BRYAN GOLDSTEIN v. RAYNER LAW GROUP PLLC THE LAW OFFICES OF GOLDSTEIN AND RAYNER (2026)

Plaintiff Estate of David Goldstein, by Bryan Goldstein, as Executor (the "Estate"), moves for a third time (Motion Seq. No. 7) for an order: (a) pursuant to Rule 3.7 of the New York Rules of Professional Conduct ("RPC"), disqualifying Dennis Rothman, Esq. ("Rothman") and the law firm of Lester Schwab Katz & Dwyer, LLP ("LSKD") from representing any Defendant; and (b) pursuant to CPLR 2221, granting leave to renew the Estate's prior motion for disqualification (Motion Seq. No. 4) and, upon renewal, disqualifying Rothman and LSKD pursuant to RPC 1.7, 1.10, and 3.7. Defendants Kim Rayner ("Rayner"), Rayner Law Group PLLC ("RLG"), and the Law Offices of Goldstein and Rayner ("G&R") oppose.

For the reasons set forth below, the motion is denied.

Background

The factual background of this litigation has been set forth at length in this Court's prior decisions and need not be fully repeated. In brief, David Goldstein and Kim Rayner were the two partners of G&R, a Rockland County law firm, for many years preceding Goldstein's sudden death on June 1, 2022. Goldstein held a 95% partnership interest and managed the firm's finances; Rayner held a 5% interest and practiced matrimonial and family law. Following Goldstein's death, Rayner undertook to wind up the partnership, a process that has proven extremely contentious and has spawned this litigation, in which the Estate asserts claims for an accounting, conversion, unjust enrichment, breach of the partnership agreement, constructive trust, and breach of fiduciary duty, and Defendants assert counterclaims for unpaid partnership profits and origination fees.

Defendants have been represented since the inception of this action by LSKD, principally through Rothman and, until his withdrawal as trial counsel on March 5, 2026, through Alfredo Alvarado, Esq. ("Alvarado"), an LSKD partner and Rayner's husband.

This is the Estate's third application to disqualify LSKD. The first such motion (Motion Seq. No. 2) was denied without prejudice on November 13, 2024, as unsigned, in light of the parties' referral to mediation. The second (Motion Seq. No. 4) was denied without prejudice, with leave to renew at the time of trial, by decision dated May 14, 2025 (See NYSCEF Doc. No. 278), this Court having found that "since the methodology employed by Alvarado awaits discovery, there is no way to assess whether Alvarado's testimony is otherwise necessary at this juncture in the litigation." The Court further declined to disqualify Alvarado or LSKD on the witness-advocate ground at that time.

Following the completion of discovery, including Alvarado's deposition on July 17, 2025, and following the March 3, 2026, status conference at which Alvarado's role as a potential fact witness was discussed at length, Alvarado withdrew as trial counsel on March 5, 2026. At the April 1, 2026, pre-motion conference, the Court granted the Estate leave to file the instant motion. The Court also struck Plaintiff's jury demand by order dated May 14, 2026 (NYSCEF Doc. No. 483), such that this matter will proceed to a bench trial.

The Estate now argues that (1) Alvarado will give testimony at trial that is prejudicial to Defendants regarding the spreadsheets furnished to the Estate as a purported "accounting" of G&R, regarding Rayner's claim to partnership profits, and regarding Rayner's claim to an origination fee on the Bellini matter, such that LSKD and Rothman must be disqualified under RPC 3.7(b)(1); and (2) Rothman's representation of Alvarado individually at his non-party deposition, while Rothman and LSKD concurrently represented all Defendants, creates a concurrent conflict of interest requiring Rothman's disqualification under RPC 1.7(a), imputed to SKD under RPC 1.10.

Discussion

A. Standard Governing Disqualification Motions

A party's right to counsel of its choosing is a valued right that may not be abridged absent a clear showing that disqualification is warranted. See S & S Hotel Ventures Ltd. Partnership v 777 S.H. Corp., 69 NY2d 437, 443 [1987]. The RPC "provide guidance, not binding authority, for courts in determining whether a party's law firm, at its adversary's instance, should be disqualified during litigation." Id. at 440. The movant bears the burden of demonstrating that disqualification is warranted, and courts must be mindful that disqualification motions are "often interposed for tactical reasons" and, even when made in good faith, "result in unfair prejudice" if granted improvidently. See Id. at 443-44.

