Shopping Spree!

In last month's issue, we began a discussion of a vexatious practice of some matrimonial litigants: They consult with attorneys whose services they have no intention of engaging simply to disqualify them from being able to represent their spouses. Attorneys affected by such “serial consulters” need to know what their options and obligations are.

The 'Existing' Law

It has been held that “the existence of a conflict of interest requires disqualification of the attorney. The representation of conflicting or adverse interests may constitute professional misconduct because a lawyer, as one in a confidential relationship and as any fiduciary, is charged with a high degree of undivided loyalty to his client. Thus, with rare and conditional exceptions, the lawyer may not place himself in a position where a conflicting interest may, even inadvertently, affect, or give the appearance of affecting, the obligations of the professional relationship.” Kelly v. Greason, 23 NY2d 368 (1968).

In existing “subsequent representation” cases, the keys remain: 1) the existence of a prior attorney-client relationship between the moving party and opposing counsel; 2) that the matters involved in both representations are substantially related; and 3) that the interests of the present client and former client are materially adverse. Tekni-Plex Inc. v. Meyner and Landis, 89 NY2d 123(1996); Reem Contracting Corp v. Resnick Murray St. Assoc., 43 AD3d 369 (1st Dept 2007); Calandriello v. Calandriello, 32 AD3d 450 (2nd Dept. 2006); see also Lucci v. Lucci, 150 AD2d 650 (2nd Dept 1989); Messina v. Messina, 175 AD2d 866 (2nd Dept 1991). If those elements were proven by a clear showing, the presumption of disqualification was deemed irrebuttable. Solow v. W.R. Grace & Co, 83 NY2d 303 (1994). It is the proponent of disqualification who has the burden of proof. S & S Hotel Ventures Limited Partnership v. 777 S. H. Corp, 69 NY2d 437 (1987); Aryeh v. Aryeh, 14 AD3d 634 (2nd Dept 2005); Gaspar v. Hallrock Poured Concrete Inc., 7 AD3d 871, (3rd Dept 2004). In Kassis v. Teacher's Ins. and Annuity Ass'n, 93 NY2d 611 (1999), the Court of Appeals held that until the proponent meets that burden, the presumption of disqualification created by the prior representation of an adverse party is rebuttable.

The Kassis court also noted that even where there is no conflict demonstrated and/or a “Wall” has been built to insulate the particular conflicted attorney from the firm's continued representation, the firm must ensure that proper measures are taken to obviate any appearance of impropriety. The imputed disqualification of a firm by the conflict of one attorney, has at times been held to include “of counsel” relationships. See Nemet v. Nemet, 112 AD2d 359 (2d Dept 1985; Cardinale v. Golinello, 43 NY2d 288(1997).

Conflicting Interests

In reviewing the issues and proofs, the court must also consider the party's valued right to choose their own counsel, and the fairness and effect in the particular factual setting of granting disqualification or continuing representation. S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp., 69 NY2d 437 (1987). The issue of disqualification lies within the sound discretion of the court. Aryeh; Zutler v. Drivershield Corp., 15 AD3d 397, (2d Dept. 2005); Flores v William J. Price Assoc., LLC, 20 AD3d 343 (1st Dept 2005). The court should be wary of well-recognized dangers of disqualification motions, which are used as tactical derailment weapons in litigation. Solow v. Grace; S & S Hotel Ventures Limited Partnership. The right to choose ones own counsel has been held to be a right not be abridged unless a clear showing is made that disqualification is warranted. Bentz v Bentz, 37 AD3d 386 (2d Dept 2007); Rose v. Thrifty Rent-a Car System, Inc., 305 AD2d 484(2d Dept 2003).

Conclusory allegations are insufficient to justify depriving a party of counsel of his or her choice. Medical Capital Corp v. MRI Global Imaging Inc., 27 AD3d 427 (2d Dept. 2006). This is also true of bare conclusory allegations that claims in the former and current representations are “similar if not identical and that confidences were imparted in the former representation which are relevant to the current representation.” Id. In Unger v. Unger, 15 A.D.3d 389 (2d Dept. 2005), the Second Department held there was no basis for the disqualification, where “apart from one innocuous exchange of pleasantries in a restaurant,” the wife never communicated with the husband's attorney. Further, the fact that the husband's attorney had represented a corporation in which the wife had a passive interest did not lead to the conclusion that the husband's attorney had ever acquired any confidences or secrets from the wife.

