United States District Court, S.D. New York
July 6, 2005.
BANGKOK CRAFTS CORPORATION, Plaintiff/Counterclaim Defendant,
CAPITOLO DI SAN PIETRO IN VATICANO, Defendant/Counterclaimant. CAPITOLO DI SAN PIETRO IN VATICANO, Defendant/Counterclaimant, v. TREASURES OF ST. PETER'S IN THE VATICAN LTD., et al., Additional Counterclaim Defendants.
The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
On April 12, 2005, third-party plaintiffs E-21 Global Inc.
(a.k.a. Magi XXI, Inc.) ("E-21"), Craig Franco ("Franco"), and
Maxx International ("Maxx") (collectively, the "Third-Party
Plaintiffs") moved for an order disqualifying John Meringolo
("Meringolo") as counsel to counterclaim defendant New
Renaissance Art, Inc. ("NewRen"). For the reasons set forth
below, the motion is denied.
On August 23, 2004, this Court granted the motion of
third-party defendant Gerald P. Colapinto ("Colapinto") and
Second Renaissance, LLC ("SRLLC") to dismiss fraud claims
asserted by NewRen and the Third-Party Plaintiffs on the grounds
that they had failed to plead the facts underlying their claims
with requisite particularity pursuant Rule 9(b), Fed.R.Civ.P.
See Bangkok Crafts Corp. v. Capitolo di San Pietro in
Vaticano, 331 F. Supp. 2d 247 (S.D.N.Y. 2004). On September 7,
2004, Global, Franco, Maxx, and NewRen moved, inter alia, for
leave to amend the third-party complaint. On September 29, 2004,
the Court signed a stipulation and order withdrawing the
September 7 motion.
On October 27, 2004, the Court granted Meringolo's motion to
withdraw as counsel to E-21, Franco, Maxx, and NewRen. On December 30, 2004, an order was signed permitting Greenberg
Traurig, LLP to appear as counsel for E-21, Franco, and Maxx.
During the week of January 24, 2005, Meringolo was re-engaged by
NewRen. On February 16, 2005, the Court granted the motion of
Richard M. Greene to withdraw as co-counsel to NewRen. On
February 3, 2005, the Third-Party Plaintiffs renewed their motion
to file an amended third party complaint against Colapinto,
SRLLC, and additional counterclaim defendants Bangkok Crafts
Corporation ("BCC") and Treasures of St. Peter's in the Vatican
("TSV"). On February 28, 2005, Colapinto and SRLLC filed
opposition to the Third-Party Plaintiffs' renewed motion. On
February 22, 2005, Meringolo and David NewRen founder,
president, and sole shareholder of NewRen filed declarations in
support of Colapinto's and SRLLC's opposition to Third-Party
Plaintiffs' renewed motion. On March 9, 2005, Meringolo filed a
supplemental declaration concerning the Third-Party Plaintiffs'
The instant motion was filed on March 12, 2005. It was heard
and marked fully submitted on May 25, 2005. On June 6, 2005, an
order was entered (1) determining that Meringolo's February 22,
2005 declaration had improperly disclosed communications between
and among the Third-Party Plaintiffs and their counsel, and (2)
requiring, inter alia, that Meringolo and all parties to the
action and their counsel return to counsel for the Third-Party
Plaintiffs all copies of the communications at issue. Discussion
The gravamen of the Third-Party Plaintiffs' motion is that
Meringolo has breached his duty of loyalty to them by (1)
withdrawing the September 4, 2004 motion for leave to amend
without their consent, (2) opposing (on his own behalf and on
behalf of NewRen) their renewed motion for leave to amend, and
(3) improperly disclosing their privileged communications in
connection with that opposition. According to the Third-Party
Plaintiffs, Meringolo should be disqualified because the
above-described acts constitute violations of Canon 5 of New
York's Code of Professional Responsibility. See N.Y. Code of
Professional Responsibility DR 5-105, N.Y. Comp. Code R. & Regs.
tit. 22, § 1200.24(a),(b).
Meringolo argues that disqualification is inappropriate
because: (1) NewRen does not have any claims that are adverse to
those of the Third-Party Plaintiffs; (2) the Third-Party
Plaintiffs have no interest in the outcome of the claims of the
Capitolo Di San Pietro in Vaticano ("Capitolo") against NewRen,
and (3) NewRen has no interest in the outcome of the Third-Party
Plaintiffs' claims against SRLLC, Colapinto and the other
The Second Circuit has stated that:
[t]he authority of federal courts to disqualify
attorneys derives from their inherent power to
"preserve the integrity of the adversary process." Bd. of Educ. v.
Nyguist, 590 F.2d 1241, 1246 (2d Cir. 1979). . . .
