Richmond County v. Fodera (2025)

Case details
Full caption
Richmond County v. Carl FODERA
Country
United States
Jurisdiction
New York (NY)
Court
New York Court of Appeals
Decided
2025
Disposition
Motion Denied
Grymes Development Company v. Fodera, 88 Misc.3d 767 (2025)245 N.Y.S.3d 863, 2025 N.Y. Slip Op. 25245 WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.188 Misc.3d 767Supreme Court, Richmond County, New York.GRYMES DEVELOPMENT COMPANY, Plaintiff,v.Carl FODERA, Defendant.Jieun Cecelia Kim and Chan Hui Cho As fee simple owners inchains of conveyance from Carl Fodera, Third Party Plaintiffs,v.Stewart Title and First Nationwide of NY, Inc., Third Party Defendants.Index No. 102723/2009|Decided on November 10, 2025Editor's Note: This document contains discussion of unverified citations, likely generated by AI tools used by a party orcounsel. These citations are not attributable to the Court. The unverified citations have been preserved as part of the officialrecord, but links are unavailable.Background: After contempt application was filed against insureds, the successor homeowners, to enforce a pre-existingrecorded judgment requiring removal of swimming pool on their property, as it encroached on easement in favor of adjoininglot, and after stipulated resolution was reached of contempt matter, insureds brought third-party action against their title insurers,complaining that such judgment was not uncovered in title search and title report for their property, and alleging that insurerswere liable for damages. Following discovery that insureds' summary judgment memorandum cited to fictitious, non-existentcase law as result of reliance on artificial intelligence (AI), insureds' counsel sought to withdraw such motion without prejudice.Insurers objected and sought imposition of sanctions, including dismissal of insureds' third-party action and/or reimbursementof attorney fees and costs.Holdings: The Supreme Court, Wayne M. Ozzi, J., held that:citing to non-existent case law was frivolous conduct, providing predicate for imposition of sanctions;insureds' summary judgment motion would be denied with prejudice as result of counsel's conduct;dismissal of insureds' third-party action was not warranted;counsel was required to pay $2,000 financial sanction to Lawyers Fund for Client Protection; andcounsel was further required to reimburse reasonable attorney fees and costs of insurers in respective amounts of $11,718.50and $5,275.Ordered accordingly.
Grymes Development Company v. Fodera, 88 Misc.3d 767 (2025)245 N.Y.S.3d 863, 2025 N.Y. Slip Op. 25245 WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.2Attorneys and Law FirmsThird Party Plaintiff: SUNGCHAN CHO, Address:163-07 Depot Rd., Ste 208, Flushing, NY 11358, Phone:7183212577]Third Party Defendant First Nationwide, KEITH S. GARRET, Address:1801 Argyle Sq, Babylon, NY 11702, Phone:(631)572-8872Third Party Defendant Stewart Title, JAMES PENNINGTON TRUITT, Sherwood & Truitt Law Group, LLC, Address:300Garden City Plaza, Suite 136, Garden City, NY 11530, Phone:516 408 7030OpinionWayne M. Ozzi, J.*768 **865 The following documents have been read and considered in this matter, which was the subject of hearings beforethe Court on August 19, 2025 and virtually on October 16, 2025: NYSCEF Doc Nos. 69-106.BackgroundThe issue the Court decides here involves counsel for Third Party Plaintiffs, Sungchan Cho, Esq.'s use of a non-existent casecitation and non-existent quotations from said case in a summary judgment motion, as a result of his reliance on artificialintelligence (“AI”). In essence, the motion relied on a non-existent case generated by AI, resulting in an AI “hallucination,” i.e.,the production of false or misleading information. This emerging problem, which has been the subject of several recent opinionsin New York State Court cases, has reared its head in this matter. “[I]mproper usage of AI continue[s] to plague the courts.”Augustin v. Formula 3 Brook. Inc., 2025 WL 2006010, *3, 2025 NY Misc. LEXIS 6143, *6, 86 Misc.3d 1236(A) (Sup. Ct.Kings July 26, 2025). With the proliferation of AI technology, and its use by legal research search engines, numerous internet“search