Holloman v. Manginelli Realty Co.

81 A.D.3d 413, 917 N.Y.S.2d 141

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 1, 2011
• Status: Published

Opinion

Order, Supreme Court, Bronx County (Lucindo Suarez, J.), entered September 24, 2010, which denied the motion of nonparty law firm retained by the New York Liquidation Bureau, as ancillary receiver for the insurance carrier, to withdraw as counsel for defendants, unanimously affirmed, without costs.

Defendants are the owner and managing agent of an apartment building in which the infant plaintiff was allegedly exposed to lead-based paint between May 2002 and September 2004. The ancillary receiver retained the law firm to represent defendants in the matter in October 2005. Five years later, when the matter was ready for trial, the entity handling covered claims of the carrier in liquidation notified the law firm and defendants that it was disclaiming coverage, asserting that the alleged exposure did not occur within the policy period.

The motion court properly denied the law firm’s motion without reaching the merits of the coverage dispute, since it is settled that a motion for withdrawal by counsel under such circumstances is an improper attempt to test an insurer’s disclaimer of coverage (see Brothers v Burt, 27 NY2d 905 [1970]). “[T]he right of an insurer to deny coverage[ ] can only be resolved by a declaratory judgment action in which the defendants] would be able to adequately litigate the facts of [the insurance company’s] disclaimer” (Sojka v 43 Wooster LLC, 19 AD3d 266, 267 [2005] [internal quotation marks and citations omitted]). Furthermore, the law firm did not demonstrate any conflict of interest arising from its clients’ conduct or inconsistency between their interests, which would warrant granting the motion to withdraw (compare Dillon v Otis El. Co., 22 AD3d 1 [2005]; Carbonetti v Carver Concrete Corp., 43 AD2d 522 [1973]). Concur—Tom, J.P., Mazzarelli, Renwick, Freedman and Manzanet-Daniels, JJ.