From Casetext: Smarter Legal Research

Raffaeli v. Raffaeli

Supreme Court, Westchester County, New York.
Jun 1, 2016
41 N.Y.S.3d 721 (N.Y. Sup. Ct. 2016)


No. 2089/2013.


Carolyn Cathleen RAFFAELI, Plaintiff, v. John Joseph RAFFAELI, Jr., Defendant.

James J. Nolletti, Esq., Collier, Halpern, Newberg & Nolletti, LLP, White Plains, Attorneys for plaintiff. Linda A. Eichen, Esq., Fuchs & Eichen, Esqs., Harrison, Attorneys for defendant.

James J. Nolletti, Esq., Collier, Halpern, Newberg & Nolletti, LLP, White Plains, Attorneys for plaintiff.

Linda A. Eichen, Esq., Fuchs & Eichen, Esqs., Harrison, Attorneys for defendant.


The following papers, numbered 1 to 53, were considered in connection with Plaintiff's Order to Show Cause, dated March 2, 2016, seeking an Order, disqualifying the law firm of Fuchs & Eichen, Esqs., from further representing Defendant in this matter.


Order to Show Cause/Affirmation/Affidavit in Support/Exhs. A–F1–9

Memorandum of Law 10

Affidavit in Opposition/Eichen Affidavit in Opposition/Barbieri

Affidavit in Opposition/Exhs. A–JJ11–50

Defendant's Memorandum of Law 51

Reply Affirmation 52

Reply Memorandum of Law 53

In this hotly contested, protracted matrimonial action, Plaintiff is seeking to disqualify Defendant's counsel, who has recently hired a paralegal who previously worked extensively on this matter at Plaintiff's counsel's law firm.

This divorce action was commenced on April 22, 2013. At the time of commencement, Plaintiff was represented by another firm. On or about July 24, 2014, Plaintiff retained her current attorneys, the firm of Collier, Halpern, Newberg, & Nolletti, LLP (“CHNN”). Defendant has always been represented by Fuchs & Eichen, Esqs. (”F & E). Plaintiff asserts that the litigation “is still in the discovery phase, as there are complex financial issues yet to be resolved” (Nolletti Affirmation at ¶ 5). Justice Ecker appointed a Special Discovery Master/Referee to supervise discovery and to resolve disclosure disputes that may arise (Nolletti Affirmation at ¶ 6).According to the motion papers, in the matrimonial division of CHNN, for the last 9 years, Plaintiff's main counsel, James P. Nolletti, Esq., worked closely with two associates, Alexandra M. Maxwell and Efrem Z. Fischer, and up until January 2016, a paralegal, Marie “Toni” Barbieri. Since the commencement of this action, for about 18 months, while Toni worked at CHNN, she worked 536 hours on the instant matrimonial action. According to Nolletti, Toni had “been present during conversations amongst us during which valuation strategies and case theories were discussed, and she has participated in the same. Toni also exchanged and/or was copied on numerous email threads involving not only the Plaintiff and Plaintiff's attorneys, but also Plaintiff's executive assistant/office manager, one Mary Keane, who is soon to be deposed by FUCHS & EICHEN. Moreover, Toni has communicated with the forensic accountants hired by [Nolletti] as part of our litigation strategy team in this case, and worked closely with” the associates “on financials matters related to this case” (Nolletti Affirmation at ¶¶ 8–9). According to Nolletti, Toni was privy to, or participated in, a “substantial amount of privileged and confidential communications and conversations” (Nolletti Affirmation at ¶ 10).

CHNN billed the client for 534 hours (Nolletti Affirmation, Exh. F).

