Summary
holding that while generally an action against attorney by nonclient third party will not lie, an attorney may be liable for injuries sustained by third party as consequence of attorney's improper conduct, such as where attorney committed a wrongful or malicious act
Summary of this case from RX USA International, Inc. v. Superior Pharmaceutical Co.Opinion
August 17, 1981
In an action by a stockholder, inter alia, to compel the issuance of an attorney's letter, defendant appeals from an order of the Supreme Court, Kings County (Bernstein, J.), dated December 22, 1980, which denied its motion for summary judgment. Order modified, on the law, by adding thereto, after the provision denying the motion for summary judgment, the following: "except the motion is granted to the extent of dismissing the demand for relief pursuant to section 487 Jud. of the Judiciary Law." As so modified, order affirmed, without costs or disbursements. Plaintiff, an alleged owner of unregistered and restricted stock of a corporation, brought this action, inter alia, seeking damages on the ground that the defendant, Whitman Ransom, counsel to the corporation which issued the stock, aided and abetted the corporation, its officers and the transfer agent, in an effort to impede plaintiff's attempt to sell his stock by refusing to provide an opinion letter releasing the restricted stock for sale, although plaintiff allegedly complied with rule 144 of the Securities and Exchange Commission ( 17 C.F.R. § 30.144). Generally, an action against an attorney by a nonclient third party will not lie (see Gifford v. Harley, 62 A.D.2d 5; Victor v. Goldman, 74 Misc.2d 685; Dallas v. Fassnacht, 42 N.Y.S.2d 415). However, an attorney may be held liable for injuries sustained by a third party as a consequence of the attorney's wrongful or improper exercise of authority, or where the attorney has committed fraud or collusion or a malicious or tortious act (see Newburger, Loeb Co. v. Gross, 563 F.2d 1057, cert den 434 U.S. 1035; Cronin v. Scott, 78 A.D.2d 745; Sefi Fabricators v Tillim, 79 Misc.2d 213; Kasen v. Morrell, 18 Misc.2d 158). Except as hereinafter noted, summary judgment is not appropriate in this case and a trial should be had, as questions of fact exist as to whether Whitman Ransom's refusal to issue the opinion letter was part of a deliberate and unwarranted attempt to forestall plaintiff's transfer of his stock while permitting favored shareholders to transfer their shares. These allegations, if proven, would subject Whitman Ransom to liability (see Newburger, Loeb Co. v. Gross, supra). Finally, section 487 Jud. of the Judiciary Law provides for a cause of action against an attorney where the alleged deceit or collusion with the intent to deceive any party, occurred in a pending judicial proceeding (see Looff v. Lawton, 97 N.Y. 478). Where the deception is directed against a court, a pending judicial proceeding is not required; it is sufficient if the deception relates to a prior judicial proceeding or one which may be commenced in the future (see People v. Connolly, 3 A.D.2d 943; Fields v. Turner, 1 Misc.2d 679). Neither circumstance exists in this case and the claim for relief pursuant to section 487 should be dismissed. Hopkins, J.P., Mangano, Margett and Thompson, JJ., concur.