Greene v. Greene, 47 N.Y.2d 447 (1979)
An attorney is disqualified from representing a client if the attorney’s firm includes members who formerly held a fiduciary relationship (such as partner) with the opposing party’s firm, especially when those members may have gained confidential information relevant to the current litigation.
Summary
Helen Greene sued Finley, Kumble, Wagner, Heine & Underberg, alleging breach of fiduciary duty related to a trust. Her counsel was Eaton, Van Winkle, Greenspoon & Grutman. Two Eaton firm members, Grutman and Bjork, were former partners at Finley, Kumble. The court addressed whether the Eaton firm should be disqualified due to conflict of interest, given Grutman and Bjork’s prior fiduciary duties to Finley, Kumble. The court held that the Eaton firm was disqualified because Grutman and Bjork’s prior access to confidential information at Finley, Kumble created an unacceptable conflict of interest.
Facts
Helen Greene established an inter vivos trust in 1969 and later sued Finley, Kumble (her former lawyers) for breach of fiduciary duty in managing the trust.
Grutman and Bjork were partners at Finley, Kumble from 1970-1976 and 1974-1976, respectively, before joining the Eaton firm.
Greene retained the Eaton firm in 1977, knowing Grutman and Bjork’s past affiliation with Finley, Kumble and the potential conflict.
Procedural History
Finley, Kumble moved to disqualify the Eaton firm.
Special Term denied the motion.
The Appellate Division affirmed.
The New York Court of Appeals granted leave to appeal and modified the Appellate Division order, granting the disqualification motion.
Issue(s)
Whether a law firm should be disqualified from representing a client when two of its members were formerly partners in the opposing party’s law firm and may have gained confidential information during their tenure there.
Holding
Yes, because the former partners’ fiduciary duty to their old firm, combined with the potential access to confidential information relevant to the litigation, creates an unacceptable conflict of interest that warrants disqualification of the entire firm.
Court’s Reasoning
The court emphasized the attorney’s duty of loyalty to a client and the prohibition against representing conflicting interests. “It is a long-standing precept of the legal profession that an attorney is duty bound to pursue his client’s interests diligently and vigorously within the limits of the law”.
The court noted that attorneys are forbidden from placing themselves in positions where they must advance, or appear to advance, conflicting interests. This prohibition is “designed to safeguard against not only violation of the duty of loyalty owed the client, but also against abuse of the adversary system and resulting harm to the public at large.”
The court reasoned that Grutman and Bjork, as former partners at Finley, Kumble, owed a fiduciary duty to the firm, similar to that owed by an attorney to a client.
Finley, Kumble alleged that Grutman and Bjork gained confidential information regarding the firm’s potential liability concerning the plaintiff’s trust.
The court found that it could not discount the possibility that information obtained by Grutman and Bjork in their role as fiduciaries would be used in the lawsuit. The court stated that “[a]n attorney traditionally has been prohibited from representing a party in a lawsuit where an opposing party is the lawyer’s former client”.
Although a party may generally select an attorney of their choosing, this right is not limitless and cannot violate fiduciary relationships. The court concluded that the Eaton firm should be disqualified to maintain the integrity of the adversary system.