Zambrotta v 2935 Equities LLC
Annotate this CaseDecided on October 15, 2012
Supreme Court, Kings County
Christopher Zambrotta, Plaintiff,
against
2935 Equities LLC, VITRA INC., and VANGUARD CONSTRUCTION & DEVELOPMENT CO., INC., Defendants.
2935 Equities LLC, Third-Party Plaintiff,
against
Vitra, Inc., Third-Party Defendant.
2935 Equities LLC, Second Third-Party Plaintiff,
against
Vanguard Construction & Development Co., Inc., Second Third-Party Defendant.
Vanguard Construction & Development Co., Inc., Third Third-Party Plaintiff,
against
State Painting & Decorating Co., Inc., Third Third-Party Defendant.
18686/03
Defendant/third-party plaintiff/second third-party plaintiff 29-35 Equities LLC s/h/a 2935 Equities LLC and defendant/third-party defendant Vitra, Inc. were represented by John R. Marquez, Esq. of Hoey, King, Epstein, Prezioso & Marquez. Defendant/second-third-party defendant Vanguard Construction & Development Co., Inc. was represented by Anne P. Eccher, Esq. of Smith Mazure Director Wilkins Young & Yagerman, P.C.
Jack M. Battaglia, J.
Recitation in accordance with CPLR 2219 (a) of the papers considered on defendant/ third-party plaintiff/second third-party plaintiff 2935 Equities LLC and defendant/third-party defendant Vitra, Inc.'s motion for an order, pursuant to CPLR 3212, granting them conditional summary judgment against defendant/second third-party defendant/third third-party plaintiff Vanguard Construction & Development Company, Inc. for common law and contractual indemnification in their Verified Third-Party Complaint:
-Notice of Motion for Conditional Summary Judgment
Affirmation in Support
Memorandum of Law in Support of Motion for Summary Judgment
Exhibits A-L
-Affirmation in Opposition
Exhibits A-C
Defendant/third-party plaintiff/second third-party plaintiff 29-35 Equities LLC s/h/a 2935 Equities LLC and defendant/third-party defendant Vitra, Inc. were represented by John R. Marquez, Esq. of Hoey, King, Epstein, Prezioso & Marquez. Defendant/second-third-party defendant Vanguard Construction & Development Co., Inc. was represented by Anne P. Eccher, Esq. of Smith Mazure Director Wilkins Young & Yagerman, P.C.
On November 6, 2002, plaintiff Christopher Zambrotta allegedly sustained personal injuries during the course of his work at a construction site located at 29 9th Avenue in New York County. Plaintiff alleges that Defendants were negligent, and violated Labor Law § § 200, 240(1) and 241(6). (See Amended Verified Complaint ¶ 43.) Defendant 2935 Equities LLC owned the premises; defendant Vitra, Inc. leased the premises; and defendant Vanguard Construction & Development Company, Inc. was the general contractor. Defendant 2935 Equities commenced third-party actions against Vitra and Vanguard; and Vanguard commenced a third-party action against State Painting and Decorating, which was Plaintiff's employer.
It is the third-party action commenced by 2935 Equities against Vitra that brings to the fore the problem on this motion, in which those parties seek an order, pursuant to CPLR 3212, granting them summary judgment on their claims for indemnification against Vanguard Construction. In its Verified Third-Party Complaint against Vitra, its lessee, 2935 Equities alleges claims for contractual indemnification, common-law indemnification and contribution, and breach of an agreement to procure insurance. [*2]
2935 Equities LLC and Vitra, Inc. are both represented by the law firm of Hoey, King, Epstein, Prezioso & Marquez ("the Firm"). 2935 Equities commenced its third-party action as against Vitra on November 17, 2003. In counsel's Affirmation in Support, he affirms that "issue was not joined" in that third-party action, and that "[s]ubsequently, this firm was substituted as counsel for [2935 Equities] and has answered on behalf of [2935 Equities] and Vitra on all subsequent pleadings."
The Court may raise the issue of disqualification sua sponte, and should do so under certain circumstances, such as where there is a clear conflict of interest. (See Flushing Savings Bank v FSB Properties, Inc. 105 AD2d 829, 831 [2d Dept 1984]; Vinokur v Raghunandan, 27 Misc 3d 1239[A], 2010 NY Slip Op 51108[U], *1 [Sup Ct, Kings County 2010]; Dorsainvil v Parker, 14 Misc 3d 397, 400 [Sup Ct, Kings County 2006]; cf. Dominguez v Community Health Plan of Suffolk, Inc., 284 AD2d 294, 294 [2d Dept 2001].)
