Schmidt v. State , 722 N.Y.S.2d 623 ( 2000 )

Wisner, J.

(dissenting and voting to reverse). We respectfully dissent and conclude that the Court of Claims erred in determining that claimants’ counsel did not violate Code of Professional Responsibility DR 7-104 (a) (1) (22 NYCRR 1200.35 [a] [1]). This is not a case in which New York State Department of Transportation (DOT) employees are being sued individually for their actions, a distinction that is important under Niesig v Team I (76 NY2d 363, 368, n 1). The notice of intention indicated claimants’ intent to file a claim against defendant generally, and the DOT in particular. Under Niesig, an attorney representing a corporation also — as a matter of law — represents those employees of the corporation who are “parties,” as defined by Niesig. Unless the same rule applies here, defendant is “effectively read out of the [disciplinary] rule” (Niesig v Team I, supra, at 371). Thus, as we see it, the issue is not whether the signal crew members were represented personally by the Attorney General when they were interviewed but whether, at that time, the DOT was represented by the Attorney General. Once that representation is established, it extends for purposes of DR 7-104 (a) (1) to any employee of the DOT who may be considered a “party” under Niesig. It is not disputed here that the signal crew members are “parties” under Niesig. If it is established that the Attorney General was representing the DOT at the time of the interviews, then in our view the Attorney General was also representing the signal crew members as “parties” for purposes of DR 7-104 (a) (1).

Contrary to the majority, we conclude that the DOT was represented by the Attorney General for purposes of DR 7-104 (a) (1) upon the service of the notice of intention and thus was so represented 20 months later when the interviews were conducted. The majority examines the purposes of the notice of intention, and concludes that those purposes would not be served by holding that the service of a notice of intention triggers the Attorney General’s representation. The focus here, however, should be on DR 7-104 (a) (1), and the purposes that it serves. “ ‘The general thrust of the [disciplinary] rule is to prevent situations in which a represented party may be taken advantage of by adverse counsel’ ” (Niesig v Team I, supra, at 370, quoting Wright v Group Health Hosp., 103 Wash 2d 192, 197, 691 P2d 564, 567). Those situations may arise before, as well as after, commencement of formal proceedings. Thus, the term “party,” as it is used in the disciplinary rule, has been interpreted consistently “to include a person who is a potential litigant” (United States v Jamil, 546 F Supp 646, 654, revd on other grounds 707 F2d 638; see, NY St Bar Assn Comm on Prof Ethics Opn 607 [1990]).

A notice of intention to file a claim against an agency of defendant must set forth “the general nature of the claim with enough detail to enable the State to investigate” (Ferrugia v State of New York, 237 AD2d 858, 859; see, Court of Claims Act §11 [b]). It must be served upon the Attorney General (see, Court of Claims Act § 11 [a] [i]), who is the “officer responsible for the investigation and litigation of the claim” (Andriola v State of New York, 53 AD2d 966, 968, lv denied 40 NY2d 803; see, Matter of Welch v State of New York, 71 AD2d 494, 496, lv denied 50 NY2d 802; see also, Executive Law § 63 [1]) and who must ascertain the agency’s liability. Claimants here served a verified notice of intention alleging that the accident was caused by a faulty traffic signal that had been installed and maintained by the DOT. Thus, the Attorney General’s representation of the DOT with respect to those allegations commenced upon the service of the notice of intention, and the disciplinary rule “safeguards against [the DOT] making * * * ill-advised disclosures and unwarranted concessions” (Niesig v Team I, supra, at 370) while claimants, as here, investigate the viability of their claims.

The majority believes that application of DR 7-104 (a) (1) upon service of a notice of intention will preclude a claimant’s investigation of a possible claim. We disagree. The need to conduct informal discovery was one of the many competing interests balanced by the Court of Appeals in Niesig when it defined the term “party” as it is used in DR 7-104 (a) (1). The test that the Court formulated is equally applicable in a preclaim context where a notice of intention has been served. Although DR 7-104 (a) (1) applies to “employee-parties,” it does not apply to nonparty employees, including witnesses to the event giving rise to the litigation, and thus those employees may be interviewed informally at any time (see, Niesig v Team I, supra, at 374-375). Furthermore, there are established procedures for conducting pre-claim discovery (see, Court of Claims Act § 17 [2]; CPLR 3102 [c], [f]; see also, Matter of Stewart v New York City Tr. Auth., 112 AD2d 939, 940).

The majority apparently is concerned that, if DR 7-104 (a) (1) is applied in this context, attorneys will forego investigation of claims rather than run the risk of stumbling upon an “employee-party” and violating the disciplinary rule. The rule, however, cannot be violated inadvertently. There is a requirement of knowledge, which implies that the rule is intended to deter purposeful or deliberate misconduct (see, Niesig v Team I, supra, at 370; Wolfram, Modern Legal Ethics § 11.6.2, at 611). This leads us to conclude that an attorney cannot violate DR 7-104 (a) (1) in this context unless that attorney knows not only that the agency involved is represented by the Attorney General, but also that the employees contacted are “employee-parties” under Niesig.

In our view, claimants’ counsel knew that the DOT was represented by the Attorney General inasmuch as claimants’ service of the notice of intention triggered that representation. Thus, the sole remaining issue is whether claimants’ counsel was aware of the status of the DOT employees as “employee-parties” under Niesig. The majority concludes that there is insufficient evidence establishing that element of knowledge. They effectively place the burden on the Attorney General to ascertain who are “employee-parties,” and then to provide that information to claimants. We agree that, had the Attorney General done that in this case, there would be no question about the misconduct of claimants’ counsel, but that is not to say that without such proof there can be no violation of DR 7-104 (a) (1). The focus here under the disciplinary rule is upon the knowledge of claimants’ counsel, not upon the knowledge of the Attorney General.

Contrary to the majority’s determination, there is proof that claimants’ counsel knew that he was contacting “employee-parties” of the DOT whose acts or omissions he would seek to impute to the DOT. The critical proof of that knowledge was supplied by claimants’ counsel in an affirmation in opposition to defendant’s motion. In our view, the majority misreads that affirmation. Police photographs documented the misaligned signal, and DOT records showed that the signal had been knocked down by a truck and then repaired by the signal crew just hours before the accident. Although claimants’ counsel did not state explicitly that he had this evidence before the interviews were conducted, the clear implication of his affirmation is that he did. Indeed, that evidence provided the basis for seeking out the members of the signal crew to interview them. Thus, we conclude that, prior to the interviews, claimants’ counsel had reason to believe from evidence in his possession that the accident was caused by a misaligned traffic signal and that the signal crew was responsible for that misalignment.

Because in our view claimants’ counsel knew, not only that the DOT was represented by the Attorney General, but also that the signal crew members were “employee-parties” under Niesig, we would hold that claimants’ counsel violated DR 7-104 (a) (1) by interviewing the signal crew members outside the presence of the Attorney General. That is not to say, however, that we would grant the relief requested in defendant’s motion. In the absence of significant taint or unfairness, the draconian measures proposed by defendant are inappropriate (see, S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., 69 NY2d 437, 445). Any remedy should be left to the sound discretion of the court, taking into account “all the significant interests to be balanced” (S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., supra, at 444). Accordingly, we conclude that the order denying defendant’s motion should be reversed and the matter remitted to the Court of Claims to determine the appropriate remedy.

Green, J. P., and Kehoe, J., concur with Scudder, J.; Wisner and Htjrlbutt, JJ., dissent and vote to reverse in a separate opinion by Wisner, J.

Order affirmed, with costs.