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FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023
NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF ROCKLAND
----------------------------------------------------------------------X
KPL GREEN LLC,
Plaintiff, Index No: 030709/2023
-against- Motion Seq. No. 002
GREENPORT/HUDSON ASSOCIATES, LLC,
MORGENSTERN DEVOESICK, PLLC,
as Escrow Agent, and CRAZY BEER WORLD, INC.,
Defendants.
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DEFENDANT MORGENSTERN DEVOESICK, PLLC’s MEMORANDUM OF LAW IN
SUPPORT OF MOTION TO DISQUALIFY PLAINTIFF’S ATTORNEYS
LEWIS BRISBOIS BISGAARD & SMITH LLP
Jeffrey Y. Spiegel, Esq., Esq.
Stephen G. Rickershauser, Esq.
Attorneys for Defendant Morgenstern DeVoesick,
PLLC
77 Water Street, Suite 2100
New York, New York 10005
(212) 232-1300
Jeffrey.spiegel@lewisbrisbois.com
Stephen.rickershauser@lewisbrisbois.com
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT .....................................................................................................1
PERTINENT BACKGROUND.......................................................................................................2
LEGAL STANDARD ......................................................................................................................7
ARGUMENT ...................................................................................................................................8
I. AS BOTH LENA E. PAXOS, ESQ. AND BRIAN K. CONDON, ESQ. WILL BE
NECESSARY WITNESSES AT THE TRIAL OF THIS ACTION, THEY AND
THE FIRM OF CONDON PAXOS PLLC SHOULD BE DISQUALIFIED ......................8
CONCLUSION ..............................................................................................................................11
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TABLE OF AUTHORITIES
Page
State Cases
Falk v. Gallo,
73 A.D.3d 685 (2d Dept. 2010) .............................................................................................8, 9
Friia v. Palumbo,
89 A.D.3d 896 (2d Dept. 2011) .........................................................................................7, 8, 9
Gould v. Decolator,
131 A.D.3d 448 (2d Dept. 2015) .....................................................................................7, 8, 10
Lauder v. Goldhamer,
122 A.D.3d 908 (2d Dept. 2014) ...............................................................................................7
S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp.,
69 N.Y.2d 437 (1987) ................................................................................................................7
Spielberg v. Twin Oaks Constr. Co., LLC,
134 A.D.3d 1015 (2d Dept. 2015) .........................................................................................7, 8
Court Rules
CPLR 3211(a)(1) .............................................................................................................................6
Rule 3.7 ........................................................................................................................................7, 8
Other Authorities
N.Y. Comp. Codes R. & Regs. Title 22 § 1200.21 (1999) ......................................................1, 7, 8
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Defendant Morgenstern DeVoesick, PLLC (“MDP”), by its undersigned attorneys, submits
this Memorandum of Law in support of its motion to disqualify Lena E. Paxos, Esq. and Brian K.
Condon, Esq. and their firm, Condon Paxos PLLC, as counsel for Plaintiff pursuant to N.Y. Comp.
Codes R. & Regs. Title 22 §1200.21 (1999), on the grounds that both Ms. Paxos and Mr. Condon,
the only members of the firm, are necessary witnesses for discovery and trial because they handled
the underlying transaction and have independent knowledge of material facts at issue in this matter.1
PRELIMINARY STATEMENT
Plaintiff brings the instant complaint (the “Complaint” or “Compl.”) against the defendants
seeking damages stemming from the purchase and sale of real property located at 300 Fairview
Avenue, Hudson, NY (the “Property”). It is beyond dispute that Mr. Condon and Ms. Paxos
represented Plaintiff in the underlying transaction which forms the basis of Plaintiff’s claims in this
action. The Complaint asserts (i) a breach of contract cause of action against Greenport Hudson
Associates, LLC (“GHA”), the seller of the Property; (ii) a breach of fiduciary duty claim against
MDP, GHA’s counsel for the transaction; and (iii) a declaratory judgment claim against Crazy Beer
World, Inc. (“Beer World”), a tenant of the Property. The pleadings, affidavits, and documentary
evidence submitted in this action all lay bare that both Ms. Paxos and Mr. Condon have independent
knowledge of material facts surrounding the underlying transaction and related agreements between
the parties, such that their testimony during discovery and at trial will be necessary. For these
reasons, and as developed below, the Court should grant disqualification of both attorneys and their
law firm.
1
Submitted herewith is the Affirmation of Jeffrey Y. Spiegel, Esq., dated December 29, 2023
(“Spiegel Aff.”) with annexed exhibits and the Affidavit of Jeffrey DeVoesick, Esq., sworn to on
December 29, 2023 (“DeVoesick Aff.”). References to “Ex. __” (bold) herein are to the Exhibits
annexed to the Spiegel Aff.
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PERTINENT BACKGROUND2
On or about June 7, 2022, GHA, as “Seller,” entered into a certain Contract for the Purchase
and Sale of Real Property (the “Contract”) with Maraki Realty Corp. (“Maraki”), as “Purchaser,”
with regard to the purchase and sale of the Property. (Compl. ¶6, Ex. A.) (Ex. B)3 Ms. Paxos and Mr.
Condon represented the Purchaser (i.e. Plaintiff) in the transaction. (DeVoesick Aff. at ¶6) Prior to
the execution of the Contract with Plaintiff, GHA entered into a lease agreement with Beer World to
lease approximately 17,000 square feet of space at the Property (the “Lease” or “Beer Lease”). (Ex.
D) The Lease provided Beer World with 120 days from the execution of the Lease to “move its
existing New York State SLA [State Liquor Authority] license to the leased space. This provision
was twice amended, extending the date to December 31, 2022. (Id.) Due to the existence of the
contingency Lease with Beer World, the Contract between Plaintiff and GHA provided in relevant
part, as follows:4
2. Purchase Price. The purchase price shall be Five Million Nine Hundred Thousand
Dollars ($5,900,000) (“Purchase Price”) payable to Purchaser in cash or certified at
Closing.
At Closing, $578,910.00 of the Purchase Price shall be escrowed (the “Escrow Fund”)
with Seller’s attorneys as Escrow Agent pending Seller’s execution of the proposed
lease (“Beer Lease”) with [Beer World]….
The respective parties have agreed that the end date of several contingencies set forth in
the Beer Lease (including, but not limited to, the liquor license contingencies) may
exceed the anticipated Closing Date, the Escrow Agent for the Premises shall continue
to hold the Escrow Fund until such date as the Beer Lease is executed and all
contingencies are cleared, satisfied, waived or removed or the Beer Lease is canceled.
2
MDP does not concede that the allegations in the Complaint (Ex. A) are accurate, but they
are assumed to be true for the purpose of this motion.
