Nonclient Deposits into Attorney Escrow Do Not Create a Fiduciary Duty Absent an Escrow Agreement; Aiding-and-Abetting Fraud Requires Proof of Actual Knowledge

Introduction

In Groisman v. Jeffrey Zwick & Associates (2d Cir. Jan. 6, 2026) (summary order), the Second Circuit affirmed summary judgment for a real-estate attorney and his firm (collectively, “Zwick”) on claims by investor Daniel Groisman for (i) breach of fiduciary duty and (ii) aiding-and-abetting fraud under New York law.

The case arose from a failed cross-border investment arrangement: Groisman, an Argentine real estate investor, wired $3 million at the direction of Moshe Feler (aka Yosef Feler) into an attorney escrow account at the Law Offices of N.C. Caller P.C., where Zwick worked. Groisman never contacted Zwick or the firm before or after sending the funds. Years later, Groisman learned that there had been no “Brooklyn deal” as represented by Feler; instead, the funds were later deployed into a New Jersey investment based on an operating agreement bearing a forged Groisman signature—unknown to Zwick.

The appeal presented two central issues: (1) whether Zwick owed Groisman a fiduciary duty based on receipt/handling of the funds in an attorney escrow account, despite no escrow agreement and no attorney-client relationship; and (2) whether Groisman produced evidence sufficient to permit a jury to find Zwick had “actual knowledge” of Feler’s fraud, as required for aiding-and-abetting liability.

Note: The court’s disposition is a summary order and “do[es] not have precedential effect,” though it provides a clear synthesis of New York fiduciary-duty and aiding-and-abetting-fraud principles as applied to attorney escrow settings.

Summary of the Opinion

Standard of review: The Second Circuit reviewed summary judgment de novo under McCutcheon v. Colgate-Palmolive Co., applying Fed. R. Civ. P. 56(a).
Breach of fiduciary duty: Affirmed. The court held Zwick owed Groisman no fiduciary duty because Groisman had no escrow agreement or contact with Zwick, and Groisman’s unilateral belief that Zwick represented him could not create a fiduciary relationship.
Aiding-and-abetting fraud: Affirmed. The court held Groisman failed to adduce evidence from which a reasonable jury could find Zwick had actual knowledge of Feler’s fraud; “red flags” and speculation about what should have alarmed Zwick were insufficient.

Analysis

Precedents Cited

1) Summary judgment framework

McCutcheon v. Colgate-Palmolive Co. — Provided the appellate standard: de novo review, construing evidence in favor of the non-movant.
Fed. R. Civ. P. 56(a) — Anchored the “no genuine dispute as to any material fact” requirement.

2) Fiduciary duty: when courts will (and will not) infer “higher trust”

Yukos Capital S.A.R.L. v. Feldman (quoting United States Fire Ins. Co. v. Raia) — Supplied the elements of breach of fiduciary duty: fiduciary relationship, misconduct, causation/damages.
Brass v. Am. Film Techs., Inc. — Recognized that fiduciary relationships can be inferred from conduct where one party reasonably trusted another, but the inference requires more than unilateral trust.
Northeast General Corp. v. Wellington Advertising, Inc. — Emphasized courts should not “infer and superimpose” fiduciary duties absent evidence the parties created a relationship of “higher trust.”
Pauwels v. Deloitte LLP — Reiterated that “special circumstances” are necessary to convert a business relationship into a fiduciary one.

3) Escrow doctrine: deposit alone is not an escrow relationship

Gargano v. Morey — Acknowledged fiduciary duties may arise from an escrow agreement actually made between depositor and escrow agent.
In re AppOnline.com (quoting National Union Fire Ins. Co. Pittsburgh, Pa. v. Proskauer Rose Goetz & Mendelsohn) — Stated the key limitation: “the mere delivery” of property to an escrowee does not itself constitute an escrow transaction.
Shapiro v. Snow Becker Krauss P.C. — Supported the proposition that “mere deposit” of funds into an escrow account does not create a fiduciary relationship (or an escrow agreement) between depositor and account holder.

4) Nonclient claims against attorneys; duty-to-inquire boundaries

Regions Bank v. Wieder & Mastroianni, P.C. — Used to underscore that a depositor’s unilateral trust in an attorney does not create a fiduciary duty absent the attorney’s acceptance of that trust relationship; also reinforced that an attorney receiving instructions from his client generally must comply.
Shapiro v. McNeill — Functioned as the opinion’s closest analogue: no contact, no escrow agreement, no instructions to attorney, and no irregularity triggering any duty to inquire—therefore no duty owed by attorney to nonclient.
Solondz v. Barash — Rejected the theory that a would-be client’s unilateral belief creates an attorney-client relationship.
Shapiro v. McNeill — Also supplied the rule that ethical violations do not themselves create duties giving rise to causes of action where none exist at law.

5) Aiding-and-abetting fraud: actual knowledge and evidentiary rigor

Lerner v. Fleet Bank, N.A. — Set out the elements: underlying fraud, defendant’s knowledge of the fraud, and substantial assistance.
Krys v. Pigott — Required actual knowledge, not constructive knowledge.
Silvercreek Mgmt. Inc. v. Citigroup, Inc. — Explained the interaction between the trial burden (“clear and convincing evidence”) and summary judgment: plaintiffs must adduce evidence sufficient to meet that standard; “red flags” cannot substitute for actual knowledge.
FTC v. Moses — Reinforced that speculation and conjecture cannot defeat summary judgment.

