New York’s Appellate Division, 1st Department, has thrown out a defamation action filed by one Manhattan attorney against another that had charged the defendant pursued a sham malpractice suit against the plaintiff solely to gain the privilege against libel for statements made in the course of legal proceedings.

Defendant Thomas E. Engel filed the underlying malpractice claim against plaintiff Michael A. Lacher on behalf of Parametric Capital Management and its chief executive, Erik Postnieks, in July 2003. That suit charged among other things that Lacher had padded his bills and surfed dating and gambling Web sites during the 18-month period in which he billed Parametric more than $3 million for his work in an arbitration proceeding.

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