Failure to show the nature and substance of the allegedly imparted confidential information and its bearing upon the new matter warrants the denial of disqualification (Schneider v. Saiber Schlessinger Satz & Goldstein LLC, 260 AD2d 321 (1st Dept 1999); so does failure to show that relevant confidential information was actually obtained during the course of the earlier representation or to demonstrate that allowing the continued representation of the new client would create the appearance of impropriety (Dillon v. Valco American Corp., 14 AD3d 589 (2d Dept 2005)). That quired to disclose the specific confidences it is claimed were imparted to the attorney whose disqualification is being sought as doing so would breach the very confidence sought to be protected. Rose Ocko Foundation v. Liebovitz, 155 AD2d 426 (2nd Dept 1989 ); Jamaica Public Service Co., v. AIU Insurance Co., 92 NY2d 631 (1998). All that is required is the adduction of facts that would make it reasonable to infer that the attorney gained some information about the former client that is of some value to the present client. Matter of Hof, 102 AD2d 591 (2nd Dept. 1984). In balancing the competing interests, the Court of Appeals in S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp. , 69 N.Y.2d 437 (1987), reminds us: “The right to counsel of choice is not absolute and may be overridden where necessary ' for example, to protect a compelling public interest ' but it is a valued right and any restrictions must be carefully scrutinized.” (Citing to Matter of Abrams, 62 NY2d 183 (1984)).

The Court of Appeals in Solow v. Grace also comments on the overriding issue as follows: “Analysis begins with examining the purposes of the rule. The irrebuttable presumption is employed to fully protect client confidences and secrets, to offer a clear test which is easy to administer and to avoid an appearance of impropriety on the part of the attorney or the law firm.”

In Greene v Greene, 47 NY2d 447 (1979), the Court of Appeals, spoke again:

It is a long-standing precept of the legal profession that an attorney is duty bound to pursue his client's interests diligently and vigorously within the limits of the law (Code of Professional Responsibility, canon 7). For this reason, a lawyer may not undertake representation where his independent professional judgment is likely to be impaired by extraneous considerations. Thus, attorneys historically have been strictly forbidden from placing themselves in a position where they must advance, or even appear to advance, conflicting interests (see, e.g., Cardinale v. Golinello, 43 NY2d 288, 296 ' ; Eisemann v. Hazard, 218 NY 155, 159 '; Code of Professional Responsibility, DR 5-105). This prohibition was designed to safeguard against not only violation of the duty of loyalty owed the client, but also against abuse of the adversary system and resulting harm to the public at large.

Two Adverse Parties

Perhaps the clearest instance of impermissible conflict occurs when a lawyer represents two adverse parties in a legal proceeding. In such a case, the lawyer owes a duty to each client to advocate the client's interests zealously. Yet, to properly represent either one of the parties, he must forsake his obligation to the other. Because dual representation is fraught with the potential for irreconcilable conflict, it will rarely be sanctioned even after full disclosure has been made and the consent of the clients obtained (Matter of Kelly, 23 NY2d 368, 376, 378 ' ; Eisemann v. Hazard, ' supra; Matter of Gilchrist, 208 App.Div. 497 ' ; see also, Matter of Cohn, 46 N.J. 202 ' ). Particularly is this so when the public interest is implicated (see, e.g., Matter of A & B, 44 N.J. 331, 209 A.2d 101), or where the conflict extends to the very subject matter of the litigation (Matter of Kelly, supra, 23 N.Y.2d at p. 378 ' ; see Matter of Gilchrist, supra, 208 App.Div. at pp. 497-498).

Lee Rosenberg, a member of this newsletter's Board of Editors, is a partner with Saltzman Chetkof & Rosenberg LLP in Garden City. He is a fellow of the American Academy of Matrimonial Lawyers.

