Supreme Court, Richmond County, November 10, 2025

OPINION OF THE COURT

Wayne M. Ozzi, J.

{**88 Misc3d 768}The following documents have been read and considered in this matter, which was the subject of hearings before the court on August 19, 2025, and virtually on October 16, 2025 (NY St Cts Elec Filing [NYSCEF] Doc Nos. 69-106).

Background

The issue the court decides here involves counsel for third-party plaintiffs, Sungchan Cho, Esq.'s use of a nonexistent case citation and nonexistent quotations from said case in a summary judgment motion, as a result of his reliance on artificial intelligence (AI). In essence, the motion relied on a nonexistent case generated by AI, resulting in an AI "hallucination," i.e., the production of false or misleading information. This emerging problem, which has been the subject of several recent opinions in New York State court cases, has reared its head in this matter. "[I]mproper usage of AI continue[s] to plague the courts." (Augustin v Formula 3 Brooklyn Inc., 86 Misc 3d 1236[A], 2025 NY Slip Op 51113[U] [Sup Ct, Kings County 2025].) With the proliferation of AI technology, and its use by legal research search engines, numerous Internet "search tools," and various formal and informal databases purporting to compile legal information, there is great risk that the circumstances encountered here will continue to repeat themselves.

This AI-related issue now before the court has its genesis in third-party plaintiffs Kim and Cho's motion for summary judgment in a third-party action they commenced as homeowners against two title companies, one of which issued a policy of insurance (First Nationwide of NY, Inc.), which in turn was underwritten by Stewart Title. By way of brief background, the third-party complaint in this case alleges that the title search and report for the home purchased by third-party plaintiffs at 144 Grymes Hill Road, Staten Island, New York, failed to uncover a prior recorded judgment (NYSCEF Doc No. 37), against one of third-party plaintiffs' predecessors in title, and which determined that the swimming pool area on the subject property was encroaching on an easement in favor of a neighboring lot. The recorded judgment, which runs with the land, specifically directed a prior owner to remove all encumbrances and encroachments. However, this was never accomplished, and the property thereafter changed hands a number of times. After third-party plaintiffs' purchase, the beneficial owner of the easement filed a contempt application against the third-party plaintiffs to enforce the judgment, {**88 Misc3d 769}which application was resolved through a stipulation between the parties. The main issue in this case is the measure of damages owed by the title insurers third-party defendants to third-party plaintiffs, including but not limited to whether they are liable for the pool removal only, for the costs of replacing the encroaching pool and improvements, or for the diminution in property value. This was the subject of the summary judgment motion. The memorandum of law filed in support of Kim and Cho's motion (NYSCEF Doc No. 77) cited Landry v Title [*2]Guarantee & Trust Co. (132 Misc 2d 910 [Sup Ct, NY County 1986]), the offending nonexistent case, for the proposition that third-party plaintiffs are entitled to the cost of removing and rebuilding the pool in a proper location as a measure of damages.

The issue of the misuse of AI in the motion papers came to the attention of the court soon after the summary judgment motion was filed, when counsel for Stewart Title filed its opposition and indicated that the case third-party plaintiffs cited did not exist. Several days later, counsel for third-party plaintiffs acknowledged that no such case existed, apologized to the court and counsel, and asked to withdraw the motion without prejudice. He thereafter filed a "Notice of Withdrawal of Motion" which states in part, "This withdrawal is made without prejudice, unless otherwise directed by the Court."

Counsel for Stewart Title objected to the withdrawal being without prejudice, as successive summary judgment motions typically are not permitted, and he had expended time researching and responding to the motion. He asked the court to review the papers and determine whether plaintiffs' third-party action should be dismissed, whether Stewart should be reimbursed for the fees it incurred in opposing the motion, and whether any other sanctions are appropriate. Counsel for First Nationwide of NY also opposed the motion being withdrawn without prejudice, as counsel had expended substantial time and effort in preparing a full opposition, including legal research and briefing. It also noted that the court may wish to "consider appropriate further relief as outlined in Stewart Title's submission."

