     06-2364-cv
     Amalfitano v. Rosenberg

1                         UNITED STATES COURT OF APPEALS

2                              FOR THE SECOND CIRCUIT

3                                August Term, 2007

4    (Argued: September 6, 2007                Opinion Filed: July 15, 2008)

5                              Docket No. 06-2364-cv

6                    -------------------------------------

7                   VIVIA AMALFITANO AND GERARD AMALFITANO,

8                              Plaintiffs-Appellees,

9                                      - v -

10                               ARMAND ROSENBERG,

11                              Defendant-Appellant.

12                   -------------------------------------

13   Before:     WALKER, CALABRESI, and SACK, Circuit Judges.



14               Appeal from a judgment of the United States District

15   Court for the Southern District of New York (Naomi Reice

16   Buchwald, Judge), after a bench trial, awarding the plaintiffs

17   $268,245.54 and costs against the defendant under the provisions

18   of New York Judiciary Law § 487 for the defendant's attempted

19   deceit of Supreme Court, New York County, and successful deceit

20   of the Appellate Division, First Department, in connection with

21   an action against the plaintiffs.      Because the issue of the

22   actionability of attempted deceit is undecided under New York

23   law:

24
1               Questions certified to the New York State Court of

2    Appeals.

3                               WILLIAM J. DAVIS, Scheichet & Davis,
4                               P.C., New York, NY, for Defendant-
5                               Appellant.

6                               RICHARD E. HAHN, Llorca & Hahn LLP, New
7                               York, NY, for Plaintiffs-Appellees.


8    SACK, Circuit Judge:

9               Defendant-Appellant Armand Rosenberg appeals from the

10   judgment of the United States District Court for the Southern

11   District of New York (Naomi Reice Buchwald, Judge) finding him

12   liable pursuant to New York Judiciary Law § 487 for treble

13   damages arising from several of his actual and attempted acts of

14   deception on New York State courts in the course of litigation

15   before them.   See Amalfitano v. Rosenberg, 428 F. Supp. 2d 196

16   (S.D.N.Y. 2006).    On appeal, he contends that (1) the district

17   court's finding that the Appellate Division was deceived was not

18   supported by clear and convincing evidence; and (2) the district

19   court erred in concluding that section 487 imposes liability for

20   attempted deceit.

21              For the reasons that follow, we certify to the New York

22   Court of Appeals two questions regarding whether section 487

23   permits recovery of damages based on an attempted, but

24   unsuccessful, deceit.

25                                BACKGROUND

26              Three brothers, Peter, James, and John Costalas, were

27   at one time engaged in a family real estate and restaurant

                                       2
1    business together.   Unbeknownst to James and John, Peter

2    undertook a series of personal business transactions that

3    ultimately resulted in the loss of four of five buildings owned

4    by the family, and eleven of their twelve restaurants.      Peter

5    diverted between eight and ten million dollars of the family

6    business to himself, forging the signatures of several members of

7    his family on business documents.      He used this money both to

8    fund his "palatial" apartment overlooking Central Park and to

9    cover his losses from extensive and ultimately unsuccessful

10   options trading.

11             Rosenberg, a member of the New York Bar, began

12   representing Peter in the early 1990s after these misadventures

13   first came to light.   The representation included several

14   foreclosure proceedings on the family's buildings.      Rosenberg

15   also negotiated with James and John on Peter's behalf to dissuade

16   them from seeking to have criminal charges brought against Peter.

17             The Gruntal Litigation

18             Although James and John did not in the end seek to have

19   criminal charges brought against Peter, they did file a civil

20   lawsuit against him, also naming as a defendant Gruntal & Co.,

21   Inc. ("Gruntal"), the broker Peter used in his unsuccessful

22   options trading.   See Complaint at 1, Costalas v. Gruntal & Co.,

23   No. 92 Civ. 8677 (S.D.N.Y. filed Dec. 1, 1992) (the "Gruntal

24   litigation").   Rosenberg never formally appeared in the Gruntal

25   litigation, but he was retained by Peter and communicated with



                                        3
1    James and John's counsel, Vito Vincenti, on several occasions

2    with regard to the Gruntal litigation.

