Cremers v. Brennan

196 Misc. 2d 262, 764 N.Y.S.2d 326, 2003 N.Y. Misc. LEXIS 786
CourtCivil Court of the City of New York
DecidedMay 30, 2003
StatusPublished

This text of 196 Misc. 2d 262 (Cremers v. Brennan) is published on Counsel Stack Legal Research, covering Civil Court of the City of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cremers v. Brennan, 196 Misc. 2d 262, 764 N.Y.S.2d 326, 2003 N.Y. Misc. LEXIS 786 (N.Y. Super. Ct. 2003).

Opinion

OPINION OF THE COURT

Paul G. Feinman, J.

The defendants’ motion to disqualify plaintiffs’ counsel is denied. The plaintiffs’ application for sanctions is also denied.

Plaintiffs commenced this action to recover fees allegedly owed pursuant to the terms of five separate contracts concerning performances arranged by defendant for plaintiff, a singer [263]*263known professionally as Amber. Plaintiffs allege breach of contract, unjust enrichment, unlicensed employment agent, and conversion. Defendant Nightlife Productions is a corporation established to procure live performance engagements for musicians, and to collect and forward the fees owed to the performers, deducting a commission. The individual defendants are employees of Nightlife Productions (hereinafter defendants) (see complaint and answer fifi 1-6).1 Defendants advance three counterclaims alleging tortious interference with contract, defamation, and services rendered for which they have not been paid.

Defendants move to disqualify plaintiffs’ counsel, Mr. Collins, and the firm for which he is of counsel, Serling Rooks & Ferrara, LLP, alleging the firm and one of its associates, Theodore D. Weis, Esq., had previously had a three-year relationship with defendants which ended only shortly before this litigation was commenced (see, notice of motion, exhibit C), and that there is, at the very least, the appearance of impropriety in allowing Mr. Collins or the firm to continue representing plaintiff. They rely on the Code of Professional Responsibility sections addressing an attorney’s obligation to withdraw from representing a client in the same or a substantially related matter in which that client’s interests are materially adverse to the interests of a former client (Code of Professional Responsibility DR 5-108 [a] [l]-[2] [22 NYCRR 1200.27 (a) (l)-(2)]).2

There is an irrebuttable presumption that a lawyer who represents one client in an earlier matter and then attempts to [264]*264represent another in a substantially related matter which is adverse to the interests of the former client must be disqualified (Solow v Grace & Co., 83 NY2d 303, 313 [1994]; Code of Professional Responsibility DR 5-108 [a] [22 NYCRR 1200.27 (a)]). If an attorney in a firm is disqualified from representing a client, there is a rebuttable presumption that all the attorneys in the firm are disqualified (id.). Disqualification protects the client’s secrets and confidences by preventing even a possibility that they will be used in related litigation (Tekni-Plex v Meyner & Landis, 89 NY2d 123, 131 [1996]).

Although the Code of Professional Responsibility establishes important ethical standards for attorneys, when its principles are raised in the course of litigation, the courts are required to “use our judicial process to make our own decision in the interests of justice to all concerned” (S&S Hotel Ventures Ltd. Partnership v 777 S.H. Corp., 69 NY2d 437, 443 [1987]). The courts must balance the vital interest in avoiding even the appearance of impropriety with a concern for a party’s right to be represented by counsel of his or her choosing (Jamaica Pub. Serv. Co. v AIU Ins. Co., 92 NY2d 631, 638 [1998]). In addition, there is a well-recognized “danger” that motions to disqualify can be tactical “derailment” weapons in litigation (id.; see Solow at 310). Therefore, to establish an irrebutable presumption of disqualification pursuant to DR 5-108 (a) (1), the movant must prove there was an attorney-client relationship between the moving party and opposing counsel, that the matters involved in both representations are substantially related, and that the interests of the present client and former client are materially adverse (Jamaica Pub. Serv. Co. at 636). To establish disqualification pursuant to DR 5-108 (a) (2), the party seeking disqualification must also show a “reasonable probability” that confidential information will be disclosed during the course of litigation (id. at 637).

