Sanders Equities LLC v. Maldonado

2025 NY Slip Op 34592(U)

Opinion

Sanders Equities LLC v Maldonado 2025 NY Slip Op 34592(U) December 17, 2025 Supreme Court, Nassau County Docket Number: Index No. 605681/2022 Judge: Sharon M.J. Gianelli Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU COMMERCIAL DIVISION - Part 7 Present: Hon. Sharon M.J. Gianelli X SANDERS EQUITIES LLC, NEXT MILLENNIUM Index No. 605681/2022 REALTY, LLC, AERIAL WAY AND ROBBINS LLC, 123 FROST ASSOCIATES L.P., Mot. Seq. No. 006 135 NORTH BROADWAY LLC and 69 BLOOMINGDALE LLC., DECISION AND ORDER AFTER INQUEST Plaintiffs,

-against-

KEVIN MALDONADO, KEVIN MALDONADO AND ASSOCIATES, P.C. d/b/a KEVIN MALDONADO & ASSOCIATES d/b/a KEVIN MALDONADO & PARTNERS LLC, MELISSA MALDONADO, KEVIN MALDONADO and MELISSA MALDONADO, as TRUSTEES of THE KEVIN AND MELISSA MALDONADO TRUST, EAGLE LAKE HOLDINGS LLC, BUSHMAN HILL REAL ESTATE LLC, WM WELCH ENTERPRISES LLC, BLUE STONE AND MULCH LLC, WMWHOLDINGS LLC, and HART MANSION LLC,

Defendants. X

Upon consideration of the papers and evidence submitted at inquest, the Court makes the

following Findings of Fact and Conclusions of Law.

This is a damages inquest resulting from three written Decisions and Orders of this Court

following a series of defaults by Defendants Kevin Maldonado ("Maldonado") and Kevin

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Maldonado and Associates, P.C. d/b/a Kevin Maldonado & Associates d/b/a Kevin

Maldonado & Partners LLC (the "Firm") (collectively, "Defendants").

In the first Decision and Order, this Court ruled on the Sanders Entities' motion to strike,

to preclude, or to compel under CPLR 3124 (3). The Court concluded that Maldonado and

the Firm "have shown themselves overall to be evasive, uncooperative, and dilatory" after

refusing for two years to produce disclosure, ruling that they "have just about earned" the

"drastic steps" of "[s]striking and/or preclusion."

But the Court granted them "one additional opportunity" to "fully comply with all

outstanding discovery" within "thirty (30) days from the date of entry of this Decision and

Order," with "leave" for Plaintiffs (hereinafter the "Sanders Entities") to "re-apply" for

disclosure sanctions should Maldonado and the Firm "fail to comply with this Decision

and Order" (Sanders Equities LLC v Maldonado, 2024 NY Slip Op 34593[U] [Sup Ct,

Nassau County Oct. 7, 2024, Gianelli, J.]; NYSCEF Doc. No. 170). The Court's "one

additional opportunity" became three, this Court extending its original deadline from

November 8, 2024 to January 3, 2025, then from January 3, 2025 to January 10, 2025

(see NYSCEF Doc. No. 181, ,i,i 8-22). Maldonado and the Firm never complied with this

Court's directives, and the Sanders Entities moved for leave to renew.

In the second Decision and Order, this Court ruled on the Sanders Entities' motion,

pursuant to CPLR 2221 (e), for leave to renew their prior motion, pursuant to CPLR 3124

(3), to strike Maldonado and the Firm's Answer. This Court ruled: "Defendants

Maldonado and the Firm have not only been afforded numerous opportunities to comply

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with the Court's Orders, including three (3) final warnings, Defendants Maldonado and

the Firm have repeatedly and intentionally failed to comply, without reasonable

explanation." The Court "Granted" the Sanders Entities' motion to strike Maldonado and

the Firm's Answer for "willful and contumacious refusal to comply with required

discovery" (Sanders Equities LLC v Maldonado, 2025 NY Slip Op 30694[U] [Sup Ct,

Nassau County Mar. 3, 2025, Gianelli, J.]; NYSCEF Doc. No. 246).

In the third Decision and Order, this Court ruled on the Sanders Entities' motion,

pursuant to CPLR 3212, for partial summary judgment on liability. The Court held that

"the Court's striking of Defendants' Answer for failure to comply with discovery directives

is tantamount to a liability determination favorable to Plaintiffs. As such, no triable issues

of fact remain on the issue of liability." "Consequently," the Court held, "in accordance

with New York case law, Defendants are considered to have admitted liability." The Court

"Granted" partial summary judgment against Maldonado and the Firm "on the First,

Second, Third, Fourth, Fifth, Sixth, Tenth, and Eleventh Causes of Action in the Verified

Complaint," and ordered that "an inquest to assess Plaintiffs' damages shall be held in-

person on October 8, 2025 at 9:30 a.m. before Hon. Jeffrey S. Brown (Ret.) at the Nassau

County Supreme Court" (Sanders Equities LLC v Maldonado, 2025 NY Slip Op 32439[U]

[Sup Ct, Nassau County, July 2, 2025, Gianelli, J.]; NYSCEF Doc. No. 273).

On October 8, 2025, on the day of the damages inquest, Maldonado and the Firm

defaulted again, declining to appear in Court to defend against a damages award.

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"In an inquest to ascertain damages upon a default ... , if the defaulting party fails to

appear in person or by representative, the party entitled to judgment may be permitted to

submit properly executed affidavits as proof of damages" (Commonwealth Land Tit. Ins.

Co. v Islam, 220 AD3d 739,741 [2d Dept 2023] [quotations and ellipses omitted]; see 22

NYCRR § 202,46).

Pursuant to 22 NYCRR § 202,46, on October 8, 2025, the Sanders Entities applied to this

Court, and on October 14, 2025, the Court, by email, granted their application, to conduct

this inquest on papers (see NYSCEF Doc. Nos. 279- 280), which the Court now addresses.

Before turning to the Court's Findings of Fact and Conclusions of Law, the Court

addresses certain rules of law governing this inquest.

All Liability Allegations Deemed Admitted

"A defendant whose answer is stricken as a result of a default admits all traversable

allegations in the complaint, including the basic allegation of liability," after which the

"sole issue to be determined at the inquest is the extent of the damages sustained by the

plaintiff' (Chalom v Elat Car & Limousine Serv., Inc., 239 AD3d 933, 934 [2d Dept 2025]

[quotations and brackets omitted]).

"[D]efaulters are deemed to have admitted all factual allegations contained in the

complaint and all reasonable inferences that flow from them" (Freedom Mtge. Corp. v

Hansen-Velazquez, 242 AD3d 1058 [2d Dept 2025] [quotations omitted]).

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Based upon this rule of law, evert paragraph of the Verified Amended Complaint is

deemed admitted, with the exception of the following, all of which address damages:

Paragraphs 14, 134-135, 141-142, 148-149, 165, 173-174, 182, 190, 198, 219, and 238 (see

NYSCEF Doc. No. 91).