3                The August 1993 Agreement

4                In August 1993, John and Peter signed an agreement (the

5    "August 1993 Agreement") in which Peter assigned his one-third

6    interest in the family business and partnerships to John in

7    exchange for $12,000.     The assets transferred included Peter's

8    interest in the partnership known as 27 Whitehall Street Group,

9    which owned the one building the family had not lost, located at

10   27 Whitehall Street in Manhattan ("27 Whitehall Street").      Peter

11   also assigned to John two-thirds of any recovery he might receive

12   in his cross-claims against Gruntal.1

13               Rosenberg represented Peter in the negotiations that

14   led to the drafting of the August 1993 Agreement.    He held

15   several telephone conversations with Vincenti in connection with

16   it, and he received several drafts of the agreement.    Rosenberg

17   was also "instrumental" in negotiating a settlement of Peter's

18   cross-claim against Gruntal, which involved a payment of

19   $200,000.    In accordance with the August 1993 Agreement,

20   Rosenberg retained one-third of the payment as his fee and

21   divided the remaining two-thirds into two equal checks.2     Vivia



          1
            The other one-third was assigned to Rosenberg as a
     contingency fee.
          2
            It is not clear from the record why two-thirds of the
     recovery was divided into two checks even though the August 1993
     Agreement provided that all of the two-thirds recovery was to go
     to John. Perhaps John and James planned to share that recovery.

                                       4
1    Amalfitano, James's daughter and one of the appellees in this

2    case, picked up one of those checks on her father's behalf.     It

3    is not clear from the record what happened to the other check for

4    one-third of the settlement.   Presumably, it went to John.

5               On April 11, 1994, Peter was dismissed as a party to

6    the Gruntal litigation by stipulation.

7               The Costalas Litigation

8               In 1993, after the upheaval that resulted from the

9    discovery of Peter's wrongdoing, Vivia began to assume

10   responsibility for the family business.    At that point the

11   business included just one restaurant and the building at 27

12   Whitehall Street.   The building was subject to a

13   two-million-dollar mortgage at the time.    In 2000, Vivia

14   purchased the building from the family in order to avoid

15   foreclosure.   The contract of sale was assigned to Vivia's

16   corporation, MSA Twins, Ltd. Vivia personally guaranteed the

17   mortgage loan, and John and James were released from their

18   obligations on the mortgage.

19              On May 24, 2001, Peter, represented by Rosenberg,

20   initiated a lawsuit in New York state court against Vivia and her

21   husband, Gerard Amalfitano, alleging that they had defrauded the

22   family business and partnership in the sale of 27 Whitehall

23   Street.   See Complaint at 1, Costalas v. Amalfitano, No.

24   110552/01 (N.Y. Sup. Ct. filed May 24, 2001) (the "Costalas




                                      5
1    litigation").3    Despite the August 1993 Agreement removing Peter

2    from the partnership, the complaint alleged that Peter was a

3    member of the partnership.    On July 31, 2001, the Amalfitanos

4    moved to dismiss the complaint in the Costalas litigation on the

5    ground that Peter lacked any interest in 27 Whitehall Street

6    because he had transferred his interest to John under the August

7    1993 Agreement.

8              In response to the motion to dismiss, Rosenberg filed a

9    cross-motion for summary judgment.    In its support, he prepared

10   an affidavit, executed by Peter, that asserted that the August

11   1993 Agreement "was never intended and did not have any real

12   effect" because Peter's prior attorney, Oscar Goldberg, had

13   advised him to sign the agreement as a sham to avoid potential

14   creditors.

15             Supreme Court, New York County (Ira Gammerman, J.)

16   granted the Amalfitanos' motion to dismiss.    Rosenberg, on behalf

17   of his client Peter, moved to vacate the dismissal.    Justice

18   Gammerman denied the motion on the grounds that (1) Peter was

19   prohibited by the parol evidence rule from arguing that the

20   August 1993 Agreement was a sham, and (2) Peter lacked standing

21   to bring the lawsuit.4


          3
            Ironically, the complaint also included a claim against
     Gerard pursuant to N.Y. Jud. Law § 487.
          4
            The first order of dismissal was entered by default when
     Rosenberg did not appear for oral argument. In support of a
     motion to vacate the default judgment, Rosenberg submitted an
     affidavit and medical records showing that he had been
     hospitalized the day after the scheduled argument and had not

                                       6
1              Rosenberg, on Peter's behalf, appealed the denial of

2    the motion to vacate to the Appellate Division, First Department.

