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State v. The Monfort Trust

United States District Court, E.D. New York

October 7, 2014

STATE OF NEW YORK and THE NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Plaintiffs,
v.
THE MONFORT TRUST, KENNETH ANSCHUTZ, Individually and as Trustee of the Monfort Trust, TOWNSEND ANSHUTZ, Individually and as Trustee of the Monfort Trust, PAMELA J. MONFORT, Individually and as Trustee of the Monfort Trust, NANCY FAMIGLIETTI, as Trustee of the Monfort Trust, JAMES C. TITUS, as Trustee of the Monfort Trust, DEBORAH FIREBAUGH, and JOHN L. BRADLEY, JR., Defendants. JOHN L. BRADLEY, JR., Third-Party Plaintiff,
v.
O.J
v.
REALTY CORP., MUSSO 3636 LLC, MUSSO PROPERTIES, LLC and VICTOR A. MUSSO, Individually, Third Party Defendants. THE MONFORT TRUST, TOWNSEND AUSHUTZ, Individually and as Trustee of the Monfort Trusts, PAMELA J. MONFORT, Individually and as Trustee of the Monfort Trusts, NANCY FAMIGLIETTI, Individually and as Trustee of the Monfort Trusts, and JAMES C. TITUS, Individually and as Trustee of the Monfort Trusts, Third Party Plaintiffs,
v.
MUSSO 3636 LLC and VICTOR MUSSO, Third Party Defendants.

ORDER

STEVEN I. LOCKE, Magistrate Judge.

This case comprises a first party action and two third party actions. Before the Court are two motions brought by the third party plaintiffs in the third party actions to disqualify attorney Theodore Firetog from representing third party defendants. See Docket Entries ("DE") [73] & [95]. Third party plaintiff John Bradley submitted supplemental papers with the court's permission. Defendants oppose the motions. For the reasons stated below, the motions are denied.

BACKGROUND

The First Party Action

The complaint was filed by the State of New York and the New York State Department of Environmental Conservation (the "DEC") pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601, et seq. ("CERCLA"), to recover costs for the clean-up of the former Munsey Dry Cleaners Site ("the Site") located in Port Washington, New York. According to the complaint, the Site was owned by the Monfort Trust, and each of its trustees are named as co-owners. The DEC and the owners of the Site entered negotiations regarding assessment of the Site for the presence of hazardous materials and remediation. In October 2000, DEC and the defendants entered into a consent order (the "Agreement") that was amended in May 2002. Under the terms of the Agreement, defendants were to reimburse the State for work related to the Site within thirty days of receiving an invoice for that work. The Agreement "caps reimbursement of the State's costs at $30, 000, unless DEC determines that additional investigative work is required to be performed and the Respondents [Monfort Trust and trustees] perform the additional investigative work pursuant to this Order, ' in which case Respondents shall also pay to the Department the additional State costs.'" Compl., ¶ 34, DE [1].

The DEC sent invoices requesting payment for additional investigative work on September 26, 2002, June 8, 2005, and June 27, 2006, but defendants only paid $30, 000. Plaintiffs instituted this action to recover the remainder of costs owed under the invoices, as well as future costs associated with the clean-up effort at the Site.

Third Party Actions

On February 8, 2013, two third party complaints were filed. The first was brought only by defendant trustee John L. Bradley, Jr., see DE [32], while the second was filed by the Monfort Trust and most of the other individual trustee defendants. See DE [34]. Victor Musso and Musso 3636 LLC were named as third party defendants in both actions, while the Bradley third party complaint also named O.J.V. Realty Corp. and Musso Properties.

According to the third party complaints, on November 5, 2003 the Monfort Trust sold and conveyed title to the Site to third party defendant Musso 3636. Third party defendant Victor Musso had been the property manager at the Site prior to the sale. In connection with the sale, two indemnification agreements were executed in September 2003 - one between Bradley, individually and as a Beneficiary under the Monfort Trust, and O.J.V. Realty Corp. and Victor Musso, see DE [32-4], the second between Pamela Monfort, James Titus, Townsend Anshutz and Nancy Famiglietti, individually and as Trustees of the Monfort Trust, and O.J.V. Realty Corp. and Victor Musso. See DE [73-8].[1] Bradley's third party complaint asserts claims for breach of contract and promissory estoppel, while the other third party complaint seeks indemnification together with attorneys' fees and costs. In both third party actions, Musso asserted a crossclaim[2] for contribution and/or indemnification from the third party plaintiffs.

Attorney Firetog and the Motions to Disqualify

Currently before the Court are two motions to disqualify attorney Theodore Firetog from continuing to represent Musso in this case.[3] After Bradley submitted a motion on notice seeking the disqualification, the third party plaintiffs in the other third party action attempted to join Bradley's motion. Noting that such an approach would be inappropriate since there are two distinct third party actions, Magistrate Judge Wall denied the request and allowed them to submit their own motion. They have done so, albeit as a letter motion. Defendants have opposed both motions. Bradley also argues that Firetog's conflict is imputed to his co-counsel, Richard Goldberg of the Law Offices of Steven Cohn, P.C., thus requiring disqualification of Goldberg and the Cohn firm as well.

It is undisputed that Firetog represented the Montfort Trust and its beneficiaries during the negotiations between the DEC and the Monfort Trust regarding the clean-up of the Site. See Firetog Decl. ¶ 2, S.J. Mot. Ex. C, DE [73-4] (in which Firetog affirms that he represented all the Montfort Trust defendants in connection with environmental matters relating to the Site, including the Order of Consent dated October 7, 2000 and the subsequent modification on May 7, 2002). Firetog claims, however, that he did not have anything to do with the drafting or negotiation of the Indemnification Agreements at issue in the third party complaints, nor did he represent any party in the sale of the Site from the Trust to Musso. Third party plaintiffs do not dispute this, but argue that the information he received while representing them during the negotiation of the Consent Orders with the DEC is relevant to the third party actions and necessitates his disqualification.

DISCUSSION

Legal ...


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