WHEN A NEW YORK ATTORNEY DOES NOT HAVE A PHYSICAL LOCATION IN NEW YORK

Nonresident attorneys admitted in New York must maintain a physical office in the State in order to practice law in New York but the failure by a nonresident attorney to comply with this requirement at the time a complaint is filed does not render that filing a nullity.

ARROWHEAD CAPITAL FINANCE, LTD. v. CHEYNE SPECIALTY FINANCE FUND LP, 2019 NY Slip Op 1124 - NY: Court of Appeals February 14, 2019:

"An attorney who is "regularly admitted to practice as an attorney and counsellor, in the courts of record of this state, whose office for the transaction of law business is within the state, may practice as such attorney or counsellor, although [ ] resid[ing] in an adjoining state" (Judiciary Law § 470). This statute, first enacted in 1862, requires that nonresident attorneys maintain a physical office in New York in order to practice law here (Schoenefeld, 25 NY3d at 25, 27). Whether an action, such as filing a complaint, taken by a lawyer duly admitted to the bar of this State but without the required New York office, is a "nullity" is an issue of first impression for this Court. Arrowhead contends that this Court's holding in Dunn v Eickhoff, that "[t]he disbarment of a lawyer creates no nullities,' the person involved simply loses all license to practice law," is dispositive (35 NY2d 698, 699 [1974]). If an action of a disbarred lawyer is not a nullity, Arrowhead argues, neither is an action taken by a duly admitted attorney who fails to maintain a physical office in New York. This is essentially the approach taken by the Second and Third Departments, which have expressly rejected the nullity rule (see Elm Mtg. Corp. v Sprung, 33 AD3d 753, 754 [2d Dept 2006]; Stegemann v Rensselaer County Sheriff's Off., 153 AD3d 1053, 1055 [3d Dept 2017]). These courts, relying on our holding in Dunn, have extrapolated "a general rule," namely, given that representation of a party "by a person who was not authorized or admitted to practice law under the Judiciary Law — whether a disbarred attorney or a person practicing law without a license — does not create a nullity' or render all prior proceedings void per se," then "[t]he same principle should apply when a party is represented by an attorney who, although a member in good standing of the Bar of State of New York, has failed to demonstrate compliance with Judiciary Law § 470" (Elm Mtg. Corp., 33 AD3d at 754). Instead, these courts have held that a party may cure a section 470 violation with the appearance of compliant counsel or an application for admission pro hac vice by appropriate counsel (see Stegemann, 153 AD3d at 1055).

Defendants counter that Dunn involved plaintiffs' affirmative use of the disbarment of their own attorney for strategic reasons and should therefore not control the present case. Instead, defendants urge us to adopt the First Department's approach, which requires that a court dismiss the complaint without prejudice after finding a section 470 violation (see Webb v Greater NY Auto. Dealers Assn., Inc., 93 AD3d 561, 561 [1st Dept 2012]; Neal v Energy Transp. Group, 296 AD2d 339, 339 [1st Dept 2002]; Lichtenstein v Emerson, 251 AD2d 64, 64 [1st Dept 1998]). Without such a deterrent, defendants argue, Judiciary Law § 470 would itself be a nullity.

We agree with the Second and Third Departments that, given our holding in Dunn, it would be incongruous to conclude that, unlike the acts of a disbarred attorney, actions taken by an attorney duly admitted to the New York bar who has not satisfied Judiciary Law § 470's office requirement are a nullity. We therefore hold that a violation of Judiciary Law § 470 does not render the actions taken by the attorney involved a nullity. Instead, the party may cure the section 470 violation with the appearance of compliant counsel or an application for admission pro hac vice by appropriate counsel (see Stegemann, 153 AD3d at 1055). Where further relief is warranted, the trial court has discretion to consider any resulting prejudice and fashion an appropriate remedy (see Dunn, 35 NY2d at 699 [noting that plaintiffs did not assert any prejudice as a result of their attorney's disbarment]; cf. CPLR 321 [c] [detailing procedure for cure when attorney is disbarred or otherwise disabled any time before judgment]) and the individual attorney may face disciplinary action for failure to comply with the statute (see e.g. Matter of Marin, 250 AD2d 997, 998 [3d Dept 1998]; Matter of Larsen, 182 AD2d 149, 155 [2d Dept 1992]; 22 NYCRR 130-1.1 [a], [c] [3] [permitting the court to impose sanctions if it finds counsel made a false material statement]). This approach ensures that violations are appropriately addressed without disproportionately punishing an unwitting client for an attorney's failure to comply with section 470."