A state appeals court Thursday ruled that Mark Zauderer, the court-appointed referee overseeing the combative breakup of Napoli Bern, was correct not to recuse himself last year after a former leader of the law firm argued he was conflicted.

An Appellate Division, First Department, panel wrote in a short opinion that Zauderer “did not abuse his discretion in finding that his impartiality would not be reasonably questioned such that he should recuse himself from this matter.”

Former firm leader Marc Bern is pitted against fellow former leader Paul Napoli in the personal injury firm's long-running wind-down and breakup. Bern had argued that Zauderer had a conflict and should step down because he had briefly represented Quinn Emanuel Urquhart & Sullivan, a firm that would come to represent Napoli.

Specifically, Zauderer had entered an appearance for Quinn Emanuel in an unrelated dispute that involves former Quinn partners who spun off to form the law firm Selendy & Gay.

Then in June 2018, a current Quinn Emanuel partner, Luke Nikas, wrote to Zauderer to say he would again be representing Paul Napoli in the Napoli Bern wind-down and breakup matter.

Shortly after that, and realizing there could be a conflict, Zauderer withdrew from his representation of Quinn Emanuel in the Selendy & Gay case.

In denying Bern's disqualification bid last year, Zauderer said—among other reasons he gave—that in light of him dropping the Quinn Emanuel case, there was no conflict that would affect his role in deciding disputes between Napoli and Bern.

He also noted that while Nikas was now at Quinn Emanuel, he had no involvement with the Selendy & Gay dispute and had never had discussions with Zauderer about that matter or the Napoli Bern matter.

In affirming Zauderer's denial of Bern's motion to disqualify him, a unanimous First Department panel on Thursday wrote that Zauderer “notified the parties that he was withdrawing as counsel for a law firm in an unrelated matter 'effective immediately' before plaintiff's [Bern's] new counsel, an attorney at said firm, even filed his notice of appearance.”

The panel added that Bern “points to no credible evidence, such as adverse rulings or other actions evidencing the alleged judicial bias.”

“Furthermore,” the panel wrote, “as part of the settlement agreement naming Zauderer, an attorney with an active private practice, as referee in this action winding up the parties' legacy firm, the parties explicitly agreed to waive any such conflict.”

The panel was composed of Justices Dianne Renwick, Sallie Manzanet-Daniels, Marcy Kahn and Peter Moulton.

Bern's lawyer, Clifford Robert of Robert & Robert, said in an email on Thursday that “Mr. Bern remains focused on zealously representing his clients and looks forward to completing the wind down of the legacy firm.”

Nikas, who remains Napoli's lawyer, said in an email that he and his client are “pleased with this victory and look forward to our upcoming trial.”