tools,” and various formal and informal databases purporting to compile legal information, there is great risk that thecircumstances encountered here will continue to repeat themselves.This AI-related issue now before the Court has its genesis in Third Party Plaintiffs Kim and Cho's motion for summary judgmentin a third-party action they commenced as homeowners against two title companies, one of which issued a policy of insurance(First Nationwide of NY, Inc.), which in turn was underwritten by Stewart Title. By way of brief background, the Third Partycomplaint in this case alleges that the title search and report for the home purchased by Third Party Plaintiffs at 144 Grymes HillRoad, Staten Island, New York, failed to uncover a prior recorded judgment (NYSCEF Doc. # 37), against one of Third PartyPlaintiffs' predecessors in title, and which determined that the swimming pool area on the subject property as encroaching onan easement in favor of a neighboring lot. The recorded judgment, which runs with the land, specifically directed a prior ownerto remove all encumbrances and encroachments. However, this was never accomplished, and the property thereafter changedhands a number of times. After Third Party Plaintiff's purchase, the beneficial owner of the easement filed a contempt applicationagainst the Third Party Plaintiffs to enforce the judgment, *769 which application was resolved through a stipulation betweenthe parties. The main issue in this case is the measure of damages owed by the title insurers Third Party Defendants to ThirdParty Plaintiffs, including but not limited to, whether they are liable for the pool removal only, for the costs of replacing theencroaching pool and improvements, or are liable for the diminution in property value. This was the subject of the summaryjudgment motion. The memorandum of law filed in support of Kim and Cho's motion (NYSCEF Doc. # 77) cited Landry v. TitleGuarantee & Trust Co., 132 Misc 2d 910 (Sup. Ct. NY Co. 1986)FC, the offending non-existent case, for the proposition thatThird Party Plaintiffs are entitled to the cost of removing and rebuilding the pool in a proper location as a measure of damages.The issue of the misuse of AI in the motion papers came to the attention of the Court soon after the summary judgment **866motion was filed, when counsel for Stewart Title filed its opposition and indicated that the case Third Party Plaintiff cited didnot exist. Several days later, counsel for Third Party Plaintiffs acknowledged that no such case existed, apologized to the Court
Grymes Development Company v. Fodera, 88 Misc.3d 767 (2025)245 N.Y.S.3d 863, 2025 N.Y. Slip Op. 25245 WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.3and Counsel, and asked to withdraw the motion without prejudice. He thereafter filed a “Notice of Withdrawal of Motion”which states in part, “This withdrawal is made without prejudice, unless otherwise directed by the Court.”Counsel for Stewart Title objected to the withdrawal being without prejudice, as successive summary judgment motions typicallyare not permitted, and he had expended time researching and responding to the motion. He asked the Court to review the papersand determine whether Plaintiffs' third-party action should be dismissed, whether Stewart should be reimbursed for the fees itincurred in opposing the motion, and whether any other sanctions are appropriate. Counsel for First Nationwide of NY alsoopposed the motion being withdrawn without prejudice, as counsel had expended substantial time and effort in preparing a fullopposition, including legal research and briefing. It also noted that the Court may wish to “consider appropriate further reliefas outlined in Stewart Title's submission.”The Court scheduled a hearing regarding these issues. At that time, the Court gave the parties an opportunity to be heardregarding the motion and the issue with the fictitious case citation. Counsel for Third Party Plaintiff acknowledged that heresearched some cases using “AI” but neglected to check the *770 citation to the nonexistent case for accuracy. For someinexplicable reason, co-Third party Defendant First Nationwide of NY did not appear and indicated