The court scheduled a hearing regarding these issues. At that time, the court gave the parties an opportunity to be heard regarding the motion and the issue with the fictitious case citation. Counsel for third-party plaintiffs acknowledged that he researched some cases using "AI" but neglected to check the {**88 Misc3d 770}citation to the nonexistent case for accuracy. For some inexplicable reason, co-third-party defendant First Nationwide of NY did not appear and indicated it did not receive notice of this hearing, so the court provided an opportunity for it to be heard and to seek its costs and attorney fees in a second virtual conference.

Analysis and Discussion

Submission of a brief relying on and quoting from a nonexistent case obviously does the court and the parties no good. It of course raises a number of ethical issues, in addition to wasting the time and resources of the court and opposing counsel, and potentially impacting the rights of the litigants. As the court imposes sanctions on counsel for third-party plaintiffs, as further detailed below, it is required to issue a written decision setting forth the conduct on which the award is based, the reasons why the court determined the conduct was frivolous, and why the amount awarded was determined to be appropriate. (22 NYCRR 130-1.2.)

A motion predicated on a "nonexistent case" is a frivolous filing within the meaning of the Rules of the Chief Administrator of the Courts for the imposition of sanctions. It needs little explanation that such a motion was "completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law." (See 22 NYCRR 130-1.1 [c] [1].) Similarly, the memorandum asserted "material factual statements that were wrong" by relying on and describing case precedent that did not exist. (Ibid.; see also Matter of Samuel, 82 Misc 3d 616, 620 [Sur Ct, Kings County 2024].)

In determining whether conduct was frivolous for the purpose of imposing sanctions, the court should consider, among other issues: (1) the circumstances under which the conduct took [*3]place, including the time available for investigating the legal or factual basis of the conduct; and (2) whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party. (22 NYCRR 130-1.1.) Here, counsel had ample time to file a summary judgment motion as the matter had not yet been certified as ready for trial. In finding the conduct here frivolous, the court notes that the Surrogate's Court in Matter of Samuel (82 Misc 3d 616, 620 [Sur Ct, Kings County 2024]) observed that a simple search for the citation on a legitimate legal research platform, such as {**88 Misc3d 771}Westlaw or Lexis, takes only minimal effort. However, this court notes that the failure to take that simple step in this case resulted in a waste of limited judicial resources, as well as the resources and time of counsel and the parties in this matter. The conduct was apparent or should have been apparent had the attorney checked the citation.

By signing a paper, an attorney or party certifies that, to the best of that person's knowledge, information and belief, formed after an inquiry reasonable under the circumstances, the presentation of the paper or the contentions therein are not frivolous as defined in section 130-1.1 (c) of this subpart. (See 22 NYCRR 130-1.1a.) Here, there was no reasonable inquiry; had a reasonable inquiry been undertaken, the problem would have immediately revealed itself.

Another case dealing with a similar issue, Mata v Avianca, Inc. (678 F Supp 3d 443, 448 [SD NY 2023]), noted the following:

"Many harms flow from the submission of fake opinions. The opposing party wastes time and money in exposing the deception. The Court's time is taken from other important endeavors. The client may be deprived of arguments based on authentic judicial precedents. There is potential harm to the reputation of judges and courts whose names are falsely invoked as authors of the bogus opinions and to the reputation of a party attributed with fictional conduct. It promotes cynicism about the legal profession and the American judicial system."

