Justice Angela Iannacci
Attorney Walsh sought an order dismissing the third-party complaint. Third-party plaintiffs cross-moved to disqualify Walsh as cooperative Cathedral Properties’ counsel. The action arose from a conversion and attempted refinance of mortgages by the co-op. Cathedral Court Associates (CCA) was the former owner and conversion sponsor. Walsh was to advise the board regarding the refinance of the co-op’s wrap mortgages. CCA principal Blinbaum, and also with management company Old Court Realty, notified the co-op the wrap was not pre-payable. The co-op sued seeking to compel Blinbaum to accept prepayment without penalty. The order directing Blinbaum to accept prepayment was reversed, leaving only the issue of the co-op’s claims of breach of fiduciary duty and fraud by the Blinbaum affiliates. The affiliates sued Walsh asserting claims for contribution and indemnification based on alleged negligence in failing to discover that the wrap was not pre-payable before payment of the good faith deposit. The court found no evidence suggesting the entire loss was Walsh’s responsibility, thus indemnification was improperly asserted against him, granting dismissal of the third-party complaint. It also denied disqualification noting the advocate-witness rule was inapplicable.
