Altungeyik v. Ayknat

• Decision Date: 20 October 2015
• Docket Number: No. 61139–2014.,61139–2014.
• Citation: 26 N.Y.S.3d 212 (Table)
• Parties: Fikret ALTUNGEYIK individually, directly as a 9/2014 shareholder office and director and derivatively as a shareholder of Euro Planet, Inc., Plaintiff, v. Aydener AYKNAT and Euro Planet, Inc., Defendant.
• Court: New York Supreme Court

26 N.Y.S.3d 212 (Table)

Fikret ALTUNGEYIK individually, directly as a 9/2014 shareholder office and director and derivatively as a shareholder of Euro Planet, Inc., Plaintiff,

v.Aydener AYKNAT and Euro Planet, Inc., Defendant.

No. 61139–2014.

Supreme Court, Suffolk County, New York.

Oct. 20, 2015.

William A. Gogel, Esq., Agulnick & Gogel, LLC, Great Neck, Attorney for Plaintiff.

Walter Drobenko, Esq., Astoria, Attorney for Defendant.

EMILY PINES, J.

In this shareholder's derivative action/dissolution proceeding, the plaintiff, Fikret Altungeyik ("Plaintiff') moves (Mot.Seq.005) to disqualify defendants' counsel, Walter Drobenko, Esq. ("Drobenko"), on the ground that Drobenko had previously represented the Plaintiff in the preparation of a pre-nuptial agreement, an immigration application, and the Shareholders' Agreement of defendant Euro Planet, Inc. ("Euro Planet"). Plaintiff also claims that Drobenko negotiated to be his partner in a restaurant.

In June 2014, the parties agreed to dissolve Euro Planet pursuant to Business Corporation Law § 1104(a). In its Order dated June 16, 2014, the Court found that, based upon the agreement of the parties, the requirements set forth in BCL § 1104(a) had been met; that the Defendant shareholder had expressed an interest in carrying on the business of the corporation and becoming the 100% shareholder; and that a trial would be necessary solely on the issue of the value of the corporate entity as of the date of the agreement embedded in the Court's decision-June 16, 2014. The Court's Order also determined that the valuation trial would hear evidence in order to determine amounts, if any, each of the individual shareholders owed to each other with regard to the corporation's business. The Court's Decision set down a trial on the issues of the value of Euro Planet as well as monies owed by each shareholder in connection with the operation of the business, to be held on October 1 and 2, 2014. However, following the withdrawal of Plaintiff's original counsel, the trial was delayed and ultimately commenced on February 17, 2015, with Plaintiff representing himself pro se.

On February 19, 2015, based upon Plaintiff's failure to appear ready to continue trial, the Court issued a conditional order dismissing the action subject to Plaintiff submitting opposition to dismissal within 14 days thereof. Plaintiff did not submit opposition and the action was dismissed.

Thereafter, however, Plaintiff retained new counsel and by order dated July 6, 2015, the Court, among other things, granted Plaintiff's motion to vacate the order dated February 19, 2015 dismissing the action. Plaintiff now moves, by order to show cause dated August 20, 2015, to disqualify Defendants' counsel on the grounds set forth above. Additionally, Plaintiff alleges, among other things, that it will be necessary to call Drobenko as a witness at the trial.

In opposition to the motion Defendants submit an affirmation from Drobenko stating, inter alia, that he represented Euro Planet during the preparation and execution of the Shareholders' Agreement, and not Plaintiff; that Plaintiff's application is untimely and barred by the doctrine of laches because it has been made after the trial commenced on February 17, 2015; that he was consulted but not retained by Plaintiff with regard to Plaintiff's immigration application; that he never negotiated to be Plaintiff's partner in a restaurant; and that there will be no need to for him to testify at trial since the trial is limited to the issues of the value of Euro Planet as of the date of the Court's order and reconciliation of any amounts owed between the parties. He avers that he has neither personal knowledge of these issues nor is he the sole or even appropriate witness to be called to testify as to these matters.

On October 14, 2015, Plaintiff's attorney made certain claims during oral argument before this Court in support of the motion to disqualify Defendants' counsel, Drobenko. During the argument, he maintained that Defendants' attorney obtained personal and private information while representing Plaintiff in two substantially similar matters, the immigration application and the pre-nuptial agreement. Additionally, counsel stated that Drobenko is a necessary witness to the trial because he was the attorney that drafted the January 2014 Shareholders' Agreement and determined the value the corporation's shares. Furthermore, Plaintiff's attorney argued that his client was unaware of the contents of the Shareholders' Agreement, due to it not being translated into his native language; therefore, Drobenko is assertedly a necessary witness at trial to determine the valuation of the business.

At oral argument, Defendants' attorney maintained that at the time of the Shareholders' Agreement drafting, he was solely the attorney for the corporation, and not the Shareholders individually. He also stated that although he did assist the Plaintiff with a pre-nuptial agreement and a prospective immigration application, these issues are not substantially similar in any manner to the issue at bar-the June 2014 value of Euro Planet. Defendants' attorney also reiterated that he has no personal knowledge to the value of Euro Planet as of June 2014; thus his testimony is neither needed nor appropriate at trial. While he stated that the Plaintiff and his client collectively decided the value of each share as of the January 2014Shareholders' Agreement date, and that he was not involved in this determination, he averred that such is not the issue to be tried before this Court. As set forth in this Court's June 16, 2014 Decision, that is the date chosen for the valuation and not the date of the Shareholders' Agreement as argued by the Plaintiff's counsel.

Additionally, Defendants' counsel stated that this motion for disqualification, made after the commencement of trial, and more than one year after this Court set forth a mutually agreed upon expedited process for resolving this entire case, is untimely and should be denied by this Court. Furthermore, Defendant is seeking an additional award of counsel fees for the delay in litigation.

Discussion

The disqualification of an attorney is a matter that rests within the "[s]ound discretion of the court" (Matter of Town of Oyster Bay v. 55 Motor Ave. Co., LLC, 109 AD3d 549, 550 [2d Dept 2013] quoting Columbus Constr. Co., Inc. v. Petrillo Bldrs. Supply Corp ., 20 AD3d 383, 383 [2d Dept 2005] ). "A movant seeking disqualification of an opponent's counsel bears a heavy burden" (Mayers v. Stone Castle Partners, LLC, 126 AD3d 1, 5 [1st Dept 2015] ). The key basis for such burden is contained within the concept that a party's right to be represented "[b]y counsel of its own choosing is a valued right which should not be abridged absent a clear showing that disqualification is warranted" (Mediaceja v. Davidov, 119 AD3d 911[2d Dept 2014] ).

"[A] party seeking disqualification of its adversary's lawyer must prove: (1) the existence of a prior attorney-client relationship between the moving party and opposing counsel, (2) that the matters...