Fed. Dist. Court in NY Denies Motion to Disqualify Attorney/Law Firm in Zoning Dispute

The Village of Chester and Village of Chester Board of Trustees (collectively, “Defendants”) moved to disqualify Larry Wolinsky, Esq., and his firm, Jacobowitz and Gubits, LLP (J&G). Defendants claimed that J&G represented both BT Holdings and Defendants in a prior Article 78 proceeding and, therefore, J&G must be disqualified from advocating against Defendants in the instant action. Second, Defendants asserted that Mr. Wolinsky was a “necessary witness” as to whether the Settlement Agreements incorporated a right to RM-N zoning and, therefore, J&G must be disqualified pursuant to the advocate-witness rule.

In January 2008, Plaintiff submitted a petition to annex the Town portions of the Property into the Village. On June 15, 2012, Defendants commenced a special proceeding in the Appellate Division against the Town and the Town Board, seeking to overturn the Town’s denial of the Petition. Plaintiff was granted party status in this proceeding. Plaintiff and Defendants were co-petitioners in an Article 78 proceeding against the Town and the Town Board, seeking to annul the Town’s SEQRA findings. The parties reached a settlement of the Appellate Division Litigation and the Article 78 proceeding and the parties entered into two settlement agreements.

The court first noted that, in the Second Circuit, disqualification is justified “only if an attorney’s conduct tends to taint the underlying trial.” Here, it was evident that Defendants did not have a formal attorney-client relationship with J&G in the Article 78 proceeding’ Defendants conceded that they did not pay any fee to J&G or enter into any fee arrangement, written contract, or retainer agreement with J&G. Moreover, even if Defendants’ representatives had believed that J&G represented Defendants in the Article 78 proceeding, such a belief would not have been reasonable because a village board cannot retain counsel without express authority by statute or local resolution. Additionally, J&G did not create a “de facto and/or implied attorney-client relationship” with the Defendants because did not have a reasonable basis to believe that any confidential information they disclosed to J&G would have been kept secret from their co-petitioner and J&G’s long-term client, BT Holdings. Defendants’ motion to disqualify J&G on the grounds of successive representation was therefore denied.

Defendants next argued that Mr. Wolinsky’s testimony may prejudice his client, BT Holdings, by demonstrating that Plaintiff and Defendants did not have a meeting of the minds on whether the Settlement Agreements incorporated a right to RM-N zoning. The court determined that at trial, Plaintiff would likely focus on Defendants’ failure to enact any zoning at all. Here, the Settlement Agreements referred to RMN zoning as “a new zoning district to be adopted post-annexation”, thus the language was not “sufficiently adverse” to Plaintiff’s arguments such that it would warrant disqualification of his entire firm. Accordingly, Defendants’ motion to disqualify J&G pursuant to the advocate-witness rule was denied without prejudice.

BT Holdings, LLC v Village of Chester, 2015 WL 8968360 (SDNY 12/14/2015)