3    Included in the record on appeal was Peter's affidavit asserting

4    that the August 1993 Agreement was a sham.    Also included were

5    several of the family partnership's tax returns, which had

6    erroneously continued to list Peter as a partner even after the

7    August 1993 Agreement was executed.    The First Department

8    reversed the order of the trial court, concluding that there were

9    "[s]erious open questions" regarding "the real need for and

10   purpose of the purported assignment" and whether Peter was a

11   member of the partnership.   Costalas v. Amalfitano, 760 N.Y.S.2d

12   422, 424, 305 A.D.2d 202, 203 (1st Dep't 2003).

13             Back in the trial court, the parties proceeded with

14   pre-trial discovery.   Thereafter, Justice Gammerman granted the

15   Amalfitanos' motion to dismiss.   Rosenberg then moved on Peter's

16   behalf to vacate the dismissal based on alleged ex parte

17   communications between the Amalfitanos' counsel and Justice

18   Gammerman.   The motion was denied.   The First Department

19   unanimously affirmed the trial court's judgment.    See Costalas v.

20   Amalfitano, 808 N.Y.S.2d 24, 23 A.D.3d 303 (1st Dep't 2005).

21             The Instant Suit

22             On March 16, 2004, the Amalfitanos filed the instant

23   diversity action in the United States District Court for the


     received notice of a rescheduled argument date. The trial court
     found that Rosenberg had provided a reasonable excuse, but it
     nonetheless denied the motion to vacate the default judgment for
     failure to show that the claims had merit.

                                       7
1    Southern District of New York.     The complaint alleged that

2    Rosenberg's conduct in the Costalas litigation violated New York

3    Judiciary Law § 487,5 and caused them damages in the form of

4    attorney's fees and expenses from that litigation.

5                The case was tried to the bench over a period of four

6    days.    The Amalfitanos called as witnesses themselves, Vito

7    Vincenti, and Rosenberg.     Rosenberg called no witnesses.

8                In addition to finding the facts described above, the

9    district court concluded that Rosenberg engaged in "a persistent

10   pattern of unethical behavior" during the Costalas litigation.

11   Amalfitano, 428 F. Supp. 2d at 203.

12               First, after the Amalfitanos served a notice of

13   deposition on the former family accountant, Howard Komendant,



          5

                 Judiciary Law § 487 reads in its entirety:

                 § 487   Misconduct by attorneys

                 An attorney or counselor who:

                 1. Is guilty of any deceit or collusion, or
                 consents to any deceit or collusion, with
                 intent to deceive the court or any party; or,

                 2. Wilfully delays his client's suit with a
                 view to his own gain; or, wilfully receives
                 any money or allowance for or on account of
                 any money which he has not laid out, or
                 becomes answerable for,

                 Is guilty of a misdemeanor, and in addition
                 to the punishment prescribed therefor by the
                 penal law, he forfeits to the party injured
                 treble damages, to be recovered in a civil action.

     N.Y. Jud. Law § 487.

                                        8
1    Rosenberg sent Komendant a letter stating, in part, "You should

2    be advised, that in my opinion, if, in fact, you served in a

3    professional capacity, all communications, contacts and documents

4    were of a privileged nature."   Rosenberg cited no authority for

5    this proposition and failed to respond to opposing counsel's

6    letter citing authority that there is no accountant-client

7    privilege in New York.   Rosenberg subsequently failed to attend

8    the Komendant deposition.   Komendant nonetheless brought counsel

9    to the deposition, and the Amalfitanos were required to pay for

10   the cost of his attendance.

11             Second, Rosenberg failed to correct Peter's deposition

12   testimony to the effect that John and James had never brought

13   suit against Gruntal, that Peter had never signed any documents

14   during the Gruntal litigation, and that Peter had only sold stock

15   options in the amount of "five, ten [options], here and there."

