DISQUALIFICATION OF COUNSEL

Deerin v Ocean Rich Foods, LLC, 2018 NY Slip Op 00820, Decided on February 7, 2018, Appellate Division, Second Department:

""A party seeking disqualification of its adversary's counsel based on counsel's purported prior representation of that party must establish (1) the existence of a prior attorney-client relationship between the moving party and opposing counsel, (2) that the matters involved in both representations are substantially related, and (3) that the interests of the present client and former client are materially adverse" (Gjoni v Swan Club, Inc., 134 AD3d 896, 897 [internal quotation marks omitted]; see Tekni-Plex, Inc. v Meyer & Landis, 89 NY2d 123, 131; Sharifi-Nistanak v Coccia, 119 AD3d 765). "A party's entitlement to be represented in ongoing litigation by counsel of his or her own choosing is a valued right which should not be abridged absent a clear showing that disqualification is warranted" (Kelleher v Adams, 148 AD3d 692, 692 [internal quotation marks omitted]; see Matter of Rovner v Rantzer, 145 AD3d 1016; Lipschitz v Stein, 65 AD3d 573, 576; Gulino v Gulino, 35 AD3d 812). "The party seeking to disqualify a law firm or an attorney bears the burden to show sufficient proof to warrant such a determination" (Kelleher v Adams, 148 AD3d at 692-693 [internal quotation marks omitted]; see Matter of Rovner v Rantzer, 145 AD3d at 1016; Lipschitz v Stein, 65 AD3d at 576; Gulino v Gulino, 35 AD3d at 812). However, doubts as to the existence of a conflict of interest are resolved in favor of disqualification in order to avoid even the appearance of impropriety (see Gjoni v Swan Club, Inc., 134 AD3d at 897; Matter of Fleet v Pulsar Constr. Corp., 143 AD2d 187, 188).

"One who has served as attorney for a corporation may not represent an individual shareholder in a case in which his interests are adverse to other shareholders'" (Morris v Morris, 306 AD2d 449, 452, quoting Matter of Greenberg [Madison Cabinet & Interiors], 206 AD2d 963, 965; see Gordon v Ifeanyichukwu Chuba Orakwue Obiakor, 117 AD3d 681, 683). Here, the plaintiff alleged in an affidavit that the defendants' counsel was involved in the formation of Ocean Rich, and the defendants' counsel admitted that he had represented Ocean Rich in "various past matters." Counsel's prior representation of Ocean Rich "was in fact represent[ation of] its [three] shareholders," whose competing interests are at issue in this action (Matter of Fleet v Pulsar Constr. [*3]Corp., 143 AD2d at 189). Likewise, counsel's involvement in the formation of Ocean Rich and his representation of it against third parties was "substantially related" to the present action (Gjoni v Swan Club, Inc., 134 AD3d at 897 [internal quotation marks omitted]; see Tekni-Plex, Inc. v Meyer & Landis, 89 NY2d at 131; Sharifi-Nistanak v Coccia, 119 AD3d at 765). Since the defendants' counsel was "in a position to receive relevant confidences" from the decedent, whose estate's interests "are now adverse to the defendant[s'] interests," the Supreme Court should have granted that branch of the plaintiff's cross motion which was to disqualify the defendants' counsel (Gordon v Ifeanyichukwu Chuba Orakwue Obiakor, 117 AD3d at 683; see Tekni-Plex, Inc. v Meyer & Landis, 89 NY2d at 131; Gjoni v Swan Club, Inc., 134 AD3d at 897; Sharifi-Nistanak v Coccia, 119 AD3d at 765)."