- Court
- New York Supreme Court, Appellate Division, Second Department
- Case
- Jianjun Qiao v. Tang
- Date
- June 3, 2026
- Slip Op. No.
- 2026 NY Slip Op 03431
Background
Plaintiff Jianjun Qiao commenced this action against attorney John Yong Tang, Tang’s law firm Tang, P.C., and Tang’s wife Yilan Li, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and conversion, among other claims. Plaintiff alleged that in August 2022, Tang and Tang, P.C. refused to return certain funds that they had agreed to hold in escrow since 2011 under two agreements to which plaintiff was a party.
The defendants moved to dismiss under CPLR 3211(a), arguing lack of standing, illegality of the underlying contracts, and collateral estoppel. Supreme Court, Queens County (Joseph Risi, J.), denied the motion as to the first through fourth, sixth through ninth causes of action. Defendants appealed.
Holding
The Appellate Division, Second Department, modified the order by granting dismissal of the first, fourth, sixth, seventh, and ninth causes of action and the eighth cause of action as against Yilan Li specifically. The Court affirmed the denial of dismissal as to the second, third, and eighth causes of action (the last only as against Tang and Tang, P.C.).
On standing, the Court found defendants failed to establish plaintiff lacked standing since plaintiff was a party to the two 2011 agreements at issue. The contracts were not illegal on their face, so the court properly declined to refuse enforcement on that basis. However, several causes of action were found to be insufficiently pleaded or otherwise deficient as a matter of law, warranting dismissal. The surviving claims center on the breach of contract and conversion theories relating to the escrow funds.
Takeaways
This decision demonstrates the careful claim-by-claim analysis courts apply on CPLR 3211 motions involving multiple causes of action. A party’s status as a signatory to the operative agreements establishes standing as a matter of law, and the illegality defense requires a showing that the contract is illegal on its face. The partial modification here reflects the Second Department’s willingness to trim excess causes of action while preserving viable core claims for breach of contract and conversion of escrow funds.
Why It Matters
Attorneys holding escrow funds face significant exposure when they refuse to release those funds. This case confirms that escrow depositors have standing to bring direct contract and conversion claims against the escrow agent. The survival of the breach of contract and conversion claims means that the dispute over the 2011 escrow funds will proceed to discovery and potentially trial, highlighting the fiduciary obligations that attach to attorneys holding client funds in escrow and the potential personal liability that accompanies a refusal to return them.