Opinion 25-130

September 10, 2025

Digest: A judge who receives an insurance reserve balance payment from the judge’s former law firm is disqualified for two years from all cases involving the firm.  The two-year period commences from the date of payment.  The disqualification is subject to remittal.

Rules:   Judiciary Law § 14; 22 NYCRR 100.2; 100.2(A); 100.3(E)(1); 100.3(E)(1)(b)(ii); 100.3(E)(1)(c); 100.3(F); Opinions 21-22(A); 21-17; 16-38; 16-24; 11-21.

Opinion:

          The inquiring full-time judge was previously an equity partner at a law firm.  After taking the bench, the judge sought to terminate his/her financial connections to the firm, including any retirement or pension benefits.  However, the judge recently received a separate payment from the law firm for a return of the judge’s “insurance reserve balance.”  The law firm characterized the reserve as “a sort of escrow account” maintained to cover claims that might be brought against the firm.  Thus, “[p]artners contribute through deductions from distributed income, and any balance is returned at a later time following a partner’s departure.”  The judge asks if he/she must “recuse from all cases involving the firm for a two-year period after receipt of the insurance reserve balance payment.”

          A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act in a manner that promotes public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]).  A judge must disqualify in any proceeding where the judge’s impartiality “might reasonably be questioned” (22 NYCRR 100.3[E][1]), including where required by rule or law (see e.g. Judiciary Law § 14).  For example, disqualification is required when the judge knows that he/she has an economic or other interest that could be substantially affected by the proceeding (see 22 NYCRR 100.3[E][1][c]) or that a lawyer with whom the judge previously practiced law served during such association as a lawyer concerning the matter (see 22 NYCRR 100.3[E][1][b][ii]).

          In Opinion 16-24, we advised that a judge must disclose the ongoing relationship when an attorney appearing before the judge is holding money in escrow for the judge.  If the escrow funds are released without controversy, the disclosure obligation ends when the escrow arrangement terminates (id.).  Significantly, the facts in Opinion 16-24 involved attorneys holding funds for a judge in connection with discrete real estate transactions or rental arrangements, rather than in connection with the unwinding of the “significant financial and business relationships” typical of former “law firm colleagues” (id.).

          By contrast, where a judge is receiving money from a law firm in concluding a prior business relationship between them, we have said the judge is disqualified from presiding in any case involving his/her prior law firm until two years have passed after completion of the financial and business relationship (see e.g. Opinions 21-17; 16-36; 11-21, fn 2).  Here, the inquiring judge was an equity partner in the law firm, and we understand the judge previously received certain retirement and pension benefits or distributions.  In our view, the judge must now disqualify for two years from receipt of the insurance reserve balance payment.

          Assuming the judge can be fair and impartial, the disqualification is subject to remittal where feasible (see Opinion 21-17; 22 NYCRR 100.3[F]).  Remittal is a three-step process.  First, the judge must fully disclose the basis for disqualification on the record.  Second, without the judge’s participation, the parties and (if represented) their lawyers must all agree that the judge should not be disqualified.  Third, the judge must independently conclude he/she can be impartial and be willing to participate in the case.  If all three steps are satisfied, the judge may accept remittal of disqualification and must incorporate the agreement into the record of the proceeding (see Opinion 21-22[A]).

          As a reminder, it is not the parties’ burden to request the judge’s disqualification; rather, “it is the judge’s burden to disqualify him/herself at the outset, even if the parties are fully aware of the conflict and do not express any concern” (id. [citation omitted]).