Court Opinion

ID: 5851574
Source: CourtListenerOpinion
Date Created: 2022-01-13 00:04:02.921949+00
Date Added: 2024-06-11T08:44:06.689115
License: Public Domain

Birns and Sullivan, JJ.,
concur in a memorandum by Sullivan, J., as follows: The motion to strike counsel’s appearance in behalf of defendant City Partners should be granted, but I cannot agree with the analogy Special Term drew of this action, which seeks an examination of the partnership books and an accounting from the sole general partner, Guterman, to a derivative action. The natures of a derivative action and a proceeding to seek examination of a partnership’s books are clearly different, and the principles of a derivative action are not applicable here. In a derivative action an inherent conflict arises between the partnership, in whose behalf the action is brought, and the defendant partner whose conduct is challenged. As for the request of plaintiff, a limited partner, to strike counsel’s appearance so as to prevent dual representation of the partnership and the general partner, both named as defendants, defendants’ affidavits fail to dispel the veneer of conflict of interest between Guterman and the partnership regarding certain real estate transactions. Based upon the allegations I believe the potential for serious conflict between the partnership and the sole general partner is very real, and agree that the extraordinary remedy of removing counsel should be invoked here. (See Langer v Garay, 30 AD2d 942.)