Lawyers can be sued for aiding an abetting a fraudulent act or scheme. Such cases are rare, but not unheard of. Harpia Asset Management, LLC v. Shanbaum, 2020 NY Slip Op 30953(U) is one such case. Plaintiff alleged that the defendant lawyer aided and abetted another party’s wrongful conduct in connection with a foreclosure sale. (These are allegations that have not been proven.) The key allegation is that the lawyer favored one client over another in connection with a foreclosure sale.
The opinion summarizes the facts this way:
Harpia Asset Management LLC, 434 Throop Avenue LLC, Harpia Throop JV LLC, Harpia NYC Throop Holdings LLC, and Kris Henry (collectively, the Plaintiffs) operated a joint venture for the purpose of developing a property located at 434 Throop Avenue, Brooklyn, New York (the Property). The Shanbaum Defendants represented the Plaintiffs in a foreclosure action involving the Property captioned Nationstar Mortgage LLC v. Kris Henry et al., Index No. 506082/2014 (the Foreclosure Action). And, on January 30, 2019, the court (Dear, J.) in the Foreclosure Action signed a Final Judgment of Foreclosure (the Foreclosure Judgment), which ordered the sale of the Property within 90 days (NYSCEF Doc. No. 1, ¶ 35). On March 27, 2019, Nationstar Mortgage LLC (Nationstar) filed a Notice of Sale scheduling an auction sale (the Auction) of the Property on April 18, 2019 (id., ¶ 38). However, inasmuch as when the Foreclosure Judgment was entered on February 5, 2019, the Foreclosure Judgment was entered with the incorrect block number for the Property (id., ¶¶ 36-37), on March 29, 2019, Nationstar filed a motion to correct the Foreclosure Judgment nunc pro tunc, to correct the block number and extend the time for the Auction (id., ¶ 39).