This is a rare decision from a trial level court involving some of the most serious allegations of intentional wrongdoing by an attorney. Remarkably, the defendant attorney Bahrenberg had been a close friend and attorney of the owners of the corporate plaintiffs for over 20 years. The Oikonomos case is an instructive review of the various causes of action that may be available to a client against an attorney with a cautionary word about unnecessary duplicative claims.
It was claimed the attorney counseled multiple parties to the same transaction with adverse interests in a gross conflict of interest. It was also claimed that the attorney made intentional misreresentations to his clients concerning the legal and financial condition of investments; and, advised third parties to take adverse positions to the detriment of his clients. The Court granted a pre-trial motion to dismiss the fraud and breach of fiduciary duty claims finding that they were "subsumed under the claims for legal malpractice as they all arise from the same sets of alleged facts and actions." Moreover, the Court noted that "a fraud claim will generally not be maintained where the injury and damages sought are the same as those occasioned by the claim of legal malpractice."
However, the Court emphasized the gravity of the allegations and allowed the punitive damage claim and Judiciary Law Section 487 claim to proceed to trial. The potential consequence of these claims is devastating to a defendant. Judiciary Law Section 487 allows an injured client to recover treble damages against an attorney who is "guilty of any deceit or collusion or consents to any deceit or collusion, with intent to deceive...." Oikonomos v. Bahrenberg, (Sup. Ct. Suffolk County 2013).
To obtain an award of punitive damages, it is necessary to prove more than intentional misconduct; "they are permitted when the conduct evinces a high degree of moral turpitude and demonstrate such wanton dishonesty as to imply criminal indifference to civil obligations."