it did not receive notice ofthis hearing, so the Court provided an opportunity for it to be heard and to seek its costs and attorney fees in a second virtualconference.Analysis and DiscussionSubmission of a brief relying on and quoting from a non-existent case obviously does the Court and the parties no good. It ofcourse raises a number of ethical issues, in addition to wasting the time and resources of the Court and opposing counsel, andpotentially impacting the rights of the litigants. As the Court imposes sanctions on Counsel for Third Party Plaintiffs, as furtherdetailed below, it is required to issue a written decision setting forth the conduct on which the award is based, the reasons why theCourt determined the conduct was frivolous, and why the amount awarded was determined to be appropriate. NY Ct. R 130-1.2.A motion predicated on a “non-existent case” is a frivolous filing within the meaning of the Rules of the Chief Administrator forthe imposition of sanctions. It needs little explanation that such a motion was “completely without merit in law and cannot besupported by a reasonable argument for an extension, modification or reversal of existing law.” See NY Ct. R. 130-1.1. Similarly,the memorandum asserted “material factual statements that were wrong” by relying on and describing case precedent that didnot exist. Ibid. See also Matter of Samuel, 82 Misc.3d 616, 620, 206 N.Y.S.3d 888 (N.Y. Sur. 2024).In determining whether conduct was frivolous for the purpose of imposing sanctions, the court should consider, among otherissues: (1) the circumstances under which the conduct took place, including the time available for investigating the legal orfactual basis of the conduct; and (2) whether or not the conduct was continued when its lack of legal or factual basis wasapparent, should have been apparent, or was brought to the attention of counsel or the party. NY Ct. R. 130-1.1. Here, Counsel**867 had ample time to file a summary judgment motion as the matter had not yet been certified as ready for trial. In findingthe conduct here frivolous, the court notes that the Surrogate's Court in Matter of Samuel, 82 Misc.3d 616, 620, 206 N.Y.S.3d888 (N.Y. Sur. 2024), observed that a simple search for the citation on a legitimate legal research platform, such as *771Westlaw or Lexis, takes only minimal effort. However, this Court notes that the failure to take that simple step in this caseresulted in a waste of limited judicial resources and as well as the resources and time of counsel and the parties in this matter.The conduct was apparent or should have been apparent had the attorney checked the citation.By signing a paper, an attorney or party certifies that, to the best of that person's knowledge, information and belief, formedafter an inquiry reasonable under the circumstances, the presentation of the paper or the contentions therein are not frivolous asdefined in section 130-1.1(c) of this Subpart. See NY Ct. R. 130-1.1-a. Here, there was no reasonable inquiry; had a reasonableinquiry been undertaken, the problem would have immediately revealed itself.Another case dealing with a similar issue, Mata v. Avianca, Inc., 678 F.Supp.3d 443, 448 (S.D.N.Y. 2023), noted the following:
Grymes Development Company v. Fodera, 88 Misc.3d 767 (2025)245 N.Y.S.3d 863, 2025 N.Y. Slip Op. 25245 WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.4“Many harms flow from the submission of fake opinions. The opposing party wastes time and money in exposing thedeception. The Court's time is taken from other important endeavors. The client may be deprived of arguments based onauthentic judicial precedents. There is potential harm to the reputation of judges and courts whose names are falsely invokedas authors of the bogus opinions and to the reputation of a party attributed with fictional conduct. It promotes cynicism aboutthe legal profession and the American judicial system.”Certainly, AI presents both opportunities and challenges to the legal profession. Here, the problem of AI “hallucinations” —where the technology provides fictitious answers to an inquiry — may have been the cause of the problem in this case. (SeeAder v. Ader, 87 Misc.3d 1213(A), 240 N.Y.S.3d 701 (N.Y. Sup. Ct. 2025); OpenAI identifies reason ChatGPT “hallucinates”accessed September 11, 2025 at: https://www.msn.com/en-us/news/ technology/openai-identifies-reason-chatgpt-hallucinates/ar-AA1MbcaX?ocid-BingNewsVerp). The fallibilities and limitations of AI make plain why blind reliance upon it isimpermissible and ill advised.While it is clear that technologies can assist attorneys by helping them providing high quality and efficient professional servicesto their clients, technology does not in any way displace or exempt attorneys from their professional duties and *772 judgments.