No Evidence Tending to Defeat Liability

"At an inquest, the defendants should not be permitted to introduce evidence to defeat

the plaintiffs cause of action" (Suburban Graphics Supply Corp. v Nagle, 5 AD3d 663,

665 [2d Dept 2004]; Dellis v Dellis, 81 AD3d 870, 871 [2d Dept 2011] ["The defendants'

answer was ultimately stricken based upon their failure to comply with discovery orders,"

so "defendants were properly precluded at the subsequent inquest on damages from

introducing any evidence tending to defeat the plaintiffs cause of action"]).

Under this principle, at an inquest, a defendant is prohibited from introducing documents

or testimony to attempt to deny or disprove liability (see e.g. Reilly v Grieco, 242 AD3d

1033 [2d Dept 2025] ["Supreme Court erred in permitting the defendant to testify that

the plaintiffs allegations of sexual abuse were untrue and that he had never sexually

abused the plaintiff. ... The defendant's testimony denying the basic allegation ofliability

prejudiced a substantial right of the plaintiff, as that issue had been decided in her favor

.... Accordingly, the court should have granted ... a new trial on the issue of damages"]).

No Consideration of Proximate Causation

"The sole issue to be determined at the inquest is the extent of the damages sustained by

the plaintiff, and the court may not consider the question of whether the defendant caused

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the damages sustained by the plaintiff' (Chalom v Elat Car & Limousine Serv., Inc., 239

AD3d at 934; see e.g. Castaldini v Walsh, 186 AD3d 1193, 1194 [2d Dept 2020] [an

"inquest court should not consider the question of whether the defendant caused the

damages sustained by the plaintiff," so "there is no merit to Walsh's contention that the

Supreme Court should have granted his motion to dismiss the complaint at the close of

the plaintiffs' evidence for failure to establish causation"]).

Under this principle, at an inquest, a defendant is prohibited from introducing documents

or testimony to attempt to deny or disprove causation (see e.g. LD Acquisition Co. 9, LLC

v TSH Trade Group, LLC, 211 AD3d 928, 930 [2d Dept 2022] ["The sole issue to be

determined at an inquest is the extent of damages sustained by the plaintiff. Here, the

inquest court erred in considering the question of whether the defendants caused the

damages sustained by the plaintiff'] [citations and quotations omitted]).

No Statute-of-Limitations Defense

Where a defendant defaulted on liability, it may no longer assert a statute-of-limitations

defense (see e.g. Christiana Tr. v Victor, 224 AD3d 869, 872 [2d Dept 2024] ["Since the

defendant never vacated his default, he is precluded from raising the affirmative defenses

of lack of standing and statute of limitations"]; Deutsche Bank Natl. Tr. Co. v O'Connor,

223 AD3d 872, 877 [2d Dept 2024] ["Since the defendant failed to vacate her default, she

... was precluded from asserting a statute of limitations defense"]; Nestor I, LLC v

Moriarty-Gentile, 179 AD3d 936, 938 [2d Dept 2020] ["unless the defendants' default is

vacated or excused, the defendants waived their statute of limitations defense"]).

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With these rules of law for damages inquests in mind, the Court now makes the following

Findings of Fact.

FINDINGS OF FACT

The following fact are taken from the Verified Amended Complaint (see NYSCEF Doc. No.

91), all allegations of which, except for damages, are deemed admitted (Chalom v Elat

Car & Limousine Serv., Inc., 239 at 934), the Affirmation of Steven Blaustein in Support

of Award of Damages at Inquest, dated November 21, 2025 (the "Blaustein Aff."), and the

evidentiary submissions thereto, all of which are uncontroverted.

The Court credits all of the following facts and resolves all credibility determinations and

inferences flowing from in favor of the Sanders Entities, and against Maldonado and the

Firm.

Background and the Litigated Matters

The Sanders Entities are a group of affiliated real estate ownership, management, and

leasing entities who own commercial properties in the Counties of Nassau and Suffolk.

For approximately twenty-three years, the Firm, a small law firm practice of which

Maldonado is sole principal and attorney, provided legal services to the Sanders Entities

in various matters pending in the State and Federal Courts on Long Island.

Beginning in 2016, Maldonado and his Firm worked on and billed the Sanders Entities

on the following matters:

a. Next Millennium Realty LLC, et al. v The Travelers Companies, Inc., et

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al., Supreme Court, Nassau County, Index No. 600996/201 6 (the "Insurance Litigation Matter");

b. The Rehabilitation Institute, Inc. v 123 Frost Associates L.P., Supreme Court, Nassau County, Index No. 612897/2017 (the "Rehabilitat ion Institute Matter");

c. 101 Frost Street Associates, L.P. v United States Atomic Energy Commission, et al., United States District Court, Eastern District of New York, Case No. 17-cv-03585 (the "Cost Recovery Matter");

d. United States ofAmerica v IMC Eastern Corp., et al., United States District Court, Eastern District of New York, Case No. 18-cv- 03818 (the "Western Plume Litigation");

e. 123 Frost Associates L.P. v The Rehabilitatio n Institute, Inc., Supreme Court, Nassau County, Index No. 601013/2019 (the "123 Frost Matter");

f. Hicksville Water District v Jerry Spiegel Associates, Inc., et al., United States District Court, Eastern District of New York, Case No. 19-cv- 06070 (the "Hicksville Water District Matter");

g. 69 Bloomingdale, LLC v Coral Graphics, et al., United States District Court, Eastern District of New York, Case No. 20-cv- 02613 (the "69 Bloomingdal e Road Matter");

h. Jerry Spiegel Associates, Inc. v Public Service Mutual Insurance Company, et al., Supreme Court, Nassau County, Index No. 609148/202 0 (the "Magna Carta Litigation");

1. 135 North Broadway, LLC v. Ligita Solano, et al., Supreme Court, Nassau County, Index No. 604700/201 9 (the "135 North Broadway Matter"); and

J. The New York Department of Environmen tal Conservatio n Matters (the "DEC Matters");

k. The Environmen tal Protection Agency Matters (the "EPA Matters");

I. Arthur Sanders et al v Barry M. Strauss Associates Ltd., Supreme Court, New York County, Index No. 651984/202 0 (the "Sanders Matter"); and

m. Aerial Way and Robbins LLC v Robbins Lane Service Center, Inc., Supreme Court, Nassau County, Index No. 601294/201 7 (the "Aerial Way Matter").

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Maldonado and his Firm referred to these adversarial and litigated matters in the Firm's

legal bills by various names, including the "Insuranc e Litigation Matter," the "Cost

Recovery Matter," the "Hicksville Water District Matter," the "Western Plume Litigation,"

the "Magna Carta Matter," the "DEC Matters," the "EPA Matters," the "69 Bloomingdale

Road Matter," the "Aerial Way Matter," the "Sanders Matter," the "135 North Broadway

Matter," the "123 Frost Matter," and the "Rehabilitation Institute Matter" (together the

"Matters").

