Jacobson v. Fein, Such & Crane, LLP

Summary

The Appellate Division, Second Department, affirmed an order denying attorney defendants' motion to dismiss claims, including claims under Judiciary Law § 487, arising from alleged deceit in a foreclosure action. The court held that res judicata and collateral estoppel did not apply because the attorneys were not parties or in privity with a party to the foreclosure action and the alleged attorney fraud was not decided there. The court also held that the claims were not improper collateral attacks on the foreclosure judgment and were not time-barred, because damages accrued no earlier than entry of that judgment and the alleged continuing wrongs extended the limitations period.

Holdings

1. Res judicata did not require dismissal because the attorney defendants were neither parties to the foreclosure action nor in privity with a party to that action.
2. Collateral estoppel did not require dismissal because the foreclosure action did not consider or decide allegations that the attorney defendants perpetrated fraud.
3. The complaint was not subject to dismissal for failure to state a cause of action because it alleged deceitful conduct by attorneys, injury, and damages that could reasonably be attributed to that conduct.
4. The Judiciary Law § 487 claims did not constitute an improper collateral attack on the judgment of foreclosure and sale.
5. The claims relating to conduct before November 2014 were not time-barred because the Judiciary Law § 487 claims accrued no earlier than October 15, 2018, and the alleged continuing wrongs accrued on the date of the last wrongful act.

Questions Presented

1. Whether the plaintiff's claims against the attorney defendants were barred by res judicata because they arose from the prior foreclosure action.
2. Whether collateral estoppel barred the claims because issues concerning the alleged attorney fraud had been decided in the foreclosure action.
3. Whether the Judiciary Law § 487 claims constituted an improper collateral attack on the foreclosure judgment.
4. Whether claims concerning conduct occurring before November 2014 were barred by the statute of limitations.
5. Whether the complaint adequately alleged a Judiciary Law § 487 claim, including injury and damages attributable to the alleged deceit.

Disposition

affirmed