Commercial Division Blog
Posted: March 5, 2015 / Categories Commercial, Law Firms and Professional Ethics
Court Declines to Disqualify Counsel That Negotiated Agreement Under Attorney-Witness Rule
On February 9, 2015, Justice Bransten of the New York County Commercial Division issued a decision in MRC RE Holdings LLC v. Schreiber, 2015 NY Slip Op. 30235(U), refusing to disqualify counsel who negotiated an agreement from acting as trial counsel in action to enforce that agreement, explaining:
Rule 3.7(a) of the Rules of Professional Conduct provides that, unless certain exceptions apply, a lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact. However, the challenging party carries a heavy burden of identifying the projected testimony of the advocate-witness and demonstrating how it would be so adverse to the factual assertions or account of events offered on behalf of the client as to warrant his or her disqualification. Moreover, disqualification under the advocate-witness rule may be required only when it is likely that the testimony to be given by the witness is necessary.
Defendants argue that since plaintiff's counsel in the instant action was also counsel to plaintiff with respect to the disputed agreement, he will be a necessary witness. Specifically, they argue that his testimony will be necessary because he engaged in correspondence with defendants' counsel during negotiation of the LC and in the aftermath of the failure of the loan to close.
While defendants' argument is not unreasonable, prior to discovery, it is premature to disqualify counsel. Merely because an attorney has relevant knowledge or was involved in the transaction at issue does not make the attorney's testimony necessary. Accordingly, Defendants' motion to disqualify plaintiff's counsel is denied, with leave to renew following the completion of discovery.
(Internal quotations and citations omitted) (emphasis added).