that another person had asserted a
claim to the stock. Id. at *4.
Accepting all factual allegations in the Complaint as true, and
drawing inferences in the light most favorable to the plaintiff,
Trepel has stated a claim under Section 487. At a time when the
District Court expressed an intent to issue an order restraining
Diop from liquidating his assets, and Dippold acknowledged on the
record that Diop was under instructions not to remove any
personal possessions from his apartment, Dippold allegedly
colluded with her client to manipulate the superintendent into
permitting Diop to remove and liquidate his valuables. This would
constitute deceit and collusion practiced on both the District
Court and the plaintiff with an intent to deceive them both. The
deceit and collusion would have become even more egregious at the
point when Dippold and Trepel's counsel jointly submitted a
proposed restraining order for the District Court to execute,
while Dippold knew that Diop was, at that very moment, violating
the order's terms with impunity and with Dippold's assistance.
Dippold argues that Trepel has no standing to raise a claim
based on Section 487 because the statute requires the plaintiff
to allege an attorney-client relationship between himself and
Dippold. Dippold is wrong. The plain text of Subsection 1 of Section 487 requires an intent to deceive "any party" and
provides for treble damages for "the party injured." N.Y. Jud.
Law § 487 (McKinney 2005) (emphasis supplied). By contrast,
Subsection 2 of Section 487 explicitly applies to an attorney who
"[w]ilfully delays his client's suit." Id. (emphasis
supplied). Section 487 claims have been routinely upheld when
brought against an adversary's counsel. See Handel,
596 N.Y.S.2d at 806-07; Fields, 147 N.Y.S.2d at 544.
The cases Dippold cites on this point do not require a contrary
conclusion. Rogath v. Koegel, No. 96 Civ. 8729 (DAB), 1998 WL
695668 (S.D.N.Y. Oct. 6, 1998), describes Section 487 as one of a
series of "assorted legal malpractice claims," id. at *2 n. 4,
and then collectively dismisses those claims in a footnote
without any analysis of the requirements of Section 487, id. at
*4 n. 10. Aglira v. Julien & Schlesinger, P.C.,
631 N.Y.S.2d 816 (1st Dep't 1995), is a generic legal malpractice case, and
does not involve Section 487. Mecca v. Shang, 685 N.Y.S.2d 458,
459 (2d Dep't 1999), dismissed the Section 487 claim of a
litigant's wife on the ground that she was not a party to the
prior proceeding. Finally, Olshansky, 2001 WL 99857, at *4,
held that even a non-party could raise a Section 487 claim
provided that he alleged a fiduciary relationship, id., but did
not hold that a fiduciary relationship is required for a party
to raise such a claim.
Dippold also argues that Trepel only alleges one bad act, and
that this cannot meet the "chronic, extreme pattern of legal delinquency" standard. The conduct alleged in the Complaint
supports the notion that Dippold engaged in an ongoing practice
of deception and collusion the alleged bad acts extend well
beyond a single statement at the October 28 hearing. In any
event, as described above, a single act of deceit undertaken with
an intent to deceive will support a claim.
In sum, the Complaint alleges a claim under N.Y. Judiciary Law
§ 487. The remaining claims against Dippold and the Beldock Firm
present alternate grounds for recovery. Since the presence of
these claims will not affect the scope of discovery, it is
unnecessary to address their sufficiency in the context of this
motion to dismiss. Defendants may renew their arguments relating
to the remaining claims in a motion for summary judgment or a
motion in limine if appropriate.
The motion to dismiss brought by Dippold and the Beldock Firm