(See AI and Legal Ethics: What Lawyers Need to Know, accessed Sept 11, 2025 https://www.lexisnexis.com/pdf/practical-guidance/ai/ai-and-legal-ethics-what-lawyers-need-to-know.pdf). The misuse of AI technology also implicates the lawyer'sethical duty to provide independent professional judgment in rendering legal services. Undoubtedly, lawyers are selected andhired by the public for their judgment and counsel.The potential benefits of AI technologies and the risks presented by their misuse, led the New York State Bar Association, likesome other State Bar Associations, to form a Task Force on Artificial Intelligence, which issued a 2024 Report making manyrecommendations regarding the use of AI by attorneys. See Report and Recommendations of the New York State Bar AssociationTask Force on Artificial Intelligence, April 2024, accessed at https://nysba.org/wp-content/uploads/2022/03/2024-April-Report-and-Recommendations-of-the-Task-Force-on-Artificial-Intelligence.pdf. **868 The Report discusses the various rules ofprofessional conduct regarding competence, diligence, candor and professional independence that are involved when AItechnology is used. Regarding the issue of professional independence, the Report notes that a lawyer shall not permit a “person todirect or regulate the lawyer's professional judgment in rendering legal services.” (Rule 5.4, Report at p. 59). While technologyis not a “person,” the Report finds that lawyers should refrain from relying exclusively on its output when providing legal advice,in order to maintain a lawyer's “independent judgment on a matter.” (See also New York City Bar Association Committee onProfessional Ethics, Formal Opinion 2024-5 Ethical Obligations of Lawyers and Law Firms relating to the Use of GenerativeArtificial Intelligence in the Practice of Law).The Court acknowledges and empathizes with the many challenges faced by legal practitioners, who have competing demandson their time and attention, and are as subject to errors and other frailties as much as anyone else. As legal professionals andofficers of the Court, however, they are bound to ensure that their advocacy comports with the applicable ethical standards andrules of practice. The Court also notes and heavily considers that Counsel in this matter directly and immediately admitted theproblem once it was pointed out by opposing counsel, apologized for same, and offered to withdraw the motion. However the“error” here cannot be considered minimal. Although it surely appears to have resulted from a *773 simple failure to checkthe citation, rather than a calculated misdeed, the brief was signed and certified, and thus raises the issue of “candor to thetribunal” and the spectre of “fraud on the Court.” At a minimum, a lawyer has an ethical obligation and duty to refrain fromknowingly make a false statement of fact or law to the Court (New York Rules of Professional Conduct, Rule 3.3(a)(1)). Forthese reasons, there must be some consequence for this offensive filing. The Court cannot turn its back on what occurred hereby simply allowing the motion to be withdrawn without prejudice. Such a response would leave opposing counsel without aremedy for their wasted time and leave clients, courts, and other practitioners that much more exposed to similar conduct inthe future. To allow a denial without prejudice also would violate the general proscription on successive summary judgmentmotions without good cause. (Lapadula v. Kwok, 304 A.D.2d 798, 757 N.Y.S.2d 869, 870 (2003)). For these broader reasons,a stronger response is appropriate.
