Moray v. UFS Indus., Inc.

Citations: 2017 NY Slip Op 8822; 156 A.D.3d 781; 67 N.Y.S.3d 256Docket: 2016-00543

Court: Appellate Division of the Supreme Court of the State of New York; December 19, 2017; New York; State Appellate Court

Original Court Document: View Document

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In Moray v UFS Industries, Inc., the Appellate Division of the Supreme Court of New York, Second Department, addressed two appeals concerning the disqualification of attorney Rocco F. D'Agostino as counsel for the plaintiffs in two breach of contract actions involving UFS Industries, Inc. The Supreme Court of Westchester County had previously denied motions by UFS Industries and Baldwin Endico Realty Associates, Inc. to disqualify D'Agostino based on his employment of paralegal James Monteleon, who had prior connections to the defendant's affairs. 

The appellate court reversed the lower court's orders, stating that the prior disqualification of D'Agostino in a related Bronx County case—due to Monteleon's involvement—was sufficient to warrant disqualification in the current Westchester County actions. The court concluded that the substantial impropriety associated with Monteleon's prior employment and his significant participation in the defendants' matters justified the disqualification of D'Agostino as counsel in both actions. The decision included an order for costs to the appellants.

To disqualify an attorney or law firm due to a conflict of interest, the moving party must establish three key factors: (1) a prior attorney-client relationship with the opposing counsel, (2) substantial relation between the matters involved in both representations, and (3) materially adverse interests between the current and former clients. If these factors are proven, an irrebuttable presumption of disqualification arises. In this case, the defendants successfully established that Monteleon, a paralegal and later an associate of D'Agostino, is irrebuttably presumed disqualified from representing the plaintiffs due to his prior employment. 

When one attorney is disqualified for acquiring confidential information, a rebuttable presumption of disqualification applies to their entire firm unless it is shown that the attorney did not have access to confidential information. The plaintiffs failed to rebut the presumption against D'Agostino, as they did not demonstrate that Monteleon lacked the opportunity to acquire confidential information or that any such information would not be significant in the litigation. Furthermore, the plaintiffs did not implement a 'Chinese wall' to isolate Monteleon from the case. It is sufficient that there is a reasonable probability of disclosure of confidential information, which was present given Monteleon's significant involvement in the defendants' affairs and his role alongside D'Agostino. Even if the irrebuttable presumption did not apply to Monteleon, disqualification of D'Agostino is still justified based on the specific circumstances. Any doubts regarding conflicts of interest favor disqualification.

Disqualification of an attorney may be necessary not only in cases of actual conflict of interest but also to prevent any appearance of impropriety. Attorneys must avoid situations that could lead to conflicting interests, intentionally or inadvertently affecting their professional obligations. In the case involving Monteleon, his prior employment and current involvement with the plaintiffs' attorney against UFS and Baldwin Endico creates an appearance of conflicting interests. Even if Monteleon has not acquired significant client confidences, this does not negate the necessity for disqualification of D'Agostino due to the appearance of impropriety. To mitigate such appearances, firms must implement adequate screening measures to ensure that disqualified attorneys do not participate in relevant representations. The absence of such measures in this case justifies D'Agostino's disqualification as plaintiffs' counsel.