16             Third, Rosenberg refused to produce Peter's personal

17   tax returns, insisting that they were "totally irrelevant."     He

18   eventually produced the returns, but only after being ordered to

19   do so by Justice Gammerman.   The returns, eventually admitted

20   into evidence, showed that Peter had not asserted a partnership

21   interest in 27 Whitehall Street Group after the August 1993

22   Agreement.

23             Fourth, Rosenberg told the Amalfitanos that he

24   possessed audio recordings that would be very damaging to them --

25   what he referred to as an "atomic bomb."   He then refused to

26   produce the recordings, while continuing to emphasize how

                                      9
1    damaging they were.   Once he was ordered by Justice Gammerman to

2    produce the recordings, they turned out to be unintelligible.

3              Fifth, Rosenberg sought unsuccessfully to introduce

4    into evidence an agreement dated October 1993 signed only by

5    Peter stating, in direct contradiction of the August 1993

6    Agreement, that Peter, James, and John were all equal partners in

7    27 Whitehall Street Group.    Rosenberg did this despite his

8    knowledge that the August 1993 Agreement was valid and had been

9    signed by his client.

10             Finally, Rosenberg sought to admit a document that

11   purported to be Peter's 1998 personal tax return and that listed

12   an interest in 27 Whitehall Street Group.    That document,

13   however, did not bear a receipt stamp to indicate that it had

14   been filed with the IRS.   Indeed, Rosenberg had already produced

15   in discovery Peter's stamped 1998 return, which did not list any

16   interest in 27 Whitehall Street.

17             The district court found for the plaintiffs and

18   assessed damages in the amount of $89,415.18, comprising the

19   Amalfitanos' legal fees from the inception of the Costalas

20   litigation to the judgment.    Because section 487 provides for

21   treble damages, the court trebled the award to $268,245.54.    The

22   court also requested that the clerk of the court forward a copy

23   of the court's opinion to the Committee on Grievances of the

24   Southern District of New York and to the First Judicial

25   Department Departmental Disciplinary Committee.

26             Rosenberg now appeals.

                                      10
1                                 DISCUSSION

2              I. Standard of Review

3              We review the district court's findings of fact after a

4    bench trial for clear error and its conclusions of law de novo.

5    Koam Produce, Inc. v. DiMare Homestead, Inc., 329 F.3d 123, 126

6    (2d Cir. 2003).   "In reviewing findings for clear error, we are

7    not allowed to second-guess either the trial court's credibility

8    assessments or its choice between permissible competing

9    inferences."   Ceraso v. Motiva Enters., LLC, 326 F.3d 303, 316

10   (2d Cir. 2003).   This is so even if we might have weighed the

11   evidence differently, as "[w]here there are two permissible views

12   of the evidence, the factfinder's choice between them cannot be

13   clearly erroneous."    Anderson v. City of Bessemer, 470 U.S. 564,

14   574 (1985).

15             II. Section 487

16             Section 487 of the New York Judiciary Law, set forth in

17   full in footnote 5, above, provides in relevant part that an

18   attorney who

19             [i]s guilty of any deceit or collusion, or
20             consents to any deceit or collusion, with
21             intent to deceive the court or any
22             party . . . [i]s guilty of a misdemeanor, and
23             in addition to the punishment prescribed
24             therefor by the penal law, he forfeits to the
25             party injured treble damages, to be recovered
26             in a civil action.

27   N.Y. Jud. Law § 487.

28             Section 487 thus permits a civil action to be

29   maintained by any party who is injured by an attorney's


                                       11
1    intentional deceit or collusion in New York on a court or on any

2    party to litigation, and it provides for treble damages.    See

3    Fields v. Turner, 147 N.Y.S.2d 542, 543-44, 1 Misc. 2d 679,

4    680-81 (N.Y. Sup. Ct. 1955) (holding that the predecessor to

5    section 487 provides a remedy to any party injured by the deceit

6    of an attorney representing a party to an action, not only that

7    attorney's client).   The act of deceit need not occur during a

8    physical appearance in court; the statute applies to any oral or

9    written statement related to a proceeding and communicated to a

10   court or party with the intent to deceive.   Id. at 544, 1 Misc.

11   2d at 681.

12             It would appear that some courts in New York have

13   imposed an additional prerequisite to recovery: that the

14   plaintiff in a section 487 action show "a chronic and extreme

15   pattern" of legal delinquency by the defendant.   See Galland v.

