Graca v. Krasnik

In Graca v. Krasnik (20 Misc 3d 1127[A], 872 N.Y.S.2d 690, 2008 NY Slip Op 51640[U]), the court raised sua sponte the issue of a potential conflict where, as here, a law firm represented both the driver of a leased vehicle and the leasing company, and the law firm was moving for summary judgment on behalf of the leasing company based upon the Graves Amendment. It was held, among other things, that there is an "inherent conflict of interest in representing the named defendants where, if the case against one defendant (owner/lessor) is dismissed pursuant to the Graves Amendment, the other defendant (driver) is left bearing full liability for the claims alleged in Plaintiff's complaint." The court reasoned that "Defendants' attorneys cannot zealously represent both Defendants where they seek dismissal of the claims against one of the defendants they represent while the other has no independent advocate to oppose the motion which would result in their shouldering full liability." (Id.) The court pointed out that "the mere assertion of a Graves Amendment defense does not mean there are no questions of fact as to whether the Amendment applies"; and that the Graves Amendment "is only a defense to vicarious liability, so a defendant must also demonstrate that there was no negligence on their part." (See id.). The court further held that "the issue giving rise to the conflict of interest, the dismissal of the claim against one defendant shifting liability to the other, rises to a level that full disclosure and consent would not cure." In Graca, in which the court raised the issue of disqualification sua sponte, and which is analogous to the instant case on its facts, the court only disqualified the law firm from "continuing to represent both Defendants simultaneously", and stayed the action for "new counsel to be provided to [the driver, the leasing company], or both." (See Graca v. Krasnik, 20 Misc 3d 1127[A], 2008 NY Slip Op 51640[U], at 4.) The court, sua sponte, found that an impermissible conflict existed where a defendant's firm represented an individual driver as well as the leasing company from which this defendant had obtained the vehicle. The conflicted defense attorney had moved for summary judgment and dismissal of the complaint only as against the leasing company, which motion, if granted, would have left the individual driver solely responsible for any negligence attributable to his actions. In essence, the court found that the individual driver was left without a representative to argue in his best interest.