B. Rule of Professional Conduct 3.7(b)(1) — The Advocate-Witness Rule

RPC 3.7(b)(1) provides that a lawyer may not act as advocate before a tribunal if "another lawyer in the lawyer's firm is likely to be called as a witness on a significant issue other than on behalf of the client, and it is apparent that the testimony may be prejudicial to the client." Disqualification under this rule requires a showing that the testifying lawyer's testimony is necessary — assessed by reference to "the significance of the matters, weight of the testimony, and availability of other evidence" — and that such testimony "may be prejudicial" to the client, meaning the prejudice must be "apparent," "visible," and "a real possibility, not just a theoretical possibility." S & S Hotel Ventures, 69 NY2d at 446; HoganWillig, PLLC v Swormville Fire Co., 210 AD3d 1369, 1373 [4th Dept 2022].

Two threshold considerations bear on the application of this rule here. First, Alvarado has withdrawn as trial counsel. RPC 3.7(b)(1) operates to bar a lawyer from acting "as advocate before a tribunal" where another lawyer in the firm will testify against the client's interest. Alvarado is no longer acting as advocate before this tribunal in this matter. The rule's core concern — that a firm's lawyer-advocate will be placed in the position of arguing his or her own credibility, or that of a colleague, to the finder of fact — is substantially diminished where the testifying lawyer has removed himself from the advocacy role. The Estate's submissions do not squarely address this change in circumstance, instead focusing on Rothman's continued role as trial counsel notwithstanding Alvarado's withdrawal.

Second, and relatedly, this matter will be tried without a jury. New York courts have recognized that the policy underlying the advocate-witness rule — that "it is unseemly for an attorney to advocate his own credibility before a jury" — is "undermined" in the context of a jury trial in a manner not present in a bench trial. See Salomone v Abramson, 48 Misc 3d 318, 332 [Supreme Ct, New York County [2015]; See also H.H.B.K. 45th St. Corp. v Stern, 158 AD2d 395, 397 [1st Dept 1990] (where the action "is one to be decided without the aid of a jury, we do not think the court will have difficulty according proper weight to an attorney's testimony should he be called by the opposing party"). The Official Comment to RPC 3.7 likewise observes that "[t]he tribunal is not likely to be misled when a lawyer acts as advocate before a tribunal in a matter in which another lawyer in the lawyer's firm testifies as a witness." RPC 3.7, Cmt. 5.

While the Estate correctly notes, citing Advanced Visual Concepts, Ltd. v Saffron Props., LLC, 51 Misc 3d 50 [App Term, 2d Dept 2016], that the bench-trial posture is not dispositive of a disqualification motion, it remains a material factor weighing against disqualification where, as here, the testimony at issue does not concern the core financial record upon which the accounting claim will be decided, but rather collateral matters bearing on credibility.

Turning to the substance, the Estate identifies three categories of anticipated testimony from Alvarado that it contends will be prejudicial to Defendants: (1) testimony regarding his preparation of the spreadsheets initially characterized to the Estate as an "accounting" performed by an outside accounting firm; (2) testimony regarding the joint tax returns filed by Alvarado and Rayner and the absence of any reported entitlement to partnership profits; and (3) testimony regarding referral fee arrangements, including as to the Bellini matter.

As to the first category, the Court does not discount that Alvarado's deposition testimony in which he acknowledged personally preparing the spreadsheets at LSKD's offices, with the assistance of LSKD's Director of Finance and an LSKD accounts coordinator, notwithstanding the prior representation to the Estate's former counsel that an outside accounting firm had prepared an "accounting of the law firm's activities" — bears on the credibility of representations made on Rayner's behalf during the pre-litigation period. However, the central issue to be tried with respect to the accounting claims is not the genesis or provenance of the 2022 spreadsheets, but the financial condition of the partnership as of the date of Goldstein's death and through the wind-up period, which will be established principally through the partnership's books and records and the testimony of the parties' respective accounting witnesses — Paul Rothstein and Yigal Rechtman. Alvarado's testimony as to how and why the spreadsheets were assembled, while potentially relevant to credibility, is not shown to be necessary to the Court's determination of the accounting itself, particularly where the underlying financial records will independently be before the Court. The Estate has not demonstrated that this testimony rises to the level of "apparent" prejudice on a "significant issue" within the meaning of RPC 3.7(b)(1), as opposed to impeachment-type evidence of the kind courts have found insufficient to warrant disqualification, especially at a bench trial where the finder of fact is well equipped to weigh such evidence without the risk of jury confusion that animates the rule.

