Acp 140 W. End Ave. Assocs., Lp v Kelleher
Annotate this CaseDecided on August 11, 2003
Civil Court Of The City Of New York, New York County
ACP 140 WEST END AVENUE ASSOCIATES, LP Petitioner,
against
IAN KELLEHER 140 West End Avenue, Apt. 26-U New York, NY 10023 Respondent QUENT KELLEHER , "JOHN DOE," AND/OR "JANE DOE," Respondents-Undertenants.
L& T Index No. 088424/2002
Belkin Burden Wenig & Goldman, LLP, (David Skaller of counsel) for
petitioner.
Kossoff Alper & Unger (Edward Paul Alper of counsel) for
respondents.
Gerald Lebovits, J.
Petitioner commenced this nonprimary-residence holdover on August 9, 2002. Respondents now move to disqualify petitioner's law firm, Belkin, Burden, Wenig and Goldman, LLP (the "Belkin firm"), from representing petitioner in this proceeding. Respondents also move to dismiss the petition with prejudice. The basis for the motion is that Jeffrey Levine, Esq., respondents' former attorney, switched sides during the pendency of this proceeding and joined the Belkin firm on June 9, 2003. The Belkin firm objects to disqualification, stating that Mr. Levine is not involved in any way with the prosecution of the case against the Kellehers and that respondents' firm, Kossoff Alper & Unger (the "Kossoff firm"), delayed in bringing this motion.
Under DR 5-108 (a) (1) of the Code of Professional Responsibility, "a lawyer who has represented a client in a matter shall not, without the consent of the former client after full disclosure * * * * [t]hereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client." (22 NYCRR 1200.27 [a] [1].) This former-client conflict is imputed to all the lawyers in the moving lawyer's new firm by DR 5-105 (d), which provides that "[w]hile lawyers are associated in a law firm, none of them shall knowingly accept or continue employment when any one of them would be prohibited from doing so under section 1200.20 (a), 1200.24 (a) or (b), 1200.27 (a) or (b), or 1200.45 (b) of this Part except as otherwise provided therein." (22 NYCRR [*2]1200.24 [d].)
A rebuttable presumption of disqualification arises from serial adverse representation; the presumption applies to the individual attorney and to the entire firm. (Alicea v. Bencivenga, 270 AD2d 125, 126 [1st Dept 2000, mem]. In Alicea, the moving lawyer joined plaintiffs' law firm two years after the action began. Before joining plaintiffs' law firm, defendant's former attorney was "personally responsible" for handling the defense, evaluating the case, and conducting the depositions. The court refused to consider plaintiffs' offer to create a "Chinese wall" to shield the moving lawyer from the other attorneys involved in prosecuting the case and held that plaintiffs' counsel did not overcome the presumption of disqualification.
In Kassis v Teacher's Insurance & Annuity Association, the Court of Appeals re-stated the general rule that when an attorney working in a law firm is disqualified from undertaking a subsequent representation opposing a former client, all the attorneys in that firm are likewise precluded from representation. (See Kassis v Teacher's Ins. & Annuity Assn., 93 NY2d 611, 616 [1999].) The rule of imputed disqualification reinforces an attorney's ethical obligation to avoid the appearance of impropriety, protects client confidences from misuse in substantially related and adverse litigation, frees the former client from any anxiety that matters disclosed will later be used against it, and provides a clear and readily administered test, thereby encouraging self-enforcement among members of the legal profession. (Id.)
In Kassis, the moving lawyer, a first-year associate, played "an appreciable role as counsel for plaintiff" at his previous law firm. (Id. at 618.) He conducted depositions that resulted in extensive transcripts, appeared as sole counsel for the client in two court-ordered mediation sessions, and conversed regularly with the client before switching to join the law firm of his client's current adversary. The Kassis Court found particularly heavy defendants' burden in rebutting the presumption that the moving lawyer acquired material confidences and thus disqualified the firm. (See 93 NY2d at 618-619.)
The Kassis Court noted that "imputed disqualification is not an irrebuttable presumption." (93 NY2d at 617, citing Solow v W.R. Grace & Co., 83 NY2d 303, 309 [1994].) The party seeking to avoid disqualification must prove that any information the disqualified lawyer acquired is unlikely to be significant or material in the litigation. (Id.)
The Belkin firm is unable to make that showing. The parties concede that Mr. Levine was personally and principally responsible for handling respondents' defense when he worked for the Kossoff firm. Mr. Levine defended respondents at their respective depositions, prepared drafts of opposition papers to petitioner's pending summary judgment motion, and billed over 115 hours on this matter. According to respondent Quent Kelleher's affirmation, "'Involved' would be a gross understatement. Mr. Levine was the attorney for both my brother, respondent Ian Kelleher, and for me, for almost a year." (Kelleher Affidavit at ¶ 3 [emphasis in original].)
