State v. Carvel Corp.

Kupferman, J. P.,

dissents in a memorandum as follows: Defendant-appellant, an attorney, appeals from a denial of his motion for summary judgment in an action brought against the Carvel Corporation, various of its directors and affiliated corporations and the attorney. In question is the liability of an attorney director for alleged wrongful acts on behalf of, and in conspiracy with, the Carvel Corporation in violation of article 22 of the New York General Business Law (§340 et seq.; the Donnelly Act). (See, also, the discussion of New York antitrust laws in: Marketing Laws Survey: “State Antitrust Laws”, vol I, W. P. A., 1940, p 441 et seq.) The fact that the attorney is a director of the Carvel Corporation, which is accused of restraint of trade, does not, in and of itself, subject him to liability because of this status. Something more than mere status of a corporate officer must exist before individual liability can attach. (Michaels v Lispenard Holding Corp., 11 AD2d 12, 14; Turntables, Inc. v M. B. Plastics Corp., 31 AD2d 792.) Moreover, appellant has asserted that he is not part of the management of the Carvel Corporation. This is supported by the uncontroverted affidavit of a vice-president of the corporation. As general counsel to Carvel, the only action alleged by the plaintiff was the attorney’s attempts to speak, uninvited, at a meeting of Carvel franchisees. As an attorney, he is not subject to liability to third parties unless his conduct rises to the level of a tortious act. (Drago v Buonagurio, 46 NY2d 778.) Surely, advice of an attorney to a client is not actionable, and, while erroneous advice might subject his client to liability, it does not follow that the attorney, himself, is liable. (D. & C. Textile Corp. v Rudin, 41 Misc 2d 916.) As our colleague, Mr. Justice Silverman (then at nisi prius) stated in Rudin (supra, at p 919, quoting Ford v Williams, 13 NY 577, 584) “ ‘But where one acts only in the execution of the duties of his calling or profession, and does not go beyond it, and does not actually participate in the trespass he is not liable, though what he does may aid another party in its commission.’” Where attorneys have been guilty of fraud, collusion, or a malicious or tortious act, liability has been upheld. (Gifford v Harley, 62 AD2d 5; Hahn v Wylie, 54 AD2d 629; Sullivan v State Div. of Human Rights, 73 AD2d 946.) Also, in situations where the attorney was at the heart of a criminal scheme (Newburger, Loeb & Co. v Gross, 563 F2d 1057). The plaintiff contends that the attorney’s statement to the meeting of Carvel franchisees was “loud, intemperate, and intimidating.” Other than that, there has been no showing that the defendant has done anything other than to act as general counsel, albeit in an active manner. “It is recognized that ‘[t]he public interest * * * demands that attorneys, in the exercise of their proper function as such, shall not be civilly liable for their acts when performed in good faith and for the honest purpose of protecting the interests of their clients.’ ” (Hahn v Wylie, supra.) There has been no showing that the actions here have been anything but in the course of an attorney’s proper function. Although the *730plaintiff contends that its conclusory allegations will be proven later, and that discovery is needed to do this, there is no showing of facts sufficient to defeat this motion for summary judgment. Once the defendant makes a prima facie showing that the action lacks merit, the plaintiff must come forward with evidentiary proof to show there is a bona fide issue requiring trial. Conclusory allegations are not enough to create a cause of action without a showing of wrongful or unlawful acts. (Rothschild v World-Wide Autos. Corp., 24 AD2d 861; Jennings v Burlington Inds., 19 AD2d 877; Matsushita Elec. Corp. of Amer. v Jamaica Gas & Elec. of Great Neck, 44 AD2d 708; Di Sabato v Soffes, 9 AD2d 297.) The Donnelly Act (General Business Law, § 340 et seq.) specifically permits the Attorney-General to issue subpoenas in order to gather information relevant to an inquiry into violations of the act. (Matter of Amos Post, Inc. v Attorney-General of State of N. Y., 70 AD2d 750.) Since this may be done prior to trial, any information indicating culpability on the part of the attorney could have been gathered then. (See Report of Special Committee to Study New York Antitrust Laws of New York State Bar Assn., 1957, p 41a.) In fact, the Attorney-General has been obtaining information since at least 1978 (see Matter of Crowley Foods v Lefkowitz, 75 AD2d 940) which is more than enough time within which to have obtained any information needed to bolster its position against this attorney. To date, the court has recognized liability of a lawyer to third parties only where conduct has fallen within one of the acknowledged categories of tort or contract. (Drago v Buonagurio, 46 NY2d 778, supra.) As long as one has done no more than serve as an attorney, no matter how zealously, there is no liability. Public policy requires that attorneys should be free to advise their clients and voice their opinions, without fear of liability to third parties, when acting on behalf of their clients. (D. & C. Textile Corp. v Rudin, supra.) Unless an attorney is in this position, his usefulness to his client is impaired. Holding the attorney liable in the performance of his function as corporate counsel, without any showing of culpability, can result in a chilling effect on all lawyers inasmuch as it creates a problem with respect to his duty to give undivided loyalty to the client and his own self-interest in avoiding personal liability. An attorney owes a duty of undivided allegiance to his client, and his professional judgment must be exercised solely for the benefit of such client.* The defendant-appellant’s motion for summary judgment dismissing the complaint, as against him, should be granted.

Canon 5 of the Code of Professional Responsibility states: A lawyer should exercise independent professional judgment on behalf of his client. (See, also, EC 5-1 through 5-14.)