Defendant AMA Capital Partners, LLC, and AMA's chief executive officer, defendant Paul Leand, Jr. (together, moving defendants), move to disqualify the law firm of Quinn Emanuel Urquhart & Sullivan, LLP, from representing plaintiffs in this action. The motion is [*2]granted.

Plaintiffs, Gonzalo Gil-White, Jose Antonio Cañedo-White, and Carlos Enrique Williamson-Nasi, are or were executives and investors of Oro Negro, a Mexican oil company. (NYSCEF No. 92 at 1.) Plaintiffs allege that defendants Alterna Capital Partners, LLC, Contrarian Capital Management, LLC, and Maritime Finance Company LTD ("MFC") (bondholders in Oro Negro's "ad-hoc group"), and AMA and Leand (financial advisors to the ad-hoc group), engaged in a conspiracy to seize Oro Negro's oil rigs. (See NYSCEF No. 92 at 12.) The alleged conspiracy included filing allegedly frivolous criminal actions in Mexico and seeking plaintiffs' deportation from the United States. (NYSCEF No. 92 at 2-3; NYSCEF No. 6 at 6.)

In July 2023, plaintiffs commenced an action in Miami-Dade County Court. (NYSCEF No. 9.) In August 2023, AMA moved to disqualify Quinn Emanuel from representing plaintiffs in that action. (NYSCEF No. 10.) AMA alleged that Quinn Emanuel had formed an attorney-client relationship with AMA in relation to an ongoing arbitration proceeding. (NYSCEF No. 10.) Quinn Emanuel argued that it represented only AMA's co-investor, Värde Partners, Inc., in the arbitration and had communicated with AMA solely on the basis of "common interest privilege." (NYSCEF No. 12 at 6-7.)

In October 2023, the Florida court granted AMA's motion to disqualify Quinn Emanuel. (See NYSCEF No. 8.) The court found that Quinn Emanuel had established an attorney-client relationship with AMA in the arbitration matter and therefore that Quinn Emanuel had a disqualifying conflict of interest. (NYSCEF No. 8 at 2-3.) The Florida court also rejected Quinn Emanuel's "common interest privilege" argument and its contention that United Kingdom law governed the dispute. (NYSCEF No. 8 at 3.)

Later in October 2023, following the Florida court's order, Quinn Emanuel sent AMA a letter denying the existence of an attorney-client relationship and purporting to terminate any such relationship, to the extent a relationship ever existed. (NYSCEF No. 31.) Leand sent Quinn Emanuel an email that same day rebutting Quinn Emanuel's claims. (NYSCEF No. 32.) Quinn Emanuel voluntarily dismissed AMA from the Florida action on November 15, 2023. (NYSCEF No. 19.)

A week later, on November 22, 2023, plaintiffs brought this action. (NYSCEF No. 1.) AMA and Leand now move to disqualify Quinn Emanuel. AMA and Leand argue that the Full Faith and Credit Clause (US Const, art. IV, § 1) requires this court to give the Florida order issue-preclusive effect, and therefore that Quinn Emmanuel must be disqualified here from representing plaintiffs. (NYSCEF No. 6 at 12-16; NYSCEF No. 40 at 2-5.) Alternatively, AMA argues that an independent New York-law analysis would lead to the same result. (NYSCEF No. 6 at 16-22; NYSCEF No. 40 at 5-11.) Finally, AMA contends that Quinn Emanuel should also be disqualified with respect to defendant Leand. (NYSCEF No. 40 at 12.)

In opposition, plaintiffs argue that the Florida court did not have jurisdiction over AMA and therefore that the Florida order is not entitled to full faith and credit or preclusive effect. (NYSCEF No. 33 at 9-12.) They argue that this court should undertake an independent review of the issue under New York law and find that it never formed an attorney-client relationship with AMA. (Id. at 12-16.) And plaintiffs contend that disqualification would unduly prejudice them. [*3](Id. at 17.)

I. Whether the Florida Court Order is Entitled to Issue-Preclusive Effect

Moving defendants argue that the Florida order is entitled to preclusive effect under the Full Faith and Credit Clause of the U.S. Constitution. (NYSCEF No. 6 at 12-13.) This court agrees.

