Opinion
Index No. 651266/2013 003
05-11-2022
MONARCH TENANTS ASSOCIATION, DIVINA COFRESI, JUAN DIAZ, TERESA ESTRELLA, JUANA GOMEZ, JOSEFINA GONZALES, CAMELIA JIMENEZ, EVANGELISTA GUZMAN, ANTOINETTE JOSEPH, RAMONA LOPEZ, JAMES MCNEILL, QUIRIRI MARTINEZ, AUSTIN NELSON, MARIA OLMEDO, ANA PETERSON, MANUELA ROBLES, ADELINA RODRIGUEZ, ENRIQUE SEDA, GLORIA SIERRA, ELBA SOTO Plaintiff, v. CONVERMAT CORPORATION, MONARCH REALTY GROUP LLC, MONARCH REALTY HOLDINGS, LLC, FS 41-45 TIEMANN PLACE LLC, 184-188 CLAREMONT INVESTORS LLC, 3139 BROADWAY INVESTORS, LLC, 3620 BROADWAY INVESTORS LLC, ROBERT SEDAGHATPOUR, FARZAD SHAHERY, AMY ABRAHAM, EZRA BENNETT, Defendant.
Unpublished Opinion
MOTION DATE 05/04/2022
DECISION + ORDER ON MOTION
HON. LAURENCE LOVE PART JUSTICE
The following e-filed documents, listed by NYSCEF document number (Motion 003) 116, 117, 118, 119, 120, 124, 127, 128, 129, 130, 131, 132 were read on this motion to/for ATTORNEY - DISQUALIFY .
Upon the foregoing documents, the decision on defendants' motion seeking an Order disqualifying the firm of DLA Piper LLP as attorneys for Plaintiffs is as follows:
Plaintiffs commenced the instant action by filing a summons and complaint on April 9, 2013. Since the filing of the instant action, plaintiffs' attorneys have been DLA Piper, LLP and Manhattan Legal Services, Inc. On March 2, 2013, defendants interposed an answer in this action. Since the filing of said answer, defendants' attorneys have been Adam Leitman Bailey, PC. Now, almost nine years later, defendants move to disqualify DLA Piper, LLP as counsel for plaintiffs. In support of the instant motion, defendants submit the affidavits of Frank Iaffaldano, the former President and COO of Kor Realty Group ("Kor"), and named defendant, Frank Shahery, vice president of and a director of Convermat Corporation. Said affidavits establish that in or around 2007, DLA Piper represented an affiliate of Kor in the sale of an affordable housing project known as Hillside Gardens, located in San Diego, California, to another affiliate of Kor in a joint venture with Abington Hillside, LLC, and Hillside Investors, LLC. Defendant, Shahery is the managing member of Hillside Investors, LLC. In order to obtain financing for the sale, Hillside Investors, LLC was required to provide certain financial information of its members to the companies who issued the financing and as such, DLA Piper had access to the business plans of Hillside Investors, LLC and Shahery. Based upon same, defendants argue that there is a potential conflict of interest and that DLA Piper must be disqualified as counsel for plaintiffs. The Court notes that Farzad Shahery has been a named defendant at all relevant times during this action.
Pursuant to the New York Rules of Professional Conduct, Rule 1.9(a), "A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing." It is well-settled that "any doubts [regarding whether to grant a motion to disqualify] are to be resolved in favor of disqualification." Matter of Stober v. Gaba & Stober, P.C., 259 A.D.2d 554, 555 (2d Dept. 1999); see also Matter of Strasser v. Asher, 129 A.D.3d 457, 458-59 (1st Dept. 2015) ("[i]t is well settled that an attorney must avoid not only the fact, but even the appearance, of representing conflicting interests.") Sperr v. Seaman, Inc., 284 A.D.2d 449 (2d Dept. 2001). However, "[a] movant seeking disqualification of an opponent's counsel bears a heavy burden." Mayers v Stone Castle Partners, LLC, 126 A.D.3d 1, 5, 1 N.Y.S.3d 58, 61 (1st Dep't 2015). "The key basis for such burden is contained within the concept that a party's right to be represented '[b]y counsel of its own choosing is a valued right which should not be abridged absent a clear showing that disqualification is warranted.'" Altungeyik v. Ayknat, 49 Misc.3d 1209(A), 26 N.Y.S.3d 212, at *3 (Sup. Ct. Suffolk Cnty. 2015) (quoting Mediaceja v Davidov, 119 A.D.3d 911, 989 N.Y.S.2d 892 (2d Dep't 2014)). "The appearance of impropriety, standing alone, is insufficient to grant a motion to disqualify." Hickman v. Burlington Bio-Medical Corp., 371 F.Supp.2d 225, 229 (E.D.N.Y. 2005). For disqualification to be warranted, Defendants must prove: "(1) the existence of a prior attorney-client relationship between the moving party and opposing counsel, (2) that the matters involved in both representations are substantially related, and (3) that the interests of the present client and former client are materially adverse." Tekni-Plex, Inc. v Meyer & Landis, 89 N.Y.2d 123, 131, 651 N.Y.S.2d 954, 958 (1996).
To be clear, there is no attorney client relationship between Farzad Shahery and DLA Piper, LLP and defendants utterly fail to establish same. In the 2007 deal, DLA Piper represented Kor and its affiliate, Swift Real Estate Partners, LLC ("Swift") as the selling entities, adverse to Hillside Investors LLC, one of the purchasing entities. In addition, Kor has not been a client of DLA Piper since 2012 and the documents related to said deal are currently located at DLA Piper's assistant general counsel's office ("OGC") in San Diego, California, where access to said files has been restricted. OGC has determined DLA Piper does not possess any business plan, financial information or any other confidential information of Mr. Shahery, Hillside Investors or of any of the Defendants in this action.
Defendants further contend that the matters are substantially related as described in paragraph 5 of the Shahery Affidavit that "The Landlords are all small companies, whose only asset is the particular building contained in their respective names. Each particular building is run as an affordable housing project. As small companies, each shares the business plan of the other."
The instant action not only concerns entirely separate real estate located on the other side of the country, but specifically involves tenants' claims that Defendants, as owners or operators of apartment buildings in Manhattan, knowingly overcharged rent and fees, brought frivolous legal proceedings, and engaged in other harassing conduct. Unless defendants are conceding that their business plan is, in fact, a plan to knowingly overcharge rent and fees, bring frivolous legal proceedings and otherwise harass tenants, then the subject matters could hardly be less related.
It is abundantly clear that the filing of the instant motion is nothing but a delay tactic and upon the filing of any further meritless motions, the court will consider an award of costs and sanctions.
ORDERED that the instant motion is DENIED in its entirety.