Opinion
No. 2021-04780 Index No. 600362/16
05-17-2023
Arihay Kaikov, etc., appellant, v. Laser Yadgarov, et al., respondents.
Anderson, Bowman & Zalewski, PLLC, Kew Gardens, NY (Matthew J. Routh of counsel), for appellant.
Anderson, Bowman & Zalewski, PLLC, Kew Gardens, NY (Matthew J. Routh of counsel), for appellant.
MARK C. DILLON, J.P. COLLEEN D. DUFFY LINDA CHRISTOPHER JOSEPH A. ZAYAS, JJ.
DECISION & ORDER
In an action, inter alia, to recover damages for breach of fiduciary duty, the plaintiff appeals from an order of the Supreme Court, Suffolk County (John H. Rouse, J.), dated April 30, 2021. The order, insofar as appealed from, granted the motion of the defendants Eugene Khavison and Khavison & Associates, P.C., and the separate motion of the defendants Laser Yadgarov, Radion Aminov, NY Prime Holdings II, LLC, and Joseph Berov, to disqualify the plaintiff's counsel, Dustin Bowman, and the law firms with which he is associated, from representing the plaintiff in this action.
ORDERED that the order is affirmed insofar as appealed from, without costs or disbursements.
In January 2016, the plaintiff commenced the instant action seeking, inter alia, damages for breach of fiduciary duty. The plaintiff alleged that he is the managing member of the defendant NY Prime Holdings II, LLC (hereinafter NY Prime), and that the defendants caused certain real property owned by NY Prime to be sold without authority. The plaintiff alleged that the defendants Laser Yadgarov and Radion Aminov, who each owned a minority interest in NY Prime, with the plaintiff owning the majority interest, caused the subject property to be sold to the defendant Joseph Berov without authority; that at the closing, Berov reconveyed the property to the defendant Domeluca II, LLC; and that the defendants Eugene Khavison and Khavison & Associates, P.C. (hereinafter together the Khavison defendants), represented NY Prime at the closings.
In January 2021, the Khavison defendants moved to disqualify the plaintiff's counsel, Dustin Bowman, and the law firms with which he was associated, Anderson Bowman & Zalewski, PLLC, and Shiryak, Bowman, Anderson, Gill & Kadochnikov, LLP (hereinafter together the Bowman firms), from representing the plaintiff in this action. The Khavison defendants alleged that Bowman had previously represented NY Prime, the adverse members of NY Prime, Yadgarov and Aminov, and the plaintiff in a prior related action commenced by Berov, the settlement of which resulted in the transfer and sale of the subject property. The Khavison defendants contended that Bowman's prior representation created a conflict of interest, and also that Bowman would be a necessary witness in the instant trial in violation of the advocate-witness rule. In February 2021, Yadgarov, Aminov, NY Prime, and Berov (hereinafter collectively the Yadgarov defendants) also moved to disqualify Bowman and the Bowman firms from representing the plaintiff in this action.
The Supreme Court granted the separate motions of the Khavison defendants and the Yadgarov defendants. The plaintiff appeals.
"The disqualification of an attorney is a matter that rests within the sound discretion of the court" (Delaney v Roman, 175 A.D.3d 648, 649 [internal quotation marks omitted]). Although a party's entitlement to be represented in ongoing litigation by counsel of his or her own choosing is a valued right, that right "will not supersede a clear showing that disqualification is warranted" (Matter of Marvin Q., 45 A.D.3d 852, 853; see Scopin v Goolsby, 88 A.D.3d 782, 784). "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 A.D.3d 896, 897 [internal quotation marks omitted]). Any "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" (Janczewski v Janczewski, 169 A.D.3d 773, 774; see Moray v UFS Indus., Inc., 156 A.D.3d 781, 784).
"One who has served as attorney for a corporation may not represent an individual shareholder in a case in which his [or her] interests are adverse to other shareholders" (Deerin v Ocean Rich Foods, LLC, 158 A.D.3d 603, 608 [internal quotation marks omitted]). Here, Bowman represented NY Prime and its three members, the plaintiff, Yadgarov, and Aminov, in a prior action that was "substantially related" to the present action (id. at 608 [internal quotation marks omitted]; see Gordon v Ifeanyichukwu Chuba Orakwue Obiakor, 117 A.D.3d 681, 683). Bowman's prior representation of NY Prime "was in fact represent[ation of] its [three] shareholders, whose competing interests are at issue in this action" (Deerin v Ocean Rich Foods, LLC, 158 A.D.3d at 608 [internal quotation marks omitted]). Since Bowman was "in a position to receive relevant confidences" from Yadgarov and Aminov, whose interests are now adverse to the plaintiff's interests, disqualification of Bowman was proper (id. [internal quotation marks omitted]; see Gordon v Ifeanyichukwu Chuba Orakwue Obiakor, 117 A.D.3d at 683).
In addition, pursuant to rule 3.7(a) of the Rules of Professional Conduct (22 NYCRR 1200.0), unless certain exceptions apply, "[a] lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact" (see Friia v Palumbo, 89 A.D.3d 896, 896). Here, Bowman is likely to be a witness with respect to a significant issue of fact in this litigation (see id. at 896-897; Falk v Gallo, 73 A.D.3d 685, 686). Thus, Bowman also must be disqualified from representing the plaintiff pursuant to the advocate-witness rule (see Rules of Prof Conduct rule 3.7[a]; Gould v Decolator, 131 A.D.3d 448, 449-450; Lauder v Goldhamer, 122 A.D.3d 908, 910-911).
Where one attorney is disqualified due to a conflict of interest, "there is a rebuttable presumption that the entirety of the attorney's current firm must be disqualified" (Moray v UFS Indus., Inc., 156 A.D.3d at 783; see Rules of Prof Conduct rule 1.10[a]; Kassis v Teacher's Ins. & Annuity Assn., 93 N.Y.2d 611, 617). "That presumption may be rebutted by proof that any information acquired by the disqualified lawyer is unlikely to be significant or material in the [subject] litigation" and that "the law firm properly screened the disqualified lawyer from dissemination and receipt of information subject to the attorney-client privilege" (Matter of Town of Oyster Bay v 55 Motor Ave. Co., LLC, 109 A.D.3d 549, 551; see Kassis v Teacher's Ins. & Annuity Assn., 93 N.Y.2d at 617-618). Here, the plaintiff failed to present any evidence to rebut such presumption (see Kassis v Teacher's Ins. & Annuity Assn., 93 N.Y.2d at 618-619; Moray v UFS Indus., Inc., 156 A.D.3d at 783; Matter of Town of Oyster Bay v 55 Motor Ave. Co., LLC, 109 A.D.3d at 551). Therefore, the Supreme Court properly disqualified the Bowman firms.
"While courts disfavor motions to disqualify counsel that are made during or on the eve of trial," here, the parties have not yet completed discovery and are not imminently ready to proceed with trial (M.A.C. Duff, Inc. v ASMAC, LLC, 61 A.D.3d 828, 830).
Accordingly, the Supreme Court providently exercised its discretion in granting the separate motions to disqualify Bowman and the Bowman firms from representing the plaintiff in this action.
DILLON, J.P., DUFFY, CHRISTOPHER and ZAYAS, JJ., concur.