The Sanders Entities and Defendants did not have separate engageme nt letters for each

of the Matters. Rather, Maldonado and the Firm handled the Matters together under a

single ongoing continuou s representa tion of the Sanders Entities with no formal retainer

agreement. Except for the Rehabilitation Institute Matter, the Matters were entangled in

multiple actions surroundi ng a Superfund site, having multiple layers of complications

due to the expertise necessary to understan d the scientific and legal issues related to

environmental laws as well as the numerous numbers oflitigants. Due to the sophisticated

nature of the Matters, the Sanders Entities, in good faith, relied on Maldonado's

representations on the status of each of the Matters and the accuracy of the invoices

presented by Maldonado representi ng the work product being produced by the Firm.

As the Sanders Entities would later discover, the statuses of the Matters provided by

Maldonado were inaccurate and the invoices were a fabrication of the work product

actually produced by the Firm.

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Maldonado and the Firm's Total Fees Billed and Paid

From January 2018 to April 2021, the time period for which the Sanders Entities now

seek damages in this lawsuit, Maldonado and the Firm billed and collected an exorbitant

amount oflegal fees from the Sanders Entities. The total amount of payments the Sanders

Entities made to Maldonado and the Firm for which the Sanders Entities seek recovery in

this lawsuit equals $2,037,776.85 (Blaustein Aff., Ex. 2). Put another way, the Sanders

Entities have paid Defendants a sum of $2,037,776.85, based on the following total

payments in each of the Matters:

a. The Insurance Litigation Matter: $1,275,979.19;

b. The Rehabilitation Institute and 123 Frost Matters: $88,796.58;

c. The Cost Recovery Matter: $350,776.87;

d. The Western Plume Litigation: $46,997.50;

e. The "Hicksville Water District Matter: $124,291.90;

f. The 69 Bloomingdale Road Matter: $3,402.75;

g. The Magna Carta Litigation: $3,280.00;

h. The 135 North Broadway Matter: $410.00;

1. The DEC Matters: $17,556.00;

J. The EPA Matters: $112,864.06;

k. The Sanders Matter: $262.00; and

1. The Aerial Way Matter: $13,160.00.

(Blaustein Aff., Exs. 3-14).

On July 3, 2025, the Court granted partial summary judgment against Maldonado and

the Firm "on the First, Second, Third, Fourth, Fifth, Sixth, Tenth, and Eleventh Causes of

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Action in the Verified Complaint," and ordered that "an inquest to assess Plaintiffs'

damages shall be held in-person on October 8, 2025 at 9:30 a.m. before Hon. Jeffrey S.

Brown (Ret.) at the Nassau County Supreme Court" (the "Summary Judgment Decision")

(Blaustein Aff., Ex. 15).

The Sanders Entities proceed on damages on the following claims:

• The First Cause of Action for Attorney Deceit / Judiciary Law § 487;

• The Second Cause of Action for Fraud;

• The Third Cause of Action for Breach of Fiduciary Duty; and

• The Sixth Cause of Action for Legal Malpractice.

Based upon these Findings of Fact, the Court now makes the following Conclusions of

Law.

CONCLUSIONS OF LAW

The Burden of Proving "Reasonableness" ofFees was Upon Maldonado and the Firm

Before turning to the individual causes, the Court will address the law governing fee

disputes between attorneys and clients. Ordinarily, the burden is upon the plaintiff to

prove the elements of his or her case by a preponderance of the evidence (see e.g. PJI

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In an attorneys' fee dispute such as this, however, the burden is reversed, remaining upon

the lawyer to prove the "reasonableness" of attorneys' fees, even if the client already paid

the fee:

• Jeffrey L. Rosenberg & Assoc., LLC v Candid Litho Print., Ltd., 76 AD3d 510, 510

[2d Dept 2010] ["In cases involving disputes between attorney s and clients over

legal fees, as a matter of public policy, the attorneys have the burden of establishing

that their compens ation was fair and reasonable. In light of these considerations, .

. ., the plaintiff failed to establish its prima facie entitlem ent to judgmen t as a

matter of law since it did not demonst rate the reasonableness of the fees it

charged"] [citations omitted];

• O'Connor v Blodnick, Abramo witz and Blodnick, 295 AD2d 586, 587 [2d Dept

2002] ["The trial court granted the defendan ts judgmen t as a matter of law at the

close of the plaintiff s case on the ground that the plaintiff failed to satisfy his

burden of establishing ... that the services billed for were not perform ed at all or

were unneces sary.... As a matter of public policy, the [attorne y defendants] had

the burden of establishing that their compensation was fair and reasonable. The

fact that the fees in question were already paid to the defenda nts did not alter the

fact that the defenda nts bore the ultimate burden of proof as to the reasonableness

of their fees. A new trial must be granted to afford [the attorneys] an opportun ity

to satisfy their burden of proof'] [citations and quotatio ns omitted]; and

• Jacobson v Sassower, 66 NY2d 991, 993 [1985] [As "a matter of public policy,

courts pay particula r attention to fee arrangem ents between attorneys and their

clients. An attorney has the burden of showing that a fee contract is fair,

reasonable, and fully known and understo od by the client"] [citation omitted]). 12

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Based upon these authorities, it was not the Sanders Entities' burden at this inquest to

prove "unreasonableness" of Maldonado and the Firm's fees - it was Maldonado and the

Firm's "ultimate burden of proof as to the reasonableness of their fees," and the "fact that

the fees in question were already paid" did "not alter the fact" that the burden of proof

remained upon Maldonado and the Firm (O'Connor v Blodnick, Abram owitz and

Blodnick, 295 AD2d at 587).

Maldonado and the Firm defaulted at the inquest, declining to attemp t to demon strate

the "reasonableness" of their attorneys' fees. Therefore, the Court concludes that the fees

Maldonado and the Firm charged the Sanders Entities were unreaso nable, and credits all

of the Sanders Entities' assertions in this regard.

The First Cause ofAction for Attorn ey Decei t/ Judici ary Law §487

This Court has granted the Sander s Entities partial summa ry judgme nt on liability on the

First Cause of Action for Attorney Deceit / Judiciary Law§ 487 (see Sander s Equities LLC

v Maldonado, 2025 NY Slip Op 32439[U] [N.Y. Sup Ct, Nassau County 2025]; NYSCEF

Doc. No. 273).

Judiciary Law§ 487 provides: "An attorne y or counselor who ... [i]s guilty of any deceit

... with intent to deceive ... any party ... or ... wilfully receives any money or allowance

for or on account of any money which he has not laid out ... forfeits to the party injured

treble damages, to be recovered in a civil action."

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"Under Judiciar y Law§ 487 (1), an attorney who is guilty of any deceit ... with intent to

deceive ... any party ... may be liable to the injured party for treble damages in a civil

action" (Altman v Orseck, 235 AD3d 818, 819 [2d Dept 2025] [quotatio ns and brackets

omitted]).

