January 30, 1995
Appeal from the Supreme Court, Rockland County (Scarpino, J.).
Ordered that the order is affirmed insofar as appealed from, with costs.
During the period at issue in this action, the law firm of Howard Mann acted as the attorney and escrow agent for Highview-Nyack Properties, Inc. (hereinafter Highview), a corporation founded to build and to sponsor the sale of condominium units. The plaintiffs were the minority shareholders of Highview, and the defendant Raymond Carlisle was the majority shareholder. Carlisle also owned the defendant AARK Construction Corp. (hereinafter AARK), which was Highview's managing agent and construction company. In their amended complaint, the plaintiffs named Highview and the Howard Mann law firm as defendants, alleging, inter alia, that Mann and his firm had conspired with Carlisle and AARK to misappropriate Highview's funds.
Under these circumstances, Mann and his law firm may not continue to serve as attorneys for codefendants Carlisle and AARK because of the appearance of impropriety and because of a conflict of interest with their prior clients, namely, codefendant Highview and the plaintiffs, who were the minority shareholders of Highview (see, e.g., Chang v. Chang, 190 A.D.2d 311; Flushing Sav. Bank v. FSB Props., 105 A.D.2d 829; Code of Professional Responsibility Canon 9). Mann should also be disqualified because it is likely that he will be called as a key witness in the case against Carlisle and AARK and because he is a codefendant whose defense may be inimical to that of his clients (see, Code of Professional Responsibility DR 5-101 [B] [ 22 NYCRR 1200.20 (b)]; DR 5-102 [A] [ 22 NYCRR 1200.21 (a)]; see, e.g., S S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp., 69 N.Y.2d 437; Chang v. Chang, supra; Fairview at Old Westfield v European Am. Bank, 186 A.D.2d 238; North Shore Neurosurgical Group v. Leivy, 72 A.D.2d 598). Rosenblatt, J.P., Altman, Friedmann and Florio, JJ., concur.