3
The Contract was thereafter amended by Addenda to Contract on three different occasions.
(Affidavit of Susan Gordon, Ex. A) (Ex. C). Pursuant to the first amendment the parties agreed that
the Purchaser would take title under the entity name KPL Green LLC (i.e. Plaintiff). (Id.)
4
In the Contract, “Purchaser” refers to Plaintiff; “Seller” refers to GHA.
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Within three (3) days of the Beer Lease not being executed, Seller shall provide
Purchaser’s counsel with written notice of the same and, upon Purchaser’s receipt of
said notice, the full amount of the Escrow Fund shall be remitted to Purchaser’s counsel.
If the Escrow Fund is dispersed to Purchaser as a result of [Beer World’s] failure to
execute the Beer Lease, or satisfy the contingencies set forth therein, the Purchaser
and/or its affiliates covenant and agree that they shall have no right to seek any further
indemnification or compensation from Seller in excess of the Escrow Fund.
If the contingencies are satisfied, cleared, waived and/or removed and the Beer Lease is
executed, then the full amount of the Escrow Fund shall be transferred to the Seller,
upon three (3) days written notice to Purchaser’s counsel, less the monthly rent
payments, as set forth in the Beer Lease, which shall be released to Purchaser in
amounts equal to the monthly rent and the four (4) month construction period (the
“Forgiveness Period”). However, should the Beer Lease not be fully executed on or
before the Closing Date, Seller shall also authorize the release of said monthly rent
payments from the Closing Date up to and through the Forgiveness Period. It being
understood and agreed between Seller and Purchaser that once rent payments are made
pursuant to the Beer Lease, no further monthly payments from the Escrow Fund shall be
tendered to Purchaser and the remaining Escrow Fund shall be released to Seller upon
three (3) days written notice to Purchaser.
Contract, Section 2 (Compl. Ex. A)
The Contract further provided:
12. Survival of Representations. All representations, warranties and agreements made
by either party shall not survive Closing and transfer of title.
Id. at Section 12
On or about November 8, 2022, the purchase and sale transaction contemplated by the
Contract was closed, and Plaintiff accepted title to the Property. (Compl. ¶16.) Plaintiff and GHA
executed a Real Estate Closing Statement (“Closing Statement”). (Gordon Aff. ¶7, Ex. A) (Ex. I)
Pursuant to the Closing Statement, GHA and Plaintiff agreed to credit Plaintiff $74,865.38 for the
Beer Lease. (Id. at ¶8, Ex. B.) However, the Closing Statement made no provision for the
$578,910.00 Escrow Fund. (Id.; see also DeVoesick Aff. at ¶12) A material factual dispute exists
whether Plaintiff, by way of its attorneys, caused the Purchase Price (as defined in the Contract) and
proceeds of the sale to be disbursed as reflected in the Closing Statement, rather than delivering
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$578,910.00 of the Contract Purchase Price to MDP or otherwise failed to make arrangements for
the creation or funding of the Escrow Fund with MDP. (Gordon Aff. ¶9); (DeVoesick Aff. ¶17)
On December 30, 2022, counsel for Beer World, Albert Hrdlicka, emailed MDP requesting a
further extension of the liquor contingency, stating that the liquor authority had not yet processed
Beer World’s application. (Compl., Ex. F.) Hrdlicka further stated that “just in case the landlord
doesn’t agree to the extension the tenant reserves their right to cancel the lease since they have not
received the liquor license yet.” (Id.) Plaintiff alleges that on January 3, 2023, three days after
expiration of Beer World’s liquor contingency, Hrdlicka contacted counsel for Plaintiff (Condon
Paxos PLLC) requesting the extension. (Compl. ¶23.) On January 18, Plaintiff’s firm emailed MDP
requesting immediate proof of the Escrow Fund “in light of the recent developments with Beer
World”. (Compl., Ex. E.) On January 24, 2023, Plaintiff allegedly sent notices to GHA, MDP and
Beer World, acknowledging and accepting Beer World’s supposed termination of the Beer Lease.5
(Compl. ¶24.) Mr. Condon then sent notices to GHA and MDP that same day demanding
disbursement of the Escrow Fund pursuant to the Contract. (Id. ¶28.) Plaintiff alleges that to date
MDP has failed to provide proof of disbursement of the Escrow Fund. (Id. ¶29.)
The Complaint’s First Cause of Action alleges breach of contract against GHA and the
Second Cause of Action alleges breach of fiduciary duty against MDP, both for failing to hold
$578,910 in escrow until the liquor contingency was either satisfied, cleared, waived or removed or
the Beer Lease was terminated. The Third Cause of Action seeks a judgment declaring that Beer
World terminated the Lease with Plaintiff effective January 1, 2023, thereby triggering disbursement
of the Escrow Fund as contemplated by the Contract.
5
Beer World’s Verified Answer with Counterclaims specifically denies terminating the lease
and seeks judgment declaring that the lease is in full force and effect. (Ex. F ¶¶ 30-45)
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On April 14, 2023, MDP and GHA jointly moved to dismiss the Complaint.6 GHA argued,
among other things, that Plaintiff failed to adequately allege its own performance under the Contract
and the plain language of the Contract barred Plaintiff from bringing this action. MDP argued,
among other things, that Plaintiff could not state a claim for breach of fiduciary duty against MDP
because a fiduciary relationship never existed, a fact both undisputed and corroborated by
documentary evidence. (see e.g. Joint Motion to Dismiss papers) (Exs. G-I, L)
In support of Plaintiff’s opposition to defendants’ motion, Ms. Paxos submitted a fact
affidavit, which she based upon her own personal knowledge. (See Affidavit of Lena E. Paxos, Esq.
“Paxos Aff.”) (Ex. K) Ms. Paxos’ affidavit and the exhibits attached thereto unequivocally
demonstrate that disqualification of Condon Paxos PLLC is warranted. In her affidavit, Ms. Paxos
attests to having independent knowledge about numerous material facts surrounding the underlying
transaction for which Plaintiff brings this current litigation, including details about the Contract,
negotiations regarding the terms thereof, and the meaning and interpretation of such terms. (Id at
¶¶5-24). Ms. Paxos further attests to facts purporting to support the establishment of an escrow fund.
She states on several occasions that her firm communicated directly with MDP about the wiring of
funds that “Plaintiff remitted, through counsel… to MDP’s escrow account” (Id at ¶¶28-29) and that
“[o]n November 14, 2022, MDP accepted an additional $77,273.91 into its escrow account from our
firm via wire” (Id at ¶33, Ex. F).
