Menz Bonner Komar & Koenigsberg LLP, White Plains (Patrick D. Bonner, Jr. of counsel), for Financiera De Desarrollo Industrial y Comercial S.A., Trecedieciocho S.A., Amherst Inc. and Edith Sara Heredia and Garcia De Daneri, appellants.

Feuerstein Kulick LLP, New York (Daniel J. Brown of counsel), for

Liliana Heredia Del Solar, appellant.

Foreht Associates LLP, New York (Stephen R. Foreht of counsel), for respondent.

Order, Supreme Court, New York County (Gerald Lebovits, J.), entered January 29, 2018, which, to the extent appealed from as limited by the briefs, granted plaintiff's motion for an attachment, unanimously reversed, on the law, with costs, and the attachment vacated.

The IAS court erred in finding that plaintiff was likely to prevail on its claim for fees under the retainer agreement. Whether some or all of plaintiff's fee should be forfeited due to ethical violations is to be determined on a full record. At this stage of the litigation, the allegations and arguments that plaintiff violated the Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.7 (a) by suing Fideicosa for fees while still representing it in the federal action preclude a finding that plaintiff is likely to succeed on the merits. Further, the clause in the retainer agreement that gave plaintiff a veto over any settlement may be found to have violated Rules of Professional Conduct (22 NYCRR 1200.0) rule 1.2 (a) (see Matter of Snyder, 190 NY 66, 75 [1907]), which also calls into question plaintiff's likelihood of success on the merits.

The IAS court also should not have found that plaintiff was likely to prevail on its veil piercing theory (see Shisgal v Brown, 21 AD3d 845, 848 [1st Dept 2005]). Defendants generally observed corporate formalities. Moreover, defendants did not use the corporate form to perpetrate a fraud or wrong upon plaintiff. Rather, defendants merely attempted to negotiate a settlement of the (seventeen year old) case without counsel. At most, this constituted a breach of the corporation's contract (see Time Equities, Inc. v Naeringsbygg 1 Norge III AS, 50 Misc 3d 1221[A], 2016 NY Slip Op 50197[U], *5-6 [Sup Ct, NY County 2016]).

The IAS court was correct that the case was not subject to arbitration under Part 137 of the Rules of the Chief Administrator of the Courts. While the parties' broad arbitration clause constituted consent to arbitrate disputes over $50,000 (see 22 NYCRR 137.1 [b] [2]), the case could not be arbitrated because it involves alleged attorney misconduct (see 22 NYCRR 137.1 [b] [3]; Cohen v Hack, 118 AD3d 460 [1st Dept 2014]).

Finally, plaintiff has obtained adequate security for well over half of the claimed $2 million fee by way of a stipulation with the defendant-payor in the underlying federal action. Pursuant to the stipulation, the defendant payor has agreed to honor plaintiff's charging lien upon judgment or settlement.

As such, the attachment should not have issued (see Laco X-Ray Sys. v Fingerhut, 88 AD2d 425, 430 [2d Dept 1982]). Concur—Sweeny, J.P., Renwick, Tom, Kapnick, Oing, JJ.