TAVAREZ v. HILL (2009)

PRELIMINARY ISSUE PRESENTED

Should the court, sua sponte, stay the motion made for summary judgment until there is a final resolution of a potential “conflict of interest” issue arising from plaintiffs' counsel's representation of multiple parties in the same action?

RELIEF REQUESTED

Defendants Mohammed Musah and A-One Transportation [hereinafter Musah] and the defendants Olen Hill and Robin Hill [hereinafter Hill] move for summary judgment and dismissal of the complaint pursuant to CPLR 3212, for the alleged failure of all four plaintiffs to establish that each sustained a “serious injury”, as that term is defined in Section 5102 of the Insurance Law.

BACKGROUND

The three vehicle accident underlying this case took place on June 23, 2003 on the Major Deegan Expressway near Park Avenue in the Bronx.   At that time, the vehicle driven by plaintiff Jose Tavarez, was in collision with the vehicles owned and driven by the defendants.   The plaintiffs, Emely Esther Tavarez, Estephany Tavarez and Clara Guzman were passengers in the vehicle owned and driven by plaintiff Jose Tavarez, and each plaintiff (including the driver) alleges that he/she sustained a “serious injury”, as that term is defined in Insurance Law § 5102.

In support of the motion, the defendants have submitted, among other things, numerous affirmations from physicians in various specialties.   In opposition, counsel for the plaintiffs has submitted only unaffirmed medical reports and test results;  and in addition, failed to address arguments made by the defendants as to “gaps in treatment” and the failure to provide evidence of “recent” examinations supporting the serious injury claims made by each said plaintiff.

A review of the record reveals that the same attorney represents the plaintiff driver (José Tavarez) as well as the three passenger plaintiffs.   Defendant Musah, in his answer, has interposed a counterclaim against plaintiff Jose Tavarez and cross-claims against defendant Hill, and the defendant Hill has interposed cross-claims against the Musah defendants.

Plaintiff Jose Tavarez had previously moved for summary judgment on the issue of liability, but this motion was denied with leave to renew, by order of Justice Schachner, dated September 28, 2007.   The court's records reflect that no additional motion on the issue of liability has been made;  and thus, there is a meaningful risk that counsel for plaintiffs may be burdened with a conflict of interest, since the issue of liability of each driver is yet to be determined, and, in this proceeding, the passenger plaintiffs may have interests adverse to those of their driver.

DISCUSSION

An attorney who chooses to represent multiple parties in the same action will risk being held to have violated the Code of Professional Responsibility (and its applicable Disciplinary Rules);  as well as sanctioned for having engaged in a conflict of interest;  and in addition thereto, suffer the indignity and cost of becoming a defendant in a malpractice action.

Canon 5 of the Code of Professional Responsibility provides in part that “the professional judgment of a lawyer should be exercised ․ solely for the benefit of the client and free of compromising influences and loyalties ․” (Code of Professional Responsibility, EC 5-1).   The Code's Disciplinary Rules further provide as follows:

“Conflicts of Interest;  Simultaneous Representation

(A) A lawyer shall decline proffered employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the acceptance of the proffered employment, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (C) of this section.

(B) A lawyer shall not continue multiple employment if the exercise of independent professional judgment in behalf of a client will be or is likely to be adversely affected by the lawyer's representation of another client, or if it would be likely to involve the lawyer in representing differing interests, except to the extent permitted under subdivision (C) of this section.

(C) In the situations covered by subdivisions (A) and (B) of this section, a lawyer may represent multiple clients if a disinterested lawyer would believe that the lawyer can competently represent the interest of each and if each consents to the representation after full disclosure of the implications of the simultaneous representation and the advantages and risks involved.

(D) While lawyers are associated in a law firm, none of them shall knowingly accept or continue employment when any one of them practicing alone would be prohibited from doing so under section 1200.20(a), 1200.24(a) or (b), 1200.27(a) or (b), or 1200.45(b) of this Part except as otherwise provided therein.” (emphasis added;  DR 5-105 [22 NYCRR § 1200.24] )

Even the “possibility” or “appearance” of conflict is prohibited.   The Code's Disciplinary Rules state that “a lawyer shall decline proffered employment if the exercise of professional judgment on behalf of a client will be OR is likely to involve the lawyer in representing differing interests.” (emphasis added;  Code of Professional Responsibility DR 5-105(A) [22 NYCRR § 1200.24] ).   It has been noted that “The standards of the profession exist for the protection and assurance of the clients and are demanding;  an attorney must avoid not only the fact, but even the appearance, of representing conflicting interests.”  (Graca v. Krasnik, 20 Misc.3d 1127(A), 2008 WL 2928557 [N.Y.Sup.2008];  Rotante v. Lawrence Hosp., 46 A.D.2d 199, 361 N.Y.S.2d 372 [1st Dept.1974];  Edelman v. Levy, 42 A.D.2d 758, 346 N.Y.S.2d 347 [2d Dept.1973];  Sidor v. Zuhoski, 261 A.D.2d 529, 530, 690 N.Y.S.2d 637 [2d Dept.1999].)