Nolletti explains further (Nolletti Affirmation at 5–6; C. Raffaeli Affidavit at ¶ 3):

11. As is pointed out in Plaintiff's annexed affidavit, some of the more sensitive areas to which Toni has been privy to privileged or confidential information include, but are not limited to, exposure to documents for which discovery objections have been voiced by Plaintiff's counsel, legal advice and strategy discussions about such things as the methodologies being used to value Plaintiff's assets, methodologies being employed in the valuation of the defendant's assets and “investments,” strategies under consideration to counter-act and defend against anticipated valuation strategies to be employed by the defendant in the valuation of Plaintiff's business interests; access to confidential corporate information on investments that were not required to be provided to opposing counsel per Judge Ecker's order * * *; confidential investor information that Plaintiff obtained in her fiduciary capacity that was not required to be provided to opposing counsel per Judge Ecker's said order; material on guaranteed payments and contingency agreements; confidential discussions and strategy related to the parties' home on Amelia Island, Florida (and how that asset and its disposition should be handled); discussions concerning legitimacy of business expenses called into question by opposing counsel; access to material and comments from our forensic accountants regarding a tax dispute which has arisen concerning carryover losses and the strategy as to how the distribution thereof will be addressed at trial; access to investment analysis with “source of funds” strategy discussions; conversations about Plaintiff's desire to invest in a new home and how to go about it; and considerable involvement in paperwork and strategy related to the parties' real property in North Carolina which is the subject of a separate lawsuit presently pending between them entitled: C. Cathleen Raffaeli v. John J. Raffaeli, Jr.; C2 Outer Banks Investments Holdings, LLC, a Delaware limited liability company; Michael B. Liebeskind; Betsy S. Butler, Trustee.

Attached to Nolletti's Affirmation are the 30 pages of Toni's billing records on this matter from August 5, 2014 until January 27, 2016, totaling 536 hours (Affirmation, Exh. F). Nolletti also represents in his affirmation that Toni was privy to about 25 emails between October 2014 and December 23, 2015, “involving either Gary Karlitz or Mark Di Michael of Citrin Cooperman, the forensic accountants retained by me to provide confidential forensic accounting and valuation services in this case with the express written understanding that the work performed by them will be confidential and within the purview of Plaintiff's attorney-client privilege” (Nolletti Affirmation at ¶ 12), as well as over 57 emails involving Plaintiff's business manager, Mary Keane, some of which had password-protected attachments (Nolletti Affirmation at ¶ 13). Finally, Nolletti asserts that “just about every single financial document produced to this office by the Plaintiff was received, reviewed, categorized and, as to those that were sent to defendant's counsel, were compiled for service either by Toni or under her supervision” (Nolletti Affirmation at ¶ 14).

On February 8, 2016, Toni commenced working at Defendant's counsel's law firm, as their administrative assistant/paralegal. F & E is a small law firm, consisting of the two partners and Toni, who was hired to replace an exiting employee, filling the same role. Apparently, in an attempt to thwart a motion such as this, F & E instituted various screening measures to insulate the instant matrimonial action from Toni. These measures included: (1) Eichen removing all the Raffaeli files during the weekend of January 30, 2016 from her office, and storing them at the home of a non-practicing attorney, who was hired to work on the Raffaeli matter; (2) Eichen removing the Raffaeli file from Toni's office computer; (3) Eichen changing her email address for all her clients to, so that she could copy Toni on all of her email matters for those other clients, and retaining only for herself and the Raffaeli matter; (4) Eichen changing her password on her computer, so no one other than herself knows it; (5) Eichen directing Defendant to call her on her cell phone only, and they communicate only by her cell phone or by the “aol” email address; (6) Eichen directing Defendant's North Carolina attorneys to call her only on her cell phone; (7) directing Toni to not open any of Eichen's mail, and to leave it on Eichen's desk unopened; and (8) telling Nolletti about all of these facts and that all meetings, if any, including the conclusion of Plaintiff's deposition testimony can be done at a different location or his office (L. Eichen Affidavit at ¶¶ 11–15). In addition, in her affidavit, Eichen states that there has been no contact between Toni and Defendant, and no discussion about the matter in the office (L. Eichen Affidavit at ¶ 15). However, this motion for disqualification was brought nonetheless, and the Court is being asked to disqualify a law firm that has been handling this contentious and complex divorce action for 3 years.

