Larsen v Larsen

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Larsen v Larsen 2023 NY Slip Op 33248(U) September 14, 2023 Supreme Court, Kings County Docket Number: Index No. 512169/2022 Judge: Leon Ruchelsman Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 512169/2022 FILED: KINGS COUNTY CLERK 09/19/2023 01:31 PM NYSCEF DOC. NO. 234 RECEIVED NYSCEF: 09/19/2023 SUPREME COURT OF THE :STATE OF NEW YORK COUNTY OF KINGS : COMWERCIAL PART 8 ___ __ · · -----·-- -- ·--· :: ---. . .. -· --· '-·---·--·-· ·--;:: LOUANN LARSEN, as Trustee of the LARSEN 2021 FAMILY TRUST, SUBTRUSf A, and the LARSEN 2021 FAMILY TRUST, SUBTRUST C; KATERINA VOUMVOURAKIS, as Trustee of the LARSEN 2021 FAMILY TRUST, SUBTRus'± A, and the LARSEN 2021 FAMILY TRUST, sm!sTRUST B; and LYDTA LARSEN, as Trustee o{i the LARSEN 2021 FAMILY TRUST, SUBTRUST B, an¢ the LARSEN 2021 FAMILY TRUST, SUBTRUST C, as trustees and derivatively on behalf of POWER COOLING, INC. and RELIANCE MACHININ<t;, INC., Plaintiffs, Index# 512169/2022 S.epternber 14, 2023 - against LAUREN LARSEN, Defendant, and M6tion Seq. Nos. 6 and 8 POWER COOLING, INC., and RELIANCE MACHINING, INC. , Nominal Defendants, ----------- - ------,--------------------x PRESENT: HON. LEON RUCHELSMAN The defendant Lauren Larsen has rnoved seeking to disqualify counsel for the plain.tiffs Power Cooling Inc., and Reliance Machining Irie. The p+aintiffs have cross-rri.ov.ed seeking to disqualify defendant 11 s counsel. parties and argument~ held. 1 Papers were submitted by the After reviewing all the arguments this court now makes :the following determination. A:s recorded in p¼ior or:ders the nominai defendant corporations, which ate engaged ih cooling and heating services, were owned by Lloyd Larsen:. .! of the sha_res .of [* 1] cornrncpn On December i, 200.2 Lloyd place.d 51% stock of t.he corporations into a. trust 1 of 6 INDEX NO. 512169/2022 FILED: KINGS COUNTY CLERK 09/19/2023 01:31 PM NYSCEF DOC. NO. 234 RECEIVED NYSCEF: 09/19/2023 ; .and h,i_s dat1g-htet LaUJ:i'~n, the defetidant herein·, ·was named, as trustee along_ with a: i non,-_pa_rty. Further, Lioyd and his wife and :! Lauren executed an ag:;:eement whei"eiri they wer"e the orily .' Lloyd _"passed: .away· ln :2°-011 and shareholders· with -votj.Jng rig_hts. ! Lauren. wa:s gifted : 29t!of the company ~ and purchased another 20% 1 from hEn mother; leaJing her With 4:9% of the company. the 2:0--0.2 T+us.t wa,s nifor:~ed into a In 2021 ·new trust with three I (Su~trusts A and B) maintaining l9. 40%. each and i subdiv:isi·ons , two Slibtr,ust C m~int~:i.ni:q:g. 9 .• 4%) ~ The 2002 t~ust still maintained ! : 2. 75~-~ The t,rustees ! pf Stibtrusts. A,- B and C are Lloyd's other ; : .' three: children, the p~_aintiff s her.ein, Louann, Lydia and non- ·p~rty Linnea, and oth:~F non-partie_s ~ The Complaint a.~J.. eges that since Lloyd's death Lauren has_ .·mismanaged the co:rpor~tions , failing to provide distribut.ion s -and :paying her c-p.ildren ~al.q,ries and benefits for providing no. work. Further, the Complaint alleges the defendant has diverted income f·rom- .the corp·ora.tion • lf.o.r. her :·own personal gain .. In sup,port of thte motion to disqualify th.e de.fendi?-n.:t, asser~s that i_n :2'019 an attorney from Windels Marx La:n.e t Mi,t,tendorf, LLP w.-as hi_r·ect to engage ~ri decanting the trusts to affo-rd gr.eater to Louann Larsen, Lydia Larsen 9 nd percentages. of ownership ' . LinI1ea Larsen.. The b!1ain:tiff' s have c:ross-.rri.oved seekin_g to disqualify- Lauren's dounsel based upc::m the same facts. surre>,t;t_nding I! the ciecanting of the; !trusts. Essentially, each .party argues the .! 2 [* 2] 2 of 6 INDEX NO. 512169/2022 FILED: KINGS COUNTY CLERK 09/19/2023 01:31 PM NYSCEF DOC. NO. 234 RECEIVED NYSCEF: 09/19/2023 respective counsel th-?-t was involved in decanting the trusts will ! i now be called as wit~ij=sses in this action and another action commenced by Laureri ci.nd that therefore all counsel representing ii . the parti~s in this J¢tion must be disqualified. Presently, the piaintiffs have sought new counsel and consequently, the motion seeking to disqualify plaintiff's counsel is now renderfd moot; The motion seeking to disqualify now ~ill ciefendant'S counsel . . . . . . be considered. :! . Conclusions of Law It is well settled that a party in a civil action maintains an important right to! select counsel of its choosing and that such right may.not be; abridged without some overriding concern (Matter of Abrams, 