16   Kossoff, 824 N.Y.S.2d 630, 631, 34 A.D.3d 306, 307 (1st Dep't

17   2006); Solow Management Corp. v. Seltzer, 795 N.Y.S.2d 448, 448,

18   18 A.D.3d 399, 399-400 (1st Dep't 2005); Havell v. Islam, 739

19   N.Y.S.2d 371, 372, 292 A.D.2d 210, 210 (1st Dep't 2002);

20   Schindler v. Issler & Schrage, P.C., 692 N.Y.S.2d 361, 362, 262

21   A.D.2d 226, 228 (1st Dep't 1999); Wiggin v. Gordon, 455 N.Y.S.2d

22   205, 209, 115 Misc. 2d 1071, 1077 (N.Y. Civ. Ct. 1982).    That

23   requirement appears nowhere in the text of the statute, however,

24   and other courts have found attorneys liable under the statute




                                     12
1    for a single intentionally deceitful or collusive act.6   See Izko

2    Sportswear Co., v. Flaum, 809 N.Y.S.2d 119, 122, 25 A.D.3d 534,

3    537 (2d Dep't 2006) (misrepresentation of conflict); NYAT.

4    Operating Corp. v. Jackson, Lewis, Schnitzler & Krupman, 741

5    N.Y.S.2d 385, 386, 191 Misc. 2d 80, 82 (N.Y. Sup. Ct. 2002)

6    (single instance of lying under oath).

7              III. Analysis

8              The district court found that Rosenberg acted with

9    intent to deceive the trial court and the Appellate Division in

10   the Costalas litigation with respect to all of the

11   representations he made suggesting that Peter was a partner in 27

12   Whitehall Street Group, and that these misrepresentations caused

13   injury to the Amalfitanos in the form of their legal fees from

14   that litigation.   See Amalfitano, 428 F. Supp. 2d at 209, 211-12.

15   The district court further found that Rosenberg's intentional

16   misrepresentations included the allegation in the verified

17   complaint that Peter was a partner in 27 Whitehall Street Group,

18   statements in a cross-motion for summary judgment and in the



          6
            A few courts have gone further and held or suggested that
     a "chronic, extreme pattern of legal delinquency" is by itself
     sufficient for section 487 liability. See Izko Sportswear Co.,
     v. Flaum, 809 N.Y.S.2d 119, 122, 25 A.D.3d 534, 537 (2d Dep't
     2006) ("A violation of Judiciary Law § 487 may be established
     'either by the defendant's alleged deceit or by an alleged
     chronic, extreme pattern of legal delinquency by the
     defendant.'") (emphasis in original) (quoting Knecht v. Tusa, 789
     N.Y.S.2d 904, 904, 15 A.D.3d 626, 627 (2d Dep't 2005)); Parklex
     Assocs. ex rel. Holtkamp v. Parklex Assocs., 841 N.Y.S.2d 220
     (table), 15 Misc. 3d 1125(A) (N.Y. Sup. Ct. 2007). It seems to
     us that a plain reading of the statute does not support this
     interpretation, but we need not reach that question in this case.

                                     13
1    appeal to the Appellate Division, as well as the submission of

2    Peter's affidavit representing the August 1993 Agreement as a

3    sham.   The district court found that in light of Rosenberg's

4    participation in the negotiations about the August 1993 Agreement

5    and his distribution of the proceeds of the Gruntal litigation in

6    accordance with that agreement, Rosenberg knew both that Peter

7    was not a partner in 27 Whitehall Street Group and that the

8    August 1993 Agreement was valid.       Id. at 208.

9               The district court further found that the other

10   evidence, described above, of "a persistent pattern of unethical

11   behavior," id. at 203, constituted a "chronic, extreme pattern of

12   legal delinquency," Izko Sportswear, 809 N.Y.S.2d at 122, 25

13   A.D.3d at 532, to the extent (if any) such a finding was required

14   under New York law, see Amalfitano, 428 F. Supp. 2d at 207 n.36.

15              On appeal, Rosenberg does not appear to challenge the

16   finding that his deceit was intentional, and we assume that it

17   was.