It is well settled that “[t]he disqualification of an attorney is a matter that rests within the sound discretion of the court.” Halberstam v. Halberstam, 122 AD3d 679 (2d Dept.2014). “A party's right to be represented by counsel of his or her own choosing is a valued right which will not be superceded absent a clear showing that disqualification is warranted.” Halberstam, supra. “Because there are significant competing interests inherent in attorney disqualification cases', the Court of Appeals has advised against mechanical application of blanket rules,' in favor of a careful appraisal of the interest involved.' “ Lyons v. Lyons, 50 Misc.3d 876, 878 (Sup.Ct. Monroe Cty.2015), quoting Tekni–Plex, Inc. v. Meyner & Landis, 89 N.Y.2d 124, 131 (1996). “A motion to disqualify counsel triggers a collision between two important legal and practical considerations. * * * [the] right to be represented in this litigation by counsel of [one's] own choosing is a valued right which should not be abridged absent a clear showing that disqualification is warranted.' “ Lyons v. Lyons, supra at 878–79, quoting Avigdor v. Rosenstock, 47 Misc.3d 1220(A) at *11 (Sup.Ct. Kings Cty.2005).

“A party seeking to disqualify an attorney or law firm for an opposing party on the ground of conflict of interest has the burden of demonstrating (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.” Mediaceja v. Davidov, 119 AD3d 911, 911–12 (2d Dept.2014) (emphasis added); see Tekni–Plex, Inc. v.. Meyner & Landis, 89 N.Y.2d 123, supra. “A party's entitlement to be represented in ongoing litigation by counsel of [its] own choosing is a valued right which should not be abridged absent a clear showing that disqualification is warranted.' “ Matter of Town of Oyster Bay v. 55 Motor Ave. Co., LLC, 109 AD3d 549 (2d Dept.2013), quoting Matter of Dream Weaver Realty, Inc. (Poritzky–DeName), 70 AD3d 941, 943 (2d Dept.2010). “[D]oubts as to the existence of a conflict of interest must be resolved in favor of disqualification so as to avoid even the appearance of impropriety.” Cohen v. Cohen, 125 AD3d 589, 590 (2d Dept.2015) (internal quotation marks and citations omitted). Finally, “[d]isqualification of the attorney will be granted where the party seeking disqualification establishes either a substantial relationship between the issues in the litigation and the subject matter of the prior representation, or where the party's former counsel had access to confidential material substantially related to the litigation.” Avigdor v. Rosenstock, supra.

Here, Plaintiff has met her burden of proof of establishing a clear showing that disqualification of the law firm, F & E, is warranted. CHNN represented Plaintiff for almost the last two years. The matter is substantially related in that it is the same matrimonial action. But see Gabel v. Gabel, 101 AD3d 676 (2d Dept.2012) (in divorce action, court should have denied defendant's motion to disqualify Plaintiff's counsel where defendant failed to establish that the prior representation of defendant by Plaintiff's counsel in the formation of a corporation concerned any confidential information regarding the value of that corporation or that the attorney was provided with any information that is not contained in the corporate filing itself). Of course there is substantially more alleged confidential information here, than that involved in the formation of a corporation. Finally, the interests of Plaintiff and Defendant are material adverse in that they are seeking to divorce each other and they contest virtually everything in the division of the marital estate. See Albert Jacobs, LLP v. Parker, 94 AD3d 919 (2d Dept.2012) (discussions between the Plaintiff and the defendant's firm about a possible merger purportedly included matters at issue in the pending action, and thereby created a danger that confidences were disclosed, warranting the disqualification of the defendant's firm). Stated another way, the parties are on opposite side of the “v.” in the name of the case. See R. Simon, Simon's New York Rules of Professional Conduct Annotated, Rules 1.9(a) and 1.9(b), pp. 625–26, 660 (2016 ed.)