"Treble damages awarded under Judiciar y Law§ 487 are not designed to compens ate a

plaintiff for injury to property or pecuniar y interests. They are designed to punish

attorneys who violate the statute and to deter them from betrayin g their special obligation

to protect the integrity of the courts and foster their truth-see king function" (Specialized

Indus . Servs. Corp. v Carter, 99 AD3d 692,693 [2d Dept 2012] [citation s and quotatio ns

omitted]).

Judiciary Law§ 487 encompa sses a claim by a client against a lawyer for "charging her

unneces sary and excessive fees" (Lauder v Goldhamer, 122 AD3d 908, 910 [2d Dept

2014] [affirming denial of dismissal of Judiciar y Law§ 487 claim as "not duplicative of

the cause of action to recover damages for legal malpractice"]). An attorney 's deceptive

conduct causing a litigant to incur false or unneces sary attorney s' fees falls within the

ambit of the statute:

• Garanin v Hiatt, 219 AD3d 958, 959 [2d Dept 2023] [a litigant's claim that an

attorney's conduct "caused him" to incur unneces sary "attorne ys' fees" is

actionable under Judiciar y Law§ 487];

• Joseph v Fensterman, 204 AD3d 766, 767 [2d Dept 2022] ["Here, the first cause

of action adequate ly pleaded a claim to recover damages for violations of Judiciar y

Law§ 487, as it alleged that the defendan ts Abrams, Fensterm an ... intention ally

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interfered with the settlement of the New Franklin litigation, causing years of

additional litigation, in order to generate legal fees in the amount of $1.7 million"];

• Betz v Blatt, 160 AD3d 696, 699 [2d Dept 2018] ["A party's legal expenses in

defending the lawsuit may be treated as the proximate result of the

misrepresen tation" covered by Judiciary Law§ 487]).

Applying these authorities, Here, the record evidences that Maldonado and his Firm

engaged in a pattern and practice of grossly excessive billing or outright fraudulent billing

(i.e., billing for legal services Defendants either never provided, or which were provided

entirely by other law firms) that resulted in the Sanders Entities paying $2,037,776.85 in

legal fees to Defendants (Blaustein Aff., Ex. 2).

For example, in the latter part of 2019 and in early 2020, Maldonado and the Firm

devoted a great detail of time to Next Millennium Realty LLC, et al. v The Travelers

Companies, Inc., et al., Supreme Court, Nassau County, Index No. 600996/201 6 (the

"Insurance Litigation Matter"), including responding to a request by the Special Referee

for a catalog of all of the policies at issue (Blaustein Aff., ,i 20). Ultimately, Maldonado

billed more than $86,ooo simply to review and scan insurance policies when he

previously represented that a paralegal would be doing most of the work (Blaustein Aff.,

Ex. 3)

In addition, from January 2018 through May 2019 in the Insurance Matter, Maldonado

and the Firm's bills refer extensively to the deposition of an expert witness named

"Hughes." (id., at at 3, 27, 35, 41,43, 62, 68, 73-75, 87, 142, 148, 160-161). For that single

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deposition, Maldonado and the Firm billed over 600 hours of time (id.). During that

same period, Maldonado and the Firm billed approximately 316 hours of legal time for

drafting an eight-page lawyer affirmation for a Daubert motion, an amount of time which

is criminally dispropor tionate to the work product produced (id.).

In the United States ofAmerica v IMC Eastern Corp., et al., United States District Court,

Eastern District of New York, Case No. 18-cv-03818 (the "Western Plume Matter"),

Maldonado and the Firm billed over 300 hours for approximately $131,000 in legal fees

just to defend (not to take) the depositions of three witnesses (Blaustein Aff., Ex. 6).

Finally, in Hicksville Water District v Jerry Spiegel Associates, Inc., et al., United States

District Court, Eastern District of New York, Case No. 19-cv-06070 (the "Hicksville Water

District Matter"), Maldonado and the Firm billed over 60 hours for approximately

$25,000 in legal fees for filing simple motion papers in support of a co-defendant's

dismissal motion (Blaustein Aff., Ex. 7). Because of this misconduct, in July 2021, we

terminate d Maldonado and the Firm (Blaustein Aff., ,i 26).

All of the claims on which the Sanders Entities proceeded at this inquest, without

exception, arose from Maldonado and the Firm's dishonesty, misrepres entation, and

deceit by rendering false and inflated legal bills in connection with underlying, pending

litigations, or from concealing the striking of an answer by another Justice of this Court

in one of the underlying litigations (see e.g. Matter of D'Angelo, 158 AD3d 107, 116 [2d

Dept 2017] [an attorney's "self-dealing" is a "type of dishonesty" and "deceitful conduct"];

Matter of Myerson, 250 AD2d 41, 42 [1st Dept 1998] ["false billing ... is, in and of itself,

egregious conduct warrantin g severe penalty"]; Matter of Aaron, 232 AD2d 119, 124-25

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effective [2d Dept 1997] [order ing attorn ey "disba rred from the practice of law, work not immediately," after he "inflated his legal fees and expenses by charging for

actually performed"]).

forth below Therefore, under Judici ary Law§ 487, the Court grants treble damages, as set 41 NY3d (see e.g. Suzuk i v Greenberg, 220 AD3d 604, 604-05 [1st Dept 2023], lv denied atively 908 [2024] ["the court proper ly award ed treble damages" becaus e "affirm ct under misrep resent ing . . . information" is "sufficient to establish egregious condu

Judiciary Law§ 487''] [quota tions omitted]).

The Secon d Cause ofActio nfor Fraud y on the This Court has grante d the Sande rs Entities partial summ ary judgm ent on liabilit NY Slip Second Cause of Action for Fraud (see Sanders Equities LLC v Maldonado, 2025

Op 32439[U] [N.Y. Sup Ct, Nassau County 2025]; NYSCEF Doc. No. 273).

resent ation "The elemen ts of a cause of action sound ing in fraud are [1] a materi al misrep reliance of an existing fact, [2] made with knowledge of the falsity, [3] an intent to induce (Abraham thereo n, [4] justifiable reliance upon the misrep resent ation, and [5] damages" Joseph v v Torati, 219 AD3d 1275, 1279 [2d Dept 2023] [quota tions omitte d]; requir e a Fensterman, 204 AD3d at 768 ["The elemen ts of a cause of action for fraud reliance, material misrep resent ation of a fact, knowledge of its falsity, an intent to induce of action justifiable reliance by the plainti ff and damag es .... Here, the second cause firm and pleaded with the necessary particu larity the elemen ts of fraud agains t the law

Howard Fenste rman" ]).

