Hof, Matter of

• Decision Date: 09 July 1984
• Citation: 478 N.Y.S.2d 39,102 A.D.2d 591
• Parties: In the Matter of Henry HOF, Jr., Deceased. Iris Hof, Appellant; Philip M. Hof, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 39

478 N.Y.S.2d 39

102 A.D.2d 591

In the Matter of Henry HOF, Jr., Deceased.

Iris Hof, Appellant;

Philip M. Hof, et al., Respondents.

Supreme Court, Appellate Division,

Second Department.

July 9, 1984.

Martin Rosen, Mineola, for appellant.

Frank Barnett, Forest Hills, pro se.

Before TITONE, J.P., and GIBBONS, O'CONNOR and RUBIN, JJ.

TITONE, Justice Presiding.

This appeal involves an application by the administratrix of an estate to disqualify the attorney for her co-administrator. The attorney had previously represented both parties, but was dismissed by petitioner when he allegedly participated in the prosecution of a compulsory accounting proceeding seeking to surcharge her. The Surrogate of Queens County held, without an evidentiary hearing, that petitioner's allegations of a conflict of interest and her claim that the attorney would be required to testify at the accounting proceeding were insufficient to warrant disqualification. We disagree and reverse.

Decedent, Henry Hof, Jr., died on March 28, 1979. On May 29, 1979, the respondent Frank Barnett, acting as attorney for the estate, filed a petition for letters of administration on behalf of Henry's widow, and Philip Hof, a son by a prior marriage. Barnett had previously elicited information from Mrs. Hof, and others, concerning the assets of the estate, which consisted primarily of real property.

In a letter addressed to all the distributees, Barnett indicated that there were several outstanding judgments against the decedent and that the properties were also encumbered by tax and mortgage liens. The letter also suggested a possible sale of some of these properties in order to satisfy the debts of the estate. Subsequently, Mrs. Hof and her personal attorney wrote letters to Barnett demanding disclosure of the progress and status of administration of the estate. Apparently, none of these demands were answered although some property had, in fact, been sold. Mrs. Hof contends that these sales were consummated without her approval or signature, as required.

In October, 1982 Philip commenced a proceeding to compel Mrs. Hof to account. She contends that that accounting proceeding, whose aim is to surcharge her, was in fact engineered by Barnett in conflict with his fiduciary duty as her counsel, noting that an order in that proceeding was served upon her in an envelope bearing Barnett's name. Barnett is completely silent in response to these allegations.

Consequently, Mrs. Hof discharged Barnett from further representation of her as administratrix of the estate and commenced this proceeding against Barnett and Philip seeking the former's disqualification from further representation of the latter in the affairs of the estate. In her petition, she alleges, among other things, that Barnett froze her out of participation in the settlement of the estate and that he sold assets of the estate without her knowledge or consent. She further contends that by virtue of his status as the sole counsel for the estate during the period in question, his testimony will necessarily be required in the accounting proceedings. Barnett, in his answer, denied the allegations that he froze out appellant or that sales were conducted without her consent. Philip has not appeared in this proceeding.

As a general rule, where an attorney represents multiple clients and a situation arises posing a potential conflict between them in connection with his representation, he may not undertake the representation of either against the other unless it is shown either that no actual conflict exists or that such continued involvement is with the full consent of all parties upon complete disclosure (Matter of Kelly, 23 N.Y.2d 368, 376, 296 N.Y.S.2d 937, 244 N.E.2d 456; Schmidt v. Magnetic Head Corp., 101 A.D.2d 268, 476 N.Y.S.2d 268 see, also, Propriety and Effect of Attorney Representing Interests Adverse to That of Former Client, Ann., 52 A.L.R.2d 1243, 1268-1276). While it is true that an attorney represents the administrators individually and not the estate itself (Matter of Scanlon, 2 Misc.2d 65, 69, 150 N.Y.S.2d 511, citing Matter of Schrauth, 249 A.D. 847, 292 N.Y.S. 925) and that cofiduciaries may retain independent counsel (Matter of Hollinger, 93 Misc.2d 926, 932, 403 N.Y.S.2d 857), Barnett's involvement in the present proceedings should not be permitted, given their adversarial nature.

