Kassis v. Teacher's Insurance & Annuity Ass'n

717 N.E.2d 674, 93 N.Y.2d 611, 695 N.Y.S.2d 515, 1999 N.Y. LEXIS 1430
CourtNew York Court of Appeals
DecidedJuly 1, 1999
StatusPublished
Cited by57 cases

This text of 717 N.E.2d 674 (Kassis v. Teacher's Insurance & Annuity Ass'n) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kassis v. Teacher's Insurance & Annuity Ass'n, 717 N.E.2d 674, 93 N.Y.2d 611, 695 N.Y.S.2d 515, 1999 N.Y. LEXIS 1430 (N.Y. 1999).

Opinion

OPINION OF THE COURT

Smith, J.

Plaintiffs Henry Kassis and North River Insurance Company retained the law firm of Weg & Myers to represent them in an action premised upon property damage to a building owned by Kassis in New York City. Thurm & Heller, a firm of ap[614]*614proximately 26’ attorneys, is counsel for defendants and third-party plaintiffs, Teacher’s Insurance and Annuity Association and Cauldwell-Wingate Company, Inc. The decisive issue on this appeal is whether Thurm & Heller should be disqualified from continued representation of defendants on the basis that it hired Charles Arnold, a former associate of Weg & Myers who participated in the Kassis litigation while employed there. For the reasons that follow, we hold that Thurm & Heller should be disqualified, and we reverse the order of the Appellate Division that permitted the continued representation.

BACKGROUND

In 1994, two years after commencement of the underlying action, Weg & Myers was substituted as counsel for plaintiffs. Joshua Mallín, a partner at Weg & Myers, was in charge of the case, conducting most of the discovery and planning the litigation strategy. Charles Arnold, a first-year associate, assisted Mallín. Specifically, Arnold conducted five depositions of non-parties and co-plaintiff North River, attended two court-ordered mediation sessions as sole counsel for the client, appeared as Kassis’ attorney at a physical examination of the subject building, and conversed with Kassis on a regular basis. Moreover, the record indicates that Weg & Myers conducted weekly staff meetings where all associates were privy to discussions of law and strategy regarding litigation the firm handled. In addition, Arnold reviewed certain portions of the litigation file in order to conduct the depositions, but allegedly “never read the overwhelming majority of the documents contained within the file.”

In February 1997, following a deposition in the Kassis matter, Arnold informed Roula Theofanis, the partner at Thurm & Heller who was primarily in charge of the Kassis litigation, that he was leaving Weg & Myers. At the suggestion of Theofanis, Arnold was interviewed by Thurm & Heller, and began working there in March 1997. During the interview and upon commencement of his employment, Thurm & Heller cautioned Arnold that he would not be permitted to participate in the. Kassis litigation and that he was not to discuss that matter with anyone at the firm.

Upon learning of Arnold’s employment, Mallín requested that Theofanis detail the precautionary measures that the firm planned to take in order to prevent Arnold’s inadvertent disclosure of confidential information he had obtained while at Weg & Myers. By written response, Theofanis detailed the following safeguards:

[615]*615“1. The entire file which presently consists of 15 redwells will be kept in my office in lieu of our general filing area.
“2. Mr. Arnold’s office will be at a substantial distance from my office.
“3. Mr. Arnold upon commencement of his employment with the firm on March 3, 1997 will be instructed not to touch the Kassis file nor to discuss the Kassis matter with any partner, associate or staff member of the firm.
“4. There will be no meetings, conferences or discussions in the presence of Mr. Arnold concerning the Kassis’ litigation.
“5. All future associates who may work on the Kassis matter with me in preparation for trial will be instructed not to discuss this file with Mr. Arnold.”

On March 6, 1997, three days after Arnold began working at Thurm & Heller, Mallín moved on behalf of plaintiffs to disqualify the firm from further participation in the Kassis litigation. Supreme Court denied plaintiffs’ motion, finding Arnold’s involvement in the Kassis litigation while employed at Weg & Myers limited. The Appellate Division affirmed, holding that the safeguards employed by Thurm & Heller eliminated the danger of Arnold inadvertently transmitting information he might have gained from his previous employment at Weg & Myers. The court determined that “in light of the implementation of a Chinese Wall, disqualification of Thurm & Heller would provide an undue advantage to Kassis” (243 AD2d 191, 196). Two Justices dissented, concluding that Thurm & Heller should be disqualified as counsel to defendants because it hired an attorney who actively represented the opposing party on the same matter in litigation.

The Appellate Division granted plaintiffs leave to appeal to this Court and certified the following question: ‘Was the order of the Supreme Court, as affirmed by this Court, properly made?” We answer the question in the negative.

ANALYSIS

Attorneys owe a continuing duty to former clients not to reveal confidences learned in the course of their professional relationship. It is this duty that provides the foundation for the well-established rule that a lawyer may not represent a cli[616]*616ent in a matter and thereafter represent another client with interests materially adverse to interests of the former client in the same or a substantially related matter (Cardinale v Golinello, 43 NY2d 288, 295-296). Indeed, such “side switching” clearly implicates the policies both of maintaining loyalty to the first client and of protecting that client’s confidences. These same principles give rise to the general rule that, where an attorney working in a law firm is disqualified from undertaking a subsequent representation opposing a former client, all the attorneys in that firm are likewise precluded from such representation (id., at 295; see also, Code of Professional Responsibility DR 5-105 [D] [22 NYCRR 1200.24 (d)]; DR 5-108 [22 NYCRR 1200.27 (a) (1)];

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Bluebook (online)
717 N.E.2d 674, 93 N.Y.2d 611, 695 N.Y.S.2d 515, 1999 N.Y. LEXIS 1430, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kassis-v-teachers-insurance-annuity-assn-ny-1999.