The claims in the complaint are striking. Claims that a 90-year old was pushed into a guardianship, was wrested from her home of 70 years, was defamed and was the recipient of extreme emotional distress did not state a cause of action for violation of Judiciary Law 487.
in Kohler v West End 84 Units LLC 2024 NY Slip Op 34215(U) November 26, 2024 Supreme Court, New York County Docket Number: Index No. 654985/2023 Judge: Lyle E. Frank, the Judiciary Law 487 claim was dismissed as not egregious enough and not delinquent enough. This relief is not lightly given.
“Ms. Paulette Kohler (“Kohler”) has lived in one of the West End 84 Units LLC (“Landlord”) rent-controlled apartments for over seventy years. Ms. Kohler is currently 94 years old, widowed, and her only child died in 2020. In 2011, she met a Norwegian woman named Kjersti Inga Eggerud (“Eggerud”, collectively with Kohler “Plaintiffs”). The two women became friends, and on March 21, 2021, Ms. Kohler executed a Durable Power of Attorney, Health Care Proxy, and a Last Will & Testament that appointed Eggerud as her agent and sole beneficiary. These documents were executed by an attorney who had known Ms. Kohler for decades and they were duly witnessed and executed after it was confirmed that Ms. Kohler had the requisite mental capacity. The FBI Enters the Scene According to documents presented by Plaintiff, in June of 2021 an unknown person(s) contacted the FBI and alleged that Eggerud had engaged in elder abuse of Ms. Kohler. The FBI, according to these documents, conducted an initial assessment and attempted repeatedly to reach out to Ms. Kohler but she would not discuss the matter. In October, they called Eggerud and informed her of the report. Allegedly, on November 14 an FBI agent called Eggerud and informed her that the matter was closed and that there was no evidence against her. Then in December of 2021, the FBI closed the “Incident” and gave as a reason that the “[a]llegation could not be substantiated or is deemed mitigated at this time.” There are several issues of disputed fact as to whether the FBI ever sent an agent to Ms. Kohler’s apartment, what was said and done at such a meeting if it happened, and the extent to which the FBI communicated with various parties during this process. The Article 81 Guardianship Proceeding and Ultimate Reversal In late December 2021, Mrs. Kohler, who had just had surgery for an intestinal blockage, was transferred to the Riverside rehabilitation center for short term rehabilitation for recovery. Beginning in January of 2022, when Eggerud began attempting to enter Ms. Kohler’s apartment to prepare it for her release from Riverside, Landlord ( and others) refused Eggerud access to the apartment and declined to honor the power of attorney. The parties went back and forth on the matter, and in March of 2022 defendant Elizabeth Adinolfi (“Adinolfi”), a guardianship attorney employed by defendant Phillips Nizer LLP (“PN”, collectively with Adinolfi the “PNDefendants”), filed an Article 81 petition to appoint a Guardian over Ms. Kohler (the “Guardianship Proceeding”). The PN-Defendants were counsel for the Landlord, and Adinolfi claimed during the special proceeding that it was at least in part motivated by threats to file suit by Eggerud’ s counsel if the POA was not honored by Landlord. At this proceeding, Adinolfi also alleged, among other things, that Ms. Kohler lacked capacity at the time that she executed the POA and that Eggerud was under investigation from the FBI. In March the trial court granted the petition and appointed a temporary guardian over Mrs. Kohler, defendant Charles Barbuti (“Barbuti”). This decision was appealed, and the First Department overturned the decision in an order dated November 21, 2023 (the “Appeal Order”). That order reinstated the POA and health care proxy and vacated the temporary guardianship. Statement to NBC News An NBC News story about these events aired on October 14, 2022. Landlord prepared a statement for NBC (the “NBC Statement”) and made several claims about the alleged FBI investigation, Ms. Kohler’s financial affairs, and Eggerud’ s attempt to enter Ms. Kohler’s apartment with the POA. The Landlord claimed to have been motivated to initiate the guardianship proceedings “[i]n an effort to protect Mrs. Kohler” and that they were hesitant to give access to Ms. Kohler’s apartment to “someone under FBI investigation for financial abuse.” The resulting story, as well as a subsequent one on November 2, 2022, repeated allegations of possible elder abuse by Eggerud. The PN-Defendants claim to have been told by the FBI that they were “permitted to say: there are allegations that Ms. Kohler is a victim of financial fraud and that investigations are pending.” The Plaintiffs interpret this language as meaning that the PN-Defendants were not authorized to state that Eggerud was an FBI suspect in a financial fraud investigation, and the PN-Defendants interpret this language as meaning that they were permitted to state to the public that Eggerud was being investigated for elder abuse by the FBI. This Motion’s Procedural Posture Plaintiffs filed the present suit in November of 2023. They allege in the second amended complaint eighteen causes of action on behalf of Ms. Kohler and a further six on behalf of Eggerud. Broadly, the second amended complaint alleges a potential scheme to defraud Ms. Kohler of her rent-controlled apartment and various abuses of the guardianship process including alleged improper handling of Ms. Kohler’s finances during the temporary guardianship. The PNDefendants have brought the present motion to dismiss certain causes of action asserted against the PN-Defendants pursuant to the CPLR §§ 3016, 321 l(a)(l), (5), (7) and (g), as well as the N.Y. Civ. Rights Law§§ 70-A and 76-A. They have also moved for damages and sanctions against Eggerud and her counsel.”
