Preview
FILED: NASSAU COUNTY CLERK 03/18/2019 05:23 PM INDEX NO. 613848/2017
NYSCEF DOC. NO. 141 RECEIVED NYSCEF: 03/18/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
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NYC MATERIALS CORP., DTA INDUSTRIES,
INC., ANTHONY J. VULPIS, and NYC LEASING Index No.: 613848/2017
GROUP INC.,
Plaintiffs,
-against-
CSF MATERIALS CORP., MICHAEL BONSERA,
and LISA BONSERA,
Defendants.
VOLVO FINANCIAL SERVICES, a division of
VFS US LLC,
Intervenor-Plaintiff,
-against-
CSF MATERIALS CORP., LISA BONSERA NYC
MATERIALS CORP., DTA INDUSTRIES, INC.,
ANTHONY J. VULPIS and ANTHONY
CAGLIARDI,
Defendants.
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NY METRO TRUCK INC.,
Index No.: 613804/2017
Plaintiff,
-against- Consolidated Action
CSF MATERIALS CORP., NASSAU COUNTY
POLICE DEPARTMENT and NASSAU COUNTY,
Defendants.
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PLAINTIFFS’ AND ANTHONY GAGLIARDI’S MEMORANDUM OF LAW
IN SUPPORT OF MOTION TO DISQUALIFY COUNSEL FOR DEFENDANTS
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INTRODUCTION
Plaintiffs, NYC MATERIALS CORP., DTA INDUSTRIES, INC., and ANTHONY J.
VULPIS, and Joined-Party/Defendant ANTHONY GAGLIARDI respectfully submit this
Memorandum of Law in Support of its Motion to Disqualify Randy Scott Zelin, Esq. and Randy
Scott Zelin PC as counsel for Defendants: CSF MATERIALS CORP., MICHAEL BONSERA,
and LISA BONSERA. Counsel Zelin previously represented NYC MATERIALS CORP.
(“NYC Materials”) in a BIC license renewal proceeding where he was disclosed confidential
information related to the financials, corporate structure, and interworking’s of NYC Materials
and DTA Industries, as well as personal confidences of Mr. Vulpis and Mr. Gagliardi. Mr.
Vulpis further consulted with Mr. Zelin related to claims of Consolidated Plaintiff NY Metro
Truck, and based on Mr. Vulpis’ correspondence with representatives of GE Capital, Counsel
Zelin purported to be counsel to NYC Materials and/or DTA Industries related the subject
property at issue in this suit.
There can be no dispute Counsel Zelin formerly represented NYC Materials in the past
and NYC Materials’ interests herein are materially averse to the Defendants that Counsel Zelin is
presently representing. During the course of this representation and other engagements Counsel
Zelin received confidential information and there is a substantial risk such information may be
used to prejudice Plaintiff in this action if Counsel Zelin is not disqualified as Counsel for
Defendants. The underlying information related to the BIC proceeding, together with other
information obtained related to the NY Metro Truck claims, integrally relate to the parties’
course of conduct which has now led to this litigation. At a minimum, there is a sufficient
appearance of impropriety resulting for Counsel Zelin’s involvement in this action which
warrants his disqualification.
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ARGUMENT
I. COUNSEL ZELIN SHOULD BE DISQUALIFIED FROM REPRESENTING
DEFENDANTS IN THIS ACITON
Rule 1.9 of the Rules of Professional Responsibility provides that a lawyer may not
“represent another person in the same or a substantially related matter in which that person's
interests are materially adverse to the interests of the former client unless the former client gives
informed consent, confirmed in writing.” Even if the Court finds the matters are not
substantially related, the Rules prevent Counsel Zelin from “us[ing] confidential information of
the former client protected by Rule 1.6 to the disadvantage of the former client, except as these
Rules would permit or require with respect to a current client or when the information has
become generally known; or (2) reveal confidential information of the former client protected by
Rule 1.6 except as these Rules would permit or require with respect to a current client.”
As stated by the Second Department:
‘The disqualification of an attorney is a matter that rests within the
sound discretion of the court’.[] ‘A party seeking disqualification of
its adversary's counsel based on counsel's purported prior
representation of that party must establish ‘(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’…[] Any
doubts 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…
Gjoni v Swan Club, Inc., 134 AD3d 896, 897-98 [2d Dept 2015] [internal citations omitted]
[brackets added]. Here, there can be no dispute there was a prior attorney-client relationship
between Counsel Zelin and NYC Materials. As noted in the accompanying affidavits, that
representation integrally involved DTA Industries, Mr. Vupis and Mr. Gagliardi. There can also
be no dispute that NYC Materials and the other moving parties’ interest are materially adverse in
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this action to those Defendants who Counsel Zelin is now defending.
