Learn About the Law
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
STILWELL VALUE PARTNERS IV, L.P., on its own behalf with respect to certain claims and suing derivatively, as a shareholder, on behalf of Northeast Community Bancorp, Inc., a nominal defendant, Plaintiff–Appellant, v. Diane B. CAVANAUGH, et al., Defendants–Respondents, Northeast Community Bancorp, Inc., a Nominal Defendant–Respondent.
Order, Supreme Court, New York County (Charles E. Ramos, J.) entered May 19, 2014, which denied plaintiff's motion to disqualify Kilpatrick Townsend & Stockton LLP from representing defendants, unanimously affirmed, with costs.
Plaintiff failed to show that Kilpatrick Townsend & Stockton LLP's representation of Northeast Community Bancorp., Inc. (Northeast Inc.), the nominal defendant, as well as of the other defendants, in this derivative action, presents a conflict of interest because Northeast Inc. would benefit from a judgment in plaintiff's favor on its behalf. Northeast Inc.'s interests are not adverse to those of the other defendants; Northeast Community Bancorp, MHC, and the directors have not asserted any counterclaims against plaintiff, and Northeast Inc. has not asserted any cross claims against them (cf. Schmidt v. Magnetic Head Corp., 101 A.D.2d 268, 278–279 [2d Dept 1984] ). Northeast Inc. is a passive litigant, and Kilpatrick's appearance on its behalf is merely nominal (see 207 Second Ave. Realty Corp. v. Salzman & Salzman, 291 A.D.2d 243 [1st Dept 2002]; Greenfield v. Giambalvo, 36 Misc.3d 1209[A], 2012 N.Y. Slip Op 51232[U], *6–7 [Sup Ct, Kings County 2012] ).
Even if we were to find that a conflict of interest existed, we would nevertheless agree with the motion court that plaintiff waived its objection to the representation (see Hele Asset, LLC v. S.E.E. Realty Assoc., 106 AD3d 692 [2d Dept 2013] ). Plaintiff's delay of more than two years after this action was commenced before moving to disqualify, during which time its counsel discussed settlement with Kilpatrick, supports the court's finding that the motion is an attempt to gain a tactical advantage (see e.g. St. Barnabas Hosp. v. New York City Health & Hosps. Corp., 7 AD3d 83, 95 [1st Dept 2004] ).
We have considered plaintiff's remaining contentions and find them unavailing.̌
A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes visit FindLaw's Learn About the Law.
Decided: December 30, 2014
Search our directory by legal issue
Enter information in one or both fields (Required)
Harness the power of our directory with your own profile. Select the button below to sign up.
Learn more about FindLaw’s newsletters, including our terms of use and privacy policy.
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
Search our directory by legal issue
Enter information in one or both fields (Required)