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Where an attorne y induces a client to pay the attorne y money based upon false, misstated,

or inflated legal bills, it is a fraud:

• Vermon t Mut. Ins. Co. v McCabe & Mack, LLP, 105 AD3d 837, 839-40 [2d Dept

2013] ["Here, the compla int alleged that the defend ants commi tted fraud by

misrep resentin g that they made a motion for a default judgme nt when they never

made, filed, or drafted such a motion, that the plaintif f relied on the

misrep resenta tion, and that the defend ants billed the plaintif f for drafting the

motion. Those allegations were sufficient to state a cause of action to recover

damages for fraud"] [quotat ions omitted];

• Tsimer man v Janoff, 40 AD3d 242, 242 [1st Dept 2007] [denying dismissal of

client's fraud claim alleging that "defend ant law firm ... padded bills, overbilled,

farmed out work to a lawyer who was not a membe r of the firm" and provided a

"false stateme nt of services rendered"]; and

• In re Weinstein, 4 AD3d 29, 36 [1st Dept 2004] ["respo ndent's double billing ...

was a violation of DR 1-102 (A) (4)" prohibi ting "dishonesty, fraud, deceit, or

misrepr esentat ion"]).

Turning to damages, the "true measur e of damage" for fraud "is indemn ity for the actual

pecuniary loss sustain ed as the direct result of the wrong, or what is known as the 'out-

of-pocket' rule" (Glob. Granite Sales Corp. v Sabovic, 166 AD3d 587,58 9 [2d Dept 2018]

[quotat ions omitted ]). "Under this rule, the loss is compu ted by ascertaining the

difference betwee n the value of the bargain which a plaintiff was induced by fraud to make

and the amoun t or value of the consideration exacted as the price of the bargain" (id.

[quotations omitted ]; see also e.g. Maisano v Becka.ff, 2 AD3d 412, 413-14 [2d Dept 2003] 18

[* 18] 18 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

["Damages are to be calculated to compensate plaintiffs for what they lost because of the

fraud .... The plaintiff's own testimony established that his actual out-of-pocket loss as

a result of the fraud was $427,000, or the difference between the amount which he

invested and the amount which he received back"]).

Here, record evidence demonstrate s that the representatio n of Plaintiff Next Millennium

Realty, LLC ("Next Millennium") in the Insurance Litigation Matter (Blaustein Aff., Exs.

3, 16) constituted a fraud. Specifically, between June 2019 and April 2021, Maldonado

and the Firm billed, and the Sanders Entities paid, $263,255.80 related to Defendants'

alleged provision of legal services in connection with filing a motion for summary

judgment on behalf of Next Millennium and opposing four pending motions for summary

judgment (Blaustein Aff., Ex. 3, at 194-195, 200-201, 210-211, 215-216, 231-233, 253, 261,

266,270,27 4,278,282, 286).

In reality, the motions for summary judgment were not written by Maldonado or the

Firm, but another law firm, Whiteman Osterman & Hanna LLP ("WOH") (Blaustein Aff.,

,r,r 30, 31, 36-37). The only work product that Maldonado and the Firm actually delivered

to the Sanders Entities was a three-page client affidavit that was virtually entirely

rewritten by the Sanders Entities' General Counsel, Steven Blaustein (Blaustein Aff., Ex.

19). The fraud was eventually discovered by the Sanders Entities in May 2021, when the

Sanders Entities received two bills, one from Maldonado and the Firm for $73,737.50,

and one from WHO for approximately $65,000, for the exact same work on the motions

for summary judgment (Blaustein Aff., Exs. 17, 18, 20; ,r,r 32-37, 40).

[* 19] 19 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

This amount constitu tes "definite, measura ble out-of-pocket damages resulting from the

alleged fraud" (Vice, Inc. v Stapp, 209 AD3d 794, 797 [2d Dept 2022]). Therefore, the

Court awards the Sanders Entities money damages on the Second Cause of Action for

Fraud in the amount of $263,255.80.

The Third Cause ofAction for Breach ofFiducia ry Duty

This Court has granted the Sanders Entities partial summar y judgmen t on liability on the

Third Cause of Action for Breach of Fiduciary Duty (see Sanders Equities LLC v

Maldonado, 2025 NY Slip Op 32439[U] [N.Y. Sup Ct, Nassau County 2025]; NYSCEF

Doc. No. 273).

"The elements of a cause of action to recover damages for breach of fiduciary duty are (1)

the existence of a fiduciary relationship, (2) miscond uct by the defendan t, and (3)

damages directly caused by the defenda nt's misconduct" (Sneider v Great S. Bay Surgical

Assoc., 235 AD3d 685, 687 [2d Dept 2025] [quotations omitted] ).

"The relationship of client and attorney is one of unique fiduciary reliance which imposes

on the attorney the duty to deal fairly, honestly and with undivide d loyalty including

maintain ing confidentiality, avoiding conflicts of interest, operatin g competently,

safeguarding client property and honoring the clients' interests over the lawyer's" (St.

Annes Dev. Co. v Batista, 165 AD3d 997, 997-98 [2d Dept 2018] [quotatio ns, brackets,

and ellipses omitted] ).

[* 20] 20 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

Any attorneys' fee dispute necessarily "begins with a reflection on the nature of the

attorney-client relationship," because the "greatest trust between people is the trust of

giving counsel" (Matte r of Cooperman, 83 NY2d 465, 471-72 [1994] [quotat ions and

brackets omitted]).

"This unique fiduciary reliance, stemmi ng from people hiring attorne ys to exercise e professional judgme nt on a client's behalf -'giving counse l'-is imbued with ultimat

trust and confidence," so the "attorney's obligations, therefore, transce nd those prevailing

in the commercial market place" (id. at 472 [quotations omitted]). "To the public and

clients, few features could be more paramo unt than the fee--the costs oflegal services ...

. Accordingly, attorney-client fee agreem ents are a matter of special concern to the courts

and are enforceable and affected by lofty principles different from those applicable to

commonplace commercial contrac ts" (id.).

Under these principles, an attorney's overbilling or false billing of a client is a breach of

fiduciary duty:

• Sobel v Ansanelli, 98 AD3d 1020, 1021-23 [2d Dept 2012] ["The plaintif fs breach

of fiduciary duty claims, set forth under the first and second causes of action, were

premis ed upon allegations that the defend ants had charged excessive legal fees

totaling over $44,00 0 .... Contrary to the defend ants' contention, the Supreme

Court properly denied those branch es of their motion which were pursua nt to

CPLR 3211 (a) (1) and (7) to dismiss the first and second causes of action alleging,

in effect, breach of fiduciary duty premis ed on the theory that the defend ants

[* 21] 21 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

charged excessive legal fees" because such allegations "are sufficient to state a

cause of action soundin g in breach of fiduciary duty"];

• Reiver v Burkha rt Wexler & Hirschberg, LLP, 73 AD3d 1149, 1150 [2d Dept 2010]

["The plaintiffs comme nced this action against their former attorneys, alleging ...

that the attorne ys breache d their fiduciary duty to them by charging them

excessive legal fees .... Contrar y to the defend ants' content ions ... , the allegations

of the compla int are sufficient to state a viable cause of action soundin g in breach

of fiduciary duty"]; and

• U.S. Ice Cream Corp. v Bizar, 240 AD2d 654, 655-56 [2d Dept 1997] [client's

allegations the "defend ant law firm engaged in numero us instanc es of improp er

billing in the underlying litigation in which it represe nted the plaintiffs"

demon strated breach of the lawyer's "fiduciary" obligation "to exercise the highest

degree of good faith, honesty, integrity, fairness , and fidelity" and to "not have

persona l interes ts antagon istic to those of his client"]).

