The Court of Appeals in Albany ()
ALBANY – A suit against Greenberg Traurig and former partner Leslie Corwin was revived Tuesday by the state Court of Appeals, which found that under legal traditions dating back to the early days of New York statehood—and even older British common law—the action is not time-barred.
The unanimous Court of Appeals held in Melcher v. Greenberg Traurig, 24, that a six-year statute of limitations applies to attorney deceit claims under CPLR 213(1), not the three-year claim that the defendants argued was applicable in the case under CPLR 214(2).
The Appellate Division, First Department had applied the three-year statute and dismissed the suit brought by James Melcher as untimely (NYLJ, Jan. 18, 2013).
Melcher filed suit against Corwin and Greenberg Traurig, alleging that Corwin knowingly attempted to deceive the court, in June 25, 2007. That date exceeded the three-year limit from the Jan. 27, 2004, conversation in which Melcher alleged that Corwin, who represented a hedge fund, told him a 1998 agreement had diminished Melcher’s share of profits from the fund.
Writing for the court Tuesday, Judge Susan Phillips Read (See Profile) said claims for attorney deceit under state Judiciary Law §487 is traceable to a law—which first called for treble damages—that was adopted in New York in 1787. But she said that even at that early date, the attorney deceit law embodied common-law traditions of colonial New York and of England going back several centuries.
New York’s proscriptions for attorney deceit, Read wrote, evolved from those established in the Statute of Westminster, which was adopted by the Parliament summoned by King Edward I in 1275. The cause of action was carried into New York law through adoption of that 1275 law and of other British common laws when New York established its own statutes, she wrote.
But Read said it was in error to hold that a three-year period of recovery for attorney deceit “upon a liability, penalty or forfeiture created or imposed by statute” under CPLR 214(2) applied.
Instead, she said, Judiciary Law §487 should be governed by a “catch-all” phrase in CPLR 213(1) applying to “an action for which no limitation is specifically prescribed by law.” She said that interpretation was supported by the Court of Appeals’ own ruling in Amalfitano v. Rosenberg, 12 NY3d 8 (2000), in which the court said treble damages could be levied in a case of attempted, but unsuccessful, attorney deceit (NYLJ, Feb. 17, 2009).
Chief Judge Jonathan Lippman (See Profile) and Judges Victoria Graffeo (See Profile), Robert Smith (See Profile), Eugene Pigott Jr. (See Profile) and Jenny Rivera (See Profile) concurred with Tuesday’s decision.
Judge Sheila Abdus-Salaam (See Profile) took no part in the ruling.
Melcher claimed that as a former member of the Apollo Medical Fund Management hedge fund, he was entitled to profits that were illegally withheld from him. He sued Apollo and its principal, Brandon Fradd, in 2003 seeking those profits.
In January 2004, Melcher said Corwin, who represented Apollo and Fradd, informed him of the 1998 agreement he claimed limited profits Melcher could realize from the hedge fund.
Melcher asked to see the document, and said he was prepared to use forensic testing to verify if it did, in fact, date to 1998. But he said Corwin told him that Fradd burned the two-page document while making tea.
It later was determined that the document was too badly damaged to undergo forensic examination.
Melcher sued Greenberg Traurig and Corwin, contending that they tried to help Fradd deceive the court about the document’s whereabouts and the circumstances of its damage.
Melcher alleged that Corwin and Fradd made the false statement to the trial court that they were holding the original 1998 documents in escrow “to mislead the Supreme Court that the document was safe and had not been tampered with, when the truth was the opposite.”
The defendants, Melcher claimed, intended to “deceive, to prevent the Supreme Court and plaintiff from ever discovering that the amendment’ had been burned under highly suspicious circumstances, that the files of the law firm that supposedly drafted it contained no evidence that it ever existed, and that the lawyers who supposedly drafted it had no knowledge of it.”
In a separate action, Melcher won a verdict of nearly $500,000 in Supreme Court against Fradd and the hedge fund.
Jeffrey Jannuzzo, who represents Metcher, applauded Tuesday’s ruling.
“Today’s decision means that Mr. Melcher’s long quest for justice will not be derailed on a technicality, and that Greenberg Traurig will have to stand trial for treble damages, which could approach $20 million,” Jannuzzo said.
James Potter of Hinman Straub in Albany argued on Melcher’s behalf before the Court of Appeals.
Roy Reardon of Simpson Thacher & Bartlett, who represented Greenberg Traurig, said he was “surprised” at Tuesday’s ruling. Reardon is a columnist for the Law Journal who writes about the Court of Appeals.
“We are, of course, disappointed at this ruling; but we deny any wrongdoing and will continue to defend this action on the merits,” Greenberg Traurig said in a statement.