Concerning the purported Escrow Fund, Ms. Paxos makes the following attestations:
- Pursuant to the Contract [], Seller’s attorneys, MDP, were to act as Escrow Agent and
establish an Escrow Fund from the closing proceeds, provided by the Plaintiff, to ensure
6
MDP and GHA moved to dismiss Plaintiff’s First and Second Causes of Action based on
documentary evidence and for failure to state a cause of action. (Ex. G) Plaintiff’s Third Cause of
Action alleges declaratory judgment, in response to which Beer World filed its answer with
counterclaims.
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that there was money to be returned to the Plaintiff should there be a termination of the
Beer Lease. (Paxos Aff. ¶34)
- There was no obligation on the part of the Plaintiff nor its counsel as it relates to the
Escrow Fund except for Plaintiff’s obligation to pay the closing proceeds on the Closing
Date to GHA – which it did. (Id. at ¶35)
- Pursuant to the Contract [], the Escrow Agent, MDP, was required to provide written
notice to counsel for the Plaintiff prior to releasing any of the Escrow Fund to GHA.
Neither MDP, nor anyone on its behalf, provided any such written notice to Plaintiff. (Id.
at ¶36)
As further sworn to by Ms. Paxos in her affidavit, she and Mr. Condon were intimately
involved in the discussions leading up to Beer World’s purported termination of the Beer Lease and
the ensuing dispute relating to the purported escrow funds. (Id. at ¶¶ 37-49). Indeed, she attests that
her firm engaged in no less than one dozen communications with MDP and Beer World’s counsel
between January 18 and January 24, 2023 regarding these material issues. (Id.) Mr. Condon is
included on each email correspondence that Ms. Paxos annexed to her fact affidavit (Id., Exs. B –
G), which confirms that he has independent knowledge about the discussions and correspondence.
(Id. at ¶¶ 45-46, Ex. H-I)
The Court denied defendants’ Joint Motion to Dismiss in its entirety pursuant to the Decision
and Order, dated November 1, 2023 (the “Order”). (Ex. M) The Court considered, among other
things, the factual affidavit of Ms. Paxos and exhibits annexed thereto. (See Order at 2) With respect
to defendants’ motion to dismiss pursuant to CPLR 3211(a)(1), the Court found that Section 2 of the
Contract pertaining to the creation of the Escrow to be ambiguous and denied dismissal on that
ground. (Id. at 4.)
Based on the foregoing, on November 20, 2023, MDP interposed its Verified Answer to the
Complaint (Ex. N) and served deposition notices for both Ms. Paxos and Mr. Condon (Exs. Q and
R, respectively).
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MDP now seeks an Order disqualifying the attorneys and the firm of Condon Paxos PLLC as
counsel for Plaintiff pursuant to N.Y. Comp. Codes R. & Regs. Title 22 §1200.21 (1999) on the
grounds that both Ms. Paxos and Mr. Condon are the only members of their firm and will be
necessary witnesses at the trial of this matter.
LEGAL STANDARD
“The disqualification of an attorney is a matter that rests within the sound discretion of the
Supreme Court.” Spielberg v. Twin Oaks Constr. Co., LLC, 134 A.D.3d 1015, 1015 (2d Dept. 2015)
quoting Lauder v. Goldhamer, 122 A.D.3d 908, 910 (2d Dept. 2014). A party's entitlement to be
represented in ongoing litigation by counsel of his or her own choosing is a valued right which
should not be abridged absent a clear showing that disqualification is warranted. Spielberg, 134
A.D.3d at 1015 (internal citations and quotations omitted). But disqualification is regularly granted
when, as here, a party’s attorney is a necessary witness. An attorney should be disqualified when the
court determines that the attorney's testimony is necessary. See S & S Hotel Ventures Ltd.
Partnership v. 777 S.H. Corp., 69 N.Y.2d 437, 445 (1987). In determining whether the attorney's
testimony is necessary, the court must consider the relevance of the expected testimony and must
"take[] into account such factors as the significance of the matters, weight of the testimony, and
availability of other evidence." Id. at 446.
“The advocate-witness rules contained in Rules of Professional Conduct (22 NYCRR
1200.0) rule 3.7 provide guidance, but not binding authority, for courts in determining whether to
disqualify an attorney.” Gould v. Decolator, 131 A.D.3d 448, 449 (2d Dept. 2015). “Nevertheless,
pursuant to rule 3.7 of the Rules of Professional Conduct (22 NYCRR 1200.0), unless certain
exceptions apply, a lawyer shall not act as advocate before a tribunal in a matter in which the lawyer
is likely to be a witness on a significant issue of fact.” Friia v. Palumbo, 89 A.D.3d 896, 896 (2d
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Dept. 2011) (emphasis added) (internal quotations omitted); Rules of Professional Conduct (22
NYCRR 1200.0) rule 3.7(a); see Falk v. Gallo, 73 A.D.3d 685, 686 (2d Dept. 2010).
ARGUMENT
I. AS BOTH LENA E. PAXOS, ESQ. AND BRIAN K. CONDON, ESQ. WILL BE
NECESSARY WITNESSES AT THE TRIAL OF THIS ACTION, THEY AND
THE FIRM OF CONDON PAXOS PLLC SHOULD BE DISQUALIFIED
New York law is clear that a lawyer who is a necessary witness at a trial should not be the
lawyer for one of the litigants. Under rule 3.7(a), when “it is obvious that the lawyer ought to be
called as a witness of significant issue” on behalf of a client, the lawyer should not agree to the
representation. See Spielberg, 134 A.D.3d at 1015; Gould, 131 A.D.3d at 449; Friia, 89 A.D.3d at
896; Falk, 73 A.D.3d at 686. If the attorney does accept the representation, he or she is vulnerable to
a motion to disqualify.
In Spielberg, the Appellate Division, Second Department affirmed the Supreme Court’s
decision to disqualify the plaintiff’s attorney in a breach of contract action. 134 A.D.3d at 1015. The
Court found that the plaintiff’s counsel participated in negotiating the subject contract and was likely
to be a witness with respect to a significant factual issue and under such circumstances,
disqualification was warranted. Id. at 1016 (internal citations omitted)
Similarly, in Gould, the Second Department affirmed the Supreme Court’s decision which
granted the defendant’s motion to disqualify plaintiff’s attorney and his law firm in an action to
recover legal fees. 131 A.D.3d at 448. The Court found that the attorney negotiated and drafted an
agreement between the parties pertaining to the payment of legal fees at issue and thus, was likely to
be a material witness with respect to a significant fact. Id. at 449. Further, since the attorney
negotiated and drafted the agreement, he had personal knowledge of material facts relating to the
relevant provisions thereof. Id. Under these circumstances, disqualification was warranted. Id.