Sanction Includes Forfeiture of Fees

 If a conflict is found to exist, the sanction imposed will most likely include a forfeiture of all fees claimed or received for services rendered.   (LaRusso v. Katz, 30 A.D.3d 240, 818 N.Y.S.2d 17 [1st Dept.2006];  Pessoni v. Rabkin, 220 A.D.2d 732, 633 N.Y.S.2d 338 [2d Dept.1995];  Alcantara v. Mendez, 303 A.D.2d 337, 756 N.Y.S.2d 90 [2d Dept.2003];  Sidor v. Zuhoski, 261 A.D.2d 529, 690 N.Y.S.2d 637 [2d Dept.1999];  Quinn v. Walsh, 18 A.D.3d 638, 795 N.Y.S.2d 647 [2d Dept.2005].)  Shaikh v. Waiters, 185 Misc.2d 52, 710 N.Y.S.2d 873 [Sup. Ct., Nassau County 2000];  Dorsainvil v. Parker, 14 Misc.3d 397, 829 N.Y.S.2d 851 [Sup.Ct. Kings County 2006];  Ferrara v. Jordache Enters. Inc., 12 Misc.3d 769, 819 N.Y.S.2d 421 [Sup. Kings 2006];  Wolfram, Modern Legal Ethics § 7.3.3, at 353 [West Publ. Co. 1986].)  (For discussion of dual representation in other contexts, see Greene v. Greene, 47 N.Y.2d 447, 418 N.Y.S.2d 379, 391 N.E.2d 1355 [1979];  Mullery v. Ro-Mill Construction Corp., 76 A.D.2d 802, 429 N.Y.S.2d 200 [1st Dept.1980].)

Representation of Multiple Plaintiffs

In La Russo v. Katz, supra, counsel was sued (by his former client, the wife/passenger) for legal malpractice because of his representation of a husband/driver and wife/passenger as plaintiffs in a tort claim arising out of a motor vehicle accident.   In the underlying tort action the husband had separate counsel to defend him on the counterclaim brought by the direct defendant.   However, despite this independent representation on the counterclaim, plaintiffs' former counsel (Katz) was made the defendant in the malpractice claim because he allegedly, among other things, failed to advise his client (the wife/passenger) of the risks inherent in his representation of both husband and wife as plaintiffs;  and because he failed to pursue all claims available as a result of the alleged negligence of her husband.   In the underlying tort action the wife/passenger, although seriously injured, was forced to settle for the sum of $10,000, i.e., the policy limits of the other vehicle.   Among the malpractice claims made against Katz (the former attorney) was his failure to commence an action against the dealership which owned and had loaned the husband/driver the vehicle which he was driving.   Thus, the dealership's large insurance policy did not become potentially available to compensate the seriously injured wife/passenger.

Representation of Multiple Defendants

In Graca, above, the court, sua sponte, found that an impermissible conflict existed where a defendant's firm represented an individual driver, as well as the leasing company from which this defendant had obtained the vehicle.   The conflicted defense attorney had moved for summary judgment and dismissal of the complaint only as against the leasing company, which motion, if granted, would have left the individual driver solely responsible for any negligence attributable to his actions.   In essence, the court found that the individual driver was left without a representative to argue in his best interest.   The Court stated:  “Defendants' attorneys cannot zealously represent both defendants where they seek dismissal of the claims against one of the defendants they represent while the other has no independent advocate to oppose the motion which would result in their shouldering full liability.” [emphasis added] Graca, supra, at 2.

Client Consent Alone Not A Defense

 Reliance solely upon client waiver and consent as described in DR 5-105(C) as justification for representation of a passenger and driver in a motor vehicle accident is insufficient and is, in any event, always hazardous.   Subdivision (C) of DR 5-105 provides a two-prong test.   It states that a lawyer may represent multiple clients (1) if any disinterested lawyer would believe that the lawyer can competently represent the interest of each;  and (2) after full disclosure of the implications of the simultaneous representation and the advantages and risks involved, each consents to the joint representation.

