The opinion of the court was delivered by: ROBERT W. SWEET
Defendant Loews Theatre Management Corp. ("Loews") has moved by order to show cause for an order pursuant to DR 5-102(B) of the Disciplinary Rules of the Code of Professional Responsibility ("DR 5-102(B)"), 22 N.Y.C.R.R. § 1200.21, disqualifying the firm of Davis & Gilbert from representing plaintiff Parke-Hayden, Inc. ("Parke-Hayden").
The facts of this case have been discussed in detail in a prior opinion of this court, familiarity with which is assumed. See Parke-Hayden, Inc. v. Loews Theatre Mgt. Corp., 789 F. Supp. 1257, No. 91 Civ. 0215 (S.D.N.Y. Apr. 20, 1992) (the "Opinion").
On June 1, 1992, Loews moved by order to show cause for an order, among other things compelling the deposition of Robert P. Reichman ("Reichman"). Reichman is an attorney at Davis & Gilbert who provided legal services to Broadway-72 Associates (the "Owner"), prior to becoming associated with Davis & Gilbert. In a bench ruling on June 9, 1992, this court granted Loews's application to the extent of ordering Reichman's deposition. After conducting Reichman's deposition, Loews brought the present motion by order to show cause on July 15, 1992. The motion was made returnable on July 21, 1992, at which time oral argument was heard and the motion considered fully submitted.
By this action, Parke-Hayden seeks to obtain from Loews a brokerage commission relating to a proposed lease between Loews and the Owner on the grounds that it was impliedly employed by Loews to procure the lease. At the time the proposed lease was being negotiated, Reichman, then a member of the firm of Dreyer & Traub, represented the Owner in the negotiations. Although Loews has characterized Reichman as the Owner's "principal negotiator," the prominence of his role has not been established by fact. It is uncontested, however, that Reichman was privy to conversations between Loews and the Owner and had many conversations himself with Loews representatives regarding the proposed lease. In response to interrogatories, Parke-Hayden has identified Reichman as one of four people having knowledge of facts material to this case.
Sometime after the events at issue in this litigation, Reichman left Dreyer & Traub and joined Davis & Gilbert.
Loews's motion to disqualify Davis & Gilbert is based on DR 5-102(B), which provides that:
If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that the lawyer or a lawyer in his firm may be called as a witness other than on behalf of the client, the lawyer may continue the representation until it is apparent that the testimony is or may be prejudicial to the client at which point the lawyer and the firm must withdraw from acting as an advocate before the tribunal.
Loews argues that this rule mandates Davis & Gilbert's withdrawal because Reichman, a lawyer in the firm of Davis & Gilbert, "may" be called as a defense witness and because his testimony "is or may be prejudicial" to Parke-Hayden.
In view of the potential for use as a tactical device, motions to disqualify are subject to "fairly strict scrutiny, particularly motions under subdivision (B) [of DR 5-102]." Lamborn v. Dittmer, 873 F.2d 522, 531 (2d Cir. 1989). Although a literal reading of DR 5-102(B) mandates disqualification merely on the showing that the potential testimony of a witness-advocate may be prejudicial to the party his firm represents, under New York law the party seeking disqualification must demonstrate that it is likely that the "'testimony to be given by the witness is necessary'" and that it is substantially likely to be prejudicial to the party represented by his firm. Luk Lamellen U. Kupplungsbau GmbH v. Lerner, 167 A.D.2d 451, 452-53, 562 N.Y.S.2d 134 (2d Dep't 1990) (quoting S & S Hotel Ventures Ltd. Partnership v. 777 S. H. Corp., 69 N.Y.2d 437, 515 N.Y.S.2d 735, 508 N.E.2d 647 (1987)); see also, e.g., Plotkin v. Interco Dev. Corp., 137 A.D.2d 671, 524 N.Y.S.2d 763 (2d Dep't 1988); In re Estate of Bartoli, 137 Misc.2d 499, 521 N.Y.S.2d 392 (Surr. Ct. Nassau County 1987), aff'd, 143 A.D.2d 830, 533 N.Y.S.2d 324 (2d Dep't 1988); L-S Plate & Wire Corp. v. Federal Ins. Co., N. 88 Civ. 0706, slip op. at 4 (S.D.N.Y. Mar. 28, 1989) (movant must demonstrate genuine necessity for testimony and substantial prejudice); Rice v. Baron, 456 F. Supp. 1361, 1371 (S.D.N.Y. 1978) (movant bears burden of establishing existence of factors warranting disqualification).
In determining the "necessity" of the testimony, a court should consider such factors as the significance of the matter, the weight of the testimony and the availability of other evidence. S & S Hotel Ventures Ltd. Partnership, 69 N.Y. 2d at 446. For testimony to be "prejudicial" under the rule,
the "projected testimony of a lawyer or firm member must be sufficiently adverse to the factual assertions or account of events offered on behalf of the client such that the bar or the client might have an interest in the lawyer's independence in discrediting that testimony." Furthermore, the moving party "bears the burden of demonstrating specifically how and as to what issues in ...