Rosen v Rosen

[*1] Rosen v Rosen 2003 NY Slip Op 51736(U) Decided on January 6, 2003 Supreme Court, Suffolk County Pines, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 6, 2003
Supreme Court, Suffolk County

SAMUEL ROSEN, Plaintiff,

against

SUSAN ROSEN, Defendant.



03498-00



XPLAINTIFF'S ATTORNEY

KEVIN J. WERNER, ESQ.

LONG, TUMINELLO, BESSO, SELIGMAN, QUINLAN & WERNER

120 FOURTH AVENUE

BAY SHORE, NEW YORK 11706

DEFENDANT'S ATTORNEY

PETER J. GALASSO, ESQ.

GALASSO & LANGIONE

600 OLD COUNTRY ROAD, SUITE 304

GARDEN CITY, NEW YORK 11530

Emily Pines, J.

Plaintiff, Samuel Rosen, has moved to disqualify the law firm of Galasso & Langione, P.C. ("Galasso") from its representation of the defendant, Susan Rosen, in this matrimonial action. Plaintiff argues that Galasso's representation of Susan Rosen's mother, Evelyn Hanrahan ("Hanrahan") in a separate action against Susan Rosen and Samuel Rosen [*2]constitutes an unwaivable conflict of interest, requiring his disqualification from representing Susan Rosen in the matrimonial action. In that separate action ("the plenary action"), commenced in February, 2002, Hanrahan asserted three causes of action against Samuel and Susan Rosen; i.e., to impose a constructive trust upon the marital residence; for "material representations . . .made. . . with intent to deceive the plaintiff" by both defendants, knowing that such were false when made with regard to Hanrahan's interest in the marital residence; and to establish Hanrahan's right to a life estate in the marital residence. The plenary action, under Index No. 02-04895, is pending in Suffolk County Supreme Court before Justice Edward Burke. Initially, Galasso represented both Hanrahan and Susan Rosen - - clearly parties adverse to one another - - in that action; however, he has withdrawn from representation of Hanrahan Following Mr. Rosen's motion to disqualify. During that joint representation, in April, 2002, Mrs. Rosen executed a Confession of Judgment in the plenary action (deemed marked as Plaintiff's 2 before Special Referee). Although Galasso was not MRS. ROSEN's initial attorney in this matrimonial action, he was substituted as her counsel in the divorce action in late, 2000.

Galasso opposes the motion to disqualify his law firm, asserting, inter alia, that Samuel Rosen lacks standing to bring the motion; that Hanrahan and Susan Rosen have always been totally aligned in interest, thereby obviating the need for a waiver of any conflict; that Samuel Rosen has, in any case, specifically waived a potential conflict in a letter to Galasso; and that Galasso Obtained Susan Rosen's knowing consent and waiver of any potential conflict before he undertook her representation in the plenary action. In addition, Galasso has forwarded to this Court a decision in a third lawsuit ("third action"), pending in Supreme Court, New York County, wherein Justice Barbara Kapnick has denied Samuel Rosen's motion to disqualify the Galasso law firm. In the third action, Samuel Rosen has sued Susan Rosen for breach of contract; Hanrahan for quantum meruit; and Susan Rosen and Hanrahan for conversion, along with other claims not relevant to this Decision. In addition to finding that no conflict of interest exists under DR 5-108, that Court has now transferred to this Court Samuel Rosen's claims for breach of contract against Mrs. Rosen as well as his claim against Mrs. Rosen and Hanrahan for conversion. (Decision dated December 9, 2002).

As a result of the contradictory factual allegations made by Galasso and Samuel Rosen during oral argument of the disqualification motion, this Court set the matter down for an evidentiary hearing before a Special Referee, Richard Ziegler, Esq., pursuant to 22 NYCRR, Part 36. The selection of Mr. Zeigler was based in part, on his extensive expertise as a member and former chair of the New York State Bar Association Ethics Committee. The Special Referee found, following a hearing, that "Susan Rosen did not knowingly, willingly and voluntarily waive any conflict or potential conflict that exists by virtue of the simultaneous representation of her mother, Mrs. Hanrahan, by Mrs. Rosen's counsel because [*3]Mr. Galasso did not disclose or discuss with Mrs. Rosen any actual or potential conflict that could arise by virtue of the proposed simultaneous representation". The Referee's finding, which the Court adopts, is based, in part on the wording of the second cause of action in the plenary action, asserted by Galasso on behalf of Hanrahan against Mrs. Rosen, while representing both, for common law fraud. As set forth in the Referee's findings:

Although not relied on for his ultimate finding, the Referee also determined that Mrs. Rosen was not made aware of a potential conflict between Hanrahan and herself arising from the third cause of action originally asserted in the plenary action, in which Hanrahan claimed a life estate interest in the marital residence. Mrs. Rosen testified before the Referee that it was her belief that this claim could and would be satisfied through a money judgement; she was not informed that the imposition of a life estate could delay a sale of the residence should Mrs. Rosen desire to do so. This issue is relevant to the equitable distribution determination pending before this Court, because Domestic Relations Law §236B(5)(e) authorizes the Court to make various distributive awards, including the ordered sale of a marital residence, either in lieu of equitable distribution or in order to effectuate the goals of equitable distribution, where the status of the parties' assets render it impractical and/or burdensome to do otherwise. However, it is as yet unclear whether the potential conflict raised by the third cause of action in the plenary action is real, since the Court has yet to hear testimony from Mrs. Rosen regarding her desired disposition with regard to the marital residence.

The Referee found, in addition, that Samuel Rosen was not aware, and therefore did not specifically consent to Galasso's representation of Hanrahan in a lawsuit against Samuel and Susan Rosen, while simultaneously representing Susan Rosen in that same litigation. The Referee found, and this Court adopts such finding, that in February, 2001, one year before commencement of the plenary action, although Samuel Rosen agreed to Galasso's representation of Mrs. Hanrahan and Mrs. Rosen, as a joint representation; that agreement never contemplated Galasso's representation of Mrs Hanrahan and Mrs. Rosen as adverse parties, i.e.; plaintiff and defendant in the same litigation. As determined by the Referee, Mr. Rosen's agreement concerned Galasso's representation of Hanrahan as a non-party witness and Mrs. Rosen in the divorce action. The basis of the Referee's finding is the key to this Court's determination of the subject motion: [*4]

"I reach the conclusion stated above because I credit Mr. Rosen's testimony on December 2 that at the time he authorized his counsel to confirm his consent to Mr. Galasso's joint representation of Mrs. Hanrahan and Mrs. Rosen, it did not occur to him that Mr. Galasso might choose to represent both plaintiff and defendant simultaneously in the same lawsuit. It is that conduct that Mr. Rosen has challenged in the pending disqualification motion, and I find Mr. Rosen's testimony is credible when he stated, in effect, that such conduct is so beyond the pale of ethical norms that govern the conduct of lawyers in New York that Mr. Rosen did not contemplate such conduct when he consented to the proposed joint representation."

STANDING

Galasso argues, and there is some authority for the proposition, that one who has neither a prior nor current relationship with counsel sought to be disqualified lacks standing to present the issue to the Court. see, Rowley v. Waterfront Airways, Inc. 113 AD2d 926. This authority is alluded to in the decision in the third action of Justice Kapnick denying the motion to disqualify. However, exceptions to the general rule exist, since an attorney has both the authority and the obligation to bring to the attention of the court a potential violation of an ethical obligation by another attorney. In such an instance "the adverse party may move to disqualify the attorney for the opposite party on the ground of a conflict of interest". 7A C.J.S. Attorney and Client, section 157, p. 224.

Lack of standing, where a conflict of interest is demonstrated, must, therefore, be subsumed by a broader protection that adequately ensures both clients and the general public that lawyers will act within the bounds of ethical conduct. Code of Professional Responsibility Disciplinary Rule 1-103 (A); 22 NYCRR 1200.4(a). Accordingly, it has been held that disqualification can be raised by the trial court, sua sponte (In Matter of Vera, 49 AD2d 883, app.den., 38 NY2d 709, mot. for stay den., 38 NY2d 938), and that the authority to require the Bar to adhere to their ethical obligations may be exercised whenever it has been brought to the attention of the court. see, Island Pa-Vin Corp. v. Klinger, 76 Misc 2d 180, rvd. on other gr., 47 AD2d 627.