Defendants contend that, in this instance, all the problematic factors are present. They allege Mr. Weis advised and represented the corporation in various matters concerning the music industry, became “intimately familiar” with defendants’ business, learned “confidential information,” including advising [265]*265with regard to obtaining a license, and presumably conferred with other members of the law firm concerning their various business ventures (notice of motion, Brennan affidavit HH 2-3). Defendants concede neither Mr. Weis nor his law firm represented the corporation in the negotiation and execution of the contracts at issue, but argue that the work done by Mr. Weis and the firm involved facts and circumstances “substantially similar” to those between plaintiffs and defendants (notice of motion, Brennan affidavit U 6; Pick affidavit in reply H 2 [iii]).

Mr. Weis sharply disputes defendants’ characterization of their professional relationship. He states there was no ongoing relationship or exchange of confidential information, he was not retained by defendants, nor was the law firm, but rather he was hired to do certain discrete negotiations, he did not render legal advice concerning “numerous” industry matters or on general business matters, and was never asked nor provided legal advice concerning defendants’ efforts to obtain a license (Weis affidavit U 5). He characterizes the work he performed for defendants as “intermittent,” “limited” and “unrelated to the specific transactions” at issue (Weis affidavit H 11). For example, in about August 2001, he negotiated a contract on behalf of defendants for a promotional tour of Strictly Rhythm Records, for which he billed less than 15 hours (Weis affidavit 7-8; notice of motion, exhibits A, B).3 In the summer of 2002, he was requested by defendants to draft a management agreement between it and a performer named Laleh. He affirms both contracts were “fairly rudimentary” and “typical” of the type of contract he negotiated for other, similar clients, and did not involve “proprietary business information” (Weis affidavit H 12). He visited defendants’ office only once to drop off a demo CD, and “almost all communications” were by telephone and fax (Weis affidavit U 9). Furthermore, in the course of his work for defendants, he never became aware that plaintiff and defendants had any dealings with each other (Weis affidavit 1113).

Plaintiff Cremers affirms she was a client of the firm prior to the time Mr. Weis negotiated the contracts at issue with [266]*266defendants (Weis affidavit 13), and that Joseph Serling, senior partner of Serling Rooks & Ferrara, has been her legal counsel and advisor for several years. She states neither he nor the firm was involved in her negotiations with defendants or in negotiating agreements for her performance engagements (Cremers affidavit 5, 8). Her attorney representing her in this action, Mr. Collins, is of counsel to Serling Rooks & Ferrara. He describes his relationship to the firm as essentially one of facilities-sharing, and states he acts independently of the firm as concerns his clients, keeping separate accounts, and collecting fees independently, although he is occasionally referred a litigation matter from the firm and he then bills the firm for his time (Collins affidavit 5-6).

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Related

Solow v. W. R. Grace & Co.
632 N.E.2d 437 (New York Court of Appeals, 1994)
Tekni-Plex, Inc. v. Meyner & Landis
674 N.E.2d 663 (New York Court of Appeals, 1996)
Jamaica Public Service Co. v. AIU Insurance
707 N.E.2d 414 (New York Court of Appeals, 1998)
S & S Hotel Ventures Limited Partnership v. 777 S. H. Corp.
508 N.E.2d 647 (New York Court of Appeals, 1987)
Flushing Savings Bank v. FSB Properties, Inc.
105 A.D.2d 829 (Appellate Division of the Supreme Court of New York, 1984)
Ezrasons, Inc. v. American Credit Indemnity Co.
258 A.D.2d 447 (Appellate Division of the Supreme Court of New York, 1999)

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Bluebook (online)
196 Misc. 2d 262, 764 N.Y.S.2d 326, 2003 N.Y. Misc. LEXIS 786, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cremers-v-brennan-nycivct-2003.