Alliance Network, LLC v. Sidley Austin LLP, 987 N.Y.S.2d 794

Consolidated motion sequence Nos. 005–008; four separate motions to dismiss the amended complaint by different defendant groups were considered together.
Plaintiffs Alliance Network, LLC, Alliance Network Holdings, LLC, and Network World Market Center, LLC sue the Alliance brothers and several law firms for alleged funding breaches and related misconduct stemming from the WMC project.
Underlying arbitration in California (2007–2009) resulted in a large award against Alliance Network and in favor of NAMA; California court orders confirmed the award in 2010, with related stay and enforcement proceedings.
In New York, plaintiffs rely on Judiciary Law §487 and other claims (fraud, aiding/abetting/conspiracy) against attorney defendants, and on breach of contract, conversion, unjust enrichment, and related theories against the Alliance brothers.
The court ultimately granted all four motions to dismiss and dismissed the amended complaint in its entirety, including dismissing claims against Slates for lack of personal jurisdiction.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §487 and related fraud claims against attorney defendants may proceed	Plaintiffs rely on alleged deceit in multiple litigations	The First Department bars §487 actions from separate suits and requires remedy in the underlying action	Dismissed; §487 claim not proper in this action
Whether Slates defendants are subject to New York long‑arm jurisdiction	Slates defendants aided in alleged misconduct in NY courts	No NY contacts; §302(a)(2) not satisfied	Dismissed for lack of personal jurisdiction
Whether §487 and fraud claims against Alliance brothers survive	Brothers as alter egos liable for NAMA’s alleged misconduct	No underlying §487 claim against brothers; claims fail	Dismissed; underlying §487 claim against attorney defendants dismissed, destroying derivative theories
Whether breach of contract claims are barred by res judicata/collateral estoppel	Alleged alter ego liability for NAMA breaches	Arbitration decision and privity with NAMA preclude relitigation	Dismissed on res judicata and collateral estoppel grounds
Whether permanent injunction is warranted	Injunction necessary to prevent ongoing harm	Remedy inadequate where no substantive claims remain	Dismissed; injunction unavailable without surviving substantive claims

Amalfitano v. Rosenberg, 12 N.Y.3d 8 (N.Y. Ct. App. 2009) (section 487 deceit requires intentional egregious misconduct; distinguished facts)
Yalkowsky v. Century Apts. Assoc., 215 A.D.2d 214 (1st Dep’t 1995) (remedy for §487 lies in the underlying suit; second action barred)
Chibcha Rest., Inc. v. Kaminsky & Assoc., P.C., 102 A.D.3d 544 (1st Dep’t 2013) (reiterates limitations on §487; not a separate action for deceit in litigation)
Seldon v. Spinnell, 95 A.D.3d 779 (1st Dep’t 2012) (further supports limits on §487 claims)
Curry v. Dollard, 52 A.D.3d 642 (2d Dep’t 2008) (advocacy within adversarial proceedings generally not §487 deceit)
Lazich v. Vittoria & Parker, 189 A.D.2d 753 (2d Dep’t 1993) (within bounds of adversarial proceedings; no §487 deceit)
Oster v. Kirschner, 77 A.D.3d 51 (1st Dep’t 2010) (conspiracy to commit fraud requires underlying fraud)
IDT Corp. v. Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132 (N.Y. 2009) (establishes standards for quasi-contract claims; informs injury analysis)
Colavito v. NY Organ Donor Network, 8 N.Y.3d 43 (2006) (elements of conversion and possessory rights)
Abacus Fed. Sav. Bank v. Lim, 75 A.D.3d 472 (1st Dep’t 2010) (conspiracy requires underlying tort; duplicative theories dismissed)
UBS Sec. LLC v. Highland Cap. Mgt., L.P., 93 A.D.3d 489 (1st Dep’t 2012) (privity shows up in res judicata/alter ego analysis)