DECISION & ORDER The Papers numbered 1 Through 24 In NYSCEF were considered in connection with this motion by Defendant Castle Kids Bedrooms, LLC (“Castle”), pursuant to Rule 1.9(a) of Part 1200 of the Rules of Professional Conduct, disqualifying the law firm of Kurzman Eisenberg Corbin & Lever, LLP (“Kurzman”) from continuing to represent Plaintiff Crib & Teen Expo New York, LLC (“Crib”) in this action. Crib cross-moves for sanctions. FACTS In or about January 2, 2020, Castle retained Kurzman to represent it in a holdover proceeding which had been commenced against both Castle and Crib in the Town of Greenburgh Justice Court (the “Summary Proceeding”). The Summary Proceeding related to premises located at 183 South Central Avenue, Hartsdale, New York (“the subject premises”); Crib was the lessee, and Castle its sublessor. After a period of representing both Crib and Castle, including filing an Answer, Kurzman was substituted out of that action as counsel for Castle by another law firm. The Summary Proceeding is still pending. The Answer in the Summary Proceeding reflects that Crib’s and Castle’s right to continued occupancy of the subject premises under a lease was at issue. The Answer also raised legal and factual issues related to the parties’ sublease. In the instant action, Crib, now represented by Kurzman, seeks monetary damages from Castle, Kurzman’s former client (“the instant action”). In the instant action, Crib alleges that Castle breached the same sublease. CONTENTIONS OF THE PARTIES Castle asserts that the instant action and the Summary Proceeding are substantially related since both involve the parties’ tenancy at the subject premises. Castle also argues that Kurzman’s representation of Crib in the instant action is “materially adverse” to the interests of Castle, a former client, because Crib seeks damages against Castle for breach of the sublease. Castle adds that it has never consented to Kurzman representing Crib in the instant action. While Castle concedes that the retainer agreement in the Summary Proceeding permits Kurzman to continue to represent Crib and to cease representing Castle if Kurzman perceived an actual or apparent conflict between the parties, Castle argues that they never explicitly consented to Kurzman’s representing Crib in a future action in which Crib seeks monetary damages against Castle. Crib opposes the motion, arguing that the retainer agreement explicitly ruled out disqualification of Kurzman from representing Crib in that or any future proceeding. Crib also asserts that Castle has failed to allege any prejudice from Kurzman’s continued representation of Crib in the instant matter. In support of its cross-motion for sanctions, Crib argues that the issue of disqualifying Kurzman was raised in the Summary Proceeding and was summarily denied by the Town of Greenburgh Justice Court. Consequently, Crib asserts that the only purpose of the instant motion to disqualify is to delay these proceedings. In Reply, Castle argues that Crib has failed to rebut its assertions that disqualification is required by the Rules of Professional Conduct, particularly for lack of a written waiver of the conflict. In addition, Castle asserts that no motion to disqualify was ever made or ruled on in the Town of Greenburgh Justice Court. DISCUSSION “The basis of a disqualification motion is an allegation of a breach of a fiduciary duty owed by an attorney to a current or former client.” Rowley v. Waterfront Airways, 113 AD2d 926, 927 (2d Dept 1985). Courts addressing such issues must be cautious because “[d]isqualification denies a party’s right to representation by the attorney of its choice.” S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp., 69 NY2d 437, 443 (1987). Ss the Court of Appeals has advised, the “significant competing interests inherent in attorney disqualification cases” militates against “mechanical application of blanket rules” in favor of a “careful appraisal of the interests involved.” Tekni-Plex, Inc. v. Meyner & Landis, 89 NY2d 123, 131 (1996). A party’s right to counsel of choice, even in a criminal prosecution, is not absolute. Wheat v. United States, 486 US 153 (1988). Thus, a trial court, in exercising its sound discretion, may disqualify counsel merely for a potential conflict of interest. People v. Carncross, 14 NY3d 319 (2010); People v. Macerola, 47 NY2d 257 (1979). 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.” Matter of Janczewski v. Janczewski, 169 AD3d 795, 797 (2d Dept 2019); People v. Addimando, 197 AD3d 106 (2d Dept 2021). In support of its motion, Castle cites 22 NYCRR 1200.0, Rule 1.9(a). This rule provides A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing. Where the Rules of Professional Conduct are invoked in litigation, courts “are not constrained to read the rules literally or effectuate the intent of the drafters, but look to the rules as guidelines to be applied with due regard for the broad range of interests at stake.” Niesig v. Team I, 76 NY2d 363, 369-370 (1990). It is the Supreme Court’s responsibility to balance the competing interests, as “disqualification of an attorney is a matter that rests within the sound discretion of the Supreme Court.” Falk v. Gallo, 73 AD3d 685 (2d Dept 2010). “The party seeking to disqualify a law firm or an attorney bears the burden to show sufficient proof to warrant such a determination.” Lipschitz v. Stein, 65 AD3d 573, 576 (2d Dept 2009) citing Gulino v. Gulino, 35 AD3d 812 (2d Dept 2006). Here, Castle asserts that it had a prior attorney-client relationship with Kurzman, that the interests of the present client (Crib) are materially adverse to that of the former client (Castle); and that there was no express written waiver of the conflict. In opposing the motion, Crib concedes the existence of the prior attorney-client relationship but ignores the substantial similarity between the prior and current representation. Crib, through Kurzman, also denies that any confidential information was passed from Castle to counsel during the prior representation. Besides conceding that Kurzman had a prior attorney-client relationship with