In last month's issue, we began a discussion of a vexatious practice of some matrimonial litigants: They consult with attorneys whose services they have no intention of engaging simply to disqualify them from being able to represent their spouses. Attorneys affected by such “serial consulters” need to know what their options and obligations are.

The 'Existing' Law

It has been held that “the existence of a conflict of interest requires disqualification of the attorney. The representation of conflicting or adverse interests may constitute professional misconduct because a lawyer, as one in a confidential relationship and as any fiduciary, is charged with a high degree of undivided loyalty to his client. Thus, with rare and conditional exceptions, the lawyer may not place himself in a position where a conflicting interest may, even inadvertently, affect, or give the appearance of affecting, the obligations of the professional relationship.” Kelly v. Greason , 23 NY2d 368 (1968).

In existing “subsequent representation” cases, the keys remain: 1) the existence of a prior attorney-client relationship between the moving party and opposing counsel; 2) that the matters involved in both representations are substantially related; and 3) that the interests of the present client and former client are materially adverse. Tekni-Plex Inc. v. Meyner and Landis , 89 NY2d 123(1996); Reem Contracting Corp v. Resnick Murray St. Assoc. , 43 AD3d 369 (1st Dept 2007); Calandriello v. Calandriello , 32 AD3d 450 (2nd Dept. 2006); see also Lucci v. Lucci , 150 AD2d 650 (2nd Dept 1989); Messina v. Messina , 175 AD2d 866 (2nd Dept 1991). If those elements were proven by a clear showing, the presumption of disqualification was deemed irrebuttable. Solow v. W.R. Grace & Co , 83 NY2d 303 (1994). It is the proponent of disqualification who has the burden of proof. S & S Hotel Ventures Limited Partnership v. 777 S. H. Corp, 69 NY2d 437 (1987); Aryeh v. Aryeh , 14 AD3d 634 (2nd Dept 2005); Gaspar v. Hallrock Poured Concrete Inc. , 7 AD3d 871, (3rd Dept 2004). In Kassis v. Teacher's Ins. and Annuity Ass'n , 93 NY2d 611 (1999), the Court of Appeals held that until the proponent meets that burden, the presumption of disqualification created by the prior representation of an adverse party is rebuttable.

The Kassis court also noted that even where there is no conflict demonstrated and/or a “Wall” has been built to insulate the particular conflicted attorney from the firm's continued representation, the firm must ensure that proper measures are taken to obviate any appearance of impropriety. The imputed disqualification of a firm by the conflict of one attorney, has at times been held to include “of counsel” relationships. See Nemet v. Nemet , 112 AD2d 359 (2d Dept 1985; Cardinale v. Golinello , 43 NY2d 288(1997).

Conflicting Interests

In reviewing the issues and proofs, the court must also consider the party's valued right to choose their own counsel, and the fairness and effect in the particular factual setting of granting disqualification or continuing representation. S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp., 69 NY2d 437 (1987). The issue of disqualification lies within the sound discretion of the court. Aryeh; Zutler v. Drivershield Corp. , 15 AD3d 397, (2d Dept. 2005); Flores v William J. Price Assoc., LLC, 20 AD3d 343 (1st Dept 2005). The court should be wary of well-recognized dangers of disqualification motions, which are used as tactical derailment weapons in litigation. Solow v. Grace; S & S Hotel Ventures Limited Partnership. The right to choose ones own counsel has been held to be a right not be abridged unless a clear showing is made that disqualification is warranted. Bentz v Bentz, 37 AD3d 386 (2d Dept 2007); Rose v. Thrifty Rent-a Car System, Inc. , 305 AD2d 484(2d Dept 2003).

Conclusory allegations are insufficient to justify depriving a party of counsel of his or her choice. Medical Capital Corp v. MRI Global Imaging Inc. , 27 AD3d 427 (2d Dept. 2006). This is also true of bare conclusory allegations that claims in the former and current representations are “similar if not identical and that confidences were imparted in the former representation which are relevant to the current representation.” Id . In Unger v. Unger , 15 A.D.3d 389 (2d Dept. 2005), the Second Department held there was no basis for the disqualification, where “apart from one innocuous exchange of pleasantries in a restaurant,” the wife never communicated with the husband's attorney. Further, the fact that the husband's attorney had represented a corporation in which the wife had a passive interest did not lead to the conclusion that the husband's attorney had ever acquired any confidences or secrets from the wife.