Certainly, AI presents both opportunities and challenges to the legal profession. Here, the problem of AI "hallucinations"—where the technology provides fictitious answers to an inquiry—may have been the cause of the problem in this case. (See Ader v Ader, 87 Misc 3d 1213[A], 2025 NY Slip Op 51563[U] [Sup Ct, NY County 2025]; Theo Burman, OpenAI identifies reason ChatGPT "hallucinates", https://www.msn.com/en-us/news/technology/openai-identifies-reason-chatgpt-hallucinates/ ar-AA1MbcaX?ocid-BingNewsVerp [accessed Sept. 11, 2025].) The fallibilities and limitations of AI make plain why blind reliance upon it is impermissible and ill-advised.

While it is clear that technologies can assist attorneys by helping them provide high quality and efficient professional services to their clients, technology does not in any way displace or exempt attorneys from their professional duties and {**88 Misc3d 772}judgments. (See Hilary Gerzhoy et al., AI and Legal Ethics: What Lawyers Need to Know, https://www.lexisnexis.com/pdf/practical-guidance/ai/ai-and-legal-ethics-what-lawyers-need-to-know.pdf [accessed Sept. 11, 2025].) The misuse of AI technology also implicates the lawyer's ethical duty to provide independent professional judgment in rendering legal services. Undoubtedly, lawyers are selected and hired by the public for their judgment and counsel.

The potential benefits of AI technologies and the risks presented by their misuse led the New York State Bar Association, like some other state bar associations, to form a task force [*4]on artificial intelligence, which issued a 2024 report making many recommendations regarding the use of AI by attorneys. (See Report and Recommendations of the New York State Bar Association Task Force on Artificial Intelligence [Apr. 2024], https://nysba.org/wp-content/uploads/2022/03/2024-April-Report-and-Recommendations-of-the-Task-Force-on-Artificial-Intelligence.pdf [accessed Apr. 2024].) The report discusses the various rules of professional conduct regarding competence, diligence, candor and professional independence that are involved when AI technology is used. Regarding the issue of professional independence, the report notes that a lawyer shall not permit a "person to direct or regulate the lawyer's professional judgment in rendering legal services." (Rule 5.4, Report at 59.) While technology is not a "person," the report finds that lawyers should refrain from relying exclusively on its output when providing legal advice, in order to maintain a lawyer's "independent judgment on a matter." (See also NY City Bar Assn Comm on Prof Ethics Formal Op 2024-5 [2024] [Ethical Obligations of Lawyers and Law Firms relating to the Use of Generative Artificial Intelligence in the Practice of Law].)

The court acknowledges and empathizes with the many challenges faced by legal practitioners, who have competing demands on their time and attention, and are as subject to errors and other frailties as much as anyone else. As legal professionals and officers of the court, however, they are bound to ensure that their advocacy comports with the applicable ethical standards and rules of practice. The court also notes and heavily considers that counsel in this matter directly and immediately admitted the problem once it was pointed out by opposing counsel, apologized for same, and offered to withdraw the motion. However the "error" here cannot be considered minimal. Although it surely appears to have resulted from a {**88 Misc3d 773}simple failure to check the citation, rather than a calculated misdeed, the brief was signed and certified, and thus raises the issue of "candor to the tribunal" and the spectre of "fraud on the court." At a minimum, a lawyer has an ethical obligation and duty to refrain from knowingly make a false statement of fact or law to the court (Rules of Prof Conduct [22 NYCRR 1200.0] rule 3.3 [a] [1]). For these reasons, there must be some consequence for this offensive filing. The court cannot turn its back on what occurred here by simply allowing the motion to be withdrawn without prejudice. Such a response would leave opposing counsel without a remedy for their wasted time and leave clients, courts, and other practitioners that much more exposed to similar conduct in the future. To allow a denial without prejudice also would violate the general proscription on successive summary judgment motions without good cause. (Lapadula v Sang Shing Kwok, 304 AD2d 798 [2d Dept 2003].) For these broader reasons, a stronger response is appropriate.