62! NY2d 183, 476 NYS2d 494. [1984]). Therefore, the party:seekirig disqualification of an opposing party's counsel mustipresent sufficient proof supporting that determination {Schmidt v. Magnetic Head Corp., 101 AD2d 268, 476 NYS2d 151 [2d Dept., • ~ 984 J ) • Rule J. 7 of the:: New York Rules of Professional Conduc:t prohibits an attorns;iy from representing a party where it is likely the attorney will be called as a witness on behalf of the client regarding a ''slignificant issue" (id). Thus, to disqualify counsel the party see)cing such disqualification must demonstrate that the testimony of! the counsel will pe neces,'.3.ary to pursue its 3 [* 3] 3 of 6 INDEX NO. 512169/2022 FILED: KINGS COUNTY CLERK 09/19/2023 01:31 PM NYSCEF DOC. NO. 234 RECEIVED NYSCEF: 09/19/2023 own claims (Arons v. :Charpentier/ 8 AD3d 595, 77 9 1'!YS2d 2 42 [2d ! Dept., 2004]) . disqualification i Al te:i;-patively, even if not strictly necessary, woutb be proper where the testimony of counsel would be prejudieialltohis or her own client (Daniel Gale Associates, Inc.; v. peorge, 8 AD3d 608, 779 NYS2d 573 [2d DepL, 2004]) . Thus; the cruciar, questions which must be addressed is whether the testimony! of plaintiff's counsel is 'necessary' and even if not necessary: whether such testimony will prejudice any of the defendants. For testimony to: be deemed necessary thereby requiring disqualification of cbunsel, it must be demonstrated that counsel .··f . . .· is 'likely to be a wi:t,ness' ( Rule 3.. 7) and the testimony cannot be garnered from o::the!r sources, is not cumulative and is vital to prove the allegations! of the case (S6kolow, Dunaud, Mercadier & Carreras LLP v. Lacheir, 2 99 A02d q4, 7 47 NYS2d 4 41 [ pt Dept., 2.0021) . The det·endant' s •· :courtqel has presented sufficient evidence that she did not reprfesent the defendant regarding the decanting of the trusts at alV !and is not likely to therefore be called as a witness. First, Mp. Norman Seidenfeld Esq. has submitted an affidavit wherein he lasserts that he was counsel for the defendant in the decanting of tbe trusts and that Ms. Hauser was not involved in that:at all. Mr. Seidenfeld states that "I 4 [* 4] 4 of 6 INDEX NO. 512169/2022 FILED: KINGS COUNTY CLERK 09/19/2023 01:31 PM NYSCEF DOC. NO. 234 RECEIVED NYSCEF: 09/19/2023 personally negotiated,the terms with Alan Winters over a period ! i of approximately 10 ~cpnths. These negotiations took place through erriail arid telephone q$11.s. I db not recall any occasion on which ii I copied Michele Hauser on emails between Winters and me; on no occasion was she on ci~y call with us" (see, Affirmation of Norman Seidenfeld, <Jl4 states that 11 [NYSCEF Doc. No. 192]). Moreover, Ms. Hauser out never called or emailed Mr. Win-tiers . . . or reached :! to me through any me6panism for any reason at all during approximately 10 montps of negotiation·s and I neither called nor ! : emailed nor otherwise! reached out to him" (see, Affirmation of Michelle Hauser, 3I5 [NYSCEF DoC. No. 189]). It is true that MS; email to Lauren on March 25 2021 and Hauser wrote a very long : . . . there are emails between Lauren and Mr, Seidenfeld which reference Ms. Hauser's input, however, there is no ques'tion that the main counsel negotiating any changes to the trusts was Mr. Seidenfeld. Thus, toi the extent Ms. Hauser had any input in the actual negotiations h~r involvement was not significant and her testitnony will not be, necessary. called as a witness.' f Indeed, she will likely not be The testimony of Mr .. Seidenfeld will prove critical in this reg<;!rd rendering Ms, Hauser's role, if any, merely secondary. Mofreover, any further basis to assert Ms .. Hauser represented La!ureri in the decanting process because Mr. Winters, counsel for:plain,tiffbelie ved that to be the case, is insufficient qrourtds; :for disqualification. 5 [* 5] 5 of 6 INDEX NO. 512169/2022 FILED: KINGS COUNTY CLERK 09/19/2023 01:31 PM NYSCEF DOC. NO. 234 RECEIVED NYSCEF: 09/19/2023 Therefore, since,Ms. Hauser's role did not form the :basis of any .agreements tha:t were ultimately agreed upon and any ! : information she may q6ntain can he obtained from other sourc!;::;S the motion seeking di$qualification is denied. Further, the court does not consider alternative grounds seeking disqt1alification thati were raised for the first time in reply. So ordered. };:NTER: Dated: Septembe~ 14r 202~ Brooklyn,:. N. Y. Hon. JSC 6 [* 6] 6 of 6

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