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FTI CONSULTING, INC. v. ROSSI

February 25, 2004.

FTI CONSULTING, INC., Plaintiff, -against- A. CAL ROSSI, JR., BASIC CAPITAL MANAGEMENT, INC., and GENE PHILLIPS, Defendants


The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge Page 2

OPINION

Plaintiff FTI Consulting, Inc. ("FTI") has moved for partial summary judgment pursuant to Fed.R.Civ.P. 56, against defendant A. Cal Rossi, Jr. ("Rossi") and Basic Capital Management, Inc. ("BCM"). For the reasons set forth below, FTI's summary judgment motion is granted.

Prior Proceedings

  The law firm of Lankier, Siffert & Wohl LLP ("LSW") was hired by defendant Rossi, the vice president of defendant BCM, to represent him on charges of racketeering and racketeering conspiracy, as well as other serious violations of federal laws for which convictions would have resulted in substantial prison terms. LSW and Frank H. Wohl ("Wohl"), a member of LSW, engaged several experts, including FTI, to assist in the defense. On February 13, 2002, after more than three months of trial, Rossi was acquitted of all charges.

  LSW and several of the experts, excluding FTI, filed suit on December 19, 2002, for non-payment of attorney's fees and other related fees. Defendants cross-moved to disqualify Wohl from representing the plaintiffs. Defendants' motion to disqualify was denied, and plaintiffs' motion for partial summary judgment was granted. See Lankier Siffert & Wohl v. Rossi, 287 F. Supp.2d 398, 408 (S.D.N.Y. 2003) ("Lankier"). Page 3

  FTI filed suit against Rossi, BCM and Phillips on June 3, 2003. On September 3, 2003, FTI filed a motion for partial summary judgment based only on Count II of their complaint, an account stated claim for a remaining balance of $202,840.82 plus interest claimed to be owed to FTI by Rossi and BCM. Rossi and BCM cross-moved to disqualify Wohl from representing FTI on October 20, 2003. After submission of briefs, both motions were deemed fully submitted on November 5, 2003.

 Facts

  According to FTI and Wohl, who is counsel for FTI in the present suit, LSW and defendant Phillips' counsel engaged FTI in or about June 2001, at Rossi's and Phillips' request, and with their approval, to conduct an independent analysis of various transactions, documents, transcripts and other matters that the government claimed were improper. FTI sent invoices for the amount of services performed and moneys due FTI, dated January 14, 2002 in the amount of $78,542.43 and February 13, 2002, in the amount of 124, 298.39, to Wohl. Prior balances owed FTI were paid by BCM on behalf of Rossi. Wohl then sent the invoices to Rossi and BCM on or about February 4, 2002 and February 20, 2002. Since in or about February 2002, the month of Rossi's acquittal, there has been no payment on these accounts. According to FTI, no objection by Rossi over the invoice amounts was communicated to FTI. Page 4

 The Motion to Disqualify Wohl Is Denied

  The Court has already decided substantially the same issues as those raised by FTI's motion here, in the related case, Lankier, 287 F. Supp.2d at 408.

  Rossi claims that Wohl committed to providing representation for Rossi and BCM regarding the FTI invoices in the dealings BCM had with its insurance company, American International Specialty Lines Insurance Company ("AISLIC"), which was indemnifying BCM for the costs of Rossi's (but not Phillips') defense. Rossi claims that Wohl's agreement included agreeing to review with FTI their billing, agreeing to negotiate on Rossi's and BCM's behalf and obtaining confidential information about the invoices. Rossi claims that the subsequent representation of FTI therefore constitutes a conflict of interest on the part of Wohl.

  In determining whether an attorney can oppose his former client, courts evaluate whether the new matter is substantially related to the subject matter of the prior representation. The substantial relationship test involves three considerations: 1) whether the moving party is a former client of the adverse party's counsel, 2) whether a substantial relationship between the subject matter of the prior representation and subsequent representation exists, and 3) whether counsel had access or likely access to Page 5 relevant privileged information. Evans v. Artek Systems Corp., 715 F.2d 788, 791 (2d Cir. 1983).

  As already held in Lankier, 287 F. Supp.2d at 405, the prior criminal representation of Rossi is not substantially related to the fee collection litigation. When "the only connection between this case and the plaintiff's prior representation is the matter of the allegedly unpaid fees," id. (quoting Cooney & Bainer, P.C. v. Milum, No. CV94-024 65 58, 1995 WL 373951, at *4 (Conn. Super. June 19, 1995)), a substantial relationship has not been demonstrated.

  It was also held previously that Rossi and BCM failed to show that either Wohl or LSW represented BCM in its dispute with the insurance company over billing. Lankier, 287 F. Supp.2d at 405-06. ("Even if Wohl had intervened on BCM's behalf and contacted the insurance company in some manner, such conduct would be insufficient to create an attorney-client relation between Wohl and BCM in light of BCM's ...


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