Abrams v. Kearney
| Decision Date | 10 November 1986 |
| Citation | 508 N.Y.S.2d 850,133 Misc.2d 845 |
| Parties | In the Matter of the Application of Robert ABRAMS, Attorney General of the State of New York, and Edward V. Regan, Comptroller of the State of New York, Petitioners, v. For an Order Directing John D. KEARNEY, Public Administrator of Richmond County, Respondent, To Submit to a Sworn Examination Pursuant to a Subpoena Served Upon Him. |
| Court | New York Supreme Court |
Robert Abrams, Atty. Gen., for petitioners.
John J. Turvey, James J. Hasson, Staten Island, for respondent.
The public administrator in the County of Richmond is appointed by the Surrogate of that County (Surrogate's Court Procedure Act § 1102(2) ). He has the authority to take charge of the property of an intestate who leaves no eligible persons to receive letters of administration surviving. (S.C.P.A. § 1112). His powers with respect to such property are enumerated in S.C.P.A. § 1123.
In the exercise of his duties, the public administrator is responsible for the receipt and disbursement of large sums of money and other property.
The State Attorney General and State Comptroller are conducting a joint investigation into the management policies of the public administrators within New York City and outlying counties. (Wise, Agencies Probe Counsel Fees Paid via Public Administrators, New York Law Journal, 9/22/86 p. 1 col. 3). As part of this investigation, auditors and other personnel from these agencies examined the books and records of the Richmond County Public Administrator at his offices for a two week period. The Public Administrator cooperated in that aspect of the investigation.
In further pursuit of this investigation, the Attorney General issued and served administrative subpoenae duces tecum upon the Richmond County Public Administrator, John D. Kearney, and his counsel, James J. Hasson, Esq. and John J. Turvey, Esq. The Attorney General seeks the public administrator's testimony concerning the financial and management practices and policies of his office. For example, they intend to inquire as to why he had allegedly delayed completion of the administration of some estates; why real property has been allegedly sold privately, rather than at public auction, and why he is allegedly holding money in bank accounts bearing little or no interest. According to the Attorney General's memorandum, the justification and circumstances surrounding these practices must be fully explored.
When Kearney, Hasson, and Turvey refused to comply unconditionally with the subpoenae, the Attorney General commenced this proceeding to judicially enforce them, and to compel their compliance. Petitioners, Robert Abrams, as Attorney General of the State of New York, and Edward Regan, as Comptroller of the State of New York, also seek to disqualify Hasson and Turvey as counsel for the public administrator, and to exclude their presence at his examination, on the ground, inter alia, that they are also targets of this investigation.
Respondent Kearney has cross-moved to quash the subpoenae duces tecum claiming, inter alia, that it was issued without statutory authority.
Counsel for the respective parties appeared before this court for oral argument and for an offer of proof on October 9, 1986.
In view of all the proceedings in this matter until this point in time, it appears to the court that two major issues are crystallized for determination. FIRST, should the public administrator's counsel, appointed by the Surrogate, be disqualified from representing him during these administrative investigative proceedings? If not, should they at least be excluded from the public administrator's presence during his oral deposition? SECOND, do the petitioners have sufficient authority to conduct this deposition in the first place? If so, what is the scope and breadth of the permissible inquiry?
The court will address these issues ad seriatim.
Disciplinary Rule 5-102(B) provides:
If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm may be called as a witness other than on behalf of his client, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his client.
The courts have been attentive in recognizing the potential for abuse under this rule where one counsel seeks to disqualify opposing counsel on the grounds that he intends to call his adversary to give prejudicial testimony. They have imposed a relatively high standard of proof upon the party seeking the disqualification. In Rice v. Baron, 456 F.Supp. 1361, the court, after noting that the rule was never intended to permit lawyers to call opposing counsel as witnesses and thereby disqualify them as counsel, held that the moving party "bears the burden of demonstrating specifically how and as to what issues in the case the prejudice may occur and that the likelihood of such prejudice occurring is substantial." (456 F.Supp. at 1371). This rule has been similarly stated in other decisions as well (see e.g. Freeman v. Kulicke & Soffa Ltd., 449 F.Supp. 974; Lefkowitz v. Mr. Man Ltd., 111 A.D.2d 119, 489 N.Y.S.2d 498; Jacobson v. Van Rhyn, 98 A.D.2d 764, 469 N.Y.S.2d 480 (2d Dept.); Tucker v. Weissman, 89 A.D.2d 852, 453 N.Y.S.2d 41 (2d Dept.) ).
