LLC v. LLC (2024)

Supreme Court, Appellate Division, Second Department, New York.

41st Road Properties, LLC, plaintiff-respondent, v. Wang Real Property, LLC, et al., appellants, John Hon, et al., defendants-Respondents, et al., defendants.

2020–05635

Decided: November 27, 2024

ANGELA G. IANNACCI, J.P. JOSEPH J. MALTESE LILLIAN WAN DONNA–MARIE E. GOLIA, JJ.

Wang Law Office, PLLC, Flushing, N.Y. (Jean Wang of counsel), for appellants. Aronauer & Yudell, LLP, White Plains, N.Y. (Joseph Aronauer of counsel), for plaintiff-respondent. In an action to foreclose a mortgage, the defendants Wang Real Property, LLC, Roug Kang Wang, and Stella Wang appeal from an order of the Supreme Court, Queens County (Timothy J. Dufficy, J.), dated June 22, 2020.  The order, insofar as appealed from, granted those branches of the motion of the plaintiff and the defendants John Hon, Julie Hon, and John Hon, D.O., P.C., which were to cancel a notice of pendency filed by the defendants Wang Real Property, LLC, Roug Kang Wang, and Stella Wang against the subject property, for an award of attorneys' fees and costs in the sum of $7,500 to the defendant John Hon, D.O., P.C., to enjoin the defendants Wang Real Property, LLC, Roug Kang Wang, and Stella Wang from commencing a new action related to stopping the foreclosure of the mortgage on the subject property or making any court filings in the Supreme Court, Queens County, related to the ownership of the subject property without a prior court order, and to direct the Queens County Clerk to not accept for filing a notice of pendency by the defendants Wang Real Property, LLC, Roug Kang Wang, and Stella Wang against the subject property without a prior court order, and denied the cross-motion of the defendants Wang Real Property, LLC, Roug Kang Wang, and Stella Wang to disqualify counsel for the plaintiff and the defendants John Hon, Julie Hon, and John Hon, D.O., P.C. In January 2020, the plaintiff and the Hon defendants moved, inter alia, to cancel the notice of pendency filed by the Wang defendants against the property, for an award of attorneys' fees and costs in the sum of $7,500 to John Hon, D.O., P.C., associated with the discharge of the notice of pendency, to enjoin the Wang defendants from commencing a new action related to stopping the foreclosure of the mortgage on the property or making any court filings in the Supreme Court, Queens County, related to the ownership of the property without a prior court order, and to direct the Queens County Clerk to not accept for filing a notice of pendency by the Wang defendants against the property without a prior court order.  The Wang defendants opposed the motion and cross-moved to disqualify counsel for the plaintiff and the Hon defendants.  By order dated June 22, 2020, the Supreme Court granted those branches of the motion and denied the cross-motion.  The Wang defendants appeal. Finally, the Supreme Court providently exercised its discretion in denying the Wang defendants' cross-motion to disqualify counsel for the plaintiff and the Hon defendants.  “The disqualification of an attorney is a matter that rests within the sound discretion of the trial court” (Alnoukari v Nokari, 218 AD3d 527, 528 [internal quotation marks omitted];  see Matter of Blauman–Spindler v Blauman, 184 AD3d 636, 637).  “A party's entitlement to be represented by counsel of his or her choice is a valued right which should not be abridged absent a clear showing that disqualification is warranted” (Greenberg v Grace Plaza Nursing & Rehabilitation Ctr., 174 AD3d 510, 510 [internal quotation marks omitted];  see Falk v Gallo, 73 AD3d 685, 685).  On a motion to disqualify an attorney, “[t]he moving party bears the burden of showing that disqualification is warranted” (Matter of Blauman–Spindler v Blauman, 184 AD3d at 637 [internal quotation marks omitted];  see Greenberg v Grace Plaza Nursing & Rehabilitation Ctr., 174 AD3d at 510).  Here, contrary to the Wang defendants' contention, counsel for the plaintiff and the Hon defendants did not engage in champerty by entering into a mortgage agreement with the Hon defendants to secure the payment of a legal fee, since there was no assignment of the Hon defendants' rights for the primary purpose of “bringing an action thereon” (see Rozen v Russ & Russ, P.C., 76 AD3d 965, 969;  Judiciary Law §§ 488;  489).  Insofar as the Wang defendants challenge the fee arrangement between counsel and the Hon defendants, they lack standing to do so (see Rozen v Russ & Russ, P.C., 76 AD3d at 969).  Furthermore, the fee arrangement and the mortgage agreement did not violate the Rules of Professional Conduct (22 NYCRR 1200.0).