As to the second and third categories — the joint tax returns and the referral fee testimony the parties' submissions reflect a genuine dispute as to whether Alvarado's anticipated testimony is consistent with or adverse to Rayner's claims for partnership profits and the Bellini origination fee. The Estate contends that Alvarado's testimony that, as between him and Rayner, "either" of them — but not both — would receive a referral fee on certain matters undermines Rayner's claim to an origination fee on Bellini, given that Alvarado already received a one-third referral fee on that matter. Defendants respond that Alvarado's testimony was limited to two specific matters (Esquivel and Zarriello) and did not purport to describe the firm's general practice, and that Alvarado's and Rayner's positions regarding the K-1s and the profits claim are consistent rather than adverse, since both were equally subject to the K-1s issued under Goldstein's control.

On the present record, the Court cannot conclude that the Estate has carried its burden of showing that this testimony is "apparently" prejudicial to Defendants rather than, at most, a matter of degree or characterization to be tested through cross-examination and weighed by the Court as trier of fact. The "real possibility" of prejudice required by S & S Hotel Ventures has not been established with the requisite clarity, particularly where — as Defendants note and the Estate does not meaningfully dispute — the relevant facts (the existence of the K-1s, the joint returns, and the referral fee payment to Alvarado on Bellini) are independently documented and will be before the Court regardless of whether Alvarado testifies.

Accordingly, the Estate has not met its burden of demonstrating that disqualification of LSKD or Rothman is warranted under RPC 3.7(b)(1).

C. Rules of Professional Conduct 1.7(a) and 1.10 — Concurrent Conflict of Interest

The Estate separately argues that Rothman's representation of Alvarado individually at his July 17, 2025, non-party deposition, undertaken while Rothman and LSKD concurrently represented Rayner, RLG, and G&R, created a concurrent conflict of interest under RPC 1.7(a), requiring Rothman's disqualification and, by imputation under RPC 1.10, the disqualification of LSKD.

RPC 1.7(a)(2) provides that a lawyer shall not represent a client where "there is a significant risk that . . . the representation of one or more clients... will be materially limited by[ ] the lawyer's responsibilities to another client." The Estate's principal argument, advanced for the first time with record support in its reply papers, is that Rayner's sworn statement that Alvarado "had no personal knowledge of G&R's clients or financial data on the spreadsheets" is contradicted by Alvarado's deposition testimony regarding his personal knowledge of and referral relationship to at least the Esquivel matter, and that this divergence in sworn positions demonstrates that Rothman and LSKD can no longer represent both Alvarado and Defendants without their respective interests coming into conflict.

The Court has considered this argument carefully. It is true that representation of a non- party witness by counsel who simultaneously represents a party may, in some circumstances, give rise to a disqualifying conflict — particularly where the lawyer's relationship with the witness would impair vigorous cross-examination, or where the dual representation confers an improper tactical advantage, such as the ability to assert privilege objections on the witness's behalf that opposing counsel could not otherwise raise. See Grech v HRC Corp., 48 Misc 3d 859 [Supreme Court, Queens County 2015]; See also Schairer v Schairer, 192 Misc 2d 155 [Supreme Court, Nassau County 2002].

However, the cases cited by the Estate are factually distinguishable in material respects. In Grech, the non-party witnesses were strangers to the represented party, and the court found the representation had been undertaken for the purpose of impeding the adversary's informal discovery — a finding with no analogue here, where LSKD's representation of Alvarado at his deposition was disclosed in advance and was never challenged by the Estate prior to the deposition itself. In Schairer, disqualified counsel had previously represented, in an unrelated criminal matter, a court-appointed expert whose credibility the client's position in the divorce action directly required counsel to attack — an adverse relationship entirely absent here, where Alvarado and Rayner are husband and wife with substantially overlapping, not opposing, interests in the outcome of this litigation.

