Opinion
No. 55711/2008.
2010-12-15
Heather PHILIP, Plaintiff, v. Brian PHILIP, Defendant.
Angela Barker, Esq., Of Counsel for Steven M. Bernstein, Legal Services for New York City, Brooklyn, for Plaintiff. Jawan Finley, Esq., Mallilo & Grossman, Flushing, for Defendant.
Angela Barker, Esq., Of Counsel for Steven M. Bernstein, Legal Services for New York City, Brooklyn, for Plaintiff. Jawan Finley, Esq., Mallilo & Grossman, Flushing, for Defendant.
JEFFREY S. SUNSHINE, J.
The following papers numbered 1 to 3 read on this motion:
Papers Numbered
Notice of Motion/Order to Show Cause/Petition/Cross Motion and Affidavits (Affirmations) Annexed 1, 2
Opposing Affidavits (Affirmations) 3
Reply Affidavits (Affirmations)
Affidavit (Affirmation)
Other Papers
Introduction
Plaintiff-wife seeks an order disqualifying defendant-husband's attorneys, members of the law firm of Mallilo & Grossman on the ground that Anthony Mallilo, Esq. (hereinafter referred to as Counsel) is a necessary trial witness for the wife. The wife will “probably” call Counsel to testify regarding a conversation alleged to have occurred between counsel and the husband in which Counsel allegedly discouraged the wife from filing a loss of consortium claim in connection with husband's previously settled personal injury lawsuit. The husband opposes the wife's application.
Background
In August, 1986, the parties were married. On December 12, 1998, the husband was injured in an accident. The husband represented by the law office of Mallilo & Grossman in his personal injury lawsuit, commenced an action in on December 16, 1999. No action for loss of consortium was ever filed. The matter settled on September 13, 2005, for $1,275,000.00 in accordance with the personal injury closing statement filed with the Office of Court Administration. The monies are paid out in a structured settlement into a individual account in the husband's name. On August 25, 2008, almost ten (10) years after the husband's injuries were sustained and almost nine (9) years after the commencement of the personal injury action and three (3) years after the personal injury action was settled, the wife commenced the within action for divorce. The wife seeks child support, spousal support and equitable distribution. The issues of custody and visitation were settled on the eve of trial pursuant to a stipulation.
The husband is a resident of the state of Florida. The trial in this matter was initially scheduled for February 2, 3, 4, and 5, 2010, however, the parties represented to the court that they have come to an agreement. Therefore, the trial dates were vacated upon the joint application of the parties and express representations on the record that they knew that their trial dates were to be vacated. The matter was adjourned to May 4, 2010, a date specifically chosen to allow for the completion of extensive property transfers. Although the parties represented that they had a meeting of the minds, the court was later advised that the wife was unwilling to proceed with the settlement. Shortly thereafter, the husband's lawyer was relieved as the attorney of record. Accordingly, the trial was rescheduled for July 12, 13 and 14, 2010. However, prior to the trial, the wife filed an order to show cause for pendente lite relief. On June 4, 2010, this court issued a decision and order denying the wife's application for pendente lite relief on the eve of trial. This court also vacated the ex parte injunction granted by another judge in this court's absence. This court stated in its decision dated June 4, 2010, that
[i]t appears that the ex-parte injunction has simply denied the husband access to his separate funds comprised of monies from a structured settlement from a negligence action and his social security disability benefits. Defendant alleges that he is unable to pay his bills, mortgages or even afford the air fare to travel from Florida to New York for purposes of this litigation. The defendant avers to the Court during oral argument that he even waived a stay pursuant to CPLR section 321(c) when his attorney was relieved on the record on consent by way of order to show cause because he has no assets or monies to provide for basic costs because his income is limited to social security disability and payments from the structured settlements. Even without the restraint, he avers on the record that he cannot meet his basic living obligations.
In July 2010 the husband then expressed a desire to retain counsel since the injunction was vacated. The trial dates were once again vacated and a brief adjournment was granted and the trial was rescheduled for October 25, 26, and 27, 2010. On August 11, 2010, Jawan Finley of the law firm of Mallilo & Grossman signed a notice of appearance which was served on the wife's counsel on August 23, 2010, and filed with this court on August 26, 2010. Shortly before the scheduled trial, the wife's counsel brought the instant application, further delaying the action from proceeding to trial.
