This motion by former defense counsel, Russ & Russ, P.C., Jay Edmond Russ, Daniel P. Rosenthal, Kenneth J. Lauri and Ira Levine, (the Russ attorneys), for an order dismissing the parties' motions for sanctions on the moving parties for engaging in frivolous conduct as defined in 22 NYCRR 130-1.1, or, in the alternative, staying a hearing on the aforesaid motions, dated March 18, 2008, and March 24, 2008, until a decision is rendered on the Russ attorneys' motions to dismiss the complaint in an action brought against them by Rozen for breach of section 487 of the Judiciary Law (pending under Index Number 19442/2007), and another action brought against them for malpractice (pending under Index Number 01462/2008) is determined as follows.

The Russ attorneys represented the defendants in the above captioned actions brought to recover sums due on loans plaintiffs made to defendants over a number of years. After several years of engaging in discovery (beginning in January and July of 2005), the actions were tried to verdict over 10 days in August of 2007, with the jury awarding plaintiffs a verdict in excess of $800,000.00. The equitable claims are still pending resolution in this court.

After the trial concluded, the plaintiffs became aware that a certain parcel of real property situate in Mattituck, New York, which had been the subject of financial transactions between the parties, and on which it was understood at the time of trial that defendant Sally Omar held an option, was no longer subject to that option. The option had, on May 12, 2007, been assigned by Omar to her attorneys, seemingly in lieu of payment of fees. Plaintiffs assert that settlement offers extended to the Omar defendants, and their business entities, were not transmitted to them by defense counsel insofar as the offers involved the Mattituck property to which the defendants no longer held any interest.

In March of 2008 both the plaintiffs and the defendants moved for a hearing to impose sanctions on Russ & Russ, P.C., and those professionals affiliated with them, for engaging in [*2]litigation conduct which satisfies the definition of frivolous conduct as set forth in 22 NYCRR § 130-1.1. (Motion Sequence No. 008 and No. 009.). It is alleged that the conduct of the moving parties undermined the integrity of the judicial process and increased the legal fees of the plaintiffs. Specifically that : "It was the intention of the Russ & Russ Attorneys to take the option to the Mattituck property from the Omars and then cause the Rozens to incur extensive delays and expense so that they would relinquish their rights to the Mattituck property without the knowledge that the Russ & Russ Attorneys sought to develop and profiteer from the property." Rosen OSC dated March 18, 2008, ¶ 11.

It is also claimed that the Russ attorneys instructed the Omars not to divulge any financial or personal information and not to produce any bank records, nor tax returns, neither corporate or personal, or corporate books or records, and that such refusal was "part of a deliberate and designed pattern of conduct to prolong this litigation, cause the Plaintiffs to incur costs and legal fees, and frustrate the Plaintiffs' prosecution of this matter." Rosen OSC ¶ 30.

In sum, it is alleged that Russ & Russ delayed litigation, displayed lack of candor in addressing the court, manifested indifference to the expenses incurred by plaintiffs, and asserted affirmative defenses that were devoid of merit, and, because the Omars assigned the option to them, did not disclose plaintiffs' settlement offers that involved the Mattituck property.

The motion sub judice seeks to stay the hearing on the aforestated motions for sanctions on the grounds that the alleged perpetrators of frivolous conduct are no longer representing the Omars in the remainder of this or any action before this court. They claim that the court lacks jurisdiction to entertain the motion. They were, it is acknowledged, discharged in October of 2007. Moreover, it is claimed that the action for legal malpractice commenced by the Omars (under Index Number 01462/2008) is a bar to liability under 22 NYCRR 130-1.1.