18   A. Rosenberg's Successful Deceit

19              The district court concluded that Rosenberg's appeal on

20   Peter's behalf of Justice Gammerman's entry of a default

21   judgment, which included Peter's false affidavit and the

22   erroneous partnership tax returns, successfully deceived the

23   Appellate Division into reversing and remanding the first

24   dismissal by Justice Gammerman.    On appeal to us, Rosenberg

25   argues that the district court's conclusion was erroneous because



                                       14
1    his deceit was not material to the Appellate Division's decision

2    to reverse the entry of default judgment.

3                First, he contends that only the partnership would have

4    had standing to bring the suit in the Costalas litigation.     He

5    argues that the Appellate Division should therefore have affirmed

6    the default judgment on the ground that even if Peter were a

7    partner in 27 Whitehall Street Group, he was not the partnership

8    and did not have standing.    Thus Rosenberg argues that his

9    misrepresentations were not material to the Appellate Division's

10   decision because the Appellate Division should have found that

11   Peter lacked standing whether or not he was a partner.

12               This argument is without merit.   The Appellate Division

13   concluded that under certain circumstances Peter might have had

14   standing to bring the claim on his own behalf as a partner.     See

15   Costalas, 760 N.Y.S.2d at 422, 305 A.D.2d at 203-04.    But had the

16   Appellate Division known that Peter was not a partner, it seems

17   likely -- and there is plainly a sufficient basis for the

18   district court to have found -- that the Appellate Division would

19   have affirmed the dismissal of his suit for lack of standing

20   rather than reversing.    The representations made as to the

21   validity of the August 1993 Agreement and Peter's status as a

22   partner were therefore material to the Appellate Division's

23   decision.

24               Second, Rosenberg contends that the Appellate

25   Division's decision was the result of "genuine documentary

26   evidence in direct conflict" rather than Rosenberg's deceit.     By

                                      15
1    this he means that the Appellate Division correctly determined

2    that there was an issue of fact as to whether Peter remained a

3    partner in 27 Whitehall Street Group because the Appellate

4    Division relied on "genuine documentary evidence" in the form of

5    the partnership tax returns -- which neither Rosenberg nor Peter

6    created -- that erroneously continued to list Peter as a member

7    of the partnership.

8              This argument is also meritless.   If the partnership

9    tax returns had some independent legal significance -- e.g., if

10   they operated to make Peter a member of the partnership despite

11   the August 1993 Agreement to the contrary -- then we might

12   conclude that the Appellate Division's decision was based on a

13   genuine issue of fact as to Peter's membership in the

14   partnership.   But the partnership tax returns were no more than

15   potential evidence as to the identity of the members of the

16   partnership.   When Rosenberg submitted these partnership tax

17   returns knowing them to be false representations of the

18   partnership membership, he did so seeking to deceive the

19   Appellate Division.

20             We therefore find no error in the district court's

21   conclusion that Rosenberg is liable under section 487 for

22   intentionally and successfully deceiving the Appellate Division

23   into reversing the entry of default judgment in the Costalas

24   litigation.

25   B. Certification of the Question of Attempted Deceit



                                     16
1                Rosenberg's second argument on appeal is that the

2    district court erred in finding that an unsuccessful attempt to

3    deceive a court would support liability under section 487.      He

4    points out that his attempts to deceive the trial court were

5    unsuccessful because Justice Gammerman consistently found in

6    favor of the Amalfitanos.

7                Although, as the district court concluded, Rosenberg

8    did successfully deceive the Appellate Division, the question of

9    the actionability of his attempted deceit on the trial court is

10   not moot.    The district court's calculation of damages was based

11   on the cost to the Amalfitanos of defending the Costalas

12   litigation from its inception to final judgment, which therefore

13   covered the period of time in which Rosenberg was attempting (but

14   failing) to deceive Justice Gammerman, but had not yet

15   successfully deceived the Appellate Division into reversing the

16   default judgment.    See Amalfitano, 428 F. Supp. 2d at 211-12.      We

17   can affirm the judgment of the district court in its entirety

18   only if we conclude that Rosenberg's attempted deceit -- the

19   false allegations in the complaint in the Costalas litigation --

20   supports a cause of action under section 487 and was the

21   proximate cause of the Amalfitanos' damages in defending the

22   litigation from its inception.

