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Trump Loses Bid to Disqualify Morrison Cohen in Latest Suit
New York Law Journal
October 08, 2008
The widening war between Donald Trump and his former lawyers at Morrison Cohen can proceed on a new front, a New York state judge has ruled. Trump sued Morrison Cohen and partner Y. David Scharf last year for allegedly treating him like a "cash cow" and overcharging him in a case. In August, he sued the New York law firm again for allegedly invading his privacy by touting his name on its Web site as a past client. Morrison Cohen has its own claim against Trump for $470,000 in unpaid legal bills.
Now Supreme Court Justice Herman Cahn of Manhattan has ruled that Morrison Cohen and Scharf may take on their old client on behalf of some new clients who are also being sued by Trump over the use of his name.
In a decision Monday, Cahn denied Trump's motion to disqualify Morrison Cohen from representing the principals of property group Crescent Heights Diamond, which had licensed from Trump the right to build a 70-story "Trump Tower" in Israel, agreeing to pay him royalties on the sales of condominium units.
In a lawsuit filed in May, Trump claims Crescent broke the 2006 licensing agreement when it decided to sell the land instead of proceeding with the building. Trump also claims his association with and promotion of the project boosted the value of the sale for Crescent. He is seeking $45 million in damages.
Morrison Cohen and Scharf began representing Cresent principals Sonny Kahn, Russell Galbut and Bruce A. Menin shortly after the suit was filed.
In moving for the firm's disqualification, Trump argued that Scharf gained confidential information about Trump's business practices by representing him in two litigations between 2001 and 2006: a fight over ownership of the General Motors Building on Fifth Avenue and a suit against a contractor on the Trump National Golf Club in Briarcliff Manor, N.Y. The latter is now the subject of the fee dispute between Trump and Morrison Cohen.
Trump also sought the disqualification of Crescent's law firm, Emery Celli Brinckerhoff & Abady, on the grounds that it had been tainted by its work with Morrison Cohen.
But Cahn agreed with Morrison Cohen that its previous work for Trump was unrelated to the issues at the heart of the Crescent dispute.
"[T]he present dispute involves a licensing agreement between plaintiff and Crescent, and the prior representation involved completely different facts, different projects, and distinct agreements," Cahn said in Trump Marks LLC v. Crescent Heights Diamond LLC, 601372/08. "Moreover, plaintiff has not set forth any specific issues discussed with Morrison during the prior representations that are related to the present litigation."
The judge also rejected Trump's argument that his fee dispute with Morrison Cohen created a conflict of interest warranting the firm's disqualification from the Crescent case.
"It is not clear how this would create a conflict since both Morrison and the individual defendants are defending against claims asserted against them by Trump and Trump-related entities," the judge said. "In any event, the fee dispute and the instant action are separate and unconnected, and, therefore, present no conflict of interest in Morrison representing the individual defendants."
Because Morrison Cohen had no conflict, none could be imputed to Emery Celli, the judge said.
Trump was represented by Stephen B. Meister at Meister Seelig & Fein. Scharf appeared pro se for his firm.