Thus, the court will deny the summary judgment motion with prejudice. The court hereby denies Stewart Title's request that the third-party complaint be dismissed. The court exercises its discretion not to impose this most drastic remedy in this circumstance, particularly in light of the acknowledgment of the error. There are strong public policy reasons weighing in favor of allowing matters to be determined on their merits. (Fried v Jacob Holding, Inc., 110 AD3d 56, 60 [2d Dept 2013].) The course charted here responds to the conduct while allowing the litigants their "day in court" and a decision on the merits of the matter at trial. The attorney's offensive conduct should not inure to the detriment of his clients.

Having found the conduct at issue here to be frivolous, the court concludes that sanctions are appropriate. The attorney had sufficient time to research the limited issues in this case, and [*5]as noted, checking this case citation would have taken minutes, if not seconds. The failure to do so, and to file the motion nonetheless, resulted in a waste of resources for all involved. The court therefore orders that attorney for third-party plaintiffs pay a sanction of $2,000 to be deposited with the Lawyers' Fund for Client Protection (22 NYCRR 130-1.3), and he shall e-file proof of such deposit within 30 days. This amount takes into account the conduct at issue and the unnecessary waste of resources and also considers the actions of counsel in acknowledging the error as soon as it was pointed out by opposing counsel. This amount is less than that imposed {**88 Misc3d 774}in some other cases reviewed by the court. (See Mata v Avianca, Inc., 678 F Supp 3d at 466 [where the court's concerns included a lack of candor once the nonexistent cases came to light]; see generally Augustin v Formula 3 Brooklyn Inc., 86 Misc 3d 1236[A], 2025 NY Slip Op 51113[U] [Sup Ct, Kings County 2025] [directing a hearing on whether pro se defendant would be subject of monetary penalties].)

The court grants Stewart Title's application for attorney's fees and costs in the amount of $11,718.50 as detailed in their submission to the court (NYSCEF Doc No. 103), which the court finds to be a reasonable amount given the issues and court appearances involved. (See 22 NYCRR 130-1.1, 130-1.2.) It directs the attorney for third-party plaintiffs to reimburse this amount within 30 days of this decision and order, to be paid to Sherwood & Truitt Law Group, LLC. The court grants third-party defendant First Nationwide's application for fees and costs in the amount of $5,275.00, which amount the court finds to be a reasonable amount for opposing the motion. It directs the attorney for third-party plaintiffs to reimburse this amount within 30 days of this decision and order, payable to Keith S. Garret, Esq.

Finally, because counsel's conduct has impacted the litigation of this matter, and thus impacted his client, at the first hearing on this issue, the court directed counsel for third-party plaintiffs to provide his clients by overnight mail return receipt requested with a copy of the transcript of the August 19, 2025 proceedings. The court notes that counsel for third-party plaintiffs has timely complied with this portion of the decision, as evidenced by the filing on NYSCEF. (NYSCEF Doc No. 105.)

For the foregoing reasons, it is hereby ordered and adjudged: (1) the motion for summary judgment is hereby denied with prejudice; (2) attorney for third-party plaintiffs, Sungchan Cho, Esq., is hereby sanctioned in the amount of $2,000.00 which amount shall be paid to the Lawyers' Fund for Client Protection within 30 days of the date of this decision and judgment, if not already paid; (3) attorney for third-party plaintiffs shall reimburse counsel for Stewart Title in the amount of $11,718.50 within 30 days of this order, if such amount is not already reimbursed; (4) attorney for third-party plaintiffs shall reimburse third-party defendant First Nationwide in the amount of $5,275.00, within 30 days of this order, if such amount is not already reimbursed; (5) a compliance conference in this matter shall be held on December 1, 2025, at 11:00 a.m. via Teams, to {**88 Misc3d 775}determine what discovery may be outstanding so that the matter can be certified for trial, and to schedule any status or settlement conference that may be appropriate; (6) the court finds that counsel for third-party plaintiffs has already complied with the portion of the decision requiring him to provide a copy of the transcript of the August 19, 2025 proceedings; (7) all relief not expressly granted herein is denied.