Purchase Partners II LLC v. Westreich, 604219/2004
Decided: January 23, 2007

Justice Bernard J. Fried

Here is a case from the NYLJ which denied disqualification:

Third-party defendant Adam Hochfelder moves for an order: (1) quashing a subpoena, pursuant to CPLR 2304 and 3103[1]; and (2) disqualifying the law firm of Kramer Levin Naftalis & Frankel LLP (Kramer Levin) from continuing to represent defendant/third-party plaintiff Anthony Westreich in these actions.

The complaint in the main action alleges that Hochfelder and Westreich together owned a real estate investment company named Max Capital Management Corporation (Max Capital), which owned an interest in a property located at and adjacent to 260 Park Avenue South (260 Park) (see Complaint, ¶¶11-12, 21). Westreich – and certain of his family members through an entity named DTT Park Avenue South LLC (DTT) – allegedly held a share of Max Capital’s interest in 260 Park (see id., ¶22). According to the complaint, plaintiffs are persons and entities who became creditors of Max Capital, Hochfelder and/or Westreich by investing money in, and/or loaning money to, any or all of them (see id., ¶¶15-25).

DR 5-108 (B) provides, in relevant part, that:

Except with the consent of the affected client after full disclosure, a lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client:

(1) Whose interests are materially adverse to that person; and

(2) About whom the lawyer had acquired information protected by [DR 4-101 (B)] that is material to the matter.

Hochfelder has not established that disqualification of Kramer Levin is warranted under DR 5-108 (B) because, as previously stated, he has not established: (a) that he, rather than Belfonti and/or Aligned, was formerly a client of Selver or Paul Hastings; (b) that the matters involved in Selver’s and Paul Hastings’s prior representation of Belfonti and/or Aligned are substantially related to the matters involved in Kramer Levin’s current representation of Westreich; or (c) that the interests of Belfonti and/or Aligned are materially adverse to the interests of Westreich in this action.

Hochfelder has also failed to establish, as required for disqualification under DR 5-108 (B), that Selver, while he was a partner of Paul Hastings, acquired any information which is both "protected by [DR 4-101 (B)]" and "material" to the matter of this litigation. Insofar as Hochfelder may have communicated information to Selver concerning Hochfelder’s own prior relations with Max Capital and/or Westreich, such information might be material to this litigation, but would not be protected by DR 4-101 (B) – which concerns the protection of a client’s confidences and secrets – because Hochfelder has not established that he was a client of Selver’s and/or Paul Hastings’s. Conversely, insofar as Selver, in the course of his representation of Belfonti and/or Aligned, may have obtained information concerning Belfonti and/or Aligned which would be protected by DR 4-101 (B), Hochfelder has not established that any such information would be material to this litigation.

Finally, inasmuch as Hochfelder has failed to establish that Selver himself would be disqualified from representing Westreich in this litigation, if he attempted to do so, there is no basis for imputing such a disqualification to Selver’s current firm, Kramer Levin.

For the foregoing reasons, it is hereby

ORDERED that the branch of third-party defendant Adam Hochfelder’s motion which seeks to disqualify Kramer Levin Naftalis & Frankel LLP from continuing to act as counsel to defendant/third-party plaintiff Anthony Westreich is denied.