With respect to the relation between the prior action and current action, as set forth in the
accompanying affidavits, Counsel Zelin, in his prior representation was revealed privileged and
confidential information related to the financials, corporate structure and interworking’s of NYC
Materials and DTA Industries, as well as personal confidences of Mr. Vulpis and Mr. Gagliardi.
See e.g., Wander v Meier, 17 AD3d 264, 264-65 [1st Dept 2005] [“former representation of
[Plaintiff] is substantially related to the current litigation, in which [Plaintiff's] financial
condition will be placed at issue”]. Movants fear this information may be used to the advantage
of Defendants and to their detriment. First, Counsel Zelin was reveled confidences which can be
used on the issue of the party’s creditability. Second, Defendants have argued the financial
condition of NYC Materials and DTA Industries was a reason for the alleged transfer of the
subject trucks and equipment to CSF Materials. Third, the denial of the renewal license from
BIC which Counsel Zelin was involved with integrally relates the future course of conduct of the
parties and the relationship between NYC Materials, DTA Industries, NYC Leasing Group, CSF
Materials, and their respective principals.
As stated by the Second Department:
Any doubts as to the existence of a conflict of interest must be
resolved in favor of disqualification … Even when an actual conflict
of interest may not exist, disqualification may be warranted based
on a mere appearance of impropriety … An attorney must avoid not
only the fact, but even the appearance, of representing conflicting
interests. An attorney may not place himself or herself in a position
where a conflicting interest may, even inadvertently, affect, or give
the appearance of affecting, the obligations of the professional
relationship.
Moray v UFS Indus., Inc., 156 AD3d 781, 784 [2d Dept 2017]. Here, given the “nature of the
matters disclosed and the resulting substantial risk of prejudice, the very appearance of a conflict
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of interest was alone sufficient to warrant disqualification of the law firm as a matter of law
without an evidentiary hearing” Cohen v Cohen, 125 AD3d 589, 590 [2d Dept 2015];
Halberstam v Halberstam, 122 AD3d 679, 679-80 [2d Dept 2014] [“the evidence submitted on
the motion demonstrated that the discussions between Schwartz and the defendant included
matters related to the divorce, and took place prior to the defendant becoming aware that
Schwartz would be representing the plaintiff in the case. The evidence further supported the
reasonable probability that confidential information was shared by the defendant with Schwartz,
based on his belief that Schwartz could not represent either party. Accordingly, based on the
appearance of impropriety, disqualification was warranted.”]; Albert Jacobs, LLP v Parker, 94
AD3d 919 [2d Dept 2012] [“The discussions between the plaintiff and the Mintz firm, which
purportedly included matters at issue in the instant action, create “the danger that confidences”
were disclosed, thus warranting the disqualification of the Mintz firm”]; Wander v Meier, 17
AD3d 264, 264-65 [1st Dept 2005] [noting counsel’s prior representation “may be reasonably
perceived as placing such confidences … in jeopardy of disclosure to an adverse party”].
Based in Mr. Zelin’s involvement with the BIC proceeding, at a minimum, “it is
reasonable to infer that [he] gained some confidential information during its former
representation of the [Plaintiffs] which is of value to its present client, disqualification is justified
on the basis of the mere appearance of impropriety.” Walden Fed. Sav. and Loan Ass'n v Vil. of
Walden, 212 AD2d 718, 719 [2d Dept 1995]. Same is true for information conveyed to him by
Mr. Vulpis related to the NY Metro Truck claims. Even if Counsel Zelin “contends that he has
no independent recollection of the facts of the prior representation and, in effect, that whatever
information he obtained during the prior representation would not be relevant to the issues in this
matter, the [movants] are ‘entitled to freedom from apprehension and to certainty that [their]
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interests will not be prejudiced’” due to Counsel Zelin’s current representation of the
Defendants. Gjoni, 134 AD3d at 897-98 [internal citations omitted]; Decana Inc. v Contogouris,
27 AD3d 207 [1st Dept 2006] [“That the attorney in question may not have obtained confidential
information from plaintiffs during his earlier representation of them did not render
his disqualification inappropriate, since plaintiffs were entitled to be free from the apprehension,
naturally arising under the circumstances at bar, that the prior representation would inure to their
current adversaries' advantage”]; Nationwide Assoc., Inc. v Targee St. Internal Medicine Group,
P.C., 303 AD2d 728, 729 [2d Dept 2003] [“Regardless of whether Epstein in fact obtained
confidential information in connection with his former representation, the respondents are
‘entitled to freedom from apprehension and to certainty that [their] interests will not be
prejudiced’ due to Epstein's representation of Nationwide in the current actions”].
