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Attorney’s Call to Represented Party to Obtain Information to Effect Service Does Not Warrant Disqualification, But It Is Improper for Attorney to Rely on Anything Else Said on the Call

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Ortiz v. Green Bull, Inc., 2011 U.S. Dist. LEXIS 131600 (E.D.N.Y. Nov. 14, 2011)L

Presently before the Court is a motion by Werner to seal the record and for other relief based on ... an alleged violation of the New York Rules of Professional Conduct by counsel for the Plaintiff, Mark Panzavecchia based on a telephone conversation between Panzavecchia and Werner employees.***

Plaintiff contends that Green Bull's former officers were not capable of receiving service on Green Bull's behalf. *** In his declaration opposing the instant motion, the Plaintiff's attorney Mark Panzavecchia explains that he obtained this information by calling the number on the Green Bull ladders website, which in turn connected him to Werner customer service representatives located in Green Bull's former offices in Louisville, Kentucky.

The parties differ in their characterization of this call. According to Panzavecchia the purpose of his call was to "ascertain whether the Louisville, Kentucky facility was the appropriate mailing address for service and/or [whether] there was anyone who may be authorized to accept service of process on behalf of Green Bull at the Louisville, Kentucky facility". *** Panzavecchia claims that, in response to this inquiry, the Werner customer service representatives provided him with the information about Mr. Greco and Mr. Prentice.

By contrast, Werner characterizes the conversation as one where Panzavecchia contacted a party he knew to be represented by counsel, and attempted to obtain private information about the corporate structure of Werner to support the successor liability claim at the heart of the dispute between the Plaintiff and Werner.

As an initial matter, Werner contends that Panzavecchia violated Disciplinary Rule 7-104 of the New York Code of Professional Responsibility. However, this rule has been replaced by Rule 4.2, which provides that:

In representing a client, a lawyer shall not communicate or cause another to communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the prior consent of the other lawyer or is authorized to do so by law.

N.Y. Comp.Codes R. & Regs. tit. 22, § 1200.0 ("Rule 4.2(a)"). Rule 4.2(a), like its predecessor, "serves to protect the attorney-client relationship, and to prevent an attorney from taking advantage of a party in the absence of the party's counsel, for instance, by eliciting unwarranted concessions or liability-creating statements or disclosures or protected information, most particularly attorney-client communications". Tylena M. v. HeartShare Human Servs., No. 02-CV-8401, 2004 U.S. Dist. LEXIS 10398, 2004 WL 1252945, at *1 (S.D.N.Y. June 7, 2004) (internal punctuation and citations omitted).

Although courts look to state disciplinary rules when considering motions for disqualification, "such rules merely provide general guidance and not every violation of a disciplinary rule will necessarily lead to disqualification". Hempstead Video, Inc. v. Incorporated Vill. of Valley Stream, 409 F.3d 127, 132 (2d Cir. 2005).

The courts must "balance a client's right freely to choose his counsel against the need to maintain the highest standards of the profession", id. at 132 (internal quotation marks omitted), so that disqualification is only warranted where "an attorney's conduct tends to taint the underlying trial", Bd. of Educ. v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979) (internal quotation marks and citations omitted).

To the extent the purpose of the call was to obtain information in order to effectuate service on Green Bull, such conduct does not warrant disqualification. As the Second Circuit explained in Ceramco, Inc. v. Lee Pharmaceuticals, 510 F.2d 268 (2d Cir. 1975), a case similarly involving an attorney contacting a represented party to obtain jurisdictional information:

it would be too harsh to rule that the action of counsel in telephoning defendant's employees to obtain non-privileged, relevant, and accurate information as to jurisdiction and venue constituted actual wrongdoing. [The attorney's] inquiries were limited in scope to those items of information necessary to ascertain whether suit could be instituted in the chosen forum and there is no suggestion that counsel sought any unfair advantage by his inquiries. This is the kind of misconduct, if it is misconduct, which is technical in character, does no violence to any of the fundamental values which the canons were written to protect and certainly falls far short of justifying a grant of the relief requested.

Id. at 271. However, regardless of Panzavecchia's motivation for speaking to Werner representatives without counsel present, it does not change the fact that Panzavecchia used the information he obtained from the call to support the Plaintiff's claim for successor liability. As stated in his opposition to Werner's motion to dismiss, the Plaintiff argues that one basis for finding continuity of business between Werner and Green Bull is that "[a]t least one officer from Green Bull (Mr. Greco and potentially Mr. Prentice) has been retained by Werner". (Pl.'s Opp. to Motion to Dismiss at 10; see also id. at 15.) This constituted an improper use of the information obtained through the call.

Nevertheless, "a federal court should not disqualify an attorney on ethical grounds from representing a party in a pending lawsuit in the absence of a reasonable basis for believing that his or her unprofessional conduct may affect the outcome. . . . Otherwise conventional disciplinary machinery should be used." Nyquist, 590 F.2d at 1248 (Mansfield, J., concurring). Here, the information obtained by Panzavecchia would only affect the outcome of the case if the Court relies on this information in deciding the motion to dismiss. However, as this conversation does not meet any of the relevant exceptions for extrinsic information a court can consider in adjudicating a motion to dismiss, it will have no bearing on the outcome of that motion. Thus, while the use of the information obtained in the call may have been improper, the Court finds no basis for interfering with the Plaintiff's choice of counsel. Accordingly, Werner's motion to disqualify attorney Panzavecchia is denied.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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