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James E. v. Shelroc Homes

March 6, 2012


The opinion of the court was delivered by: Randolph F. Treece United States Magistrate Judge


Presently before this Court is Defendants' Motion to Disqualify Lee Palmateer, Esq., as Plaintiffs' Counsel. Dkt. No. 20, Defs.' Mot. to Disqualify, dated Nov. 18, 2011.*fn1 The Plaintiffs vigorously oppose Defendants' Motion, Dkt. No. 25,*fn2 to which the Defendants have filed a Reply thereto, Dkt. No. 26.*fn3

A disqualification motion is a "fact-intensive endeavor." Miness v. Ahuja, 762 F. Supp. 2d 465, 478 (E.D.N.Y. 2010) (citing, inter alia, Bd. of Educ. of City of New York v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979), admonishing that a decision to disqualify "can be reached only afer a painstaking analysis of the facts and precise application of precedent"). After reviewing the extensive submissions*fn4 by both parties, and performing a painstaking critique of those submissions, this Court found substantial disagreement between the parties as to the core facts and events, and concluded, "that [the difference] cannot be overcome without further fact finding."

Dkt. No. 37, Dec. & Order, dated Jan. 31, 2012, at p. 11. Accordingly, the Court directed that an evidentiary hearing should be held. Id. at p. 12.

After hearing from the parties during a Telephone Conference which was held on February 2, 2012, and after further research, the Court retreated from holding an evidentiary hearing and, in its stead, oral arguments were heard on February 15, 2012. Upon the conclusion of that Hearing, the Court reserved its decision and advised the parties that it would revisit the entire record.


A. Case No. 1:10-CV-876

Zalewski et al. v. T.P. Builders, Inc., et al.

On July 16, 2010, the Plaintiffs initiated a copyright infringement action, pursuant to 17 U.S.C. § 501, et seq., against approximately eighty parties, including the Defendants named in this action. Case No. 1:10-CV-876, Dkt. No. 1, compl. The basic gist of that infringement action alleges that Plaintiffs are builders and designers specializing in architectural and floor planning designs of residential homes. They accuse the Defendants, as well as numerous others, of violating their exclusive copyrights in the architectural designs of residential and colonial styles homes. More specifically, this action alleges that our Defendants infringed upon Plaintiffs' copyrighted drawings designated as DRA217 when they constructed a house at 4186 Albany Street, Albany, New York. Id. at ¶¶ 105-110(r), & 111-129 (Third Cause of Action). At the time Plaintiffs commenced this action, they were represented by Nancy Baum Delain, Esq., while the Defendants' insurer, Scottsdale Insurance Company, undertook their defense and provided representation through the Goldberg Segalla Law Firm, Christopher J. Belter, Esq., of Counsel.

As that litigation progressed over the following several months, stipulations of dismissal with prejudice were submitted to the Court which were converted into orders, sizably reducing the number of defendants to exclusively builders. See Dkt. Nos. 45-62, 64, 67, & 68. Further, Plaintiffs amended their complaint twice in order to narrow the allegations. See Dkt. Nos. 11, am. compl., dated Aug. 18, 2010, 60, second am. compl., dated Oct. 27, 2010 (Count Four, paragraphs 80-98, specifically refer to our Defendants). Because of the more narrowly defined allegations in the second amended complaint, the Defendants' insurer withdrew its defense and moved to withdraw. See Dkt. No. 95, sealed mot. to withdraw, dated Jan. 13, 2011. The Court granted the withdrawal motion and gave the Defendants thirty days to retain new counsel. Dkt. No. 99, sealed order, dated Feb. 3, 2011.


B. Lee Palmateer, Esq.

With the assistance of Philip Miller, Esq., the Defendants embarked upon securing new counsel. See generally Case No. 1:11-CV-1159, Dkt. Nos. 20-3, Joseph M. Clark's Decl., dated Nov. 16, 2011, & 20-4, Philip Miller, Esq., Decl., dated Nov. 15, 2011. Several attorneys were contacted but only two were interviewed. Attorney Palmateer was interviewed first by Defendant Joseph Clark and Attorney Miller on February 16, 2011, at Miller's law office. Prior to the Palmateer meeting, Attorney Miller conversed with Attorney Palmateer over the phone, and, in order for Palmateer to be prepared for their meeting, shared with him the case docket number of the pending litigation. Miller Decl., at ¶¶ 9-10. On February 16, 2011, Clark and Miller met with Palmateer at Miller's office. Id. at ¶ 13. Before Clark arrived, Miller and Palmateer discussed generally for approximately twenty minutes the pending litigation, including the procedural history, terms of engagement, and the Defendants' amenability to settlement and their settlement strategy. Id. at ¶ 15. Pursuant to both Clark's and Miller's averments, when Clark arrived, the conversation continued for another sixty minutes or so in which they, particularly Clark, shared confidential and privileged information that encompassed a detailed analysis of the overall case including the subject drawings Mr.

Zalewski was using to support his claims and the architectural drawings of the allegedly infringing home built by Shelroc and Capital Framing. Mr. Clark walked Mr. Palmateer through various aspects of both drawings, comparing and contrasting elements of both. Mr. Palmateer was actively involved in the discussion, asking questions and offering his opinions and advice.

Miller Decl., at ¶ 17; Clark Decl., at ¶ 3.

Clark and Miller represent that the candid conversations were not one-sided and that Palmateer offered his opinion and advice on a range of related subject matters. Miller at ¶ 17; Clark Decl., at ¶ 9. Additionally, Clark and Miller declare that their discussion with Palmateer included terms such as what Defendants might be willing to offer to settle ...

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