“The PN-Defendants have moved to dismiss the tenth cause of action on the grounds that it fails to state a valid Judiciary Law Section 487 claim. More specifically, the PN-Defendants argue that the claim is based on statements made during the Guardianship Proceeding, and that those statements are covered by the litigation privilege ( as addressed above). They also argue that Plaintiffs have not pled facts that reach the requisite level of egregious misconduct required for the claim. The Judiciary Law Section 487 allows an injured party to seek treble damages in a civil action against an attorney who “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.” The PN-Defendants do not cite to any case standing for the proposition that the litigation privilege shelters attorneys from liability under Section 487 for any statement made during the course of a proceeding. 2 Indeed, statements made “with intent to deceive the court” would in almost all cases need to be made during the course of a proceeding, so it would be difficult to extend the privilege (meant to protect from defamation claims) to Section 487 and still leave Section 487 as a viable cause of action. That facts pled in support of Plaintiffs’ Section 487 claim involve statements made to the court during the course of the Guardianship Proceeding does not, on its face, defeat the claim. A Section 487 claim must involve deceitful behavior that “reaches the level of egregious conduct or a chronic and extreme pattern of behavior” by the attorney at issue. Savitt v. Greenberg Traurig, LLP, 126 A.D.3d 506, 507 (1st Dept. 2015). To survive a motion to dismiss, the plaintiff need to make this showing with more than conclusory allegations. Nehmadi v. Claude Castro & Assoc. P LLC, 204 A.D .3d 544, 544 (1st Dept. 2022). Furthermore, “[a]llegations regarding an act of deceit or intent to deceive must be stated with particularity; the claim will be dismissed if the allegations as to sci enter are conclusory and factually insufficient.” Facebook Inc., v. DLA Piper LLP (US), 134 A.D.3d 610, 615 (1st Dept. 2015). To plead a valid claim under Section 487, a plaintiff must therefore plead facts with particularity that, taken as true with every favorable inference, shows that the attorney at issue intended to deceive the court and that their deception either reached an egregious level or constituted a chronic and extreme pattern. The issue for this motion is whether the Plaintiffs have met this heavy pleading standard. Plaintiffs’ basis for the Section 487 claim is largely that the PN-Defendants “engaged in a broad overreaching scheme to improperly employ the guardianship process to oust the 94 year [] old Ms. Kohler from her rent-controlled apartment ( on behalf of her landlord client) and to protect her law firm from a lawsuit, by engaging in repeated deceit” during the Guardianship Proceeding. While Plaintiffs’ papers are filled with conclusory statements and overwrought language, there are also facts beyond mere conclusory allegations pled in support of this contention. Plaintiffs allege that the PN-Defendants knew, before filing the Article 81 Petition, that the one incident of suspected financial impropriety by Eggerud ( which had occurred several years before) had been proven to have been authorized by Ms. Kohler, but that they still represented to the court in the Guardianship proceeding that the money was gone and that there were concerns about the legitimacy of the transfer. They allege that the PN-Defendants knew that there was no official FBI investigation into Eggerud but represented that there was to the Guardianship court. They allege that the PN-Defendants represented that a guardianship was needed in part because “we have reports that the apartment is in horrible condition” when, as the First Department pointed out in their Appeal Order, it was the building staff that were uncooperative with the repair requests. The issue is that while the Plaintiffs have alleged facts that go to their Section 487 claim, what they allege has not met the requisite level of egregious or extreme conduct, at least so far as deceit upon the guardianship court is concerned. Therefore, the tenth cause of action is properly dismissed.”