The asserted inconsistency between Rayner's affirmation and Alvarado's deposition testimony regarding the extent of Alvarado's "personal knowledge" of G&R's client files is, on this record, a relatively narrow factual discrepancy concerning the degree of Alvarado's familiarity with certain referred matters. It does not, without more, establish that Rothman's or LSKD's "independent professional judgment" on behalf of Defendants has been or will be "adversely affected," or that the representation of Defendants has been "materially limited," within the meaning of RPC 1.7(a)(2). Nor does the Estate identify any specific item of confidential information obtained through Rothman's representation of Alvarado that would constrain Rothman's ability to cross-examine Alvarado or otherwise advocate for Defendants — a showing this Court considers of paramount importance to any finding of a disqualifying conflict arising from successive or concurrent representation of a witness and a party. The Court is also mindful that Rothman's representation of Alvarado has been a matter of record since at least December 2023, (see NYSCEF Doc. No. 116), and that the Estate's prior disqualification motion (Motion Seq. No. 4), decided in May 2025, did not result in disqualification on this basis notwithstanding the Estate's awareness of the representation.

The Court does not minimize the unusual posture created by LSKD's representation of a non-party witness who is married to one defendant and a partner of the firm representing all defendants, nor the additional complexity introduced by the affirmations of LSKD personnel who assisted in preparing the spreadsheets at issue. These circumstances will properly inform the weight this Court, as trier of fact, accords to the testimony of these witnesses, and nothing in this decision should be understood to foreclose searching cross-examination on these points at trial. But the Estate has not demonstrated, on this record, that the circumstances rise to the level of a concurrent conflict of interest under the RPC 1.7(a) requiring disqualification of Rothman, and accordingly there is no predicate for imputed disqualification of LSKD under the RPC 1.10.

D. The Estate's Civil Practice Law and Rules § 2221 Application

The Estate's motion is also brought, in part, pursuant to Civil Practice Law and Rules § 2221 for leave to renew the February 4, 2025, motion (Motion Seq. No. 4) and the decision and order thereon (See NYSCEF Doc. No. 278). That prior decision denied disqualification without prejudice and with leave to renew once Alvarado's deposition had been completed and the "methodology employed by Alvarado" could be assessed. That condition has now been satisfied: Alvarado was deposed on July 17, 2025, and the Estate has placed his deposition testimony before the Court. To that extent, renewal is appropriate and is granted. However, upon renewal, and upon consideration of the additional facts now before it — including Alvarado's deposition testimony, the affirmations of Rayner, LSKD personnel, and Alvarado's subsequent withdrawal as trial counsel — the Court adheres to its prior determination that disqualification of LSKD is not warranted, for the reasons set forth above.

Accordingly, it is hereby

ORDERED that Plaintiff's motion (Motion Seq. No. 7) for an order pursuant to RPC 3.7 disqualifying Dennis Rothman, Esq. and Lester Schwab Katz & Dwyer, LLP from representing Defendants is DENIED; and it is further

ORDERED that the branch of Plaintiff's motion seeking leave to renew Motion Sequence No. 4 pursuant to Civil Practice Law and Rules § 2221 is GRANTED, and upon renewal, the Court adheres to its prior determination denying disqualification, for the reasons stated herein; and it is further

ORDERED that the branch of Plaintiff's motion seeking disqualification pursuant to RPC 1.7 and 1.10 is DENIED; and it is further

ORDERED that this denial is without prejudice to the Estate's right to cross-examine Alfredo Alvarado, LSKD personnel, and any other witness at trial regarding the matters raised in the instant motion, and without prejudice to any application the Estate may make at trial concerning the weight or admissibility of any testimony or evidence on these subjects; and it is further

ORDERED that the parties shall appear for a conference on June 15, 2026, to address remaining pretrial matters and the scheduling of the trial of this action.

The foregoing constitutes the Decision and Order of the Court as to Motion Seq. No. 7.

Dated: June 14, 2026

New City, New York

HON. JOHN P. COLLINS, JR., J.S.C.

John P. Collins, Jr., J.