If the Court determines it is unclear whether there is reasonable probability Counsel Zelin
was “imparted confidential information [] that could be used to the [Plaintiff’s] disadvantage” a
hearing should be held to before denying the motion. In re Azzi, 141 AD3d 1159, 1163 [4th
Dept 2016]; see also Solow v W.R. Grace & Co., 83 NY2d 303, 309 [1994] [“The rule avoids the
‘appearance of impropriety’ on the part of the attorney or the law firm. Whether a conflict
actually exists could be determined by a hearing but the rule requires disqualification even when
there may not, in fact, be any conflict of interest so that any suggestion of impropriety is
avoided”].
In light of the precedent above, Counsel Zelin has a direct conflict of interest in
representing Defendants herein. Even if the Court disagrees there is a direct conflict, it is clear,
at a minimum, Counsel Zelin’s representation of Defendants in this action creates an appearance
of impropriety warranting his disqualification.
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CONCLUSION
In accordance with the foregoing, Plaintiffs and Jointed Party Defendant Gagliardi
respectfully request the Court issue an Order disqualifying Counsel Zelin from represcñting
Defendapts, together with an award of fees and costs, and any other and further relief this Court
deems just and proper.
Dated: March 18, 2019.
White Plains, New York
Respectfully Submitted,
TRIVE A & FORTE, LL
AltfHUR . LER III
Attorneys'
for Plaintiffs and Anthony
Gagliardi
1311 Mamaroneck Ave, Suite 170
White Plains, New York 10605
(914) 949-9075
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Preview
FILED: NASSAU COUNTY CLERK 03/18/2019 05:23 PM INDEX NO. 613848/2017 NYSCEF DOC. NO. 141 RECEIVED NYSCEF: 03/18/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU ---------------------------------------------------------------------x NYC MATERIALS CORP., DTA INDUSTRIES, INC., ANTHONY J. VULPIS, and NYC LEASING Index No.: 613848/2017 GROUP INC., Plaintiffs, -against- CSF MATERIALS CORP., MICHAEL BONSERA, and LISA BONSERA, Defendants. VOLVO FINANCIAL SERVICES, a division of VFS US LLC, Intervenor-Plaintiff, -against- CSF MATERIALS CORP., LISA BONSERA NYC MATERIALS CORP., DTA INDUSTRIES, INC., ANTHONY J. VULPIS and ANTHONY CAGLIARDI, Defendants. ----------------------------------------------------------------------x NY METRO TRUCK INC., Index No.: 613804/2017 Plaintiff, -against- Consolidated Action CSF MATERIALS CORP., NASSAU COUNTY POLICE DEPARTMENT and NASSAU COUNTY, Defendants. ---------------------------------------------------------------------x PLAINTIFFS’ AND ANTHONY GAGLIARDI’S MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISQUALIFY COUNSEL FOR DEFENDANTS 1 of 7 FILED: NASSAU COUNTY CLERK 03/18/2019 05:23 PM INDEX NO. 613848/2017 NYSCEF DOC. NO. 141 RECEIVED NYSCEF: 03/18/2019 INTRODUCTION Plaintiffs, NYC MATERIALS CORP., DTA INDUSTRIES, INC., and ANTHONY J. VULPIS, and Joined-Party/Defendant ANTHONY GAGLIARDI respectfully submit this Memorandum of Law in Support of its Motion to Disqualify Randy Scott Zelin, Esq. and Randy Scott Zelin PC as counsel for Defendants: CSF MATERIALS CORP., MICHAEL BONSERA, and LISA BONSERA. Counsel Zelin previously represented NYC MATERIALS CORP. (“NYC Materials”) in a BIC license renewal proceeding where he was disclosed confidential information related to the financials, corporate structure, and interworking’s of NYC Materials and DTA Industries, as well as personal confidences of Mr. Vulpis and Mr. Gagliardi. Mr. Vulpis further consulted with Mr. Zelin related to claims of Consolidated Plaintiff NY Metro Truck, and based on Mr. Vulpis’ correspondence with representatives of GE Capital, Counsel Zelin purported to be counsel to NYC Materials and/or DTA Industries related the subject property at issue in this suit. There can be no dispute Counsel Zelin formerly represented NYC Materials in the past and NYC Materials’ interests herein are materially averse to the Defendants that Counsel Zelin is presently representing. During the course of this representation and other engagements Counsel Zelin received confidential information and there is a substantial risk such information may be used to prejudice Plaintiff in this action if Counsel Zelin is not disqualified as Counsel for Defendants. The underlying information related to the BIC proceeding, together with other information obtained related to the NY Metro Truck claims, integrally relate to the parties’ course of conduct which has now led to this litigation. At a minimum, there is a sufficient appearance of impropriety resulting for Counsel Zelin’s involvement in this action which warrants his disqualification. 