Court of Appeals for New York, Albany (Courtesy photo) Court of Appeals for New York, Albany. 

The New York Court of Appeals held Thursday that past actions taken in a lawsuit should not be thrown out if the initial attorney bringing the litigation is found to have violated Section 470 of the state’s judiciary law, which requires an attorney bringing litigation in the state to maintain a permanent office in New York.

The ruling was a unanimous reversal of a decision last year by the Appellate Division, which said litigation should have to start fresh if an attorney is found to have violated that law, making all past actions in the lawsuit null and void.

That section of state law prohibits out-of-state attorneys from bringing a lawsuit in New York if they don’t have a physical office in the state, regardless of whether they’re licensed to practice there or not.

That’s what allegedly happened when Arrowhead Capital Finance sued Cheyne Specialty Finance Fund in 2014. Arrowhead retained Barry Goldin, a solo practitioner based in Allentown, Pennsylvania, to handle the litigation, which was over alleged breaches of two trust agreements between the two companies.

Less than a year after the lawsuit was filed, attorneys for Cheyne claimed they had discovered Goldin lacked a permanent office in New York. Jeffrey Korn, a partner at Willkie Farr & Gallagher in Manhattan, said a private investigator hired by Cheyne found no evidence of an office for Goldin at the address he provided on legal documents.

Cheyne moved to dismiss the lawsuit about a year after discovering Goldin’s alleged noncompliance with the in-state office mandate. The same day the court granted Cheyne permission to file that motion, William Dahill, a partner at Wollmuth Maher & Deutsch in Manhattan, filed a notice to that he would also appear on behalf of Arrowhead in the case.

Manhattan Supreme Court Justice Shirley Werner Kornreich of the commercial division had already thrown out part of the lawsuit on different grounds before that point. Cheyne was seeking to have the rest of it tossed since Goldin allegedly didn’t have an office in New York when the complaint was filed in 2014.

That won’t happen after the Court of Appeals ruled Thursday that the litigation may continue at the trial court where it left off since Arrowhead had retained Dahill before the rest of the suit was dismissed.

The decision was based partly on the court’s 1974 decision in Dunn v. Eickhoff that found if an attorney is disbarred while a lawsuit is ongoing, the previous actions in that litigation would not be considered null. Arrowhead argued that the same rule should apply in this case. Associate Judge Michael Garcia agreed with that stance.

“It would be incongruous to conclude that, unlike the acts of a disbarred attorney, actions taken by an attorney duly admitted to the New York bar who has not satisfied Judiciary Law § 470’s office requirement are a nullity,” Garcia wrote. “Instead, the party may cure the section 470 violation with the appearance of compliant counsel or an application for admission pro hac vice by appropriate counsel.”

Arrowhead was represented before the high court by Goldin. Goldin did not immediately return a call for comment Thursday.

Shaimaa Hussein, another partner at Willkie, argued before the court for Cheyne. She did not immediately return a request for comment.

The motion to dismiss was the result of investigatory work that’s not ordinarily employed by a litigant who suspects an attorney may not have a permanent office in New York. Korn had written to the court in 2015 about Cheyne’s efforts to scope out Goldin’s alleged in-state address.

“A recent visit to the 240 Madison Avenue address that appears on pleadings beneath Mr. Goldin’s Pennsylvania address revealed no evidence of him having a physical law office there: his name is not in the building directory and the only company seemingly occupying the floor listed by Mr. Goldin is called ‘Edit Limited,’” Korn wrote.

Korn did not immediately return a request for comment on the case heading back to the trial court.

READ MORE:

Court of Appeals to Eye NY State Court Practice for Out-of-State Attorneys

Local Governments May Tax Telecommunications Infrastructure, NY High Court Rules

NYPD Can Withhold Disciplinary Records From Public, NY Court of Appeals Holds