MCGOUGH v. PHILLIPS ASSOCIATES PLLC (2026)

Order, Supreme Court, New York County (Paul A. Goetz, J.), entered on or about March 19, 2025, which granted defendant's motion to dismiss the complaint, unanimously modified, on the law, the motion denied as to the tortious interference with prospective business relations claim and as to the portion of the defamation claim premised on statements made out of court, those claims reinstated, and the order otherwise affirmed, without costs.

The abuse of process claim was properly dismissed.  The mere commencement of the underlying sexual harassment lawsuit brought against plaintiff in the United States District Court for the Southern District of New York (Hodges v. McGough Enterprises LLC, Index No. 7:23–cv–05016) (the Hodges Action), even if filed with a malicious motive, was not an abuse of process, nor has plaintiff alleged any “improper use of the process after it was issued” (see Curiano v. Suozzi, 63 N.Y.2d 113, 116–117, 480 N.Y.S.2d 466, 469 N.E.2d 1324 [1984];  Sharp v. Bar Fluid LLC, 237 A.D.3d 628, 629, 233 N.Y.S.3d 271 [1st Dept. 2025]).

The intentional infliction of emotional distress claim was also properly dismissed, as the commencement of a baseless lawsuit, and even the making of false statements to police resulting in arrest and incarceration, “while not to be condoned, is not so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community” (Kaye v. Trump, 58 A.D.3d 579, 579, 873 N.Y.S.2d 5 [1st Dept. 2009], lv denied 13 N.Y.3d 704, 2009 WL 2871206 [2009] [internal quotation marks omitted];  see Schnur v. Balestriere, 208 A.D.3d 1117, 1118–1119, 175 N.Y.S.3d 50 [1st Dept. 2022]).

Plaintiff has abandoned any separate claim for tortious interference with “advantageous business relationships” insofar as she cites only the standard for tortious interference with prospective business relations in her brief.  However, this latter claim was not properly dismissed because, although predicated on the commencement of the Hodges Action and thus falling within the general ambit of the Noerr–Pennington doctrine (see Sutton 58 Assoc. LLC v. Pilevsky, 189 A.D.3d 726, 728, 137 N.Y.S.3d 359 [1st Dept. 2020]), plaintiff's allegations that defendant filed the Hodges Action despite its awareness of evidence disproving the allegations therein were sufficient to invoke the “sham exception” to that doctrine (see Matter of People v. Northern Leasing Sys., Inc., 169 A.D.3d 527, 530, 94 N.Y.S.3d 259 [1st Dept. 2019];  Singh v. Sukhram, 56 A.D.3d 187, 192, 866 N.Y.S.2d 267 [2d Dept. 2008]).  The correspondence submitted by defendant in support of its motion to dismiss does not conclusively refute these allegations, which must be taken as true at this stage (see generally Holder v. Jacob, 231 A.D.3d 78, 86–87, 216 N.Y.S.3d 134 [1st Dept. 2024]).

The court's dismissal of the defamation claim on the basis of the litigation privilege was correct only insofar as premised on statements made in the complaint (or otherwise to the court) in the Hodges Action (see generally Front, Inc. v. Khalil, 24 N.Y.3d 713, 718, 28 N.E.3d 15 [2015]).  There is no sham exception to the privilege based on such statements (see Gottwald v. Sebert, 40 N.Y.3d 240, 253–54, 197 N.Y.S.3d 694, 220 N.E.3d 621 [2023]).  However, to the extent the claim is premised on defendant's alleged circulation of the draft complaint in the Hodges Action to plaintiff's students, such out-of-court statements to persons not related to the litigation are not covered by the privilege (see Aguirre v. Best Care Agency, Inc., 961 F Supp 2d 427, 456 [E.D.N.Y. 2013];  Long v. Marubeni America Corp., 406 F Supp 2d 285, 294 [S.D.N.Y. 2005]).  We note that defendant has submitted no proof in support of its assertion that it did not show the draft complaint to anyone but its client or plaintiff's counsel.  Although defendant denies showing the draft complaint to anyone other than its client and plaintiff's counsel, it has submitted no proof in support of this assertion.

We decline plaintiff's request for leave to amend, as she has not identified any potentially outcome-changing modifications that she would include in the amendment (see generally CPLR 3025[b];  Aponte v. Town of Islip, 236 A.D.3d 424, 426, 230 N.Y.S.3d 123 [1st Dept. 2025]).