Turning to damages, the Sander s Entities pled their breach of fiduciary duty claim as one

for disgorgement of compen sation under the faithless servant doctrine:

• NYSCEF Doc. No. 91, ,i 7 ["the many remedies to which the Sander s Entities are

entitled from Maldonado and the Firm under New York law .. . include . ..

disgorg ement of all attorneys' fees and other compen sation Maldonado and the

Firm received from the Sander s Entities during the period of their disloyalty"];

• id., ,i,i 146, 149 ["Maldonado and the Firm .. . breache d their fiduciary duties by

self-dealing, by placing their own financial interest s above the duties ofloyal ty and

candor they owed their own clients, the Sander s Entities . . . . Therefore, under 22

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common law, the Sanders Entities are entitled to disgorgemen t of all compensatio n

received by Maldonado and the Firm during the period of their disloyalty to the

Sanders Entities in an amount to be determined at trial"]; and

• id. at 32, "WHEREFORE Clause ["On the Third Cause of Action against Maldonado

and the Firm, disgorgemen t of all compensatio n received by Maldonado and the

Firm during the period of their disloyalty to the Sanders Entities in an amount to

be determined at trial"]).

"The faithless servant doctrine provides that one who owes a duty of fidelity to a principal

and who is faithless in the performance of his or her services is generally disentitled to

recover his or her compensatio n, whether commissions or salary" (R & G Brenner Income

Tax Consultants v Gilmartin, 233 AD3d 819, 822 [2d Dept 2024] [quotations and

brackets omitted]). "The faithless servant doctrine applies when an employee-agent

breaches their duty ofloyalty owed to the employer-principal" (id. [quotations omitted]).

"It makes no difference" under the faithless servant doctrine "that the services were

beneficial to the principal, or that the principal suffered no provable damage as a result

of the breach of fidelity by the agent" (Panos v Mid Hudson Med. Group, P.C., 204 AD3d

1016, 1018 [2d Dept 2022] [quotations omitted]).

"An employee forfeits his right to compensatio n for services rendered by him if he proves

disloyal" (Visual Arts Found., Inc. v Egnasko, 91 AD3d 578, 579 [1st Dept 2012]

[quotations omitted]). "Where, as here, defendants engaged in repeated acts of disloyalty,

complete and permanent forfeiture of compensation, deferred or otherwise, is warranted

[* 23] 23 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

under the faithless servant doctrine" (William Floyd Union Free Sch. Dist. v Wright, 61

AD3d 856, 859 [2d Dept 2009]).

The faithless servant doctrine applies to disloyal or self-dealing attorneys:

• Barasch & McGarry, PC v Marcowitz, 219 AD3d 1242, 1242-43 [1st Dept 2023],

lv dismissed 41 NY3d 996 [2024] ["plaintiff was entitled to summary judgment as

a matter oflaw" for breach of the "duty ofloyalty, grounded in the faithless servant

doctrine" because defendant "does not dispute that he referred a matter to another

law firm without plaintiffs knowledge or consent and collected more than

$140,000 in referral fees"];

• Chung v Williams Schwitzer & Assoc., P.C., 200 AD3d 514, 515 [1st Dept 2021]

["Supreme Court correctly concluded that, as a matter oflaw, Chung breached his

duty of loyalty to WSA by referring cases to another attorney while still employed

by WSA"]; and

• Dawes v J. Muller & Co., 176 AD3d 473, 474 [1st Dept 2019] ["plaintiffs motion

for summary judgment on her faithless servant claim should have been granted as

to liability . . . as the parties do not dispute that decedent breached his duty of

loyalty to the plaintiff. ... Thus, plaintiff is entitled to a disgorgement of the fees

which were paid to decedent individually"].

"Where, as here, forfeiture is part of the recovery sought in the action, the issue of whether

the attorney should be required to disgorge the compensation received during the period

of alleged disloyalty is properly entertained on a full record after trial" ( Ulico Cas. Co. v

Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 9, 13 [1st Dept 2008]).

[* 24] 24 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

Under the faithless servant doctrine, "forfeiture is limited to compensation paid during

the time period of disloyalty" (Owen v Hurlbut, 240 AD3d 1199, 1203 [4th Dept 2025]).

The forfeiture arises upon misconduct and disloyalty which substantially affect the

contract of employment," meaning the first date of onset of a "persistent pattern of

disloyalty" (G.K. Alan Assoc., Inc. v Lazzari, 44 AD3d 95, 104 [2d Dept 2007], affd 10

NY3d 941 [2008]).

Here, a "persistent pattern of disloyalty" began no later than January 7, 2018, based on

the following time entry in the Insurance Litigation Matter: "Review docs and prep for

depositions of insurance witnesses" (Blaustein Aff., Ex. 3, at 3). At that time, the Sanders

Entities were only aware of a single upcoming deposition of an insurance witness,

defendant United States Fire Insurance Company ("U.S. Fire") (Blaustein Aff., ,i 47).

Between January 7, 2018 through January 24, 2018, Defendants billed a total of 131.25

hours of preparation time for the January 25, 2018 deposition of U.S. Fire (Blaustein

Aff., Ex. 3, at 3-4).

During this period, the Sanders Entities received no work product or any deposition

transcript of U.S. Fire (Blaustein Aff., ,i 49). The Sanders Entities later discovered that

Maldonado and the Firm abruptly ended the deposition after a dispute over a discovery

ruling by Special Referee (Blaustein Aff., Ex. 20). Adding insult to injury, despite the

deposition not going the full seven (7) hours, Maldonado and the Firm billed the Sanders

Entities eleven (11) hours in connection with the deposition (Blaustein Aff., Ex. 3, at 4

[January 25, 2018 time entry]).

[* 25] 25 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

Maldonado and the Firm's disloyalty continued throughout their representation of the

Sanders Entities in the Matters. For example, between June 2019 and April 2021,

Maldonado and the Firm billed, and the Sanders Entities paid, a total of $263,255.80, for

work the summary judgment motions that was performed by a different law firm, WOH

(Blaustein Aff., Exs. 3, 16-20). Additionally, Maldonado and the Firm billed excessive

hours in the Western Plume Matter (300 hours to defend three depositions) and

Hicksville Water District Matter (60 hours for a motion to dismiss) (Blaustein Aff., Exs.

6 and 7). In short, Defendants disloyalty continued through the conclusion of Maldonado

and the Firm's representation of the Sanders Entities, on April 5, 2021, when the Sanders

Entities made the final payment of Maldonado and the Firm's final legal bill (Blaustein

Aff., Ex. 2).