Consent is only one prong, and even then it is only effective after “full disclosure”.   In any event, the first prong (the objective/disinterested lawyer requirement) must also be satisfied.   The Court of Appeals has held that disclosure alone does not resolve the conflict issues created by dual representation.  (Greene v. Greene, 47 N.Y.2d 447, 418 N.Y.S.2d 379, 391 N.E.2d 1355 [1979].)   In Greene it was observed that “[b]ecause dual representation is fraught with the potential for irreconcilable conflict, it will rarely be sanctioned even after full disclosure has been made and the consent of the clients obtained” (Greene, supra at 451-52, 418 N.Y.S.2d 379, 391 N.E.2d 1355).   It must be noted that the phrase “disinterested lawyer”, as used in DR 5-101(C) has been interpreted to mean “․ that a lawyer is not permitted to seek client consent to a conflict if a disinterested lawyer would advise the client to refuse consent, and that a client consent that is given is not valid if the objective test of a disinterested lawyer is not met ”.  (Emphasis added;  Shaikh, supra at 56, 710 N.Y.S.2d 873;  see also, Code of Professional Responsibility, EC 5-16)

Conflict Results In Total Disqualification

 When a conflict exists, counsel is thereafter disqualified from representing anyone in the action.  (Alcantara v. Mendez, 303 A.D.2d 337, 756 N.Y.S.2d 90 [2d Dept.2003].  Sidor v. Zuhoski, 261 A.D.2d 529, 690 N.Y.S.2d 637 [2d Dept.1999];  Quinn v. Walsh, 18 A.D.3d 638, 795 N.Y.S.2d 647 [2d Dept.2005];  Matter of H. Children, 160 Misc.2d 298, 608 N.Y.S.2d 784 [Fam. Ct. Kings Cty.1994].)

In the Matter of H. Children, supra, it was stated that “[a]n attorney who undertakes the joint representation of two parties in a lawsuit [should] not continue as counsel for either one after an actual conflict of interest has arisen”.

In Alcantara, supra, it was explained that “counsel's continued representation of the plaintiffs would result in a violation of either the ethical rule requiring an attorney to preserve a client's confidences, or the rule requiring an attorney to represent a client zealously”.   The Alcantara panel concluded, therefore, that “(counsel) is disqualified from continuing to represent any plaintiffs in this action”.

Entire Law Firm Disqualified

 In addition, it should be observed that a disqualification of one attorney in a firm results in the disqualification of the entire firm.  (DR 5-105[D];  Greene, 47 N.Y.2d at 453, 418 N.Y.S.2d 379, 391 N.E.2d 1355 [conflict of interest involving even one lawyer in a firm taints the entire firm.];  [Cardinale v. Golinello, 43 N.Y.2d 288, 401 N.Y.S.2d 191, 372 N.E.2d 26 [1977];  see also, Kassis v. Teacher's Ins. & Annuity Ass'n, 93 N.Y.2d 611, 695 N.Y.S.2d 515, 717 N.E.2d 674 [1999][entire firm prohibited from representing defendant where one of its associates had previously been employed by plaintiff's firm, and had done work on instant litigation, although associate denied receiving any confidential information as part of that work];  (Sidor v. Zuhoski, 261 A.D.2d 529, 690 N.Y.S.2d 637 [2d Dept.1999];  Ferrara v. Jordache Enters. Inc., 12 Misc.3d 769, 819 N.Y.S.2d 421 [Sup. Kings 2006];  Shaikh v. Waiters, 185 Misc.2d 52, 710 N.Y.S.2d 873 [Sup. Ct., Nassau County 2000].)

Rare Exceptions

It is extremely rare where dual representation does not pose an ethical and legal problem for counsel.(See, Code Of Professional Responsibility, EC 5-15 [“There are few situations in which the lawyer would be justified in representing in litigation multiple clients with potentially differing interests․”].)  One such instance, in a motor vehicle tort action with multiple plaintiffs, might be where liability has already been determined, and the plaintiff driver has been found to be free of fault.   In such an instance, the interests of the plaintiff driver and passenger would no longer be in conflict.   However, an attorney who undertakes to represent a driver and passenger, and thereafter fails to obtain summary judgment or a concession by the defendant on the issue of liability, will subject himself/herself to all of the adverse consequences discussed above.   Moreover, it could result in a waste of limited judicial resources since a mistrial would be required if a conflict is “discovered” at trial;  or worse, after an appeal is taken.

 Prudence dictates that an attorney should, at the very beginning, decline to represent multiple parties with potentially conflicting claims (See, Greene v. Greene, 47 N.Y.2d 447, 418 N.Y.S.2d 379, 391 N.E.2d 1355 [1979], discussed supra,)

CONCLUSION

The motion and cross-and motion are stayed pending a review of the “conflict of interest” issue.   All parties are directed to appear before this Court on February 19th 2009 at 9:30 A.M. for a conference and, if necessary, a hearing with reference to the possible existence of an irreparable conflict of interest in the representation of all four plaintiffs by one attorney.

This constitutes the decision and order of the court.

PAUL A. VICTOR, J.