Although our decisions on disqualification motions
often benefit from guidance offered by the American
Bar Association (ABA) and state disciplinary rules,
see, e.g., Fund of Funds, Ltd. v. Arthur
Andersen & Co., 567 F.2d 225, 227 n. 2 (2d Cir.
1977); Silver Chrysler Plymouth, Inc. v. Chrysler
Motors Corp., 518 F.2d 751, 753 (2d Cir. 1975), such
rules merely provide general guidance and not every
violation of a disciplinary rule will necessarily
lead to disqualification. . . .
Hempstead Video, Inc. v. Incorporated Village of Valley Stream,
409 F.3d 127
, 132 (2d Cir. 2005).
Motions to disqualify counsel have long been disfavored in this
Circuit. See, e.g., Evans v. Artek Sys. Corp.,
715 F.2d 788, 791-92 (2d Cir. 1983) (enumerating the reasons for which
disqualification motions are disfavored); Bennett Silvershein
Assoc. v. Furman, 776 F. Supp. 800, 802 (S.D.N.Y. 1991) ("The
Second Circuit has indeed been loathe to separate a client from
his chosen attorney. . . .") (collecting cases).
"Disqualification motions are often made for tactical reasons,
and thereby unduly interfere with a party's right to employ
counsel of his choice." Skidmore v. Warburg Dillon Read L.L.C.,
No. 99 Civ. 10525 (NRB), 2001 WL 504876, at *2 (S.D.N.Y. May 11,
2001) (citing Nyguist, 590 F.2d at 1246). Moreover,
disqualification motions, "even when made in the best of faith . . .
inevitably cause delay." Evans, 715 F.2d at 792 (quoting
Nyguist, 590 F.2d at 1246). A "high standard of proof" is
therefore required from one who moves to disqualify counsel.
Id. at 791 (quoting Government of India v. Cook Industries, Inc., 569 F.2d 737, 739 (2d Cir. 1978)). The appearance of
impropriety alone does not warrant disqualification. See
Nyguist, 590 F.2d at 1246-47. Rather, "unless an attorney's
conduct tends to `taint the underlying trial' . . . by disturbing
the balance of the presentations . . ., courts should be quite
hesitant to disqualify an attorney." Id. at 1246 (quoting W.T.
Grant Co. v. Haines, 531 F.2d 671, 678 (2d Cir. 1976)).
It has been stated that
[o]nly two readily identifiable situations raise the
specter that the litigation will be tainted if one
side's counsel is permitted to remain in the case:
when the challenged attorney is concurrently
representing adverse interests so that his vigor in
pursuing the interests of one of them is
questionable, see, e.g., Fund of Funds, Ltd. v.
Arthur Andersen & Co., 567 F.2d 225 (2d Cir. 1977);
or when the attorney's successive representation of
adverse interests raises the possibility that in the
present matter he will improperly use confidences
gained in the prior representation to the detriment
of his former client, see, e.g., Cheng v. GAF
Corp., 631 F.2d 1052 (2d Cir. 1980), vacated on
other grounds and remanded, 450 U.S. 903,
101 S.Ct. 1338, 67 L.Ed.2d 327 (1981).
U.S. Football League v. National Football League,
605 F.Supp. 1448, 1452 (S.D.N.Y. 1985).
Here, it is not clear that the interests of NewRen are adverse
to those of Meringolo's former clients. To be sure, by filing the
February 22, 2005 declarations, Meringolo and NewRen have taken
positions that are at odds with those of Meringolo's former
clients. In attempting to undermine the interests of his former clients in this way, Meringolo may well have violated
state disciplinary rules and the local civil rules of this
However, the Third-Party Plaintiffs have failed to carry the
"heavy burden of proving facts" sufficient to establish that the
interests of NewRen are adverse to those of Meringolo's former
clients. See Evans, 715 F.2d at 794 (2d Cir. 1983) (citing
Government of India, 569 F.2d at 739). The Third-Party
Plaintiffs have not seriously controverted Meringolo's assertion
(1) that NewRen does not have any claims that are adverse to
those of the Third-Party Plaintiffs, (2) that the Third-Party
Plaintiffs have no interest in the outcome of Capitolo's claims
against NewRen, and (3) that NewRen has no interest in the
outcome of the Third-Party Plaintiffs' claims against SRLLC,
Colapinto and the other third-party defendants.
Based on the foregoing, the Third-Party Plaintiffs' motion to
disqualify Meringolo is hereby denied. Leave is granted to the
Third-Party Plaintiffs to renew their motion to disqualify in the
event that the posture of the parties changes such that NewRen's
interests become demonstrably adverse to those of the Third-Party
It is so ordered.
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