And while it is well settled that the Rules of Professional Conduct do not apply to non-attorneys, they place a burden on attorneys to ensure that their employees conduct themselves in accordance with the Code. See Glover Bottled Gas Corp. v. Circle M. Beverage Barn, Inc., 129 A.D.2d 678 (2d Dept.1987) (disqualification of defendants' attorneys because defendants' attorneys hired paralegal who had been previously employed by Plaintiff's counsel and had worked on the litigation pending between parties and had interviewed Plaintiff's manager concerning the facts of the case). While the Court appreciates the efforts that F & E has made to insulate Defendant and Defendant's confidences from Toni, and the Court does not find that there was any untoward motivation by F & E to employ Toni at its firm mid-litigation, it is Toni's deep historical involvement in the case that causes the Court to pause. Toni's role in this matter was so entrenched, that she is not that sort of administrative staff member, with fleeting and minimal contact to a pending matter, to which the Supreme Court in Albany County was referring in Mulhern v. Calder, 196 Misc.2d 818, 822–23 (Sup.Ct.2003).

Here, the circumstances under which Toni worked at CHNN, and in which she will continue to work at F & E, are distinguishable from the typical administrative, or non-attorney employee referenced in Mulhern v. Calder. Most glaring is the sheer number of hours she billed on this case—534 hours. Her tasks were more than menial and administrative. Her work was far greater than doing a few hours of work here and there over the course of the litigation. A review of her time sheet reveals she was intimately involved in the matter—and at a level analogous to the level of work of a first-or second-year associate, who in many firms, may do similar document review and document production on a large lawsuit, who may attend client meetings, and who may correspond with the client and her representatives about central issues in the litigation. Furthermore, Toni did not refute the amount of time she spent working on this case at CHNN, or the assertions of the depth of her involvement in the litigation (Barbieri Affidavit at 1–3). See generally Sports Channel Associates v. Sterling Mets, L.P., 25 AD3d 314 (1st Dept.2006) (facts states in movant's papers which are not controverted by opposing party may be deemed admitted). Finally, as would be the case if Toni was an associate or attorney working on this matter, to the degree she did, it is difficult to accept that she could not have “had access to confidential material substantially related to the” matrimonial action. See Avigdor v. Rosenstock, supra.

As much as Defendant is entitled to counsel of his own choosing, so too, Plaintiff is entitled to know the confidences she communicated to her counsel will be protected.

While this Court is sympathetic to the dilemma that this may pose for Defendant, the Court finds it has no choice. It must disqualify F & E. The Court rejects Defendant's argument that the parties' interests are not at odds with each other, as this is a contested matrimonial action and the parties have been litigating finances and equitable distribution for the past 3 years. The Court is equally unpersuaded by F & E's attempt to analogize this situation to that in Coloccia v. Coloccia (Westchester County Index No. 12126/2006), a case in which Toni only worked a total of 2 hours on that divorce, and the issue of disqualification was addressed prior to CHNN hiring Toni (Nolletti's Reply Affirmation at ¶¶ 13–16).

Accordingly, it is hereby

ORDERED that Plaintiff's motion is granted; and it is further

ORDERED that Defendant's counsel, Fuchs & Eichen, Esqs., is disqualified from representing him in this matrimonial action as of the date of this Decision and Order; and it is further

ORDERED that the matter is stayed an additional thirty (30) days from the date of this Decision and Order for Defendant to retain new counsel.

The foregoing constitutes the Decision and Order of the Court.

Summaries of

Raffaeli v. Raffaeli

Supreme Court, Westchester County, New York.
Jun 1, 2016
41 N.Y.S.3d 721 (N.Y. Sup. Ct. 2016)
Case details for

Raffaeli v. Raffaeli

Case Details

Full title:Carolyn Cathleen RAFFAELI, Plaintiff, v. John Joseph RAFFAELI, Jr.…

Court:Supreme Court, Westchester County, New York.

Date published: Jun 1, 2016


41 N.Y.S.3d 721 (N.Y. Sup. Ct. 2016)