1 2 of 7 FILED: NASSAU COUNTY CLERK 03/18/2019 05:23 PM INDEX NO. 613848/2017 NYSCEF DOC. NO. 141 RECEIVED NYSCEF: 03/18/2019 ARGUMENT I. COUNSEL ZELIN SHOULD BE DISQUALIFIED FROM REPRESENTING DEFENDANTS IN THIS ACITON Rule 1.9 of the Rules of Professional Responsibility provides that a lawyer may not “represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.” Even if the Court finds the matters are not substantially related, the Rules prevent Counsel Zelin from “us[ing] confidential information of the former client protected by Rule 1.6 to the disadvantage of the former client, except as these Rules would permit or require with respect to a current client or when the information has become generally known; or (2) reveal confidential information of the former client protected by Rule 1.6 except as these Rules would permit or require with respect to a current client.” As stated by the Second Department: ‘The disqualification of an attorney is a matter that rests within the sound discretion of the court’.[] ‘A party seeking disqualification of its adversary's counsel based on counsel's purported prior representation of that party must establish ‘(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’…[] Any doubts 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… Gjoni v Swan Club, Inc., 134 AD3d 896, 897-98 [2d Dept 2015] [internal citations omitted] [brackets added]. Here, there can be no dispute there was a prior attorney-client relationship between Counsel Zelin and NYC Materials. As noted in the accompanying affidavits, that representation integrally involved DTA Industries, Mr. Vupis and Mr. Gagliardi. There can also be no dispute that NYC Materials and the other moving parties’ interest are materially adverse in 2 3 of 7 FILED: NASSAU COUNTY CLERK 03/18/2019 05:23 PM INDEX NO. 613848/2017 NYSCEF DOC. NO. 141 RECEIVED NYSCEF: 03/18/2019 this action to those Defendants who Counsel Zelin is now defending. With respect to the relation between the prior action and current action, as set forth in the accompanying affidavits, Counsel Zelin, in his prior representation was revealed privileged and confidential information related to the financials, corporate structure and interworking’s of NYC Materials and DTA Industries, as well as personal confidences of Mr. Vulpis and Mr. Gagliardi. See e.g., Wander v Meier, 17 AD3d 264, 264-65 [1st Dept 2005] [“former representation of [Plaintiff] is substantially related to the current litigation, in which [Plaintiff's] financial condition will be placed at issue”]. Movants fear this information may be used to the advantage of Defendants and to their detriment. First, Counsel Zelin was reveled confidences which can be used on the issue of the party’s creditability. Second, Defendants have argued the financial condition of NYC Materials and DTA Industries was a reason for the alleged transfer of the subject trucks and equipment to CSF Materials. Third, the denial of the renewal license from BIC which Counsel Zelin was involved with integrally relates the future course of conduct of the parties and the relationship between NYC Materials, DTA Industries, NYC Leasing Group, CSF Materials, and their respective principals. As stated by the Second Department: Any doubts as to the existence of a conflict of interest must be resolved in favor of disqualification … Even when an actual conflict of interest may not exist, disqualification may be warranted based on a mere appearance of impropriety … An attorney must avoid not only the fact, but even the appearance, of representing conflicting interests. An attorney may not place himself or herself in a position where a conflicting interest may, even inadvertently, affect, or give the appearance of affecting, the obligations of the professional relationship. Moray v UFS Indus., Inc., 156 AD3d 781, 784 [2d Dept 2017]. Here, given the “nature of the matters disclosed and the resulting substantial risk of prejudice, the very appearance of a conflict 3 4 of 7 FILED: NASSAU COUNTY CLERK 03/18/2019 05:23 PM INDEX NO. 613848/2017 NYSCEF DOC. NO. 141 RECEIVED NYSCEF: 03/18/2019 of interest was alone sufficient to warrant disqualification of the law firm as a matter of law without an evidentiary hearing” Cohen v Cohen, 125 AD3d 589, 590 [2d Dept 2015]; Halberstam v Halberstam, 122 AD3d 679, 679-80 [2d Dept 2014] [“the evidence submitted on the motion demonstrated that the discussions between Schwartz and the defendant