| Specialized Indus. Servs. Corp. v Carter |
| 2009 NY Slip Op 09018 [68 AD3d 750] |
| December 1, 2009 |
| Appellate Division, Second Department |
| Specialized Industrial Services Corp.,Respondent, v Benjamin E. Carter, Appellant. |
—[*1] La Reddola, Lester & Associates, LLP, Garden City, N.Y. (Robert J. La Reddola and AmolN. Christian of counsel), for respondent.
In an action, inter alia, to recover damages for fraud and violation of Judiciary Law §487, the defendant appeals, as limited by his notice of appeal and brief, from so much of an orderof the Supreme Court, Suffolk County (Jones, J.), dated July 23, 2008, as denied that branch ofhis motion which was, in effect, pursuant to CPLR 3211 (a) (1) and (7) to dismiss the first causeof action in the amended verified complaint.
Ordered that the order is affirmed insofar as appealed from, with costs.
Contrary to the defendant's contention, the Supreme Court properly denied that branch of hismotion which was to dismiss the first cause of action in the amended verified complaint alleginghis violation of Judiciary Law § 487 during the course of the underlying action brought byhis client against the plaintiff. Accepting the factual allegations in the amended verifiedcomplaint as true (see Simmons vEdelstein, 32 AD3d 464, 465 [2006]; Manfro v McGivney, 11 AD3d 662, 663 [2004]), as augmented bythe affidavits submitted by the plaintiff in opposition to the defendant's motion (see Nonnon v City of New York, 9NY3d 825, 827 [2007]; Leon v Martinez, 84 NY2d 83, 88 [1994]; Rovello vOrofino Realty Co., 40 NY2d 633, 635-636 [1976]), the plaintiff sufficiently stated a causeof action under Judiciary Law § 487 for the defendant's alleged intentional deceit duringthe course of the underlying action (seeMoormann v Perini & Hoerger, 65 AD3d 1106 [2009]; Izko Sportswear Co., Inc. v Flaum, 25AD3d 534, 537 [2006]; cf. Mahlerv Campagna, 60 AD3d 1009, 1012-1013 [2009]).
In the underlying action, judgment was entered against the plaintiff upon its default inanswering or appearing. The plaintiff obtained an order vacating the default judgment, whichwas ultimately reversed by this Court (see Dave Sandel, Inc. v Specialized Indus. Servs. Corp., 35 AD3d790 [2006]). Generally, a party who has lost a case as a result of alleged fraud or falsetestimony cannot collaterally attack the judgment in a separate action for damages against theparty who adduced the false evidence, and the plaintiff's remedy lies exclusively in moving tovacate the default judgment (see NorthShore Envtl. Solutions, Inc. v Glass, 17 AD3d 427 [2005]; Retina Assoc. of Long Is.v Rosberger, 299 AD2d 533 [2002]; New York City Tr. Auth. v Morris J. Eisen,P.C., 276 AD2d 78, 87 [2000]; Yalkowsky v Century Apts. Assoc., 215 AD2d 214,215 [1995]). Under an exception to that rule, a separate lawsuit may be brought where the [*2]alleged perjury or fraud in the underlying action was "merely ameans to the accomplishment of a larger fraudulent scheme" (Newin Corp. v Hartford Acc.& Indem. Co., 37 NY2d 211, 217 [1975]) which was "greater in scope than the issuesdetermined in the prior proceeding" (Retina Assoc. of Long Is. v Rosberger, 299 AD2dat 533 [internal quotation marks omitted]). The plaintiff here, in its amended verified complaintand supplemental affidavits, has sufficiently alleged a larger fraudulent scheme to fit within theexception to the rule against collateral attack (see New York City Tr. Auth. v Morris J. Eisen,P.C., 276 AD2d at 80, 87-88; cf. North Shore Envtl. Solutions, Inc. v Glass, 17AD3d at 428).
Contrary to the defendant's contention, the first cause of action in the amended verifiedcomplaint is not barred by the doctrine of res judicata since the Judiciary Law cause of action didnot arise out of the factual transaction which was the subject matter of that action (see Matterof Hodes v Axelrod, 70 NY2d 364, 372 [1987]; Mahler v Campagna, 60 AD3d at1011; Lazides v P & G Enters., 58AD3d 607, 609 [2009]; Triboro Fastener & Chem. Prods. Corp. v Lee, 236 AD2d603, 603-604 [1997]). Nor is the first cause of action precluded by principles of collateralestoppel in that the claim was not litigated in the underlying action and much of the evidenceupon which the plaintiff relies was discovered subsequent to entry of the default judgment in theunderlying action (see Kaufman v Eli Lilly & Co., 65 NY2d 449, 456-457 [1985];Izko Sportswear Co., Inc. v Flaum, 25 AD3d at 537; Chambers v City of NewYork, 309 AD2d 81, 85 [2003]).
The defendant's remaining contentions are without merit. Skelos, J.P., Eng, Leventhal andChambers, JJ., concur.