THALER v. JACOBY MEYERS LAW OFFICES

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

Steven THALER, Petitioner-Respondent, v. JACOBY & MEYERS LAW OFFICES, et al., Respondents-Appellants.

Decided: May 21, 2002

MAZZARELLI, J.P., SULLIVAN, ELLERIN, WALLACH and GONZALEZ, JJ. Abraham Borenstein, for Petitioner-Respondent. Suzanne L. Smith, for Respondents-Appellants.

Order, Supreme Court, New York County (Louis York, J.), entered December 6, 2001, which granted petitioner's application to disqualify attorneys who have appeared against him in an arbitration proceeding, unanimously affirmed, with costs.

Petitioner, a lawyer, commenced an arbitration to recover unpaid compensation allegedly owed by his former employers, respondents law firm and several of its members (herein, “the client”).   In the arbitration, the client is represented by respondents law firm and a lawyer (herein, “the firm”) who presently also represent petitioner and the client in their common defense of a pending legal malpractice action.   In these circumstances, it was the firm's burden to show not the absence of a substantial relationship between the arbitration proceeding and the malpractice action, but rather “the absence of any ‘actual or apparent conflict of loyalties or diminution in the vigor of representation’ ” (Dembitzer v. Chera, 285 A.D.2d 525, 728 N.Y.S.2d 78, quoting Cinema 5 v. Cinerama, Inc., 528 F.2d 1384, 1387, and citing, inter alia, Code of Professional Responsibility DR 5-105, 22 NYCRR 1200.24;  see also, Abbondanza v. Siegel, 209 A.D.2d 1023, 619 N.Y.S.2d 896).   This the firm failed to do.   It does not dispute that it will be challenging petitioner's competence as an attorney in the arbitration proceeding, and the record does not support its claim that petitioner's competence as an attorney is not an issue in the malpractice action.   The firm's representation of petitioner in the malpractice action will be affected if petitioner cannot openly and freely discuss with it matters that might reflect on his competence for fear that his confidences might be used against him in the arbitration (see, Greene v. Greene, 47 N.Y.2d 447, 451-452, 418 N.Y.S.2d 379, 391 N.E.2d 1355).