included matters related to the divorce, and took place prior to the defendant becoming aware that Schwartz would be representing the plaintiff in the case. The evidence further supported the reasonable probability that confidential information was shared by the defendant with Schwartz, based on his belief that Schwartz could not represent either party. Accordingly, based on the appearance of impropriety, disqualification was warranted.”]; Albert Jacobs, LLP v Parker, 94 AD3d 919 [2d Dept 2012] [“The discussions between the plaintiff and the Mintz firm, which purportedly included matters at issue in the instant action, create “the danger that confidences” were disclosed, thus warranting the disqualification of the Mintz firm”]; Wander v Meier, 17 AD3d 264, 264-65 [1st Dept 2005] [noting counsel’s prior representation “may be reasonably perceived as placing such confidences … in jeopardy of disclosure to an adverse party”]. Based in Mr. Zelin’s involvement with the BIC proceeding, at a minimum, “it is reasonable to infer that [he] gained some confidential information during its former representation of the [Plaintiffs] which is of value to its present client, disqualification is justified on the basis of the mere appearance of impropriety.” Walden Fed. Sav. and Loan Ass'n v Vil. of Walden, 212 AD2d 718, 719 [2d Dept 1995]. Same is true for information conveyed to him by Mr. Vulpis related to the NY Metro Truck claims. Even if Counsel Zelin “contends that he has no independent recollection of the facts of the prior representation and, in effect, that whatever information he obtained during the prior representation would not be relevant to the issues in this matter, the [movants] are ‘entitled to freedom from apprehension and to certainty that [their] 4 5 of 7 FILED: NASSAU COUNTY CLERK 03/18/2019 05:23 PM INDEX NO. 613848/2017 NYSCEF DOC. NO. 141 RECEIVED NYSCEF: 03/18/2019 interests will not be prejudiced’” due to Counsel Zelin’s current representation of the Defendants. Gjoni, 134 AD3d at 897-98 [internal citations omitted]; Decana Inc. v Contogouris, 27 AD3d 207 [1st Dept 2006] [“That the attorney in question may not have obtained confidential information from plaintiffs during his earlier representation of them did not render his disqualification inappropriate, since plaintiffs were entitled to be free from the apprehension, naturally arising under the circumstances at bar, that the prior representation would inure to their current adversaries' advantage”]; Nationwide Assoc., Inc. v Targee St. Internal Medicine Group, P.C., 303 AD2d 728, 729 [2d Dept 2003] [“Regardless of whether Epstein in fact obtained confidential information in connection with his former representation, the respondents are ‘entitled to freedom from apprehension and to certainty that [their] interests will not be prejudiced’ due to Epstein's representation of Nationwide in the current actions”]. If the Court determines it is unclear whether there is reasonable probability Counsel Zelin was “imparted confidential information [] that could be used to the [Plaintiff’s] disadvantage” a hearing should be held to before denying the motion. In re Azzi, 141 AD3d 1159, 1163 [4th Dept 2016]; see also Solow v W.R. Grace & Co., 83 NY2d 303, 309 [1994] [“The rule avoids the ‘appearance of impropriety’ on the part of the attorney or the law firm. Whether a conflict actually exists could be determined by a hearing but the rule requires disqualification even when there may not, in fact, be any conflict of interest so that any suggestion of impropriety is avoided”]. In light of the precedent above, Counsel Zelin has a direct conflict of interest in representing Defendants herein. Even if the Court disagrees there is a direct conflict, it is clear, at a minimum, Counsel Zelin’s representation of Defendants in this action creates an appearance of impropriety warranting his disqualification. 5 6 of 7 FILED: NASSAU COUNTY CLERK 03/18/2019 05:23 PM INDEX NO. 613848/2017 NYSCEF DOC. NO. 141 RECEIVED NYSCEF: 03/18/2019 CONCLUSION In accordance with the foregoing, Plaintiffs and Jointed Party Defendant Gagliardi respectfully request the Court issue an Order disqualifying Counsel Zelin from represcñting Defendapts, together with an award of fees and costs, and any other and further relief this Court deems just and proper. Dated: March 18, 2019. White Plains, New York Respectfully Submitted, TRIVE A & FORTE, LL AltfHUR . LER III Attorneys' for Plaintiffs and Anthony Gagliardi 1311 Mamaroneck Ave, Suite 170 White Plains, New York 10605 (914) 949-9075 6 7 of 7