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Keywords

attorneytestimonymotionattorney-client privilege

motionforeclosurecivil procedure

Related Cases

Rosner v. Jiro Trading Corp., Not Reported in F.Supp., 1996 WL 312354

Facts

The Commodity Futures Trading Commission appointed a Receiver for Korbean International of New York, who subsequently filed an action against the Bank of Seoul under the RICO Act. The Bank filed a motion to disqualify the Receiver, claiming a conflict of interest due to the Receiver's involvement in other actions against the Bank. The court had previously denied similar motions in related cases.

According to the Bank, the Receiver has a conflict of interest because he is suing the Bank in this action and is allegedly representing the interests of the Bank in two other actions.

Issue

Whether the Receiver should be disqualified due to alleged conflicts of interest and whether the law firm representing the Receiver should also be disqualified.

The Bank has filed a motion in this case to remove the Receiver in the CFTC v. KIIC case, because the Receiver allegedly has a conflict of interest.

Rule

A receiver is appointed for the benefit of the court and is subject only to the court's direction and control. Disqualification of an attorney is warranted only when the attorney ought to be called as a witness on behalf of the client or when the testimony may be prejudicial to the client.

As an officer of the court, the Receiver is “subject, at all times, only to its [the court's] direction and control…. Even a receiver in foreclosure is not the agent of the mortgagee or the owner of the property, but is solely an instrument, an arm, of the court.”

Analysis

The court analyzed the Bank's claims and determined that the alleged conflict of interest was irrelevant, as the Receiver serves as an instrument of the court. The court noted that the Bank failed to provide evidence that the Receiver was a necessary witness or that his testimony would be prejudicial. The court also rejected the Bank's argument regarding attorney-client privilege as baseless.

the alleged conflict of interest between the Bank and the Receiver is irrelevant.

Conclusion

The court denied the Bank's motion to disqualify the Receiver and the law firm, labeling the motion as frivolous and unwarranted by existing law. The court ordered the Bank's counsel to show cause for potential sanctions under Rule 11.

I hereby order counsel for the Bank—Kevin P. Claffey and the firm of Claffey & Mastrogiacomo, P.C.—to show cause within fifteen days why they should not be sanctioned pursuant to Rule 11(c) of the Federal Rules of Civil Procedure.

Who won?

The Receiver prevailed in the case as the court denied the Bank's motion to disqualify him, emphasizing that the Receiver is an officer of the court and not an agent of any party.

the present motion to remove the receiver is denied.

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