Murchison v. Kirby
| Decision Date | 28 December 1961 |
| Parties | John D. MURCHISON and Clint W. Murchison, Jr., copartners, d/b/a Murchison Brothers, and Gerard L. Fossland, as stockholders of Alleghany Corporation, on behalf of themselves and all other stockholders similarly situated, Plaintiffs, v. Allan P. KIRBY, Randolph Phillips, Fred M. Kirby, Charles T. Ireland, Jr., Charles T. Hill, Alfred E. Perlman, William G. Rabe, Joseph M. Fitzsimmons, Anthony Smith and Alleghany Corporation, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Randolph Phillips, defendant pro se, in support of the motion.
Townley, Updike, Carter & Rodgers, New York City, by Stuart N. Updike, Satterlee, Warfield & Stephens, New York City, of counsel, for plaintiffs in opposition.
Donovan, Leisure, Newton & Irvine, New York City, by Walter L. Stratton, New York City, for defendant Allan P. Kirby.
This is a motion by the defendant Phillips for an order disqualifying F. W. H. Adams, Esq., and the firm of Satterlee, Warfield & Stephens from acting as counsel for plaintiffs herein.
The action is one brought by the plaintiffs to set aside a settlement pursuant to which defendant Kirby, upon the payment by him of $1,100,000 was released by Alleghany Corporation of all claims asserted against him in prior derivative actions. The charge made in the complaint is that the settlement was the product of a conspiracy and corrupt agreement between defendant Kirby, then Alleghany's president, defendant Ireland, its Executive Vice President, and defendant Phillips, under which Kirby was released from liability to Alleghany for a sum much below what he would have had to pay except for their alleged fraudulent conduct. It is alleged that the settlement was consummated through fraud perpetrated upon both this Court and the State Court where the derivative actions were pending.
In the motion now before the Court defendant Phillips seeks to disqualify F. W. H. Adams and Satterlee, Warfield & Stephens, the New York law firm of which he is a partner, from acting as counsel for the plaintiffs herein. He does not take the position that the complaint does not state a cause of action or that the action should be dismissed, but rather that plaintiffs should be deprived of one of the counsel who has been working on their case.
Phillips based his motion upon a lengthy affidavit detailing what he says constitute violations by Adams of the Canons of Professional Ethics, American Bar Association.
It may be pointed out, as the Court did on the argument, that this is rather a strange procedure in that the moving party seeks not a definitive relief in connection with the action to which he is a party, but rather the collateral relief of depriving plaintiffs of their counsel. Lengthy and elaborate affidavits have been filed both for and against the motion. The facts alleged in Phillips' affidavit in support of the motion are directly contradicted by affidavits filed on behalf of Adams. Adams is a well known attorney who has served in important public posts both for the Federal Government and the City of New York. He has a high reputation for professional competence and integrity. To disqualify such a lawyer from representing a client in an action of this nature might seriously injure the reputation and professional standing of the lawyer and cause incalculable damage to his career. Certainly an issue of this significance cannot be determined on conflicting affidavits. To set the matter down for a hearing and trial would require the production of evidence, much of which will be presented in the...
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