Opinion
15188 Index No. 114874/10 Case No. 2021–02197, 2021–02198
02-01-2022
Katherine PRIESTLEY, Plaintiff–Respondent, v. PANMEDIX, INC., et al., Defendants–Respondents, Ballon, Stoll, Bader & Nadler, PC et al., Defendants, Halket Weitz LLP, sued herein as Halket Weitz, et al., Defendants–Appellants.
Traub Lieberman Straus & Shrewsberry LLP, Hawthorne (Jonathan Harwood of counsel), for appellants. Russ & Russ, P.C, Massapequa (Ira Levine of counsel), for Katherine Priestley, respondent. Rich Michaelson Magaliff, LLP, New York (Howard P. Magaliff of counsel), for Panmedix, Inc., McDonald Comrie and Phillip Yee, respondents.
Traub Lieberman Straus & Shrewsberry LLP, Hawthorne (Jonathan Harwood of counsel), for appellants.
Russ & Russ, P.C, Massapequa (Ira Levine of counsel), for Katherine Priestley, respondent.
Rich Michaelson Magaliff, LLP, New York (Howard P. Magaliff of counsel), for Panmedix, Inc., McDonald Comrie and Phillip Yee, respondents.
Kern, J.P., Friedman, Scarpulla, Rodriguez, JJ.
Order, Supreme Court, New York County (Kelly O'Neill Levy, J.), entered on or about April 12, 2021, and amended order, same court and Justice, entered on or about April 14, 2021, which, insofar as appealed from as limited by the briefs, granted plaintiff's motion for summary judgment on liability on the claims against defendant Halket & Weitz LLP s/h/a Halket Weitz (HW) for attorneys’ fees under Debtor and Creditor Law § 276–a and for aiding and abetting fraud, and denied the motion of defendants HW and Theodore Weitz, Esq. for summary judgment dismissing those claims as against HW, as well as the tortious interference with collection of a money judgment claim as against both HW and Weitz, unanimously modified, on the law, defendants’ motion for summary judgment granted as to the tortious interference claim against Weitz, and otherwise affirmed, without costs.
The tortious interference with collection of a money judgment claim should have been dismissed as against defendant Theodore Weitz, Esq., but not defendant HW (see generally James v. Powell, 25 A.D.2d 1, 2, 266 N.Y.S.2d 245 [1st Dept. 1966], revd on other grounds by 19 N.Y.2d 249, 279 N.Y.S.2d 10, 225 N.E.2d 741 [1967] ). This claim accrued on December 11, 2009, when plaintiff was prevented by the tortious interference from executing on the judgment (see Thome v. Alexander & Louisa Calder Found., 70 A.D.3d 88, 108, 890 N.Y.S.2d 16 [1st Dept. 2009], lv denied 15 N.Y.3d 703, 2010 WL 2572017 [2010] ). Although this claim was not asserted until the second amended complaint, which was not filed until after expiration of the applicable three-year statute of limitations (see CPLR 214[4] ; Thome, 70 A.D.3d at 108, 890 N.Y.S.2d 16 ), it should nonetheless be deemed timely insofar as asserted against HW because it arose out of the same transaction or occurrence as the original fraudulent conveyance claims and thus relates back to the filing of the first amended complaint (FAC) (see CPLR 203[f] ; Cady v. Springbrook NY, Inc., 145 A.D.3d 846, 846–847, 44 N.Y.S.3d 107 [2d Dept. 2016] ). Relation back is not proper as to Weitz, however, because he was not named in the FAC and there has been no showing that the failure to name him was due to a "mistake" as to his identity (see Buran v. Coupal, 87 N.Y.2d 173, 178, 181, 638 N.Y.S.2d 405, 661 N.E.2d 978 [1995] ).
Further, with respect to the tortious interference claim, plaintiff raises issues of fact as to whether HW knew that the purpose of the Security Agreement was to defraud plaintiff. There are also issues of fact as to the extent and nature of plaintiff's alleged damages (see generally James, 25 A.D.2d at 4, 266 N.Y.S.2d 245 ).
Summary judgment on liability was properly awarded to plaintiff on her claim against HW for attorneys’ fees under the applicable version of Debtor and Creditor Law § 276–a predating the amendments effective April 2020 (see generally Posner v. S. Paul Posner 1976 Irrevocable Family Trust, 12 A.D.3d 177, 179, 784 N.Y.S.2d 509 [1st Dept. 2004] ). HW was a "transferee" within the meaning of this provision, as it received a security interest in defendant Panmedix, Inc.’s (Panmedix's) property (see Debtor and Creditor Law § 270[p] ). HW also had actual intent to defraud as a matter of law. Numerous badges of fraud were already found to exist in a prior federal court order (see Priestley v. Panmedix, Inc., 18 F. Supp.3d 486, 503 [S.D.N.Y.2014] ; see also generally CDR Cre´ances S.A.S. v. First Hotels & Resorts Invs., Inc., 153 A.D.3d 1208, 1209, 62 N.Y.S.3d 52 [1st Dept. 2017] ; Wall St. Assoc. v. Brodsky, 257 A.D.2d 526, 529, 684 N.Y.S.2d 244 [1st Dept. 1999] ). The record is also clear that HW, as Panmedix's counsel, had a close relationship therewith, and that it had knowledge of plaintiff's claim and of Panmedix's inability to pay it. Although an award of attorneys’ fees is not appropriate where it is the only remedy available under the Debtor and Creditor Law, this is not the case here, as plaintiff's other fraudulent conveyance claims were found to have merit and she was awarded relief thereon. Summary judgment on liability was also properly awarded to plaintiff on her claim against HW for aiding and abetting fraud (see generally Stanfield Offshore Leveraged Assets, Ltd. v. Metropolitan Life Ins. Co., 64 A.D.3d 472, 476, 883 N.Y.S.2d 486 [1st Dept. 2009], lv denied 13 N.Y.3d 709, 2009 WL 3379028 [2009] ). It is undisputed that HW drafted the subject Security Agreement and the federal court already decided that there was no "bona fide purpose" therefor "other than to block and hinder Priestley from getting at corporate assets to which she was lawfully entitled" (see Priestley, 18 F.Supp.3d at 503–04 ; see also Oster v. Kirschner, 77 A.D.3d 51, 56–57, 905 N.Y.S.2d 69 [1st Dept. 2010] ).