Ordered that the order is affirmed, with costs.
Generally, the merits of a proposed pleading amendment will not be examined unless palpably insufficient as a matter of law (see, Casey v. State of New York, 119 A.D.2d 363). At bar, the plaintiff was acting as the attorney for the Federal Deposit Insurance Corporation when he negotiated the escrow arrangement at issue in this case. Consequently, a violation of Judiciary Law § 487 may be asserted as a legitimate counterclaim (cf., Northern Trust Bank v. Coleman, 632 F. Supp. 648). Contrary to the plaintiff's contention, the counterclaim is not based solely on unfounded allegations in the complaint (cf., Thomas v Chamberlain, D'Amanda, Oppenheimer Greenfield, 115 A.D.2d 999, appeal dismissed 67 N.Y.2d 1005). Thus we conclude that the proposed counterclaim was not palpably insufficient as a matter of law (see, Casey v. State of New York, supra).
We have examined the plaintiff's remaining contentions, and find them to be without merit. Mollen, P.J., Mangano, Thompson and Rubin, JJ., concur.