The Wife Contentions
The wife concedes that she did not have a formal relationship, or even that Counsel ever conversed with her during the husband's personal injury action. Rather, she contends that she had an “informal and indirect consultation” with Counsel. On an undisclosed date at the parties' home, the wife allegedly asked the husband whether his personal injury attorney would be able to represent her involving a claim of loss of consortium arising from the husband's personal injury. That night, the wife avers that the husband contacted Counsel by telephone she heard the husband ask Counsel “can my wife file a lawsuit for loss of sex”. After the call ended, the wife contends that the husband relayed to her that Counsel advised not to file a loss of consortium claim because it would make the couple appear “greedy”. The wife further alleges that based on Counsel's statements, she decided not to pursue the loss of consortium claim. The wife now seeks to call Counsel to testify as to the veracity of these allegations.
The wife contends that Counsel must be disqualified. She avers that her possible intention to call him to testify about the conversation raises a conflict of interest, assuming said testimony would adversely affect his client's interests. Counsel would be called to testify as to a fact that might negatively impact his client, which is the failure to bring a loss of consortium claim in the personal injury action commenced in 2002. The wife further states that the entire firm of Counsel & Grossman, not just Counsel must be disqualified from this action to avoid even the appearance of impropriety.
The wife contends that she was prepared to go to trial on July 12, 2010, which was delayed due to the husband's retention of counsel. She further avers that she “... has no desire to prolong this action and the present motion is made solely in the interest of avoiding a potential conflict of interest, which would serve to further delay the proceedings.”. Lastly, the wife avers that since the husband had the funds to retain private counsel, he will have the ability to hire alternative counsel.
The Husband's Contentions
The husband contends that “[a]t no time did the law office of Mallilo & Grossman consult with, meet with or discuss any claims with Mrs. Heather Phillip ...”. The husband avers that the wife's causes of action in the verified complaint in the within matrimonial action are contrary to a loss of consortium claim. For example, the wife's complaint states that from the beginning of the marriage until the present defendant [husband] on an almost daily basis would yell and scream at the plaintiff [wife] and call her fat, ugly, that she had a big belly, refer to her as a s[* * *] cleaner, because she took a babysitting job to support the family, a b[* * * *], a whore, a butch, f [* * *] mother [* * * *], jackass and a[* *]hole.”. He further contends that the wife's verified compliant states that the husband refused to have sex with the wife as of August 20, 2007, which is approximately two (2) years after he settled his personal injury law suit. The husband avers that the alleged conversation that occurred between the husband and Counsel are protected by the attorney client privilege. Also, it was conducted in preparation of litigation thereby constituting work product. Lastly, the husband contends that the husband's personal injury settlement and likewise a loss of consortium claim, is a separate asset and therefore, not subject to equitable distribution.
Discussion
22 NYCRR 1200 Rules of Professional Conduct
In this case, the court must examine the balance between a litigant's right to choose representation and the possibility that the choice may be prejudicial to their own interests ( see 22 NYCRR 1200.29). On April 1, 2009, New York adopted the Model Rules of Professional Conduct. Rule 3.7, entitled “Lawyer as Witness” states: (a) 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 unless:
(1) the testimony relates solely to an uncontested issue;
(2) the testimony relates solely to the nature and value of legal services rendered in the matter;
(3) disqualification of the lawyer would work substantial hardship on the client;
(4) the testimony will relate solely to a matter of formality, and there is no reason to believe that substantial evidence will be offered in opposition to the testimony; or
(5) the testimony is authorized by the tribunal.
(b) A lawyer may not act as advocate before a tribunal in a matter if:
(1) another lawyer in the lawyer's firm is likely to be called as a witness on a significant issue other than on behalf of the client, and it is apparent that the testimony may be prejudicial to the client; or
(2) the lawyer is precluded from doing so by Rule 1.7 or Rule 1.9.
(22 NYCRR 120.29 [Rule 3.7] ).
Previously, New York State adhered to the Model Code of Professional Responsibility, which similarly provided that:
(B) If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm may be called as a witness other than on behalf of his client, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his client
(22 NYCRR 1200.21 [repealed 2009] ).
The public policy underlying Rule 3.7 is straightforward in attempting to avoid conflicts of interest. “[W]hen a lawyer is called to testify against the client's interest the conflict is obvious” (People v. Berroa, 99 N.Y.2d 134, 782 N.E.2d 1148, [NY, 2002] ).
The predecessor to the Professional Conduct Rule 3.7, often referred to as the “advocate-witness rule” must not, however, be applied mechanically. The Court of Appeals observed in 1987 that the rule “... provide[s] guidance, not binding authority, for courts in determining whether a party's law firm, at its adversary's instance, should be disqualified during litigation” (S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp., 69 N.Y.2d 437, 508 N.E.2d 647 [1987] ). The court further explained that among the factors to be considered before disqualifying an attorney include “... the party's valued right to choose its own counsel, and the fairness and effect in the particular factual setting of granting disqualification or continuing representation.” ( Id.).