Failure to show the nature and substance of the allegedly imparted confidential information and its bearing upon the new matter warrants the denial of disqualification ( Schneider v. Saiber Schlessinger Satz & Goldstein LLC , 260 AD2d 321 (1st Dept 1999); so does failure to show that relevant confidential information was actually obtained during the course of the earlier representation or to demonstrate that allowing the continued representation of the new client would create the appearance of impropriety ( Dillon v. Valco American Corp. , 14 AD3d 589 (2d Dept 2005)). That quired to disclose the specific confidences it is claimed were imparted to the attorney whose disqualification is being sought as doing so would breach the very confidence sought to be protected. Rose Ocko Foundation v. Liebovitz , 155 AD2d 426 (2nd Dept 1989 ); Jamaica Public Service Co., v. AIU Insurance Co. , 92 NY2d 631 (1998). All that is required is the adduction of facts that would make it reasonable to infer that the attorney gained some information about the former client that is of some value to the present client. Matter of Hof, 102 AD2d 591 (2nd Dept. 1984). In balancing the competing interests, the Court of Appeals in S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp. , 69 N.Y.2d 437 (1987), reminds us: “The right to counsel of choice is not absolute and may be overridden where necessary ' for example, to protect a compelling public interest ' but it is a valued right and any restrictions must be carefully scrutinized.” (Citing to Matter of Abrams, 62 NY2d 183 (1984)).

The Court of Appeals in Solow v. Grace also comments on the overriding issue as follows: “Analysis begins with examining the purposes of the rule. The irrebuttable presumption is employed to fully protect client confidences and secrets, to offer a clear test which is easy to administer and to avoid an appearance of impropriety on the part of the attorney or the law firm.”

In Greene v Greene, 47 NY2d 447 (1979), the Court of Appeals, spoke again:

It is a long-standing precept of the legal profession that an attorney is duty bound to pursue his client's interests diligently and vigorously within the limits of the law (Code of Professional Responsibility, canon 7). For this reason, a lawyer may not undertake representation where his independent professional judgment is likely to be impaired by extraneous considerations. Thus, attorneys historically have been strictly forbidden from placing themselves in a position where they must advance, or even appear to advance, conflicting interests (s ee, e.g., Cardinale v. Golinello , 43 NY2d 288, 296 ' ; Eisemann v. Hazard , 218 NY 155, 159 '; Code of Professional Responsibility, DR 5-105). This prohibition was designed to safeguard against not only violation of the duty of loyalty owed the client, but also against abuse of the adversary system and resulting harm to the public at large.

Two Adverse Parties

Perhaps the clearest instance of impermissible conflict occurs when a lawyer represents two adverse parties in a legal proceeding. In such a case, the lawyer owes a duty to each client to advocate the client's interests zealously. Yet, to properly represent either one of the parties, he must forsake his obligation to the other. Because dual representation is fraught with the potential for irreconcilable conflict, it will rarely be sanctioned even after full disclosure has been made and the consent of the clients obtained (Matter of Kelly, 23 NY2d 368, 376, 378 ' ; Eisemann v. Hazard, ' supra; Matter of Gilchrist, 208 App.Div. 497 ' ; see also, Matter of Cohn, 46 N.J. 202 ' ). Particularly is this so when the public interest is implicated (see, e.g., Matter of A & B, 44 N.J. 331, 209 A.2d 101), or where the conflict extends to the very subject matter of the litigation (Matter of Kelly, supra, 23 N.Y.2d at p. 378 ' ; see Matter of Gilchrist, supra, 208 App.Div. at pp. 497-498).

Lee Rosenberg, a member of this newsletter's Board of Editors, is a partner with Saltzman Chetkof & Rosenberg LLP in Garden City. He is a fellow of the American Academy of Matrimonial Lawyers.