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In Friia, the Second Department reversed a decision which denied the defendant’s motion to
disqualify the plaintiff’s counsel in an action concerning the recovery of damages for conversion
stemming from the defendant’s withdrawal of funds from the parties’ joint bank accounts. 89 A.D.3d
at 896. Material issues of the case turned on the origins of the funds in the joint accounts. The Court
found that plaintiff’s counsel was the “only person, other than the parties, who had knowledge of”
the advice he gave to the defendant regarding the funds at issue and thus was likely to be a witness
on a significant issue of fact. Id.
Finally, in Falk, the Second Department affirmed an order granting the defendants’ motion to
disqualify the plaintiff’s attorney in an action to recover damages for a breach of contract. 73 A.D.3d
at 686. The defendants moved to disqualify plaintiff’s attorney on the ground that he was a necessary
trial witness for the defendant because he was present during the conversations between the parties
regarding the terms of the oral agreement at issue. Id. The Appellate Division found that because (i)
plaintiff’s attorney was present during the conversations between the parties regarding the terms of
the agreement at issue and (ii) plaintiff’s attorney was the only person other than the parties who had
knowledge of discussions regarding the agreement at issue, he was likely to be a witness on a
significant issue of fact and he therefore had to be disqualified. Id.
In the instant matter, it is obvious that both Ms. Paxos and Mr. Condon are necessary
witnesses in this matter regarding several significant issues of fact that touch the heart of Plaintiff’s
claims. As to Plaintiff’s First Cause of Action for breach of contract, Ms. Paxos and Mr. Condon
will be called to testify as to the formation of the Contract, the negotiation and meaning of its terms,
the scope of the alleged non-performance and the damages suffered. Plaintiff’s breach of contract
claim stems from GHA’s purported breach for failing to hold $578,910 in escrow until the liquor
contingency was either satisfied, cleared, waived or removed, or the Beer Lease was terminated as
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contemplated by Section 2 of the Contract (Compl. ¶36, Ex. A.) Based on the Court’s ruling that
Section 2 of the Contract is ambiguous (Order at 4), the testimony of Ms. Paxos and Mr. Condon
regarding the negotiation of this material term will be necessary as they are the only witnesses other
than the parties with independent knowledge. See e.g. Gould, 131 A.D.3d at 448 (lawyer who
negotiated and drafted agreement at issue disqualified as a material witness with respect to a
significant fact). The testimony of Ms. Paxos and Mr. Condon about the interpretation of Section 2
of the Contract may lend support for defendants’ position that the Contract terms prevent Plaintiff
from prevailing on its breach claims (see e.g. Joint Motion to Dismiss), and as such testimony will
be prejudicial to Plaintiff, disqualification is warranted.
As to Plaintiff’s Second Cause of Action for breach of fiduciary duty, Ms. Paxos and Mr.
Condon’s testimony regarding the interpretation of Section 2 of the Contract will also be necessary.
They will also be called to testify as to the creation and establishment of an escrow fund and their
obligations with respect thereto, the circumstances surrounding the Closing, oral agreements
communicated by counsel, and alleged damages suffered by Plaintiff. As previously stated,
defendants dispute that an escrow fund was ever created and intend to demonstrate throughout the
course of this litigation that Plaintiff failed to deliver the Escrow Fund to MDP or otherwise make
arrangements for its creation or funding. As Mr. DeVoesick states, “Plaintiff’s counsel’s obligations
vis-à-vis the funding of the Escrow Fund (as defined in the Contract), and the agreement
communicated by Ms. Paxos and Mr. Condon with regard to the Beer Lease credit and $15,000.00
escrow are material issues that need to be explored throughout the course of this litigation.”
(DeVoesick Aff. ¶21) Plaintiff cannot testify as to these matters; only Ms. Paxos and Mr. Condon
can. Accordingly, failure to conduct such discovery would be highly prejudicial to Plaintiff.
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Ms. Paxos’ affidavit states that there was “no obligation on the part of the Plaintiff nor its
counsel as it relates to the Escrow Fund except for Plaintiff’s obligation to pay the closing proceeds
on the Closing Date…” (Paxos Aff. ¶35) Defendants dispute the factual and legal merit of this
statement. (See DeVoesick Aff. ¶¶14-15) Again, whether Plaintiff’s firm had obligations at the
Closing beyond those attested to by Ms. Paxos in her affidavit is an issue that is both necessary and
material to Plaintiff’s breach claims and which Plaintiff’s firm alone has independent knowledge of.
Further, throughout the underlying transaction, MDP regularly communicated directly with
Ms. Paxos and Mr. Condon about the Contract, the Closing, and the disbursement of proceeds.
These communications between counsel are materially relevant to Plaintiff’s breach claims;
communications which Plaintiff was not involved in and of which only Ms. Paxos and Mr. Condon
have independent knowledge of. (Id. ¶23)
As to Plaintiff’s Third Cause of Action for declaratory judgment, Ms. Paxos and Mr. Condon
will be called to testify as to the circumstances surrounding Beer World’s purported termination of
the Beer Lease as they – not Plaintiff - were directly involved in the communications and
correspondence which form the basis of Plaintiff’s claim. (see Paxos Aff. ¶¶ 37-49, Exs. B-I)
Based on the foregoing, it is undeniable that these two attorneys will provide material and
necessary testimony at trial. As such, the Court should disqualify Plaintiff’s firm Condon Paxos
PLLC from any further representation in this action.
CONCLUSION
For the foregoing reasons, and those set forth in the accompanying papers, it is respectfully
submitted that Ms. Paxos and Mr. Condon, and their firm, Condon Paxos PLLC, should be
disqualified as counsel for the plaintiff, and such other and further relief as is just and proper should
be granted.
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Dated: December 29, 2023
New York, New York LEWIS BRISBOIS BISGAARD & SMITH LLP
By: /s/ Jeffrey Y. Spiegel, Esq.
Jeffrey Y. Spiegel, Esq.
Stephen G. Rickershauser, Esq.
Attorneys for Defendant Morgenstern
DeVoesick PLLC
77 Water Street, Suite 2100
New York, New York 10005
212-232-1300
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Certificate of Compliance
Pursuant to the Uniform Civil Rules for the Supreme and County Courts, I hereby certify that
the number of words in the foregoing document, according to the word count on the word processing
program utilized, inclusive of point headings and footnotes, and exclusive of the caption, tables of
contents and tables of authorities, signature block and this certificate of compliance is 3,867.
Dated: December 29, 2023
New York, New York
By: /s/ Jeffrey Y. Spiegel, Esq.
