| Hele Asset, LLC v S.E.E. Realty Assoc. |
| 2013 NY Slip Op 03061 [106 AD3d 692] |
| May 1, 2013 |
| Appellate Division, Second Department |
| Hele Asset, LLC, et al., Respondents, v S.E.E.Realty Associates et al., Appellants. |
—[*1] Sawyer & Demetri, Garden City, N.Y. (James Sawyer of counsel), forrespondents.
In an action, inter alia, for the judicial dissolution of a partnership, the distribution ofpartnership assets, and an accounting, the defendants appeal from so much of an order ofthe Supreme Court, Queens County (Brathwaite Nelson, J.), dated June 22, 2012, asgranted that branch of the plaintiffs' motion which was to disqualify their attorneys fromrepresenting any party to this action on the ground of conflict of interest.
Ordered that the order is reversed insofar as appealed from, on the facts and in theexercise of discretion, with costs, and that branch of the plaintiffs' motion which was todisqualify the defendants' attorneys from representing any party to this action on theground of conflict of interest is denied.
The defendant S.E.E. Realty Associates (hereinafter the partnership) is a New Yorkgeneral partnership which owned real property in Queens and Bronx Counties. Thedefendants Arthur Ellner and Thomas Ellner (hereinafter together the Ellners) arebrothers, and each owns a 25% interest in the partnership. Prior to his death in 2004,Leopold Schiff owned the remaining 50% interest in the partnership. The plaintiff HeleAsset, LLC (hereinafter Hele Asset), is a New York limited liability company, and theplaintiff Hermina Schiff, Leopold's widow and the executor of his estate, is a manager ofHele Asset. In 2006, the plaintiffs commenced this action alleging, inter alia, that in2001, Leopold Schiff assigned all of his rights in the partnership to Hele Asset and that,after his death in 2004, a successor partnership had been created whereby Hele Assetowned a 50% interest in the partnership along with the Ellners. The plaintiffs furtheralleged that the defendants refuse to acknowledge Hele Asset's 50% interest in thepartnership and have dissipated partnership assets.
In 2012, six years after commencement of the action and after discovery had beenconducted, the plaintiffs moved to disqualify the defendants' attorneys, Cooper, Paroff,Cooper & Cook (hereinafter the firm), from representing any party in this action on thegrounds that Ira Cooper, one of the firm's attorneys, had engaged in impropercommunications with a son of Hermina Schiff, that Ira Cooper would be called as awitness at the trial of this action, and that there was a conflict of interest in the firm'srepresentation of both the partnership and the Ellners. The plaintiffs also [*2]moved to depose Ira Cooper. The Supreme Court grantedthat branch of the plaintiffs' motion which was to disqualify the firm on the ground ofconflict of interest and denied the other branch of the motion. The defendants appealfrom so much of the order as granted that branch of the plaintiffs' motion which was todisqualify the firm on the ground of conflict of interest.
"A party's entitlement to be represented in ongoing litigation by counsel of his or herown choosing is a valued right which should not be abridged absent a clear showing thatdisqualification is warranted. While the right to choose one's counsel is not absolute,disqualification of legal counsel during litigation implicates not only the ethics of theprofession but also the parties' substantive rights, thus requiring any restrictions to becarefully scrutinized. The party seeking to disqualify a law firm or an attorney bears theburden to show sufficient proof to warrant such a determination" (Gulino v Gulino, 35 AD3d812, 812 [2006] [citations omitted]; see S & S Hotel Ventures Ltd. Partnership v777 S. H. Corp., 69 NY2d 437, 443-445 [1987]). "Whether to disqualify an attorneyis a matter which lies within the sound discretion of the court" (Matter of Madris v Oliviera,97 AD3d 823, 825 [2012]; see Matter of Marvin Q., 45 AD3d 852, 853 [2007];Olmoz v Town of Fishkill, 258 AD2d 447 [1999]). Where a party seeks todisqualify its adversary's counsel in the context of ongoing litigation, courts considerwhen the challenged interests became materially adverse to determine if the party couldhave moved at an earlier time (see Matter of Astor Rhinebeck Assoc., LLC v Town ofRhinebeck, 85 AD3d 1160, 1161 [2011]). If a party moving for disqualificationwas aware or should have been aware of the facts underlying an alleged conflict ofinterest for an extended period of time before bringing the motion, that party may befound to have waived any objection to the other party's representation (see Matter of Aaron W. v ShannonW., 96 AD3d 960, 961 [2012]; Lake v Kaleida Health, 60 AD3d 1469, 1470 [2009]).Further, where a motion to disqualify is made in the midst of litigation where the movingparty knew of the alleged conflict of interest well before making the motion, it can beinferred that the motion was made merely to secure a tactical advantage (see Matterof Voss v 87-10 51st Ave. Owners Corp., 292 AD2d 622, 624 [2002]).
The plaintiffs' six-year delay in moving to disqualify the firm, when they were awareor should have been aware of the alleged conflict of interest at or around the time theycommenced the action, constituted a waiver of their objection to the defendants' legalrepresentation. Moreover, we infer from this extended delay that the plaintiffs' motionwas made merely in order to secure some sort of tactical advantage or to force asettlement. Accordingly, the Supreme Court improvidently exercised its discretion ingranting that branch of the plaintiffs' motion which was to disqualify the firm on theground of conflict of interest.
There is no merit to the plaintiffs' alternative contentions that the Supreme Courtshould have granted those branches of their motion which were to disqualify the firm onthe grounds of improper communications, and that Ira Cooper would be called as awitness at trial (see Parochial Bus Sys. v Board of Educ. of City of N.Y., 60NY2d 539 [1983]).
The plaintiffs' remaining contentions have been rendered academic in light of ourdetermination. Dillon, J.P., Angiolillo, Austin and Hinds-Radix, JJ., concur.