While Mr. Rosen may not have been the preferred party to raise Galasso's alleged [*5]violation of the Code of Professional Responsibility, Disciplinary Rules, now that the issue has been brought to the Court's attention, it has the ability and indeed the obligation to determine the issue. It is the position of this jurist that the courts have a duty to maintain what scarce public confidence in the legal profession remains by enforcing the ethical rules applicable to all attorneys who practice before it. Accordingly, this Court finds that it has the authority to determine the issue of whether Galasso should be disqualified for ethical violations now that those alleged violations have been brought to its attention.

CONFLICT OF INTEREST/SIMULTANEOUS REPRESENTATION

The Appellate Divisions of the New York Supreme Court have adopted a version of the Model Code of Professional Responsibility, as Part 1200, Title 22, of the New York Code of Rules and Regulations (NYCRR). Code of Professional Responsibility, Disciplinary Rule 5-105(a) governs attorney conflicts arising from simultaneous representation of multiple clients, with differing interests. In the case at bar, Galasso chose to represent Hanrahan and Mrs. Rosen in the plenary action as adverse parties and, to the extent relevant to this Court, he simultaneously represented Mrs. Rosen in a matrimonial action, where she seeks equitable distribution of the marital estate.

An attorney may engage in simultaneous representation of different clients where such representation "will not adversely affect . . . . (his or her) independent professional judgment in behalf of ( his or her) client ( or clients)". Code of Professional Responsibility 5-105 (a), (b); 22 NYCRR 1200.24(a); (b). Even where clients have differing interests, an attorney may represent such clients where " a disinterested lawyer would believe that the lawyer can competently represent the interest of each and . . . each consents to the representation after full disclosure of the implications of simultaneous representation and the advantages and risks involved" 22 NYCRR 1200.24(c). This newly adopted "objective" test demands inquiry into the mind of the disinterested lawyer. If such disinterested attorney would advise the client to refuse consent to the dual representation, the attorney with the conflict is not permitted to seek clent consent. Roy Simon, New York Code of Professional Responsibility, op.cit., p. 335; EC 5-16.

It is the Court's belief that Mr. Galasso's simultaneous representation of Mrs. Hanrahan and Mrs. Rosen on opposite sides of a fairly complex commercial litigation violated the above disciplinary rule. While the Court is aware that Mrs. Rosen has testified that her interests are totally aligned with those of her mother, Hanrahan, she has never been advised of the full implications of Galasso's representation of those differing interests. As set forth above, and in the Report of the Special Referee, Mrs. Rosen's divorce attorney commenced an action on behalf of an adverse party alleging that she entered into an [*6]agreement with her mother to give her a life estate in the marital residence, knowing that such agreement was false at the time she made it. She also permitted the confession of judgment against herself granting her mother a life estate in the marital abode, while she had pending before this Court the panoply of issues inextricably related to the equitable distribution of a marital estate under Domestic Relations Law §236. Indeed, the wording of the confession of judgment suggests that Hanrahan is entitled to the alternative remedy of remaining in the premises "for the rest of her life". This Court has adopted the findings of the Special Referee, which determined that Mrs. Rosen was unaware during Galasso's dual representation, that the cause of action asserting a life estate could adversely affect her interests in the final outcome of the matrimonial action.

Based on the above, the Court finds that Mr. Galasso violated DR §5-105(a) and (c), by continuing representation of Mrs. Rosen, while he simultaneously represented her mother, Mrs, Hanrahan, in a lawsuit asserting a cause of action Against Mrs. Rosen for common law fraud and in affecting Mrs. Rosen's potential rights with respect to the marital residence in a matrimonial action before this Court. At no time, did Mrs. Rosen consent to such representation after full disclosure. Having represented Hanrahan in bringing the lawsuit and having obtained the confession of judgment by Mrs. Rosen, Mr. Galasso cannot, as he has suggested, simply withdraw from representation of Hanrahan or indeed of Mrs. Rosen and thereby cure the problem. The Court is mindful that in so finding, it may be at odds with the Decision of Supreme Court, New York County in the third action under Index # 118280-01. However, that Court's analysis was limited to DR §5-108 (covering conflicts with former clients). In addition, the New York Court did not having pending before it the equitable distribution of the marital estate, nor the benefit of factual findings following an extensive hearing by a Special Referee. In any event, the Court is not bound by the findings of a Court of coordinate jurisdiction.

