The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 32 were read on this motion to/for DISMISSAL. DECISION + ORDER ON MOTION Upon the foregoing documents, and after oral argument, which took place on February 7, 2023, where David Zegarelli, Esq. appeared for Plaintiffs Michael Flomenhaft (“Flomenhaft”) and the Flomenhaft Law Firm, PLLC (“FLF”) (collectively “Plaintiffs”), and Agatha Mingos appeared for Defendants White and Williams, LLP (“W & W”) and Chrisopher M. Dimuro (“Dimuro”) (collectively “Defendants”), the Defendants’ motion to dismiss pursuant to CPLR §§3211(a)(1) and (7) is granted. I. Background This is a defamation action arising out of statements made during litigation in the Southern District of New York (“SDNY”) and New York County Supreme Court (collectively the “Underlying Litigation”). Plaintiffs filed their Complaint on July 7, 2022 (NYSCEF Doc. 6). The Complaint provides pertinent details regarding the parties’ relationship. Flomenhaft is a personal injury attorney (id. at
12-27). The Flomenhaft Law Firm is a personal injury firm which is retained on a contingency fee basis and requires loans to maintain cash flow (id. at 28). Non-party JusticeFunds, LLC (“JusticeFunds”) provides legal financing to law firms like FLF in the form of loans (id. at 30). On December 20, 2018, JusticeFunds and Plaintiffs entered into a loan agreement (the “Loan Agreement”) wherein JusticeFunds agreed to loan seven million dollars ($7,000,000.00) to FLF (id. at 37). The Loan Agreement contained an arbitration agreement which stated: “[a]ny and all disputes…arising out of or relating to this Agreement or any other Loan Document or the breach termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this Agreement or any other Loan Document to arbitrate shall be submitted to final and binding arbitration before Judicial Arbitration and Mediation Services, Inc. “JAMS”). (id. at 47). The parties also agreed that any such arbitration would be kept confidential (id. NYSCEF Doc. 48). Allegedly, the full amount promised was never disbursed, but JusticeFunds sought to compel Plaintiffs to repay the amount that had been disbursed (id. at 45). Defendants W&W and DiMuro were retained as attorneys for JusticeFunds regarding the dispute (id. at 50). Plaintiffs allege that on May 19, 2021, Defendants violated the confidentiality clause by filing a complaint in SDNY alleging that Plaintiffs’ failure to return $1.465 million in loaned funds was “tantamount and equal to the crime of theft.” (id. at