Notwithstanding Mr. Levine's extensive involvement as counsel for respondents, David Skaller, Esq., an attorney with the Belkin firm, affirms that Mr. Levine has had absolutely no [*3]communication with anyone in his firm regarding this matter since his hiring. Mr. Skaller avers that he personally created a Chinese wall to shield Mr. Levine from the other attorneys and support staff involved in the case. According to Mr. Skaller,
"Mr. Levine is situated along a different hall from my office as well as that of my associate, Stacy Shimony, who has been involved in this case since the commencement of this proceeding. In addition, both redweld files for this case are maintained in Ms. Shimony's office, which is situated a significant distance from Mr. Levine's office. I have also directed that Ms. Shimony refrain from discussing this case with Mr. Levine or even within earshot of Mr. Levine. Of course, I have also refrained from discussing this matter with Mr. Levine." (Skaller Affirmation in Opposition to Respondent's Motion at ¶¶ 29-30.)
Mr. Skaller also affirms that he personally has not assigned any work to Mr. Levine and that Mr. Levine is not working on any of petitioner's cases. (Skaller Affirmation at ¶ 30.)
Mr. Levine's role as counsel is analogous to the moving lawyers' roles in Kassis and Alicea. Both cases rejected as inconsequential the measures suggested by the parties opposing disqualification in similar circumstances. The Kassis Court held "as a matter of law, that disqualification is required." (Kassis, 93 NY2d at 619.) The Belkin firm's screening measures are almost identical to those taken by the disqualified firm in Kassis and are equally inconsequential as a matter of law.
New York state courts generally reject screening as a means to protect firms from disqualification. (See NY St Bar Assn Comm on Prof Ethics, Topic: Conflict of Interest—Successive Representation; Moving Lawyer; Conflict Check, Op 720, at *4 [Aug. 27, 1999], citing Trustco Bank NY v Melino, 164 Misc 2d 999, 1006 [Sup Ct, Albany County 1995] [rejecting suggestion of erecting screen when moving lawyer was involved in substantially related representation at previous firm, stating that to do so is tantamount to abandoning irrebuttable presumption rule by substituting a "trust me" rule].) The Belkin firm's reliance on Solow v W.R. Grace & Company is misplaced. In Solow, the Court of Appeals declined to apply an irrebuttable presumption of imputed law firm disqualification against a 372-lawyer firm. (See 83 NY2d at 314.) The partner, associate, and paralegals who actively participated in litigation involving the former client had all left the law firm long before the current litigation. The sworn affidavits by the remaining partner and associate established that their involvement in the prior litigation had been negligible. (Id. at 314.) The Solow court noted, however, that in smaller law firms "the imputation of knowledge as a matter of law is necessary to protect the client and avoid the appearance of impropriety." (Id. at 311.) The Belkin firm employs some 31 lawyers, including Mr. Levine, the newly hired former counsel for respondents in this proceeding. It is undisputed that Mr. Levine still works for the Belkin firm and played "an appreciable role as counsel" for respondents when he worked at the Kossoff firm.
The Belkin firm argues that the Kossoff firm delayed in bringing this motion. Mr. Levine [*4]joined the Belkin firm on June 9, 2003, after receiving an offer on May 21, 2003, and accepting on May 23, 2003. Approximately one month later, on July 11, 2003, respondents moved to disqualify the Belkin firm. The Kossoff firm did not unreasonably delay in bringing this well-briefed motion. (See Alicea, 270 AD2d at 126 [finding that delay is no bar to relief sought in motion to disqualify if motion is "not made on the eve of trial" and if conflict is clear].)
The portion of respondents' motion seeking to disqualify the Belkin firm is granted. The portion of respondents' motion seeking to dismiss the petition with prejudice is denied. Respondents' reliance on Chang v Chang (190 AD2d 311 [1st Dept 1993]) is misplaced. The Chang court reversed Supreme Court's confirmation of the referee's report, recommendation, and findings because the disqualified attorney also was a defendant in a derivative action alleging self-dealing and diverting funds. (See id. at 316-317.) Respondents are unable to prove that the breach occasioned by the Belkin firm's employment of Mr. Levine irreparably tainted the proceedings.
The proceeding is restored to Part C's calendar on September 2, 2003, for petitioner's new counsel to appear.
This opinion is the court's decision and order.
Dated: August 11, 2003
J.H.C.
Decision Date: August 11, 2003
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