The choice of counsel is a valued right among litigants (Hudson Val. Mar., Inc. v. Town of Cortlandt, 54 AD3d 999, 865 N.Y.S.2d 122, [2 Dept., 2008] ), enforcement of the advocate-witness rule “may be required only when it is likely that the testimony to be given by the witness is necessary” (S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp., 69 N.Y.2d 437,supra ). “A finding of necessity takes into account such factors as the significance of the matters, weight of the testimony, and availability of other evidence” ( Id.; see also, Wolfson v. Posner, 57 AD3d 979, 869 N.Y.S.2d 804, [2 Dept., 2008]; Falk v. Gallo, 73 AD3d 685, 901 N.Y.S.2d 99, [2 Dept., 2010] ). The test for disqualification is whether the attorney's testimony is, within the meaning of Rule 3.7, “necessary” and “may be prejudicial to the client”. It is possible to permit a lawyer to serve as both advocate and witness if it is clear before the event that the lawyer will not testify on an issue of fact that is “significant” or otherwise prejudicial to their client. This court is mindful that the Appellate Division, Second Department has held that “[a] party's right to be represented by an attorney of his or her own choice “... Is a valued right which should not be abridged absent a clear showing that disqualification is warranted.” (Zutler v. Drivershield Corp., 15 AD3d 397, 397, 790 N.Y.S.2d 485 [2 Dept., 2005]; see Wolfson v. Posner, 57 AD3d 979, 869 N.Y.S.2d 804 [2 Dept., 2008]; Goldstein v. Held, 52 AD3d 471, 859 N.Y.S.2d 707 [2 Dept., 2008] ).
Burden of Proof
“The party seeking to disqualify a law firm or an attorney bears the burden of demonstrating the need for disqualification ( see Gulino v. Gulino, 35 AD3d 812, 826 N.Y.S.2d 903).” (Goldman v. Goldman, 66 AD3d 641, 885 N.Y.S.2d 641 [2 Dept., 2009] ). In this case, the wife, as the moving party, has the burden of showing that Rule 3.7 would be violated if the law firm of Mallilo & Grossman were to continue in their representation of defendant ( see Luk Lamellen U. Kupplungsbau GmbH v. Lerner, 167 A.D.2d 451, 562 N.Y.S.2d 134, [2 Dept., 1990] ).
In the case at bar, disqualification is not warranted because Counsel's testimony is not necessary to the adjudication of the underlying issues in this case, that is, the parties' divorce and child support, spousal support and equitable distribution. The wife contends on page three (3) of her affidavit in support that “ANTHONY MALLILO SHOULD BE DISQUALIFIED DUE TO THE PROBABILITY THAT HE WILL BE CALLED AS A WITNESS ON AN ISSUE ADVERSE TO HIS CLIENT”
. This court notes that the wife states that she will “probably” call Counsel. Furthermore, the wife's contention that, although she did not have a formal retainer with Counsel, which this court recognizes is not a requirement for a disqualification, she concedes that she did not even have a conversation with Counsel. She contends that her husband's alleged conversation with his personal injury counsel as related to her was an indirect consultation with her.
Capitalized as in the original.
Even assuming, arguendo, that such an argument is plausible, such testimony by Counsel would not be prejudicial to counsel's client. The husband was injured in 1999, his personal injury action was commenced in 1999 and settled in 2005; this divorce again was commenced in 2008. Clearly, such a decision to not bring a loss of consortium claim was not made in contemplation of this divorce litigation.
In New York a couple's economic decisions made during the marriage, that is, “before either party is anticipating the end of the marriage” and constrained to situations where “there is no fraud or concealment”, shall be respected by the courts ( see Mahoney–Buntzman v. Buntzman, 12 NY3d 415, 909 N.E.2d 62, [2009];see also Johnson v. Chapin, 12 NY3d 461, 909 N.E.2d 66, [2009] ). “Courts should not second-guess the economic decisions made during the course of a marriage, but rather should equitably distribute the assets and obligations remaining once the relationship is at an end.” ( Id.). In the case at bar, the disqualification is sought based upon an alleged advice given approximately nine (9) years prior to that cause of action for divorce by a lawyer to his own client and then relayed to another. The wife could have consulted her own counsel. Clearly, this was an economic decision not made in contemplation of divorce.
The Domestic Relations Law clearly states that a personal injury settlement is separate property (see DRL 236(B)(1)(d)). The statute provides “[t]he term separate property shall mean: (2) compensation for personal injuries”. It has further been determined that both the economic and non-economic portions of personal injury compensation are separate property (Howe v. Howe, 68 AD3d 38, 886 N.Y.S.2d 722, [2 Dept., 2009] ).
