In a September 7, 2010 decision, Justice Kapnick denied a motion brought pursuant to a special proceeding under Article 75 to disqualify counsel from representing the respondents in an on-going arbitration against Gordon, the movant and complainant in the arbitration. In the arbitration, Gordon alleged that the respondents breached a shareholders agreement and committed fraud. He sought disqualification of the respondents’ counsel claiming that he had contacted those same attorneys for the purpose of seeking confidential legal advice and a legal opinion personally as to the corporate, tax, and governmental, and regulatory issues raised by the subject shareholders agreement. The respondents objected to disqualification, arguing that that Gordon was in-house counsel for the respondents and any dealings he had with outside counsel were solely in his capacity as employee of the corporate client who the counsel had represented over many years for various legal matters.
The Court denied the motion upon finding: (1) the irrebuttable presumption of disqualification is not satisfied because documentary evidence and Gordon’s admissions support the conclusion that Gordon was never the client or prospective client of the outside counsel, and that counsel never affirmatively assumed the duty to represent Gordon personally; (2) Gordon only put forth conclusory statements that he disclosed confidential information to counsel and failed to specify what such communications were; and (3) Gordon knew that, because he was in-house counsel for respondents, he could not have a reasonable expectation of confidentiality in his dealings with counsel.