Attorney Disqualification: WeCare Holdings LLC v. Bedminster International Limited

U.S. District Court, Western District of New York

Attorney Disqualification

WeCare Holdings LLC v. Bedminster International Limited
08-CV-6213
Judge Telesca

Background: Defendant Bedminster International Limited moves to disqualify the law firm Harris Beach PLLC from representing WeCare Holdings LLC and C. Wesley Gregory III. Bedminster argues disqualification is warranted because Harris Beach represented WeCare Environmental LLC while also represented WeCare Holdings, a member of WeCare Environmental and one of the plaintiffs in the action. The defendant contends that, since May 10, 2006, Harris Beach has represented both WeCare Environmental and WeCare Holdings, billing WeCare Environmental for legal fees for legal services provided to both WeCare Holdings and WeCare Environmental.
On May, 10, 2006, the defendant and the plaintiffs executed a purchase and sale agreement that provided for the sale of a 50 percent interest in WeCare Environmental to defendant Bedminster. The defendant alleges that, since the execution of that agreement, Harris Beach has improperly represented WeCare Holdings in matters that conflict with the firm’s duty of loyalty to WeCare Environmental. During the pendency of the motion, however, the parties litigated the same issue before state supreme court Justice John J. Ark, who issued a decision on Jan. 8, 2010.

Ruling: Before addressing the merits of the defendant’s motion, the court determines whether the issue of the alleged conflict by Harris Beach has been decided by the state court and therefore is binding on this court by application of res judicata. The state court’s determination of this claim is barred by the application of res judicata, therefore the defendant’s motion to disqualify is denied.

Douglas A. Foss of Harris Beach PLLC for the plaintiffs, and Mark J. Moretti of Phillips Lytle LLP for the defendants