The court must now examine the offer of proof made by petitioner on the issue of what prejudice will result to respondent if counsel were to testify.
Counsel stated, at oral argument, that there were delays in completing the administration of some estates, and that some correspondence exists from the public administrator to counsel asking why they hadn't been closed.
Standing alone, this does not demonstrate clearly adverse positions between the public administrator and his counsel. Any responses to his inquiries may be totally consistent with his position, and any inference that they may prejudice the public administrator is purely speculative. In addition, Mssrs. Hasson and Turvey have been counsel to the public administrator only for the last two years. Thus, they would not be in a position to testify in response to inquiries about matters occurring prior thereto, and likewise could not testify as to the status of any estates over which they assumed no responsibilities. The Attorney General has wholly failed to differentiate between the matters over which Hasson and Turvey have assumed responsibility as counsel and those assigned to their predecessor.
The court also notes at this point that the petitioners' offer of proof emanated from the arguments of counsel, without the testimony of witnesses with knowledge of the facts, nor was there an offer of the documents referred to by counsel.
Accordingly, the court is of the opinion that petitioners have failed to meet their burden of proof on this issue. Their proof is simply too vague and speculative, and they have failed to show any substantial likelihood of prejudice to respondent if counsel were to testify.
However, should it become apparent during or after the examination of Kearney, Hasson or Turvey, that counsel will be put in a position of either discrediting the testimony of their client, or testifying as to certain matters which will prejudice their client's position, then the Attorney General shall be given leave, upon a sufficient showing, to renew and reargue this portion of their application.
The Attorney General argues that it would undermine their investigation if Turvey and/or Hasson were permitted to be present at Kearney's oral examination. Since they will also be required to testify at some future date, they may gain advance knowledge of the questions to be posed, which will prevent the spontaneous and unrehearsed responses to which the Attorney General claims to be entitled. The Attorney General claims that the public interest in such unimpeded investigation overrides the respondent's right to counsel of his choice.
The Attorney General has already agreed to permit Kearney to appear at any sworn depositions with legal representation (see petitioners' Memorandum of Law, 8/26/86 p. 11; letter of Alan D. Aviles, Assistant Attorney General, 7/21/86; transcript of hearing, 10/9/86, p. 3). It is the presence of Hasson and/or Turvey he objects to.
Although there is no right to counsel at such administrative investigations (In re Groban, 352 U.S. 330, 335, 77 S.Ct. 510, 514, 1 L.Ed.2d 376; Anonymous v. Baker, 360 U.S. 287, 292, 79 S.Ct. 1157, 1160, 3 L.Ed.2d 1234; Kanterman v. Attorney General, 76 Misc.2d 743, 350 N.Y.S.2d 516), the right to exclude counsel may be waived if counsel's presence is permitted by the examiner (Matter of Hentz & Co. v. Lefkowitz, 22 A.D.2d 475, 256 N.Y.S.2d 724, aff'd 16 N.Y.2d 544, 260 N.Y.S.2d 656, 208 N.E.2d 462).
In the Hentz case, the Attorney General was in the midst of an investigation of fraudulent business practices under the Martin Act (Gen.Bus.Law Art. 23-A). Petitioner was subpoenaed to appear for examination, and upon the return date, complied and appeared with an attorney who had previously appeared with three other witnesses in the same investigation. When the Attorney General refused to permit this attorney to be present, petitioner commenced a proceeding to enjoin the Attorney General from proceeding unless petitioner was permitted to appear with counsel of his choice. The Court of Appeals affirmed the First Department's determination 1) that the right to counsel included the right to free choice of counsel, 2) that since petitioner was afforded the right to counsel, it could not be circumscribed by rejecting petitioner's choice of counsel, without sufficient evidence that such counsel was impeding the investigation, and 3) that the mere fact that petitioner's counsel appeared with three prior witnesses was not...
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