In a 3-1 decision on February 4, 2015 in Cohen v. Cohen, the Second Department disqualified a prominent Long Island matrimonial firm from representing the wife in this 2011 divorce action.
It was disputed whether in November 2010 the husband had consulted Steven J. Eisman, senior partner in Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Einiger, LLP. The husband was unable to substantiate his allegation that he consulted with Mr. Eisman. Mr. Eisman stated that while the husband had scheduled an appointment for a consultation, he canceled it. Mr. Eisman further asserted that the husband had consulted with various top matrimonial attorneys in the area to prevent the wife from hiring an attorney.
However, it was not disputed that the husband’s brother met with Mr. Eisman in July, 2010. The brother stated that he had shared with Mr. Eisman confidential information concerning various businesses the husband and his brother owned and in which they shared common interests. This included detailed information concerning the day-to-day operations of the businesses which he operated jointly with the husband, illustrated by a diagram, described how the businesses earned a profit, and provided his opinion as to the value of the businesses. Mr. Eisman acknowledged that he had discussed with the husband’s brother “surface details” concerning, among other things, the husband’s brother’s employment, the brother’s marriage, residence, and children.
The brother (and obviously the husband) never retained the law firm as his counsel. The wife did. The husband moved to disqualify Mr. Eisman’s firm.
The Second Department first noted that the disqualification of an attorney is generally a matter resting within the sound discretion of the court. In his ruling below, Supreme Court Justice Norman Janowitz had denied that motion.
Nonetheless, the Second Department reversed, noting “doubts as to the existence of a conflict of interest must be resolved in favor of disqualification so as to avoid even the appearance of impropriety.” The appellate court held that here, Justice Janowitz should have granted the husband’s motion to disqualify the law firm. Given the undisputed evidence of the consultation between Mr. Eisman and the husband’s brother, as well as the nature of the matters disclosed there was a resulting substantial risk of prejudice.
The very appearance of a conflict of interest was alone sufficient to warrant disqualification of the law firm as a matter of law without an evidentiary hearing, and notwithstanding the existence of a factual dispute as to whether Eisman met with the [husband].
Justice Sylvia O. Hinds-Radix dissented, finding that it could not be said that the denial of the husband’s motion to disqualify the law firm from representing the wife was an improvident exercise of Justice Janowitz’s discretion.
Justice Hinds-Radix noted that disqualification of counsel conflicts with the general policy favoring a party’s right to representation by counsel of choice, and it deprives current clients of an attorney familiar with the particular matter. Thus, a party seeking to disqualify an attorney for an opposing party on the ground of a conflict of interest has the burden of demonstrating three elements:
- the existence of a prior attorney-client relationship between the moving party and opposing counsel;
- that the matters involved in both representations are substantially related; and
- that the interests of the present client and former client are materially adverse.
Thus, Justice Hinds-Radix opined, as the “substantially related” standard is now the norm, the fact that an attorney has learned of some of a former client’s financial information and corporate structure in prior litigation is not in and of itself a basis for disqualification.
Moreover, Justice Hinds-Radix noted that the Court of Appeals had rejected its prior holding that “the avoidance of even an appearance of impropriety [is] so important that any harm associated with disqualification was minimal when compared with furthering those goals.” Indeed, the Second Department has since held that, “[a]bsent actual prejudice or a substantial risk thereof, the appearance of impropriety alone is not sufficient to require disqualification of an attorney.”
While a preliminary consultation between an attorney and an adverse party regarding whether the attorney should be hired to represent the adverse party in a matter which bears a substantial relationship to the present litigation may be the basis for disqualification, Justice Hinds-Radix felt that the husband’s assertions here were insufficient to warrant disqualification. There was no evidence that the information provided by the brother was confidential, or that the brother’s interests were materially adverse to those of the wife in this case.
Jeffrey S. Schecter & Associates, P.C., of Garden City, represented the husband. Glenn S. Koopersmith, Garden City, N.Y., was appellate counsel to Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Einiger, LLP, representing the wife.