Castle, Crib fails to address Castle’s assertion that the interests of the present client are materially adverse to that of the former. Consequently, that issue is deemed conceded. Instead, Crib argues that the two matters (the Summary Proceeding and the instant matter} are not substantially related. It asserts that the Summary Proceeding relates to a holdover action where Castle and Crib are co-Respondents while the instant action involves Crib seeking damages from Castle, as a sublessor, for unpaid rent. Crib’s argument has no merit. Both actions relate to the same premises. In the instant action, Crib seeks damages for non-payment of rent in those premises. In the Summary Proceeding, Crib and Castle are co-Respondents in connection with allegations of holdover. Moreover, in the Summary Proceeding, Kurzman interposed a single Answer on behalf of both. The court finds that the two matters are “substantially related.” 22 NYCRR 1200.0, Rule 1.9(a). And, under the circumstances, the parties’ interests are “materially adverse.” Id. Crib further asserts that the motion to disqualify must be denied because, in the Summary Proceeding, Castle executed a written conflict waiver. This argument has no merit. In a retainer agreement entitled “Re: Crib & Teen City Expo New York, LLC and Castle Kids Bedroom, LLC adv. Central 183 LLC,” the following provision appears: We will act as counsel for Castle Kids in the defense of the pending holdover proceeding. Our fees for the services rendered in connection with this matter shall be paid by Crib & Teen City. Should there come a time when there is an actual or apparent conflict between Castle Kids and Crib & Teen City, we reserve the right to terminate our representation of Castle Kids, while continuing to represent Crib & Teen City. Clearly, and entirely contrary to Crib’s argument, the retainer related solely to the Summary Proceeding and not to any other matter. In addition, the retainer does not even suggest that Castle waived an attorney conflict. To the contrary, the retainer merely provides that Kurzman could withdraw, at its own discretion, from representing Castle while continuing to represent Crib. In sum, as Castle properly argues, there was no explicit written waiver of any conflict. Ironically, in the Summary Proceeding, Kurzman moved to be relieved from representing Castle due to conflict. Consequently, the motion to disqualify will not be denied due to a written conflict waiver. Crib also asserts that the motion to disqualify must be denied simply because Castle did not pass any confidential information to Kurzman. Pursuant to Rule 1.9(a), however, that fact, even if true, is irrelevant. Finally, Crib argues that application of the doctrine of res judicata compels the court to deny disqualification. “The well-worn definition of res judicata is that it prohibits re-litigation of a matter when an earlier action disposed of the same transaction or series of transactions, involving the same parties, and there was a full and fair opportunity for the parties to be heard in the prior forum.” Hon. Mark C. Dillon, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR §3211(citations omitted). In support, Crib asserts that a judge of the Town of Greenburgh Justice Court denied an identical motion to disqualify Kurzman. As more fully set forth by Castle in its papers, and conceded by Crib, no such motion was made and no decision or order was rendered. In any event, even if the Town of Greenburgh Justice Court had decided such a motion, the doctrine of res judicata would not apply. There is no identity of parties in the two actions. In sum, Crib has not sufficiently articulated application of res judicata to the instant motion. In any event, even if Crib had properly supported its argument regarding res judicata, it has not demonstrated that it applies to the instant motion to disqualify. As noted in Highlands Center, LLC v. Home Depot U.S.A., Inc., 149 AD3d 919, 921 (2017) Pursuant to the doctrine of res judicata, or claim preclusion, “a valid final judgment bars future actions between the same parties on the same cause of action” (Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d 343, 347, 690 N.Y.S.2d 478, 712 N.E.2d 647; see Matter of Hunter, 4 N.Y.3d 260, 269, 794 N.Y.S.2d 286, 827 N.E.2d 269; Gramatan Home Invs. Corp. v. Lopez, 46 N.Y.2d 481, 485, 414 N.Y.S.2d 308, 386 N.E.2d 1328). “One linchpin of res judicata is an identity of parties actually litigating successive actions against each other: the doctrine applies only when a claim between the parties has been previously brought to a final conclusion” (Blue Sky, LLC v. Jerry’s Self Stor., LLC, 145 A.D.3d 945, 44 N.Y.S.3d 173 [internal quotation marks omitted]). Notably, there has not been a final judgment in the Summary Proceeding. Moreover, in the Summary Proceeding, the parties’ positions were not materially adverse to each other — they were co-Respondents filing a single Answer. In the Summary Proceeding, Crib was not seeking damages from Castle. Here, the opposite is true. In sum, the doctrine of res judicata cannot apply. Therefore, Castle’s motion to disqualify Kurzman from representing Crib in the instant action must be granted. In light of the finding that disqualification is mandated, Plaintiff’s cross-motion seeking sanctions is moot. Based upon the foregoing, it is hereby ORDERED, that Kurzman Eisenberg Corbin & Lever, LLP are relieved as counsel to Plaintiff Crib & Teen Expo New York, LLC, as per the Code of Professional Responsibility (22 NYCRR) 1200.0, Rule 1.9(a); and it is further ORDERED, that Defendant is directed to appear virtually before the Court on April 20, 2022, at 12:00 noon, for a Status Conference; and, it is further ORDERED, that Plaintiff is likewise directed to appear virtually before the Court on the same date, represented by counsel, and that, for failure to so appear on that date, represented by counsel, the court will deem said Plaintiff in default of appearance, and entertain a motion to strike Plaintiff’s Pleadings. The foregoing constitutes the Opinion, Decision, and Order of the Court. Dated: March 25, 2022