Therefore, on the Third Cause of Action for Breach of Fiduciary Duty, the Court awards

the Sanders Entities disgorgement of all compensation paid to Maldonado and the Firm

from January 7, 2018, the first date of disloyalty, through April 5, 2021, the date of last

payment to Maldonado and the Firm, in the amount of $2,037,776.85. As a consequence

of their default, Maldonado and the Firm may "not dispute" they "breached" their "duty

ofloyalty," and, therefore, the Sanders Entities are "entitled to a disgorgement of the fees

which were paid" under the "faithless servant claim" (Dawes v J. Muller & Co., 176 AD3d

at 474).

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The Sixth Cause ofActionfor Legal Malpractice

This Court has granted the Sanders Entities partial summary judgment on liability on the

Sixth Cause of Action for Legal Malpractice (see Sanders Equities LLC v Maldonado,

2025 NY Slip Op 32439[U] [N.Y. Sup Ct, Nassau County 2025]; NYSCEF Doc. No. 273).

The Sanders Entities' legal malpractice claim involves entirely different conduct, and

different damages, than the fraud and breach of fiduciary duty claims. The Sixth Cause of

Action is not for fraudulent billing, but for professional malpractice for refusing to comply

with disclosure, causing this Court (Bucaria, J.), to strike the Sanders Entities' answer in

a litigation Maldonado and the Firm defended, captioned The Rehabilitation Institute,

Inc. v 123 Frost Associates L.P., Supreme Court, Nassau County, Index No. 612897/2017,

concealing it from the Sanders Entities afterwards, forcing the Sanders Entities to settle

the case, causing them damages as a result of the settlement of $350,000.

"In an action to recover damages for legal malpractice, a plaintiff must demonstrate [1]

that the attorney failed to exercise the ordinary reasonable skill and knowledge commonly

possessed by a member of the legal profession and [2] that the attorney's breach of this

duty proximately caused plaintiff to sustain actual and ascertainable damages" (Berkovits

v Berkovits, 190 AD3d 911, 918 [2d Dept 2021] [quotations omitted]).

An attorney who causes his or her client's default or loss on liability for noncompliance

with disclosure demands or order departs from the standard of care, committing

malpractice:

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• Carasco v Schlesinger, 222 AD3d 476, 477 [1st Dept 2023] ["Between February

2017 and July 2018, Supreme Court, New York County issued orders dismissing

the underlying action based . . . on plaintiffs failure to provide discovery. Plaintiff

then commenced this legal malpractice action against J & S, Morelli Law Firm, and

Schlesinger.... The court correctly determined that Schlesinger failed to establish

prima facie" his entitlement to dismissal of the claim for legal malpractice"];

• RTW Retailwinds, Inc. v Colucci & Umans, 213 AD3d 509, 511-12 [1st Dept 2023]

["contrary to the motion court's conclusions, and viewing the evidence in the light

most favorable to plaintiffs, the documentary evidence submitted by defendants

did not utterly refute plaintiffs' allegations that defendants failed to produce

discovery" on an "affirmative defense and that this led to the exclusion of certain

evidence at trial. ... Accordingly, defendants have not conclusively established a

defense" to a claim oflegal malpractice, requiring reversal of grant of dismissal];

and

• 4777 Food Servs. Corp. vAnthony P. Gallo, P.C. , 150 AD3d 1054, 1054-55 [2d Dept

2017] [reversing pre-answer dismissal of an "action to recover damages for legal

malpractice," where "the complaint alleges that the defendants, Anthony P. Gallo,

P.C., and Anthony P. Gallo . .. , who represented the plaintiff' in an underlying

lawsuit "negligently failed to respond to certain discovery demands ... , which

resulted in the Supreme Court . . . precluding the introduction of evidence"]).

"A settlement and release in an underlying action" entered into to "obviate the full damage

that would otherwise have flowed from his attorney's negligence" does "not preclude a

subsequent action for legal malpractice where the settlement was compelled because of

[* 28] 28 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

the mistakes of former counsel" (Lattimore v Bergman, 224 AD2d 497, 497 [2d Dept

1996]; Maroulis v Friedman, 153 AD3d 1250, 1251 [2d Dept 2017] [a lawyer remains

liable for legal malpractice "despite settlement of the underlying action, if it is alleged that

settlement of the action was effectively compelled by the mistakes of counsel"]

[quotations omitted]).

Where a client is forced to pay money out of pocket to resolve a litigation because of a

lawyer's mistakes, "the settlement was effectively compelled by defendants' malpractice"

and is a recoverable form of damage (Stevens v Wheeler, 216 AD3d 537, 538 [1st Dept

2023]). In other words, "a legal malpractice plaintiffs damages may include litigation

expenses incurred in an attempt to avoid, minimize, or reduce the damage caused by the

attorney's wrongful conduct" (I.M.P. Plumbing & Heating Corp. v Munzer & Saunders,

LLP, 199 AD3d 569, 570 [1st Dept 2021] [quotations omitted]), including a settlement

Here, the basis of the Sanders Entities Sixth Cause for Legal Malpractice involves

Maldonado and the Firm's representation of the Sanders Entities in the following two

matters (i) The Rehabilitation Institute, Inc. v 123 Frost Associates L.P., Supreme Court,

Nassau County, Index No. 612897/2017 (the "Rehabilitation Institute Matter"); and (ii)

123 Frost Associates L.P. v The Rehabilitation Institute, Inc., Supreme Court, Nassau

County, Index No. 601013/2019 (the "123 Frost Matter") (Blaustein Aff., Ex. 22-23).

Specifically, the Rehabilitation Institute Matter was a lawsuit brought by a commercial

tenant of 123 Frost Associates L.P. ("123 Frost") alleging breach of a lease agreement,

including claims against 123 Frost for declaratory judgment, breach of contract, breach of

the covenant of good faith and fair dealing, and reformation (Blaustein Aff., ,i 58). The

29 of 35 [* 29] INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

123 Frost Matter is a closely related matter to the Rehabilita tion Institute Matter, in which

123 Frost brought claims for breach of contract, declaratory judgment, tortious

interference with contract, and single enterprise liability (id., ,i 59).

In the Rehabilitation Institute Matter, Maldonado and the Firm repeatedly and

consistently violated routine requests for productio n of pre-trial disclosure (e.g.,

responses to discovery demands and interrogatories, and produce a corporate

representative from 123 Frost for a noticed deposition) (Blaustein Aff., Ex. 22) However,

Maldonado and the Firm failed to ever update 123 Frost and/ or the Sanders Entities about

any of these pre-trail discovery failures (Blaustein Aff., ,i 60). Because of these repeated

failure on or about December 13, 2018, the Hon. Stephen A. Bucaria issued a Short Form

Order striking the Answer of 123 Frost to the extent that 123 Frost was precluded from

offering certain evidence at trial supportin g its defense (Blaustein Aff., Ex. 24). Despite

the Court striking the Answer in December 2018, Maldonado and the Firm actively

concealed that fact from 123 Frost and the Sanders Entities throughou t the litigation of

both matters (Blaustein Aff., ,i 62).