REMEDY

Having found that Mr. Galasso represented Susan Rosen in this action, while he simultaneously represented her mother in an action where conflicts of interest between the parties existed, and having found that such conflicts could potentially affect Mrs. Rosen's interests in her matrimonial action, the Court is yet faced with a dilemma. An attorney's violation of the Canons of Ethics and the attendant Disciplinary Rules does not automatically require the attorney's disqualification. Trimper v. Terminix International Co., 82 F. Supp. 2d 1. There are recognized competing interests inherent in such cases. Clearly, there exists a public policy favoring a party's right to representation by counsel of her own choosing. see, Solow v. W.R. Grace & Co., 83 NY2d 303. On the other hand, the disciplinary rules are designed to protect clients from both actual and potential conflicts, so that they may engage [*7]with their attorneys in the kind of open dialogue that effective representation requires. see, Tekni-Plex, Inc. v. Meyner and Landis, 89 NY2d 123.

Disqualification of counsel during an ongoing litigation has several detrimental adverse effects, including separating the client from her attorney, running afoul of the natural desire to allow a litigant to choose her own representative, and granting relief which may have been requested for strategic purpose, by a party, who seeks to gain advantage over another litigant. see, Vegetable Kingdom, Inc. v. Katzen, 653 F. Supp. 917. In this litigation, which is one of several interrelated civil actions, involving the division of marital property; breach of contract; a proceeding to impose a constructive trust; and federal civil rights claims, it does place Mrs. Rosen in an unfortunate situation indeed, to disqualify her counsel at this date. However, the Court notes that the issue was brought to the Court's attention within a short time following Galasso's commencement of the plenary action.

On the other hand, this Court cannot simply ignore Mr. Galasso's actions. To do so would make a mockery of the adversarial system, which is designed to protect the rights of all clients to be represented zealously within the bounds of the law; and which, when faithfully applied, is designed to arrive at a close approximation of the truth. Based on the Referee's findings, the Court holds that Mr. Galasso has taken the step of requiring his client to consent to his representation of an adverse party, who asserted that she engaged knowing misrepresentations of fact to her mother as well as the granted to her mother a life estate in the marital abode. The consequences of such action include potential monetary liability and delay or indeed prohibition of the sale of the marital residence in the matrimonial action. The purported "waiver" countersigned by Mrs. Rosen states, in pertinent part, as follows:

"As stressed in various conversations, you do not have a conflict with your mother, you agree that the money is owed. . . . I want you to sign this letter and return same. . . . indicating that you are aware of our representation of your mother, that you believe that it is not in conflict with your interest in the litigation and that you are in favor of my continuing in my representation of your mother in connection with any and all matters in connection with your husband".

It is possible that a very different letter could have been provided the client, setting forth the actual and potential conflicts between mother and daughter in that lawsuit and between mother in the plenary action and daughter in the matrimonial action, followed by a statement that the daughter understood and waived any and all such conflicts. Even such a letter would have aroused the Court's suspicion, in view of the complexities involved. In fact, this Court simply cannot conceive of a knowing waiver by a client of such significant [*8]interests. Moreover, knowing of the motion to disqualify, Mrs. Rosen was then given the opportunity and did testify truthfully as to the extent of her understanding. As found by the Referee, Mrs. Rosen's stated understanding of her "consent" falls far short of that required by the Disciplinary Rules. Under the circumstances, the conflict of interest is clear and the Court is constrained to disqualify Mr. Galasso from representation of Susan Rosen in the matrimonial action pending before this Court.

The Court, in so finding, has no desire to leave Mrs. Rosen without representation. Accordingly, all proceedings pending before this Court in this matter are hereby stayed for a period of ninety (90) days from the date of Entry of this Decision and Order, in order to afford Mrs. Rosen the opportunity to obtain new counsel.

This constitutes the DECISION and ORDER of the Court.

Dated: January 6, 2003

Central Islip, New York

EMILY PINES

J. S. C.