Jeffrey Y. Spiegel, Esq.
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FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF ROCKLAND ----------------------------------------------------------------------X KPL GREEN LLC, Plaintiff, Index No: 030709/2023 -against- Motion Seq. No. 002 GREENPORT/HUDSON ASSOCIATES, LLC, MORGENSTERN DEVOESICK, PLLC, as Escrow Agent, and CRAZY BEER WORLD, INC., Defendants. ---------------------------------------------------------------------X DEFENDANT MORGENSTERN DEVOESICK, PLLC’s MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISQUALIFY PLAINTIFF’S ATTORNEYS LEWIS BRISBOIS BISGAARD & SMITH LLP Jeffrey Y. Spiegel, Esq., Esq. Stephen G. Rickershauser, Esq. Attorneys for Defendant Morgenstern DeVoesick, PLLC 77 Water Street, Suite 2100 New York, New York 10005 (212) 232-1300 Jeffrey.spiegel@lewisbrisbois.com Stephen.rickershauser@lewisbrisbois.com 133757435.1 1 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 TABLE OF CONTENTS Page PRELIMINARY STATEMENT .....................................................................................................1 PERTINENT BACKGROUND.......................................................................................................2 LEGAL STANDARD ......................................................................................................................7 ARGUMENT ...................................................................................................................................8 I. AS BOTH LENA E. PAXOS, ESQ. AND BRIAN K. CONDON, ESQ. WILL BE NECESSARY WITNESSES AT THE TRIAL OF THIS ACTION, THEY AND THE FIRM OF CONDON PAXOS PLLC SHOULD BE DISQUALIFIED ......................8 CONCLUSION ..............................................................................................................................11 133757435.1 i 2 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 TABLE OF AUTHORITIES Page State Cases Falk v. Gallo, 73 A.D.3d 685 (2d Dept. 2010) .............................................................................................8, 9 Friia v. Palumbo, 89 A.D.3d 896 (2d Dept. 2011) .........................................................................................7, 8, 9 Gould v. Decolator, 131 A.D.3d 448 (2d Dept. 2015) .....................................................................................7, 8, 10 Lauder v. Goldhamer, 122 A.D.3d 908 (2d Dept. 2014) ...............................................................................................7 S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp., 69 N.Y.2d 437 (1987) ................................................................................................................7 Spielberg v. Twin Oaks Constr. Co., LLC, 134 A.D.3d 1015 (2d Dept. 2015) .........................................................................................7, 8 Court Rules CPLR 3211(a)(1) .............................................................................................................................6 Rule 3.7 ........................................................................................................................................7, 8 Other Authorities N.Y. Comp. Codes R. & Regs. Title 22 § 1200.21 (1999) ......................................................1, 7, 8 133757435.1 ii 3 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 Defendant Morgenstern DeVoesick, PLLC (“MDP”), by its undersigned attorneys, submits this Memorandum of Law in support of its motion to disqualify Lena E. Paxos, Esq. and Brian K. Condon, Esq. and their firm, Condon Paxos PLLC, as counsel for Plaintiff pursuant to N.Y. Comp. Codes R. & Regs. Title 22 §1200.21 (1999), on the grounds that both Ms. Paxos and Mr. Condon, the only members of the firm, are necessary witnesses for discovery and trial because they handled the underlying transaction and have independent knowledge of material facts at issue in this matter.1 PRELIMINARY STATEMENT Plaintiff brings the instant complaint (the “Complaint” or “Compl.”) against the defendants seeking damages stemming from the purchase and sale of real property located at 300 Fairview Avenue, Hudson, NY (the “Property”). It is beyond dispute that Mr. Condon and Ms. Paxos represented Plaintiff in the underlying transaction which forms the basis of Plaintiff’s claims in this action. The Complaint asserts (i) a breach of contract cause of action against Greenport Hudson Associates, LLC (“GHA”), the seller of the Property; (ii) a breach of fiduciary duty claim against MDP, GHA’s counsel for the transaction; and (iii) a declaratory judgment claim against Crazy Beer World, Inc. (“Beer World”), a tenant of the Property. The pleadings, affidavits, and documentary evidence submitted in this action all lay bare that both Ms. Paxos and Mr. Condon have independent knowledge of material facts surrounding the underlying transaction and related agreements between the parties, such that their testimony during discovery and at trial will be necessary. For these reasons, and as developed below, the Court should grant disqualification of both attorneys and their law firm. 1 Submitted herewith is the Affirmation of Jeffrey Y. Spiegel, Esq., dated December 29, 2023 (“Spiegel Aff.”) with annexed exhibits and the Affidavit of Jeffrey DeVoesick, Esq., sworn to on December 29, 2023 (“DeVoesick Aff.”). References to “Ex. __” (bold) herein are to the Exhibits annexed to the Spiegel Aff. 133757435.1 1 4 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 PERTINENT BACKGROUND2 On or about June 7, 2022, GHA, as “Seller,” entered into a certain Contract for the Purchase and Sale of Real Property (the “Contract”) with Maraki Realty Corp. (“Maraki”), as “Purchaser,” with regard to the purchase and sale of the Property. (Compl. ¶6, Ex. A.) (Ex. B)3 Ms. Paxos and Mr. Condon represented the Purchaser (i.e. Plaintiff) in the transaction. (DeVoesick Aff. at ¶6) Prior to the execution of the Contract with Plaintiff, GHA entered into a lease agreement with Beer World to lease approximately 17,000 square feet of space at the Property (the “Lease” or “Beer Lease”). (Ex. D) The Lease provided Beer World with 120 days from the execution of the Lease to “move its existing New York State SLA [State Liquor Authority] license to the leased space. This provision was twice amended, extending the date to December 31, 2022. (Id.) Due to the existence of the contingency Lease with Beer World, the Contract between Plaintiff and GHA provided in relevant part, as follows:4 2. Purchase Price. The purchase price shall be Five Million Nine Hundred Thousand Dollars ($5,900,000) (“Purchase Price”) payable to Purchaser in cash or certified at Closing. At Closing, $578,910.00 of the Purchase Price shall be escrowed (the “Escrow Fund”) with Seller’s attorneys as Escrow Agent pending Seller’s execution of the proposed lease (“Beer Lease”) with [Beer World]…. The respective parties have agreed that the end date of several contingencies set forth in the Beer Lease (including, but not limited to, the liquor license contingencies) may exceed the anticipated Closing Date, the Escrow Agent for the Premises shall continue to hold the Escrow Fund until such date as the Beer Lease is executed and all contingencies are cleared, satisfied, waived or removed or the Beer Lease is canceled. 