Legal Reasoning

A. No fiduciary duty without an escrow agreement (or accepted relationship of trust)

The court treated the fiduciary-duty question as turning on relationship formation: a fiduciary duty does not arise simply because money is wired into an attorney-controlled escrow account. While escrow arrangements can create fiduciary duties (Gargano v. Morey), New York law requires something more than “mere delivery” (In re AppOnline.com; National Union Fire Ins. Co. Pittsburgh, Pa. v. Proskauer Rose Goetz & Mendelsohn). The “mere deposit” rule was reinforced by Shapiro v. Snow Becker Krauss P.C..

Factually, Groisman’s position was weakened by the complete absence of communications: he never spoke with Zwick or the firm, provided no instructions, and left $3 million in the account for roughly a year without confirming receipt or terms. Under Shapiro v. McNeill, those facts align with a classic nonclient/no-duty scenario: no contact, no escrow agreement, no instructions, and no irregularity sufficient to trigger any duty to inquire.

The court also rejected alternative duty theories:

Unilateral belief that Zwick represented him: Insufficient under Solondz v. Barash.
Ethics rules as a source of civil duty: Foreclosed by Shapiro v. McNeill, which states an ethical violation alone does not create a civil cause of action where none exists.
“Once Zwick learned the money was Groisman’s”: The court still viewed Zwick as acting on his client’s instructions (Feler), and it found no “bad faith” or “total absence of any apparent authority” that would put Zwick on notice of an irregularity (again tracking Shapiro v. McNeill and echoing Regions Bank v. Wieder & Mastroianni, P.C.).

B. Aiding-and-abetting fraud fails without evidence of actual knowledge

On aiding-and-abetting fraud, the court focused on the second element under Lerner v. Fleet Bank, N.A.: knowledge. The court reiterated that actual knowledge is mandatory (Krys v. Pigott), and that red flags cannot substitute for proof of the defendant’s state of mind (Silvercreek Mgmt. Inc. v. Citigroup, Inc.).

Groisman’s key argument—Zwick should have been “shocked” by suspicious circumstances (late disclosure of the funds’ source; an operating agreement not countersigned by Feler; and the forged signature)—was treated as, at most, an argument for constructive knowledge. The court concluded that the record did not permit a reasonable jury to find Zwick actually knew of Feler’s fraud, and that Groisman’s theory relied on speculation barred at summary judgment (FTC v. Moses).

Impact

Investor protection through formalities: The decision underscores that investors wiring funds into attorney escrow at a promoter’s direction should secure written escrow instructions/agreements and establish direct communication with the escrow holder. Absent those steps, New York law may treat the attorney as owing duties primarily to the attorney’s client, not to the unknown depositor.
Limits on suing attorneys as “deep pockets”: The opinion reinforces New York’s reluctance—illustrated by Shapiro v. McNeill—to impose fiduciary duties to nonclients without a clearly accepted trust relationship or escrow agreement.
Aiding-and-abetting fraud remains demanding: By emphasizing “actual knowledge” and the “clear and convincing” trial standard (via Silvercreek Mgmt. Inc. v. Citigroup, Inc.), the court signals that negligence-style “you should have known” cases will typically not reach a jury.
Escrow practice clarity: For transactional lawyers, the reasoning supports the proposition that compliance with a client’s wire instructions generally does not create third-party fiduciary duties unless the attorney has expressly undertaken escrow obligations to that third party or encounters unmistakable irregularities (e.g., bad faith or total lack of authority).

Complex Concepts Simplified

Fiduciary relationship: A legally recognized relationship of special trust where one party must act primarily for the benefit of the other (e.g., trustee-beneficiary). Courts do not infer it lightly from ordinary business dealings.
Escrow agreement: A defined arrangement where a neutral holder (the escrow agent) holds funds/property subject to specified written (or clearly agreed) conditions. Simply wiring money into an account labeled “escrow” does not automatically create escrow duties to the sender.
Duty to inquire (irregularity): A limited concept suggesting that, in rare circumstances, obvious signs of wrongdoing might obligate a party to investigate before acting. Here, the court found no circumstances rising to the level recognized in New York’s nonclient-attorney cases.
Aiding-and-abetting fraud: Liability for assisting someone else’s fraud. The helper must actually know about the fraud and substantially assist it—mere carelessness or failure to spot “red flags” is not enough.
Actual vs. constructive knowledge: Actual knowledge means the defendant really knew the fraudulent scheme. Constructive knowledge means the defendant “should have known.” New York aiding-and-abetting fraud requires actual knowledge.
Clear and convincing evidence: A higher proof standard than “more likely than not.” At summary judgment, the plaintiff must have evidence that could meet that higher standard at trial.

Conclusion

Groisman v. Jeffrey Zwick & Associates affirms two doctrinal through-lines in New York commercial and attorney-liability law: (1) a nonclient’s unilateral transfer of funds into an attorney escrow account—without an escrow agreement, instructions, or contact—does not create a fiduciary relationship; and (2) aiding-and-abetting fraud demands evidence of actual knowledge, not post hoc inference from purported “red flags.”

Practically, the decision highlights the importance of documenting escrow terms and clarifies that courts will not convert informal, promoter-driven money transfers into attorney fiduciary obligations to unknown third parties absent concrete indicia of assent, authority breakdown, or knowing participation in fraud.