Matter of Dix, 11 A.D.2d 555, 199 N.Y.S.2d 958, upon which the Surrogate posited his determination, is plainly distinguishable. That case involved dual representation in a probate proceeding. The party seeking disqualification, the decedent's widow, Mrs. Dix, had originally joined in seeking probate of the will as a coexecutrix, then withdrew as a copetitioner and contested probate, and, at the time of her motion to disqualify the attorney who had represented her and the other named executor as copetitioners, had retreated to a neutral stance. At that point, there was no representation of a conflicting interest or potential for use of confidential information. The Appellate Division, Third Department noted (11 A.D.2d 555, 555-556, 199 N.Y.S.2d 958) that:

"The fact that after the retention of the attorneys Mrs. Dix decided to change her status in these proceedings does not, ipso facto, make the attorneys adverse to her voluntary shifting of positions. Mrs. Dix and consulted the attorneys for their mutual benefit as prospective coexecutors and it is difficult to visualize what could possibly have transpired between the parties to create a confidential relationship, one to the other, sufficient in character to call upon the attorneys now to withdraw because of such relationship. We are unable to say that there is any conflict of interest or any confidential relationships which prevent the said attorneys, appointed by the temporary administrator, from continuing to act in that capacity."

We think that different considerations pertain in accounting proceedings where, as a result of the prior dual representation, confidences have developed leading inevitably to the possibility of conflict. Since there is an allegation that Mrs. Hof breached her fiduciary duties, it is manifest that Barnett's prior representation of her may well have been the source of information substantiating this claimed breach.

In addition, this is not an instance in which a disqualification motion is being made for tactical purposes (cf. Lopez v. Precision Papers, 99 A.D.2d 507, 470 N.Y.S.2d 678; Schmidt v. Magnetic Head Corp., 97 A.D.2d 151, 163, 468 N.Y.S.2d 649). Involved is the obtaining of confidential information from a former client which will be used against that former client. In such circumstances all that is required for disqualification is the adduction of facts "which would make it reasonable to infer that gained some information about his former client of some value to his present client" (see Silver Chrysler Plymouth v. Chrysler Motors Corp., 370 F.Supp. 581, 589, affd. 518 F.2d 751; Colonie Hill v. Duffy, 86 A.D.2d 645, 646, 447 N.Y.S.2d 23; see, also, Hempstead Bank v. Reliance Mtge. Corp., 81 A.D.2d 906, 439 N.Y.S.2d 202; North Shore Neurosurgical Group v. Leivy, 72 A.D.2d 598, 421 N.Y.S.2d 100).

Barnett's reliance upon the holding in Greene v. Greene, 47 N.Y.2d 447, 453, 418 N.Y.S.2d 379, 391 N.E.2d 1355, that petitioner must show a "reasonable probability of disclosure" of confidences, is unavailing. The "reasonable probability" here is apparent from the situation itself (Colonie Hill v. Duffy, supra ). Moreover, in Greene the court expressly reaffirmed its statement inCardinale v. Golinello, 43 N.Y.2d 288, 295, 401 N.Y.S.2d 191, 372 N.E.2d 26, that it is "no answer that the lawyer did not in fact obtain any confidential information." Clearly, petitioner need not set forth specifics to substantiate a claim of breach of the confidential attorney-client relationship as to do so would obviate the protection afforded by disqualification (Flushing Nat. Bank v. Municipal Assistance Corp. for City of N.Y., 90 Misc.2d 204, 211, 397 N.Y.S.2d 662; cf. Lopez v. Precision Papers, supra ).

The critical issue here, moreover, is not the actual or probable betrayal of confidences, but the mere appearance of impropriety and conflict of interest (Code of Professional Responsibility, Canon 9). As the Court of Appeals stated in Cardinale v. Golinello (supra, 43 N.Y.2d pp. 295-296,...