2 MDP does not concede that the allegations in the Complaint (Ex. A) are accurate, but they are assumed to be true for the purpose of this motion. 3 The Contract was thereafter amended by Addenda to Contract on three different occasions. (Affidavit of Susan Gordon, Ex. A) (Ex. C). Pursuant to the first amendment the parties agreed that the Purchaser would take title under the entity name KPL Green LLC (i.e. Plaintiff). (Id.) 4 In the Contract, “Purchaser” refers to Plaintiff; “Seller” refers to GHA. 133757435.1 2 5 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 Within three (3) days of the Beer Lease not being executed, Seller shall provide Purchaser’s counsel with written notice of the same and, upon Purchaser’s receipt of said notice, the full amount of the Escrow Fund shall be remitted to Purchaser’s counsel. If the Escrow Fund is dispersed to Purchaser as a result of [Beer World’s] failure to execute the Beer Lease, or satisfy the contingencies set forth therein, the Purchaser and/or its affiliates covenant and agree that they shall have no right to seek any further indemnification or compensation from Seller in excess of the Escrow Fund. If the contingencies are satisfied, cleared, waived and/or removed and the Beer Lease is executed, then the full amount of the Escrow Fund shall be transferred to the Seller, upon three (3) days written notice to Purchaser’s counsel, less the monthly rent payments, as set forth in the Beer Lease, which shall be released to Purchaser in amounts equal to the monthly rent and the four (4) month construction period (the “Forgiveness Period”). However, should the Beer Lease not be fully executed on or before the Closing Date, Seller shall also authorize the release of said monthly rent payments from the Closing Date up to and through the Forgiveness Period. It being understood and agreed between Seller and Purchaser that once rent payments are made pursuant to the Beer Lease, no further monthly payments from the Escrow Fund shall be tendered to Purchaser and the remaining Escrow Fund shall be released to Seller upon three (3) days written notice to Purchaser. Contract, Section 2 (Compl. Ex. A) The Contract further provided: 12. Survival of Representations. All representations, warranties and agreements made by either party shall not survive Closing and transfer of title. Id. at Section 12 On or about November 8, 2022, the purchase and sale transaction contemplated by the Contract was closed, and Plaintiff accepted title to the Property. (Compl. ¶16.) Plaintiff and GHA executed a Real Estate Closing Statement (“Closing Statement”). (Gordon Aff. ¶7, Ex. A) (Ex. I) Pursuant to the Closing Statement, GHA and Plaintiff agreed to credit Plaintiff $74,865.38 for the Beer Lease. (Id. at ¶8, Ex. B.) However, the Closing Statement made no provision for the $578,910.00 Escrow Fund. (Id.; see also DeVoesick Aff. at ¶12) A material factual dispute exists whether Plaintiff, by way of its attorneys, caused the Purchase Price (as defined in the Contract) and proceeds of the sale to be disbursed as reflected in the Closing Statement, rather than delivering 133757435.1 3 6 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 $578,910.00 of the Contract Purchase Price to MDP or otherwise failed to make arrangements for the creation or funding of the Escrow Fund with MDP. (Gordon Aff. ¶9); (DeVoesick Aff. ¶17) On December 30, 2022, counsel for Beer World, Albert Hrdlicka, emailed MDP requesting a further extension of the liquor contingency, stating that the liquor authority had not yet processed Beer World’s application. (Compl., Ex. F.) Hrdlicka further stated that “just in case the landlord doesn’t agree to the extension the tenant reserves their right to cancel the lease since they have not received the liquor license yet.” (Id.) Plaintiff alleges that on January 3, 2023, three days after expiration of Beer World’s liquor contingency, Hrdlicka contacted counsel for Plaintiff (Condon Paxos PLLC) requesting the extension. (Compl. ¶23.) On January 18, Plaintiff’s firm emailed MDP requesting immediate proof of the Escrow Fund “in light of the recent developments with Beer World”. (Compl., Ex. E.) On January 24, 2023, Plaintiff allegedly sent notices to GHA, MDP and Beer World, acknowledging and accepting Beer World’s supposed termination of the Beer Lease.5 (Compl. ¶24.) Mr. Condon then sent notices to GHA and MDP that same day demanding disbursement of the Escrow Fund pursuant to the Contract. (Id. ¶28.) Plaintiff alleges that to date MDP has failed to provide proof of disbursement of the Escrow Fund. (Id. ¶29.) The Complaint’s First Cause of Action alleges breach of contract against GHA and the Second Cause of Action alleges breach of fiduciary duty against MDP, both for failing to hold $578,910 in escrow until the liquor contingency was either satisfied, cleared, waived or removed or the Beer Lease was terminated. The Third Cause of Action seeks a judgment declaring that Beer World terminated the Lease with Plaintiff effective January 1, 2023, thereby triggering disbursement of the Escrow Fund as contemplated by the Contract. 5 Beer World’s Verified Answer with Counterclaims specifically denies terminating the lease and seeks judgment declaring that the lease is in full force and effect. (Ex. F ¶¶ 30-45) 133757435.1 4 7 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 On April 14, 2023, MDP and GHA jointly moved to dismiss the Complaint.6 GHA argued, among other things, that Plaintiff failed to adequately allege its own performance under the Contract and the plain language of the Contract barred Plaintiff from bringing this action. MDP argued, among other things, that Plaintiff could not state a claim for breach of fiduciary duty against MDP because a fiduciary relationship never existed, a fact both undisputed and corroborated by documentary evidence. (see e.g. Joint Motion to Dismiss papers) (Exs. G-I, L) In support of Plaintiff’s opposition to defendants’ motion, Ms. Paxos submitted a fact affidavit, which she based upon her own personal knowledge. (See Affidavit of Lena E. Paxos, Esq. “Paxos Aff.”) (Ex. K) Ms. Paxos’ affidavit and the exhibits attached thereto unequivocally demonstrate that disqualification of Condon Paxos PLLC is warranted. In her affidavit, Ms. Paxos attests to having independent knowledge about numerous material facts surrounding the underlying transaction for which Plaintiff brings this current litigation, including details about the Contract, negotiations regarding the terms thereof, and the meaning and interpretation of such terms. (Id at ¶¶5-24). Ms. Paxos further attests to facts purporting to support the establishment of an escrow fund. She states on several occasions that her firm communicated directly with MDP about the wiring of funds that “Plaintiff remitted, through counsel… to MDP’s escrow account” (Id at ¶¶28-29) and that “[o]n November 14, 2022, MDP accepted an additional $77,273.91 into its escrow account from our firm via wire” (Id at ¶33, Ex. F). Concerning the purported Escrow Fund, Ms. Paxos makes the following attestations: - Pursuant to the Contract [], Seller’s attorneys, MDP, were to act as Escrow Agent and establish an Escrow Fund from the closing proceeds, provided by the Plaintiff, to ensure 6 MDP and GHA moved to dismiss Plaintiff’s First and Second Causes of Action based on documentary evidence and for failure to state a cause of action. (Ex. G) Plaintiff’s Third Cause of Action alleges declaratory judgment, in response to which Beer World filed its answer with counterclaims. 