On May 4, 2020, 123 Frost entered into a settlemen t agreemen t (the "Settleme nt

Agreement"), whereby 123 Frost agreed to settle the Rehabilitation Institute and 123 Frost

Matters by paying $350,000 .00 (Blaustein Aff., Ex. 25). When the Settlemen t Agreement

was executed, 123 Frost and/ or the Sanders Entities were still unaware that the Answer

was stricken in the Rehabilitation Institute Matter (Blaustein Aff., ,i 64).

[* 30] 30 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

Therefore, the Court awards the Sanders Entities money damages on the Sixth Cause of

Action for Legal Malpractice in the amount of $350,00 0.

Prejud gment Interes t

On the First Cause of Action for Attorney Deceit/ Judiciar y Law§ 487, the record shows

that Maldonado and the Firm acquired funds from the Sanders Entities through "deceit"

and "with intent to deceive," depriving them of the use of their money (Altman v Orseck,

235 AD3d at 819).

This claim involved "an act or omission depriving or otherwise interferi ng with title to, or

possession or enjoyme nt of, property" - taking of a law firm client's fund through

dishonesty - for which prejudgm ent interest is recoverable as of right (CPLR § 5001 [a]).

Therefore, the Court awards prejudgm ent interest on the First Cause of Action (see e.g.

Stein v Einhorn, 74 AD3d 1185, 1185 [2d Dept 2010] ["Supreme Court properly calculated

prejudgm ent interest on the treble damages awarded"]; Mohassel v Fenwick, 5 NY3d 44,

47 [2005] ["In this rent overcharge proceeding, the issue is whether a rent stabilized

tenant was properly granted prejudgm ent interest on a treble damages award. We

conclude that he was."]).

On the Second Cause of Action for Fraud, a plaintiff who prevails on a claim for fraud is

entitled to prejudgm ent interest (see e.g. Huang v Sy, 62 AD3d 660, 661 [2d Dept 2009]

["Supreme Court properly awarded pre-verdict interest as a matter of right pursuan t to

CPLR § 5001 (a) upon the principal sum awarded in connecti on with the plaintiffs' causes

[* 31] 31 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

of action to recover damages for fraud"]; see also e.g. Whittemore v Yeo, 117 AD3d 544,

545-46 [1st Dept 2014] ["The court properly awarded prejudgment interest, as defendant

had the advantage of using the money that plaintiff was fraudulently induced to

contribute and plaintiff was deprived of his use thereof'] [citations omitted]). Therefore,

the Court awards prejudgment interest on the Second Cause of Action.

On the Third Cause of Action for Breach of Fiduciary Duty, a plaintiff who prevails on a

claim for breach of fiduciary duty is entitled to prejudgment interest (Huang v Sy, 62

AD3d at 661 ["Supreme Court properly awarded pre-verdict interest as a matter of right

pursuant to CPLR § 5001 (a) upon the principal sum awarded in connection with the

plaintiffs' causes of action to recover damages for ... breach of fiduciary duty"]). "[S]uch

an award is virtually mandated in situations where fiduciaries failed to properly account

for many years, during which time the fiduciary enjoyed the benefit of the injured

[principal]'s money" (Sexter v Kimmelman, Sexter, Warmfiash & Leitner, 43 AD3d 790,

795 [1st Dept 2007] [quotations omitted]). Therefore, the Court awards prejudgment

interest on the Third Cause of Action.

On the Sixth Cause of Action for Legal Malpractice, a plaintiff who prevails on a claim for

legal malpractice is entitled to prejudgment interest (Lovino, Inc. v Lavallee Law Offices,

96 AD3d 910, 913 [2d Dept 2012] ["The defendants contend that the assessment of

prejudgment interest on the entire principal amount is an impermissible double recovery

.... This contention is without merit"]; Barnett v Schwartz, 47 AD3d 197, 208 [2d Dept

2007] ["CPLR § 5001 operates to permit an award of prejudgment interest from the date

of accrual of the malpractice action in actions seeking damages for attorney malpractice"]

[* 32] 32 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

[quotations omitted]). Therefore, the Court awards prejudgm ent interest on the Sixth

Cause of Action.

The applicable rate of interest on all of the causes of action is 9% per annum (see CPLR §

5004 [a]; see e.g. Scotti v Barrett, 166 AD3d 698, 699 [2d Dept 2018] ["interest is to be

awarded at the statutory rate of 9% per annum"]).

The sole remaining question is from when interest should run. The default rule is that

prejudgm ent interest "shall be computed from the earliest ascertainable date the cause of

action existed .... " (CPLR § 5001 [b]). The exception is that where "damages were

incurred at various times, interest shall be computed upon each item from the date it was

incurred or upon all of the damages from a single reasonable intermedi ate date" (id.).

Here, because of Maldonado and the Firm's dishonesty and deceit of their longtime

clients, and their disregard for this Court's orders over three years of litigation, the Court

exercises its discretion and awards prejudgm ent interest from the "earliest ascertainable

date the cause of action existed" (CPLR § 5001 [b]), which is January 7, 2018, through the

date of entry of judgment (see e.g. Ecoline, Inc. v W.H. Peepels Co., Inc., 153 AD3d 786,

787 [2d Dept 2017] [the "award of interest on the judgment should be calculated as of the

earliest ascertainable date the cause of action existed"]).

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Accordingly,

It is

ORDERED, that Plaintiffs are awarded damages as follows: (i) on the First Cause of

Action for Attorney Deceit/ Judiciary Law§ 487, awarding treble damages on the amount

awarded on the Third Cause of Action, $2,037,776.85, for a total treble award of

$6,113,330.55; (ii) on the Second Cause of Action for Fraud, awarding money damages of

$263,255. 80; (iii) on the Third Cause of Action for Breach of Fiduciary Duty, awarding

disgorgem ent of compensa tion under the faithless servant doctrine of $2,037,776.85; (iv)

on the Sixth Cause of Action, awarding money damages of $350,000 .00; and

It is

ORDERED, that Plaintiffs are awarded prejudgm ent interest on the total principal award

at the rate of 9% per annum from January 7, 2018, through the date of entry of judgment;

and

It is

ORDERED, that Plaintiffs shall submit Judgment on Notice to the Nassau County Clerk

in accordance with this Decision and Order within thirty (30) days of the date of entry;

and

It is

ORDERED that Plaintiffs shall serve a copy of this Decision and Order with Notice of

Entry upon Defendan ts within seven (7) days of the date of entry of this Decision and

Order.

[* 34] 34 of 35 INDEX NO. 605681/2022 NYSCEF DOC. NO. 311 RECEIVED NYSCEF: 12/17/2025

This constitutes the Decision and Order of the Court after Inquest.

Dated: Mineola, New York December 17, 2025

[* 35] 35 of 35