Since 2935 Equities has a claim against Vitra in this litigation, the law firm has a clear conflict of interest in its representation of both parties. (See Rules of Professional Conduct [22 NYCRR 1200.0] Rule 1.7.) Rule 1.7(a)(1) of the Rules of Professional Conduct provides that "[e]xcept as provided in paragraph (b), a lawyer shall not represent a client if a reasonable lawyer would conclude that ... (1) the representation will involve the lawyer in representing different interests". Here, since the Firm took on the representation of a client that was prosecuting a third-party action against another client, it is clear that the representation involves representing different interests.
Rule 1.7(b) of the Rules of the Professional Conduct provides that "notwithstanding a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if, [among other things], the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation". Here, the Firm represents adverse parties in the same litigation. Therefore, Rule 1.7 bars the Firm from representing both 2935 Equities and Vitra. (See Greene v Greene, 47 NY2d 447, 451 [1979] ["Perhaps the clearest instance of impermissible conflict occurs when a lawyer represents two adverse parties in a legal proceeding"]); Georgius v Villiage of Morrisville, 83 AD3d 1158, 1158-59 [3d Dept 2011]; Caravousanos v Kings County Hosp., 27 Misc 3d 237, 239-42 [Sup Ct, Kings County 2010] [Miller, J.].)
Even though Vitra did not interpose an answer to the Verified Third-Party Complaint,"entry of a default judgment on a third-party complaint should generally await the determination of liability in the main action and until a cause of action for indemnity has accrued." (See Slovik v Wang, 110 AD2d 630, 630-31 [2d Dept 1985]; Multari v Glalin Arms Corp., 28 AD2d 122, 124 [2d Dept 1967].) The third-party action has not been dismissed by an order of the court as abandoned (see e.g. CPLR 3215[c]), and 2935 Equities had not discontinued its third-party action prior to the Firm taking on the representation of both clients.
With their papers on this motion, 2935 Equities and Vitra hint at their awareness of the [*3]conflict, but do not address it. If agreements have been made between the owner, lessee and/or their respective insurers that resolve the conflict, they do not appear from these papers, and the Court has no warrant to assume that they exist; and, in any event, will not comment on whether the conflict is waivable (see Matter of Ravitch, 82 AD3d 126, 131 [1st Dept 2011].)
Even so, since the Court raises the issues of disqualification and conflict of interest sua sponte, and mindful that ethical rules cannot be mechanically applied in litigation (see S & S Hotel Ventures Ltd. Partnership, 69 NY2d 437, 443 [1987]), it will give the Firm an opportunity to address the question (see Doody v Gottshall, 67 AD3d 1347, 1349 [4th Dept 2009].) As such, the summary judgment motion is denied with leave to renew after a determination as to whether the Firm must be disqualified from representing 2935 Equities LLC or Vitra, Inc. or both. (See e.g. Alcantara v Mendez, 303 AD2d 337, 338 [2d Dept 2003]; Sidor v Zuhoski, 261 AD2d 529, 530 [2d Dept 1999] ["An attorney who undertakes the joint representation of two parties in a lawsuit should not continue as counsel for either one after an actual conflict of interest has arisen because continued representation for either or both parties would result in a violation of the ethical rules requiring an attorney to preserve a client's confidences or the rule requiring an attorney to represent a client zealously" (citations, internal quotation marks, and brackets omitted)].)
Accordingly, the motion is denied with leave to renew after a determination as to whether the law firm of Hoey, King, Epstein, Prezioso & Marquez must be disqualified from representing 2935 Equities LLC or Vitra, Inc. or both. The Firm shall file and serve motion papers addressing the conflict of interest and disqualification on or before November 2, 2012, or shall be disqualified from representing both 2935 Equities LLC and Vitra, Inc., and those parties shall substitute counsel within thirty (30) days without the necessity of any notice or motion pursuant to CPLR 321(c).
October 15, 2012___________________
Jack M. BattagliaJustice, Supreme Court
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