A loss of consortium cause of action must be plead prior to settlement of the underlying claim. “Where there is a cause of action brought by the injured husband pending, the wife's consortium action, if not time-barred, should be joined with her husband's claim. Where, however, the husband's cause of action has been terminated either by judgment, settlement or otherwise, that should operate to bar the wife's cause of action for consortium.” (Buckley v. National Freight, 90 N.Y.2d 210, 681 N.E.2d 1287, [1997],citing Millington v. Southeastern Elevator Co., 22 N.Y.2d 498, 239 N.E.2d 897, [1968] ). “[I]f the impaired spouse has begun an action for bodily harm, and then settled it and given a release, and the deprived spouse has stood by throughout with full knowledge of the conduct, it has been possible to join in the action at any time before it has become barred by the release, and the deprived spouse cannot now be permitted to maintain a separate action.” ( Id.). Here, wife had over five years in which to file a loss of consortium claim, but failed to do so. Even if this court where to reach the question of the validity of a loss of consortium claim on the merits in this matrimonial action, it must be noted that the wife's verified compliant states that the parties ceased having sexual relations on or about August 20, 2007; the personal injury action settled in 2005 and the claim would constitute separate property of the wife not subject to equitable distribution ( seeDomestic Relations Law § 236[B][1][d][2]; see also Richmond v. Richmond, 144 A.D.2d 549, 534 N.Y.S.2d 413 [2 Dept.,1988]; Miceli v. Miceli, 911 N.Y.S.2d 473, 2010 WL 4792669 [2 Dept.,2010] ).
It is noted that the husband states that Counsel was his attorney for the personal injury action. In the case at bar, Jawan Finley an associate of the law firm of Mallilo & Grossman represents the husband. Even if Counsel were disqualified, the Rules permit a law firm to continue representation of a client even if one attorney in the firm is required to testify ( see Kaplan v. Maytex Mills, Inc., 187 A.D.2d 565, 590 N.Y.S.2d 136, [2 Dept., 1992]; see also Talvy v. American Red Cross in Greater New York, 205 A.D.2d 143, 618 N.Y.S.2d 25 [1 Dept.,1994]; Davin v. JMAM, LLC, 27 AD3d 371, 812 N.Y.S.2d 494 [1 Dept.,2006] [“Disqualification of plaintiff's law firm for violation of the advocate-witness rule (DR 5–102 [22 NYCRR § 1200.21(a) ] ) was properly denied in the absence of a showing that the testimony of plaintiff's attorneys would be necessary [citations omitted]. Moreover, even if testimony from some of plaintiff's attorneys were necessary, disqualification of the entire law firm would not therefore be warranted [citations omitted]”).
Accordingly, the wife's conclusory assertion that there is a conflict based upon her indirect consultation and that she will “probably” call Counsel is simply not a basis to deprive the husband of counsel of his choosing ( see Hall Dickler Kent Goldstein & Wood, LLP v. McCormick, 36 AD3d 758, 830 N.Y.S.2d 195 [2 Dept.,2007] [“The defendant's conclusory assertions and speculation as to the existence of a conflict of interest were insufficient to meet her burden of demonstrating that the disqualification of counsel was warranted.”] ). Although the disqualification of an attorney is a matter which rests with the sound discretion of the trial court ( see Boyd v. Trent, 287 A.D.2d 475, 476, 731 N.Y.S.2d 209), a party's entitlement to be represented in ongoing litigation by counsel of his own choosing is a valued right which should not be abridged absent a clear showing that disqualification is warranted [citations omitted]” (Bentz v. Bentz, 37 AD3d 386, 831 N.Y.S.2d 423 [2 Dept.,2007] ).
In the instant case, this court find no basis in the record which warrants the disqualification of the husband's counsel. His decision to retain the law firm of Mallilo & Grossman should not be abridged under the circumstances presented. Rather, it is apparent that the wife has used tactics to prevent this matter coming to a conclusion. She represented to this court that there was a settlement and then withdrew, as is her right prior to the execution of an agreement. Thereafter, the husband's separate assets were enjoined, denying him the ability to pay for his daily living expenses, let alone try to retain private counsel; and now on the eve of trial the motion to disqualify.
This matter will come to an end. The trial on all economic issues is referred to JHO Harkavy pursuant to Article 29, of the Judiciary Law, and in accordance with the provisions of Part 122 of the Rules of the Chief Administrator of the Courts (22 NYCRR 122). Counsel shall appear on December 20, 2010, in Part 5G at 9:30 a.m. for the limited purpose of completing a referral order to the JHO, including counsels determination on whether the matter is “hear and determine” or “hear and report” and the selection of trial dates.
The court notes that, although not persuasive for a motion to disqualify, the husband's counsel represented that they took a reduced retainer due to their prior relationship with the husband and his limited funds.
This shall constitute the decision and order of the Court.