133757435.1 5 8 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 that there was money to be returned to the Plaintiff should there be a termination of the Beer Lease. (Paxos Aff. ¶34) - There was no obligation on the part of the Plaintiff nor its counsel as it relates to the Escrow Fund except for Plaintiff’s obligation to pay the closing proceeds on the Closing Date to GHA – which it did. (Id. at ¶35) - Pursuant to the Contract [], the Escrow Agent, MDP, was required to provide written notice to counsel for the Plaintiff prior to releasing any of the Escrow Fund to GHA. Neither MDP, nor anyone on its behalf, provided any such written notice to Plaintiff. (Id. at ¶36) As further sworn to by Ms. Paxos in her affidavit, she and Mr. Condon were intimately involved in the discussions leading up to Beer World’s purported termination of the Beer Lease and the ensuing dispute relating to the purported escrow funds. (Id. at ¶¶ 37-49). Indeed, she attests that her firm engaged in no less than one dozen communications with MDP and Beer World’s counsel between January 18 and January 24, 2023 regarding these material issues. (Id.) Mr. Condon is included on each email correspondence that Ms. Paxos annexed to her fact affidavit (Id., Exs. B – G), which confirms that he has independent knowledge about the discussions and correspondence. (Id. at ¶¶ 45-46, Ex. H-I) The Court denied defendants’ Joint Motion to Dismiss in its entirety pursuant to the Decision and Order, dated November 1, 2023 (the “Order”). (Ex. M) The Court considered, among other things, the factual affidavit of Ms. Paxos and exhibits annexed thereto. (See Order at 2) With respect to defendants’ motion to dismiss pursuant to CPLR 3211(a)(1), the Court found that Section 2 of the Contract pertaining to the creation of the Escrow to be ambiguous and denied dismissal on that ground. (Id. at 4.) Based on the foregoing, on November 20, 2023, MDP interposed its Verified Answer to the Complaint (Ex. N) and served deposition notices for both Ms. Paxos and Mr. Condon (Exs. Q and R, respectively). 133757435.1 6 9 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 MDP now seeks an Order disqualifying the attorneys and the firm of Condon Paxos PLLC as counsel for Plaintiff pursuant to N.Y. Comp. Codes R. & Regs. Title 22 §1200.21 (1999) on the grounds that both Ms. Paxos and Mr. Condon are the only members of their firm and will be necessary witnesses at the trial of this matter. LEGAL STANDARD “The disqualification of an attorney is a matter that rests within the sound discretion of the Supreme Court.” Spielberg v. Twin Oaks Constr. Co., LLC, 134 A.D.3d 1015, 1015 (2d Dept. 2015) quoting Lauder v. Goldhamer, 122 A.D.3d 908, 910 (2d Dept. 2014). A party's entitlement to be represented in ongoing litigation by counsel of his or her own choosing is a valued right which should not be abridged absent a clear showing that disqualification is warranted. Spielberg, 134 A.D.3d at 1015 (internal citations and quotations omitted). But disqualification is regularly granted when, as here, a party’s attorney is a necessary witness. An attorney should be disqualified when the court determines that the attorney's testimony is necessary. See S & S Hotel Ventures Ltd. Partnership v. 777 S.H. Corp., 69 N.Y.2d 437, 445 (1987). In determining whether the attorney's testimony is necessary, the court must consider the relevance of the expected testimony and must "take[] into account such factors as the significance of the matters, weight of the testimony, and availability of other evidence." Id. at 446. “The advocate-witness rules contained in Rules of Professional Conduct (22 NYCRR 1200.0) rule 3.7 provide guidance, but not binding authority, for courts in determining whether to disqualify an attorney.” Gould v. Decolator, 131 A.D.3d 448, 449 (2d Dept. 2015). “Nevertheless, pursuant to rule 3.7 of the Rules of Professional Conduct (22 NYCRR 1200.0), unless certain exceptions apply, a lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact.” Friia v. Palumbo, 89 A.D.3d 896, 896 (2d 133757435.1 7 10 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 Dept. 2011) (emphasis added) (internal quotations omitted); Rules of Professional Conduct (22 NYCRR 1200.0) rule 3.7(a); see Falk v. Gallo, 73 A.D.3d 685, 686 (2d Dept. 2010). ARGUMENT I. AS BOTH LENA E. PAXOS, ESQ. AND BRIAN K. CONDON, ESQ. WILL BE NECESSARY WITNESSES AT THE TRIAL OF THIS ACTION, THEY AND THE FIRM OF CONDON PAXOS PLLC SHOULD BE DISQUALIFIED New York law is clear that a lawyer who is a necessary witness at a trial should not be the lawyer for one of the litigants. Under rule 3.7(a), when “it is obvious that the lawyer ought to be called as a witness of significant issue” on behalf of a client, the lawyer should not agree to the representation. See Spielberg, 134 A.D.3d at 1015; Gould, 131 A.D.3d at 449; Friia, 89 A.D.3d at 896; Falk, 73 A.D.3d at 686. If the attorney does accept the representation, he or she is vulnerable to a motion to disqualify. In Spielberg, the Appellate Division, Second Department affirmed the Supreme Court’s decision to disqualify the plaintiff’s attorney in a breach of contract action. 134 A.D.3d at 1015. The Court found that the plaintiff’s counsel participated in negotiating the subject contract and was likely to be a witness with respect to a significant factual issue and under such circumstances, disqualification was warranted. Id. at 1016 (internal citations omitted) Similarly, in Gould, the Second Department affirmed the Supreme Court’s decision which granted the defendant’s motion to disqualify plaintiff’s attorney and his law firm in an action to recover legal fees. 131 A.D.3d at 448. The Court found that the attorney negotiated and drafted an agreement between the parties pertaining to the payment of legal fees at issue and thus, was likely to be a material witness with respect to a significant fact. Id. at 449. Further, since the attorney negotiated and drafted the agreement, he had personal knowledge of material facts relating to the relevant provisions thereof. Id. Under these circumstances, disqualification was warranted. Id. 133757435.1 8 11 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 In Friia, the Second Department reversed a decision which denied the defendant’s motion to disqualify the plaintiff’s counsel in an action concerning the recovery of damages for conversion stemming from the defendant’s withdrawal of funds from the parties’ joint bank accounts. 