Adams v. Cho

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Case 1-08-01226-dem Doc9Q _ Filed 08/04/09 Entered 08/04/09 14:45:45

UNITED STATES BANKRUPTCY COURT
FASTERN DISTRICT OF NEW YORK

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Inre
Case No: 1-08-42384-dem
PHILLIP CHO, Chapter 7
Debtor.
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DIANA G. ADAMS, as the UNITED
STATES TRUSTEE,
Adversary Proceeding
Plaintiff,
Case No.: 1-08-01226-dem
PHILLIP CHO,
Defendant.
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DECISION AND ORDER DIRECTING DISQUALIFICATION OF COUNSEL

Appearances:

Chunyu Jean Wang, Esq.

Wang Law Office PLLC

Attomey for Debtor and Defendant
36-25 Main Street, Suite 3A
Flushing, New Y ork 11354

David J. Doyaga, Esq.
Doyaga & Schaefer
Attomeys for Plaintiff

26 Court Street, Suite 1002
Brooklyn, New Y ork 11242

William E. Curtin, Esq.

Office of the United States Trustee
United States Bankruptcy Court
Eastem District of New Y ork

271 Cadman Plaza East, Room 4529
Brooklyn, New Y ork 11201

DENNIS E. MILTON
United States Bankruptcy Judge
On March 25, 2009, this Court issued an Order granting the application of
attorney Chunyu Jean Wang to withdraw as counsel for the debtor Philip Cho in the main case
and the defendants The Phillip Cho Irrevocable Trust, Yuk Ling Cho, as Trustee of the Phillip
Cho Irrevocable Trust and Yuk Ling Cho, individually, in the Chapter 7 case trustee's adversary
proceeding (Case No.: 1-08-01113-dem). Ms. Wang had made this application in response to the
Chapter 7 case trustee’s motion and in anticipation of an application seeking similar relief from
the Office of the United States Trustee in this case (Case No.: 1-08-01226-dem).
In response to Ms. Wang's request that the Court delay the proceedings for ninety
days to allow the debtor and defendants time to obtain new counsel and for new counsel to
become familiar with the matters, the Court allowed Ms. Wang to remain in the case until new
counsel was obtained and adjourned the pretrial conferences in the adversary proceedings for six
weeks to May 7, 2009. This hearing was further adjourned to May 21, 2009.
On or about May 19, 2009, Ms. Wang, who had not withdrawn as counsel, filed
an application to convert the main case to a case under Chapter 13 of the Bankruptcy Code. In
this motion, Ms. Wang described the unsuccessful attempts of the debtor and the defendants to
obtain other counsel. At the hearing held on May 21, 2009, the Chapter 7 case trustee renewed
his motion for an order disqualifying Ms. Wang from representing the debtor and defendants in
the adversary proceeding which he had commenced. 	The Court had previously recognized this
conflict when it issued its order granting Ms. Wang's application to withdraw as counsel. The
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Case 1-08-01226-dem Doc 9 Filed 08/04/09 Entered 08/04/09 14:45:45

debtor has an obligation to assist the Trustee in recovering assets for creditors, in contrast to the
defendant's interest in retaining assets and preventing the trustee from recovering them. See
Pereira v. Allboro Building Maintenance, Inc., 224 B.R. 286 (Bankr. E.D.N.Y. 1998). In its
Decision and Order dated July 30, 2009, this Court found that an impermissible conflict existed
in Ms. Wang's representation of the debtor and the defendants in the Chapter 7 trustee's
adversary proceeding. The Court disqualified Ms. Wang from representation of the defendants
in that adversary proceeding.
On June 19, 2009, counsel for the United States Trustee filed a Motion
for an Order disqualifying the Wang Law Office and Chunyu Jean Wang, Esq. from
representing the debtor in the United States Trustee's adversary proceeding to deny the debtor's
discharge (the “Application”). Neither the Wang Law Office nor Chunyu Jean Wang submitted
any papers in opposition to the Application. The adversary proceeding here concerns the
validity of a transaction in December 2007, four months prior to the petition date, in which the
debtor transferred his interest in real property to a trust. Ms. Wang has stated that she served as
counsel to the debtor in the preparation of the documentation for the transfer of property to the
trust and in the preparation of the bankruptcy petition, in which the debtor failed to disclose this
transaction. Ms. Wang has further stated that this transfer was in the ordinary course of
business, a defense likely to be advanced by the defendant in this adversary proceeding. This
case will turn on the issue of the debtor's intent with respect to the transfer and the failure to
disclose it in his statement of financial affairs. In light of her admitted involvement in the facts
underlying these issues, Ms. Wang is likely to have testimony relevant to the resolution and
disposition of the
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adversary proceeding. For those reasons, among others, at a hearing held on July 2, 2009, the
Court granted this Application and disqualified Ms. Wang from representation of the defendant
in the United States Trustee's adversary proceeding. This written Decision and Order follows.
The Court further cautions Ms. Wang to reconsider her continued representation of
the debtor in the main case. Since she can expect to be called as a witness on the events
surrounding the transfer in the adversary proceedings, Ms. Wang's continued representation of
the debtor may also violate Disciplinary Rule 5-102. Disciplinary Rule 5-102 provides in
pertinent part:
A 	A lawyer shall not act or accept employment that contemplates the lawyer’s
acting as an advocate on issues of fact before any tribunal if the lawyer knows or
it is obvious that the lawyer ought to be called as a witness on a significant issue
on behalf of the client....
B. 	Neither a lawyer nor the lawyer’s firm shall accept employment in contemplated
or pending litigation if the lawyer knows or it is obvious that the lawyer or
another lawyer in the lawyer's firm may be called as a witness on a significant
issue other than on behalf of the client, and it is apparent that the testimony would
or might be prejudicial to the client.
C. 	If, after undertaking employment in contemplated or pending litigation, a lawyer
learns or it is obvious that the lawyer ought to be called as a witness on a
significant issue on behalf of the client, the lawyer shall not serve as an advocate
on issues of fact and may testify in the circumstances enumerated in DR 5-
102(B)(1) through (4).
22 N.Y.C.R.R.§ 1200.21.
The Court has stayed discovery in the United States Trustee's adversary
proceeding and shall issue an amended pretrial scheduling order at the next status conference in
the adversary proceeding. The Court shall hold a status conference in the main case and the
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adversary proceedings on September 17, 2009 at 2:00 p.m.
IT IS SO ORDERED.
Dated: Brooklyn, New York
August 4, 2009
S/Dennis E. Milton
DENNIS E. MILTON
United States Bankruptcy Judge
To: 	Chunyu Jean Wang, Esq.
Wang Law Office PLLC
Attorney for Debtor and Defendants
36-25 Main Street, Suite 3A
Flushing, New York 11354
David J. Doyaga, Esq.
Doyaga & Schaefer
Attorneys for Plaintiff
26 Court Street, Suite 1002
Brooklyn, New York 11242
William E. Curtin, Esq.
Office of the United States Trustee
United States Bankruptcy Court
Eastern District of New York
271 Cadman Plaza East, Room 4529
Brooklyn, New York 11201
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