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