89 A.D.3d at 896. Material issues of the case turned on the origins of the funds in the joint accounts. The Court found that plaintiff’s counsel was the “only person, other than the parties, who had knowledge of” the advice he gave to the defendant regarding the funds at issue and thus was likely to be a witness on a significant issue of fact. Id. Finally, in Falk, the Second Department affirmed an order granting the defendants’ motion to disqualify the plaintiff’s attorney in an action to recover damages for a breach of contract. 73 A.D.3d at 686. The defendants moved to disqualify plaintiff’s attorney on the ground that he was a necessary trial witness for the defendant because he was present during the conversations between the parties regarding the terms of the oral agreement at issue. Id. The Appellate Division found that because (i) plaintiff’s attorney was present during the conversations between the parties regarding the terms of the agreement at issue and (ii) plaintiff’s attorney was the only person other than the parties who had knowledge of discussions regarding the agreement at issue, he was likely to be a witness on a significant issue of fact and he therefore had to be disqualified. Id. In the instant matter, it is obvious that both Ms. Paxos and Mr. Condon are necessary witnesses in this matter regarding several significant issues of fact that touch the heart of Plaintiff’s claims. As to Plaintiff’s First Cause of Action for breach of contract, Ms. Paxos and Mr. Condon will be called to testify as to the formation of the Contract, the negotiation and meaning of its terms, the scope of the alleged non-performance and the damages suffered. Plaintiff’s breach of contract claim stems from GHA’s purported breach for failing to hold $578,910 in escrow until the liquor contingency was either satisfied, cleared, waived or removed, or the Beer Lease was terminated as 133757435.1 9 12 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 contemplated by Section 2 of the Contract (Compl. ¶36, Ex. A.) Based on the Court’s ruling that Section 2 of the Contract is ambiguous (Order at 4), the testimony of Ms. Paxos and Mr. Condon regarding the negotiation of this material term will be necessary as they are the only witnesses other than the parties with independent knowledge. See e.g. Gould, 131 A.D.3d at 448 (lawyer who negotiated and drafted agreement at issue disqualified as a material witness with respect to a significant fact). The testimony of Ms. Paxos and Mr. Condon about the interpretation of Section 2 of the Contract may lend support for defendants’ position that the Contract terms prevent Plaintiff from prevailing on its breach claims (see e.g. Joint Motion to Dismiss), and as such testimony will be prejudicial to Plaintiff, disqualification is warranted. As to Plaintiff’s Second Cause of Action for breach of fiduciary duty, Ms. Paxos and Mr. Condon’s testimony regarding the interpretation of Section 2 of the Contract will also be necessary. They will also be called to testify as to the creation and establishment of an escrow fund and their obligations with respect thereto, the circumstances surrounding the Closing, oral agreements communicated by counsel, and alleged damages suffered by Plaintiff. As previously stated, defendants dispute that an escrow fund was ever created and intend to demonstrate throughout the course of this litigation that Plaintiff failed to deliver the Escrow Fund to MDP or otherwise make arrangements for its creation or funding. As Mr. DeVoesick states, “Plaintiff’s counsel’s obligations vis-à-vis the funding of the Escrow Fund (as defined in the Contract), and the agreement communicated by Ms. Paxos and Mr. Condon with regard to the Beer Lease credit and $15,000.00 escrow are material issues that need to be explored throughout the course of this litigation.” (DeVoesick Aff. ¶21) Plaintiff cannot testify as to these matters; only Ms. Paxos and Mr. Condon can. Accordingly, failure to conduct such discovery would be highly prejudicial to Plaintiff. 133757435.1 10 13 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 Ms. Paxos’ affidavit states that there was “no obligation on the part of the Plaintiff nor its counsel as it relates to the Escrow Fund except for Plaintiff’s obligation to pay the closing proceeds on the Closing Date…” (Paxos Aff. ¶35) Defendants dispute the factual and legal merit of this statement. (See DeVoesick Aff. ¶¶14-15) Again, whether Plaintiff’s firm had obligations at the Closing beyond those attested to by Ms. Paxos in her affidavit is an issue that is both necessary and material to Plaintiff’s breach claims and which Plaintiff’s firm alone has independent knowledge of. Further, throughout the underlying transaction, MDP regularly communicated directly with Ms. Paxos and Mr. Condon about the Contract, the Closing, and the disbursement of proceeds. These communications between counsel are materially relevant to Plaintiff’s breach claims; communications which Plaintiff was not involved in and of which only Ms. Paxos and Mr. Condon have independent knowledge of. (Id. ¶23) As to Plaintiff’s Third Cause of Action for declaratory judgment, Ms. Paxos and Mr. Condon will be called to testify as to the circumstances surrounding Beer World’s purported termination of the Beer Lease as they – not Plaintiff - were directly involved in the communications and correspondence which form the basis of Plaintiff’s claim. (see Paxos Aff. ¶¶ 37-49, Exs. B-I) Based on the foregoing, it is undeniable that these two attorneys will provide material and necessary testimony at trial. As such, the Court should disqualify Plaintiff’s firm Condon Paxos PLLC from any further representation in this action. CONCLUSION For the foregoing reasons, and those set forth in the accompanying papers, it is respectfully submitted that Ms. Paxos and Mr. Condon, and their firm, Condon Paxos PLLC, should be disqualified as counsel for the plaintiff, and such other and further relief as is just and proper should be granted. 133757435.1 11 14 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 Dated: December 29, 2023 New York, New York LEWIS BRISBOIS BISGAARD & SMITH LLP By: /s/ Jeffrey Y. Spiegel, Esq. Jeffrey Y. Spiegel, Esq. Stephen G. Rickershauser, Esq. Attorneys for Defendant Morgenstern DeVoesick PLLC 77 Water Street, Suite 2100 New York, New York 10005 212-232-1300 133757435.1 12 15 of 16 FILED: ROCKLAND COUNTY CLERK 12/29/2023 04:42 PM INDEX NO. 030709/2023 NYSCEF DOC. NO. 63 RECEIVED NYSCEF: 12/29/2023 Certificate of Compliance Pursuant to the Uniform Civil Rules for the Supreme and County Courts, I hereby certify that the number of words in the foregoing document, according to the word count on the word processing program utilized, inclusive of point headings and footnotes, and exclusive of the caption, tables of contents and tables of authorities, signature block and this certificate of compliance is 3,867. Dated: December 29, 2023 New York, New York By: /s/ Jeffrey Y. Spiegel, Esq. Jeffrey Y. Spiegel, Esq. 133757435.1 13 16 of 16