Movants rely upon the text of 22 NYCRR 130-1.1 for support. The first and last paragraphs of the statute state: "The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court... [costs for expenses or attorney fees and incurred as a result of frivolous conduct, and also sanctions]. The award or sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated." [Emphasis added]. It is argued that the Russ attorneys are not appearing in the remaining equitable segment of the trial and are not attorneys in a proceeding before the court. Moreover, under the common law, costs of litigation and sanctions were not allowed to the prevailing party, and statutes authorizing such awards should be strictly construed in derogation of the common law. Saastomoien v Pagano, 278 AD2d 218 (2d Dept 2000). To impose financial sanctions on a discharged attorney would therefore do violence to the American rule that each side bears the cost of its own representation. Mercantile Factor's Corporation v Warner Bros Pictures, 215 A.D. 530, 534 (1st Dept 1926) aff'd 244 NY 504 (1926).

The second prong of the Russ attorneys' argument is that the parties are, in essence, forum shopping since they seek to have the undersigned justice determine the remedy for the alleged attorney misconduct instead of proceeding in the two cases already filed and assigned to other justices under the IAS system.

It is argued that the three different proceedings are duplicative, and, having chosen to seek relief for alleged attorney misconduct in two plenary actions, the parties are now precluded from having the facts determined by the undersigned and with the risk of inconsistent results. [*3]

However, it is old law that a person can be tried for the same offense, only once. Ryan v New York Telephone Co., 62 NY2d 494, 500 (1984). If it were assumed for purpose of argument that the same facts are material to each case, movants have not identified any prejudice to having it, or them, determined in the parties choice of forum. However, to the view of the court the quantum of proof is not identical in each situation, nor are the available remedies. To succeed in a claim for legal malpractice a breach of duty, proximate cause, and damages must be established. To establish causation, it must be shown that the Omars would have prevailed and would not have suffered damages, but for the alleged negligence. Carrasco v Pena & Kahn, 48 AD3d 395 (2d Dept 2008). That is a different focus than the disturbance created by frivolous conduct.

On the other hand, section 487 of the Judiciary Law addresses attorney misconduct.The proof required is either a pattern of or chronic unprofessional behavior, Wiggin v Gordon, 115 Misc 2d 1071, or a single egregious act as a lawyer. Kirk v Heppt, 532 F.Supp2d 586 (S.D.NY 2005). This application, on the other hand, provides a remedy for unnecessary legal fees visited upon plaintiff as caused by frivolous conduct. Gordon v Marrone, 155 Misc 2d 726 (Sup. Ct., NY Co. 1992).

The first ground for dismissal is rejected; to espouse it would allow a lawyer to escape liability for frivolous conduct by arranging to be fired after engaging in mischief, or, by a more civilized approach, by moving to withdraw as counsel. In this case where the essence of the frivolous conduct lays in Russ's concealment of Omar's assignment of its option to him, it would be particularly unjust to allow the concealment to operate as a shield against sanctions.

Regardless of the inherent invitation to trickery that would be created if counsel could escape liability by purposely withdrawing, it has been established that lawyers no longer serving as counsel for even non-collusive reasons are within reach of judgment. Principe v Assay Partners, 154 Misc 2d 702, 712 (Sup. Ct., NY Co. 1992). As a principle, courts have the jurisdiction and discretion to impose sanctions in order to pursue the goals of such penalties, even long after a case has been settled or dismissed. Levy v Carol Management Corporation, 260 AD2d 27, 34 (1st Dept 1999).

The Omar defendants argue that sanctions for frivolous conduct is in the nature of punishment for a lawyers' unseemly conduct, whether damages are sustained or not. The process of exposing willful mischief in the conduct of litigation is contrasted to the elements of a claim for malpractice where damages must be established. Although damages may be sustained in the wake of frivolous conduct, it is likely in the nature of delayed justice and or expenditure of unwarranted legal fees.

Finally, it must be remembered that a judge should take measures against a lawyer for unprofessional conduct of which the judge may become aware. Code of Judicial Conduct Canon 3B.

In sum, it is the decision of the court that movants have not established sufficient reason why this court should not entertain a motion by the parties for sanctions and the motion sub judice is denied. Movants' opposition to the merits of the parties motions for sanctions shall be submitted for reading by June 16, 2008, any reply thereto shall be submitted no later than June 24, 2008, and the motions are, accordingly, adjourned from April 30th to June 24, 2008.

Dated: May 30, 2008

J.S.C.