Toren v. Anderson, Kill & Olick, P. C.

185 Misc. 2d 23, 710 N.Y.S.2d 799, 2000 N.Y. Misc. LEXIS 225
CourtNew York Supreme Court
DecidedJune 8, 2000
StatusPublished
Cited by5 cases

This text of 185 Misc. 2d 23 (Toren v. Anderson, Kill & Olick, P. C.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Toren v. Anderson, Kill & Olick, P. C., 185 Misc. 2d 23, 710 N.Y.S.2d 799, 2000 N.Y. Misc. LEXIS 225 (N.Y. Super. Ct. 2000).

Opinion

OPINION OF THE COURT

Helen E. Freedman, J.

In this breach of contract action involving legal fees and disbursements, plaintiff David Toren raises two issues. The first, not previously addressed in New York, is whether a professional services corporation of lawyers organized under Business Corporation Law article 15 can represent itself, even though the corporation’s members cannot be held individually liable. The second issue concerns disqualification. of a particular attorney.

Plaintiff Toren seeks to disqualify John H. Doyle, III, a member of defendant Anderson, Kill & Olick, P. C. (AKO), a professional services corporation of attorneys, from representing AKO. Toren contends that, pursuant to Code of Professional Responsibility DR 5-102 (22 NYCRR 1200.21), Doyle cannot represent AKO, because Doyle ought to be called as a witness by AKO, and may be called as a witness by plaintiff.

AKO opposes on the ground that in the future it will appear pro se, and accordingly DR 5-102 does not apply. AKO also argues that, even if the Disciplinary Rule applies, there is no conflict requiring Doyle’s disqualification.

Plaintiff replies that, as a matter of law, a professional corporation like AKO cannot appear pro se.

Background

In 1991, pursuant to a five-year agreement with AKO (the Agreement), Toren became “of counsel” to AKO and took charge [25]*25of AKO’s intellectual property group. The parties later extended the Agreement indefinitely. AKO agreed to pay Toren a fixed annual amount, plus specified percentages of the fees from the clients that he brought to AKO. The Agreement also provided a method for calculating Toren’s reimbursable disbursements.

The parties entered into several other agreements, including: (1) an agreement regarding payment with respect to a particular AKO client, TechnoGym; (2) an agreement entered into in June 1999, after Toren gave AKO his notice of termination, which provided, inter alia, that AKO would release certain client files to him; and (3) an agreement reached on or about September 30, 1999, regarding the amounts which he had collected from clients for services rendered before his resignation, and the amounts which AKO would pay him for those services (the September 1999 Agreement).

Plaintiff seeks damages, alleging that AKO breached the various agreements, and injunctive relief with respect to, inter alia, AKO’s refusal to deliver certain files to him.

Toren contends that Doyle was involved with the events leading to this action, because he served on AKO’s Executive Committee most, if not all, of the years plaintiff was “of counsel” to the firm, because Toren and Doyle discussed AKO’s alleged continuing breaches of the Agreement, and because Doyle negotiated and signed the September 1999 Agreement for AKO, and later acknowledged AKO’s breach of that Agreement. Plaintiff argues that Doyle must be disqualified pursuant to DR 5-102 (a) and (c), because AKO should call Doyle as a witness, and pursuant to DR 5-102 (b) and (d), because Toren may call Doyle as a witness, and Doyle’s testimony is likely to be prejudicial to AKO.

Doyle disputes plaintiffs factual assertions. According to Doyle, he left the Executive Committee in February 1999, and he never discussed AKO’s alleged breaches with Toren until October 1999. Doyle claims that, until October 1999, he had no firsthand knowledge about the dispute between Toren and AKO. Doyle admits that, in mid-September 1999, Jeffrey L. Glatzer, the Executive Committee’s chairman, asked him to speak with Toren’s representative to obtain checks from AKO clients that Toren held, and that those discussions resulted in the September 1999 Agreement. Doyle acknowledges that AKO has not paid Toren pursuant to the September 1999 Agreement, but states that he had no involvement in AKO’s decision not to pay. Doyle also admits that he met with Toren in [26]*26November 1999, but states that the meeting was irrelevant to this litigation. Finally, Doyle claims that, if plaintiff called Doyle as a witness, Doyle’s testimony would not be prejudicial to AKO; rather, Doyle’s testimony would be consistent with AKO’s defenses and counterclaims.

In an affidavit, Glatzer states that AKO intends to proceed pro se in this matter, and confirms that Doyle did not participate in AKO’s decision not to pay plaintiff. Glatzer further states that Doyle has no personal or unique knowledge of any issues in the case, and that other AKO personnel, many of whom are no longer with the firm, dealt with plaintiff regarding Toren’s compensation.

AKO also argues that, because it intends to appear pro se, DR 5-102 does not apply, and that plaintiff has not established either that Doyle’s testimony is necessary, or that his projected testimony would be adverse to AKO’s interests.

Self-Representation By Anderson, Kill & Olick, P. C.

The threshold issue is whether AKO can be represented by its member attorneys, although they cannot be held personally liable in this action. CPLR 321 (a) provides that “[a] party * * * may prosecute or defend a civil action in person or by attorney, except that a corporation * * * shall appear by attorney.” The reason is that corporations cannot act “in person,” because corporations are fictional persons with limited liability, which are created by law (see, Matter of Sharon B., 72 NY2d 394, 398 [1988]), and unlike natural persons, corporations can only act through agents (see, Oliner v Mid-Town Promoters, 2 NY2d 63, 64 [1956]). To act in court proceedings, corporations are required under CPLR 321 (a) to appear by licensed attorneys who the court and other parties can hold accountable. (See, Matter of Sharon B., 72 NY2d, at 398.) Corporations can use outside counsel or staff counsel for appearances. (Supra.)

A professional corporation of attorneys can appear by its member lawyers. (See, Austrian, Lance & Stewart v Hastings Props., 87 Misc 2d 25, 26 [Sup Ct, NY County 1976]; cf., Gil-berg v Lennon, 212 AD2d 662, 664 [2d Dept 1995] [holding that a partnership of attorneys can appear pro se, citing Austrian with approval, and stating as dictum that CPLR 321 (a) is inapplicable to professional corporations of attorneys].) In Austrian, the plaintiff, a professional corporation of attorneys, moved for summary judgment upon a promissory note. Defendant objected to plaintiff appearing pro se, but the court permitted plaintiff to represent itself. (See, Austrian, Lance & Stew[27]*27art v Hastings Props., 87 Misc 2d, at 26.) The court noted that “[t]he reason corporations are required to act through attorneys is that a corporation is a hydra-headed entity and its shareholders are insulated from personal responsibility. There must therefore be a designated spokesman accountable to the court. This reasoning does not apply in the case of a professional corporation where personal liability attaches and each member (in this case a law firm) is qualified to appear before the court and argue its case.” (Supra, at 26.) Here, each of AKO’s members is a licensed and accountable officer of the court, with authority to appear before it. Accordingly, the rationale for barring corporations from appearing pro se, namely that nonlawyer agents are not accountable to the court, is inapplicable to the members of AKO.

Plaintiff cites We’re Assocs. Co. v Cohen, Stracher & Bloom

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Bluebook (online)
185 Misc. 2d 23, 710 N.Y.S.2d 799, 2000 N.Y. Misc. LEXIS 225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/toren-v-anderson-kill-olick-p-c-nysupct-2000.