Plaintiff HRH Construction LLC (HRH) moves to disqualify the law firm of Delbello Donnellan Weingarten Tartaglia Wise & Wiederkehr (DDWTWW) as counsel for defendants Peter Palazzo and Paul Slaney, because DDWTWW represents plaintiff in ongoing litigation in Westchester County, ADCO Electrical Corp. v HRH Construction LLC (Sup Ct, Westchester County, Index No. 1126/05)(the ADCO case), in which ADCO seeks payment for electrical materials and labor allegedly provided to HRH and its co-defendants.

In this action, HRH is suing Peter Palazzo, former HRH Vice President and Project Executive, and Paul Slaney, former HRH Vice President, General Counsel and Secretary for breach of fiduciary duty, usurpation of corporate opportunity, conversion and fraud.

Counsel for plaintiff state that they first learned, on November 29, 2006, that DDWTWW represents HRH in the ADCO litigation. Counsel for plaintiff then contacted Brian T. Belowich, Esq., an associate with DDWTWW, requesting that the firm withdraw as counsel, but the request was rejected. According to counsel for plaintiff, in response to a request for document production, DDWTWW produced documents related to discovery in the ADCO litigation, indicating that when DDWTWW was arguing in this litigation that defendants did not breach their duty to HRH, they [*2]were presenting a witness in that litigation whose testimony actually supports HRH's position in this litigation.

Counsel for plaintiff argue that because of the simultaneous representation of HRH, in the ADCO litigation, and defendants, in this litigation, the firm is in a conflict of interest situation and must be disqualified as counsel.

In opposition to plaintiff's motion, Mr. Belowich of DDWTWW states that he is representing defendants in this action on behalf of DDWTWW and that one of his partners, Patrick Reilly, Esq., is representing HRH in the ADCO litigation. Belowich further states that he has not received information from, nor given information to, Mr. Reilly regarding HRH and that therefore there is "no conflict in loyalties or diminution in the vigor of Mr. Reilly's representation of HRH" in the ADCO litigation. Belowich Affidavit, ¶ 30. Though providing no basis for his statement, Belowich asserts that it is his "understanding" that HRH knew about the "conflict" since the inception of this litigation in March 2006. Id., ¶ 16. Furthermore, defendants contend that the ADCO litigation against HRH is nearing completion and, therefore, the situation will soon be one of prior, rather than simultaneous representation.

Citing Springer v Fensterstock & Partners, LLP (11 Misc 3d 1057(A), 815 NYS2d 496, 2006 WL 462270, *3 [Sup Ct, NY County, Feb. 24, 2006]), defendants contend that HRH has failed to satisfy the requisite "high burden" of showing that defendants should be deprived of counsel of their choice and that disqualification is warranted. Finally, defendants contend that this motion is merely an attempt by plaintiff to divert the court from the plaintiff's failure and refusal to comply with defendants' discovery requests relating to HRH's financial documents.

In response, Janine Getler, Esq., general counsel for HRH, states that, on November 30, 2007,^[FN1] she was informed for the first time by Holly Shrader, Esq., one of the attorneys for plaintiff, that DDWTWW represents HRH in the ADCO case. She further states that she was concerned that DDWTWW might have learned information about HRH in the ADCO case that could be used to HRH's disadvantage in this case, and that DDWTWW would not zealously represent HRH in the ADCO case because it represented defendants here. Getler states that she discussed her concerns with the HRH principals and they decided to file this motion to disqualify. She further states that the disqualification motion is unrelated to the dispute over document production, and that she has informed the court, through counsel, that HRH will produce the requested financial documents.

Finally, plaintiff has recently submitted a recent decision in ADCO, denying HRH's motion for summary judgment; therefore, that case is apparently not nearing completion, as defendants assumed. See ADCO Electrical Corp. v HRH Construction, LLC, supra (March 28, 2007, Giacomo, J.).

Disciplinary Rule 5-105 (A)(22 NYCRR 1200.24) governing conflict of interest due to simultaneous representation states:

A lawyer shall decline proffered employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under [DR [*3]5-105 (C)].

Pursuant to subdivision (C),

... a lawyer may represent multiple clients if a disinterested lawyer would believe that the lawyer can competently represent the interest of each and if each consents to the representation after full disclosure of the implications of the simultaneous representation and the advantages and the risks involved(emphasis supplied).

Furthermore, pursuant to subsection (D) of the rule, lawyers

in a law firm may not "knowingly accept or continue employment when any of them practicing alone would be prohibited from doing so" under DR 5-105 (A). Law firms are required, pursuant to subsection (E) to keep records of prior engagements and to have a system by which proposed engagements are checked against current and previous engagements in order to comply with subsection (D).

Finally, Disciplinary Rule 9-101 (22 NYCRR 1200.45) mandates that attorneys avoid even the appearance of impropriety.

"A lawyer's duty to his client is that of a fiduciary or trustee," and his or her client is "entitled to feel that at least until that litigation [is] at an end, it [has the attorney's] undivided loyalty as its advocate." Cinema 5, Ltd. v Cinerama, Inc., 528 F2d 1384, 1386 (2d Cir 1976). Where, as here, a law firm simultaneously represents opposing parties in different lawsuits and " the relationship [between attorney and client] is a continuing one, adverse representation is prima facie improper . . . and the attorney must be prepared to show, at the very least, that there will be no actual or apparent conflict in loyalties or diminution in the vigor of his representation.'" Aerojet Properties, Inc. v State of New York, 138 AD2d 39, 41 (3d Dept 1988)(emphasis in original), quoting Cinema 5, Ltd. v Cinerama, Inc., 528 F2d at 1387; see also MSKCT Trust v Paraneck Enterprises, Inc., 296 AD2d 769 (3d Dept 2002). According to the Court in Cinema 5, the burden of showing that there will be no diminution of representation is a "heavy burden." Cinema 5, Ltd. v Cinerama, Inc., 528 F2d at 1387. Thus, where the representation of opposing parties is simultaneous, the burden of justifying the simultaneous representation rests on the attorney seeking to maintain the situation, rather than on the proponent of disqualification, as defendants contend. This is in contrast with motions to disqualify based on prior representation or the witness-advocate rule, where the representation is not prima facie improper, and the burden is on the proponent of disqualification. See e.g. Springer v Fensterstock & Partners, LLP, 11 Misc 3d 1057(A), supra. Here, the question is whether counsel for defendants have met their burden.Belowich, the DDWTWW attorney representing defendants, states that he has not been involved in the ADCO litigation, and has not received, nor given information to HRH's attorney in that litigation. However, Belowich has neither provided information regarding the size and structure of the firm, nor indicated what specific measures have been taken in the past and will be taken in the future to insure that a conflict does not arise in the future.

Moreover, although multiple representation may be permissible where, after full disclosure of the risks of such representation, the attorney has obtained the consent of both parties, here there is no indication that disclosure was made and consent obtained. Although HRH may well have been sloppy about keeping track of the attorneys that represented the company in different cases, a client [*4]has no fiduciary duty to be vigilant about the identity of its attorneys. In contrast, given the mandates of DR 5-105 and DR 9-101, attorneys have a responsibility to " avoid not only the fact, but even the appearance, of representing conflicting interests'" (Cinema 5 Ltd. v Cinerama, Inc., 528 F2d at 1387 [citation omitted]), and to insure that they have not undertaken simultaneous representation without disclosing the existence of that representation and obtaining consent of both clients. Unfortunately, counsel for defendants have failed to do so here.

Accordingly, it is hereby

ORDERED that plaintiff's motion to disqualify is granted.

Dated: May 4, 2007

ENTER:

_______________________

J.S.C.