Commercial Division Blog

Posted: March 8, 2015 / Categories Commercial, Law Firms and Professional Ethics

Counsel That Previously Had Represented Adverse Party Not Disqualified When Matters Not Related

On February 26, 2015, the First Department issued a decision in Becker v. Perla, 2015 NY Slip Op. 01720, reversing an order disqualifying counsel.

In Becker, the trial court disqualified the plaintiffs' counsel because they had "represented some of the defendants in a prior matter, and that the parties' interests are now directly adverse." The First Department reversed, explaining:

The present and prior matters are not substantially related, and plaintiff's attorney did not obtain confidential information from the defendants during the prior matter. In order to show that the matters are substantially related, defendants must show that the issues in the matters are identical or essentially the same. Defendants failed to make that showing. The prior matter involved the enforcement of a loan against a third party, and the present matter involves defendants' alleged diversion of monies intended for and earned by a project in the Dominican Republic. Further, the financial information involving plaintiff Becker shared by some of the defendants with the attorney during the prior matter was not confidential, since it was disclosed to Becker or otherwise known to him.

(Internal quotations and citations omitted) (emphasis added).