A. Michael Furman and Younie J. Choi obtain dismissal of a legal malpractice action on behalf of a real estate attorney in Supreme Court, New York County.10/4/2010

A. Michael Furman and Younie J. Choi obtained the dismissal of a legal malpractice action on behalf of a real estate attorney who unwittingly became embroiled in the aftermath of a heated matrimonial action. FKB's client was retained to represent a seller in what he believed would be a simple real estate transaction, arising from the stipulated divorce between the seller and her ex-husband where they agreed to split the proceeds from the sale of their marital home. Instead, he became a party to a civil action in which he and two co-defendants were alleged to have participated in a scheme to defraud the plaintiff of his share of the proceeds from the sale.

The defendant attorney was retained by the co-defendant seller, who was appointed as receiver on behalf of the plaintiff ex-husband for the purpose of selling their former marital home. After the sale was consummated, the defendant attorney split the proceeds between both the seller and her ex-husband into two separate checks made out to each party. Both checks were tendered to the seller, who, as receiver, was to forward one check to her ex-husband. However, the seller forged the check, deposited the funds into a separate receiver account, and withheld her ex-husband's proceeds.

As a result of the seller's actions, the plaintiff commenced a lawsuit against FKB's client, the co-defendant seller, and the banking institution in which the subject check was deposited. Although the plaintiff did not retain FKB's client directly, the plaintiff's claims as to FKB's client sounded in Breach of Fiduciary Duty, Conversion and Aiding and Abetting. The plaintiff alleged that the defendant attorney colluded with the seller in order to divert and withhold the plaintiff's share of the real estate proceeds, in violation of the fiduciary relationship between the plaintiff and the attorney.
FKB filed a pre-answer motion to dismiss on the grounds that all of the plaintiff's claims failed as a matter of law. Specifically, FKB argued that there was no attorney-client relationship and that the plaintiff could not establish Conversion or Aiding and Abetting, particularly since the defendant attorney did not have any knowledge or control over the unilateral actions of the co-defendant seller after the real estate transaction had been effectuated.

FKB's decision to forgo discovery and file a pre-answer motion to dismiss proved successful when Justice Jane S. Solomon (New York County Supreme Court) ordered that all funds be returned to the plaintiff and discontinued the action against all parties.

FKB's client was represented by A. Michael Furman and Younie J. Choi.

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