23               It is not clear from the plain language of section 487

24   whether an attempted deceit is actionable under the statute, or

25   whether a court would be entitled to find that the costs of

26   defending a lawsuit premised on a misrepresentation are the

                                      17
1    proximate result of such a misrepresentation.     The district court

2    concluded that section 487 would support liability for an

3    attempted deceit.    It analyzed the historical context of the

4    statute and the statutory text, and it predicted that New York's

5    highest court would find that section 487 supports a cause of

6    action for an attempted deceit.    See id. at 209-11.   The district

7    court also imposed damages in the form of the cost of legal fees

8    from the inception of the Costalas litigation and therefore

9    implicitly found that those damages were the proximate result of

10   Rosenberg's attempted deceit.

11             We think that New York law is unclear as to whether the

12   incurring of costs responding to a complaint which includes a

13   deceitful misrepresentation is to be treated as proximately

14   caused by that misrepresentation.      In our view, New York law is

15   also uncertain as to whether section 487 was intended to apply to

16   attempted deceits.

17             Of course, the district court did not have the

18   authority to certify the questions to the New York Court of

19   Appeals, and it was therefore obligated to make a prediction as

20   to what New York courts would hold under these circumstances.

21   See Indus. Risk Insurers v. Port Auth., 493 F.3d 283, 285 n.1 (2d

22   Cir. 2007).   We do have that authority.

23             "Where unsettled and significant questions of state law

24   will control the outcome of a case, we may certify those

25   questions to the New York Court of Appeals."     Colavito v. N.Y.

26   Organ Donor Network, Inc., 438 F.3d 214, 229 (2d Cir. 2006)

                                       18
1    (internal quotation marks and citation omitted).   Certification

2    is discretionary on our part as the certifying court, and the New

3    York Court of Appeals, as the recipient of our certification, has

4    discretion whether or how to respond.   Id.   "In deciding whether

5    to certify a question we consider: (1) the absence of

6    authoritative state court decisions; (2) the importance of the

7    issue to the state; and (3) the capacity of certification to

8    resolve the litigation."   O'Mara v. Town of Wappinger, 485 F.3d

9    693, 698 (2d Cir. 2007).

10             We conclude that the questions that follow are

11   appropriate for certification.

12             First, no New York court has, to the best of our

13   knowledge, addressed the question of whether an attempted deceit

14   can form the basis for liability under section 487 or proximately

15   cause damages.   Second, it appears to us that the question of how

16   to deter attorney misconduct in connection with litigation is an

17   important issue for the New York courts.   Finally, certification

18   would resolve this litigation.   We would almost surely affirm the

19   district court's judgment in its entirety if the New York Court

20   of Appeals determines that section 487 permits the award of

21   treble damages for an attempted deceit of the New York courts.

22   But we would need to remand for the district court to recalculate

23   damages if the Court of Appeals reads the statute otherwise.

24             We therefore certify the following questions to the New

25   York Court of Appeals:



                                      19
1               (1) Can a successful lawsuit for treble damages brought

2    under N.Y. Jud. Law § 487 be based on an attempted but

3    unsuccessful deceit upon a court by the defendant?

4               (2) In the course of such a lawsuit, may the costs of

5    defending litigation instituted by a complaint containing a

6    material misrepresentation of fact be treated as the proximate

7    result of the misrepresentation if the court upon which the

8    deceit was attempted at no time acted on the belief that the

9    misrepresentation was true?

10              We leave it to the New York Court of Appeals, as

11   always, to alter or expand on these questions if and as it sees

12   fit.   See id. at 699.

13              IV. Conclusion

14              It is hereby ORDERED that the Clerk of the Court

15   transmit to the Clerk of the New York Court of Appeals a

16   Certificate in the form attached, together with a copy of this

17   opinion and a complete set of the briefs, appendices, and record

18   filed by the parties in this Court.    This panel will retain

19   jurisdiction to decide the case once we have had the benefit of

20   the views of the New York Court of Appeals, or once that court

21   declines certification.     We order the parties to bear equally any

22   fees and costs that may be requested by the New York Court of

23   Appeals.




                                       20