Grymes Development Company v. Fodera, 88 Misc.3d 767 (2025)245 N.Y.S.3d 863, 2025 N.Y. Slip Op. 25245 WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.5Thus, the Court will deny the summary judgment motion with prejudice. The Court hereby denies Stewart Title's request thatthe Third Party Complaint be dismissed. The Court exercises its discretion not to impose this most drastic remedy in thiscircumstance, particularly in light of the acknowledgment of the error. There are strong public policy reasons weighing in favorof allowing matters to be determined on their merits. (Fried v. Jacob Holding, Inc., 110 A.D.3d 56, 60, 970 N.Y.S.2d 260, 263(2013)). The course charted here responds to the conduct while allowing the litigants their “day in court” and a decision on themerits of the matter at trial. The attorney's offensive conduct should not inure to the detriment of his clients.Having found the conduct at issue here to be frivolous, the Court concludes that sanctions are appropriate. The attorney hadsufficient time to research the limited issues in this case, and as noted, checking this case citation would have taken **869minutes, if not seconds. The failure to do so, and to file the motion nonetheless, resulted in a waste of resources for all involved.The Court therefore orders that attorney for Third Party Plaintiff pay a sanction of $2,000 to be deposited with the LawyersFund for Client Protection (22 NYCRR 130-1.3), and he shall efile proof of such deposit within 30 days. This amount takes intoaccount the conduct at issue, the unnecessary waste of resources and also considers the actions of counsel in acknowledgingthe error as soon as it was pointed out by opposing counsel. This amount is less than that imposed *774 in some other casesreviewed by the Court. (See Mata v. Avianca, Inc., 678 F.Supp.3d at 466 (where the Court's concerns included a lack of candoronce the non-existent cases came to light); see generally Augustin v. Formula 3 Brook. Inc., 2025 WL 2006010, 3, 2025 NYMisc. LEXIS 6143, 6, 86 Misc.3d 1236(A) (Sup. Ct. Kings July 26, 2025)(directing a hearing on whether pro se defendantwould be subject of monetary penalties).The Court grants Stewart Title's application for attorney's fees and costs in the amount of $11,718.50 as detailed in theirsubmission to the Court (NYSCEF Doc. # 103), which the Court finds to be a reasonable amount given the issues and courtappearances involved. (See NY Ct. R. 130-1.1 and 1.2). It directs the attorney for Third Party Plaintiffs to reimburse this amountwithin 30 days of this Decision and Order, to be paid to Sherwood & Truitt LLC. The Court grants Third Party Defendant FirstNationwide application for fees and costs in the amount of $5,275.00, which amount the Court finds be a reasonable amount foropposing the motion. It directs the attorney for Third Party Plaintiffs to reimburse this amount within 30 days of this Decisionand Order, payable to Keith S. Garrett, Esq.Finally, because Counsel's conduct has impacted the litigation of this matter, and thus impacted his client, at the first hearing onthis issue, the Court directed Counsel for Third Party Plaintiffs to provide his clients by overnight mail return receipt requestedwith a copy the transcript of the August 19, 2025 proceedings. The Court notes that counsel for Third Party Plaintiff has timelycomplied with this portion of the decision, as evidenced by the filing on NYSCEF. (NYSCEF Doc No. 105).For the foregoing reasons, it is hereby Ordered and Adjudged:(1) The motion for summary judgment is hereby denied with prejudice.(2) Attorney For Third Party Plaintiff Sungchan Cho, Esq. is hereby sanctioned in the amount of $2,000.00 which amount shallbe paid to the Lawyers Fund for Client Protection within 30 days of the date of this Decision and Judgment, if not already paid.(3) Attorney For Third Party Plaintiff shall reimburse Counsel for Stewart Title in the amount of $11,718.50 within 30 days ofthis Order, if such amount is not already reimbursed.(4) Attorney For Third Party Plaintiff shall reimburse Third Party Defendant First Nationwide in the amount of $5,275.00,within 30 days of this Order, if such amount is not already reimbursed.(5) A compliance conference in this matter shall be held on December 1, 2025 at 11:00 am via Teams, to *775 determine whatdiscovery may be outstanding so that the matter to be certified for trial, and to schedule any status or settlement conferencethat may be appropriate.
Grymes Development Company v. Fodera, 88 Misc.3d 767 (2025)245 N.Y.S.3d 863, 2025 N.Y. Slip Op. 25245 WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.6(6) The Court finds that Counsel for Third Party Plaintiffs has already complied with the portion of the decision requiring himto provide a copy of the transcript of the August 19, 2025 proceedings.**870 (7) All relief not expressly granted herein is denied.All Citations88 Misc.3d 767, 245 N.Y.S.3d 863, 2025 N.Y. Slip Op. 25245End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
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