The Clause calls for the judgment of an out-of-state court to be given "'the same credit, validity, and effect'" as it would be given in the rendering state. (See O'Connell v Corcoran, 1 NY3d 179, 184 [2003], quoting Underwriters Nat. Assurance Co. v North Carolina Life & Accident & Health Ins. Guaranty Assn., 455 US 691, 704 [1982].) The Clause prohibits questioning the merits of an out-of-state order, although it allows a court independently to assess the rendering court's jurisdiction if that jurisdiction is challenged. (See Fiore v Oakwood Plaza Shopping Ctr., 78 NY2d 572, 577 [2011].) If the rendering court is found to lack jurisdiction, then the judgment is not entitled to full faith and credit. (See Estin v Estin, 334 US 541, 549 [1948].)

In opposing the motion, plaintiffs contest whether the Florida court had personal jurisdiction over the defendants in that action.^[FN1] (NYSCEF No. 33 at 14.) The Full Faith and Credit Clause creates a strong presumption that the rendering court had appropriate jurisdiction. (See Cook v Cook, 342 US 126, 128 [1951]; Williams v North Carolina, 325 US 226, 234 [1945].) To overcome the presumption of jurisdiction, "it is not sufficient to show that there is doubt about the jurisdiction, but it must be made to appear clearly, by a fair preponderance of the evidence, that no jurisdiction was acquired. . . ." (Hayes v Kerr, 19 AD 91, 110 [1st Dept 1897].) To determine whether the Florida court had jurisdiction, this court must determine whether Florida's long-arm statute was satisfied and whether the Florida court's exercise of jurisdiction comports with due process.^[FN2] (See JDC Fin. Co. I v Patton, 284 AD2d 164, 166 [1st Dept 2001].)

In arguing that the Florida court lacked jurisdiction, plaintiffs rely primarily on the jurisdictional challenge that AMA itself raised in the Florida action. (NYSCEF No. 33 at 10.) According to plaintiffs, that challenge, coupled with their voluntary dismissal of AMA from the Florida action, shows "that neither party truly believed the issue court had jurisdiction over AMA or the dispute." (Id.) This argument is unpersuasive.

Under Florida law, a complaint may sufficiently plead long-arm jurisdiction "in the language of the statute without pleading the supporting facts." (Venetian Salami Co. v Parthenais, 554 So 2d 499, 502 [Fla 1989].) AMA did not dispute, in moving to dismiss the Florida complaint, that the complaint mirrors several provisions of Florida's long-arm statute. (See NYSCEF No. 17 at 12.) In the Florida complaint, plaintiffs allege that "[d]efendants [*4]committed the tortious acts in Miami" (NYSCEF No. 9 at ¶ 57.) This allegation closely tracked Florida Statute § 48.193 (1) (a) (2), which provides for long-arm jurisdiction based on defendant's "[c]ommitting a tortious act within this state." The Florida complaint similarly alleges that "[d]efendants injured Florida residents and during the same time engaged in commercial activity in Florida" (NYSCEF No. 9 at ¶ 57), which resembles the language in Florida Statute § 48.193 (1) (a) (6). The Florida complaint was therefore sufficient under Florida law, even had it not contained any specific factual allegations, since it pleaded jurisdiction over defendants "in the language of the statute."

Because the Florida complaint is not insufficient on its face, this court must next decide whether defendants' Florida motion to dismiss was sufficient to show that the Florida court lacked jurisdiction. A motion to dismiss on jurisdictional grounds will prevail only if it is supported by affidavits containing representations that, if credited, would "specifically refute" the jurisdictional allegations in the complaint. (Sayers Constr., LLC v Timberline Constr., Inc., 306 So 3d 275, 279 [Fla Dist Ct App 2020].) An affidavit that asserts merely "legal conclusions" instead of refuting the jurisdictional facts will be insufficient in Florida to shift the burden back to the plaintiff to rehabilitate the jurisdictional allegations of the complaint. (See Acquadro v Bergeron, 851 So 2d 665, 672-673 [Fla 2003].)

In support of the current motion to disqualify, defendants submit the memorandum of law supporting the motion to dismiss. (See NYSCEF No. 17.) Defendants do not, however, provide the affidavits accompanying the memorandum. As a result, this court's analysis of the sufficiency of the supporting affidavits will necessarily be limited to the portions of those affidavits directly referenced within the motion papers that defendants have submitted.

On the record before this court, defendants did not, in the Florida action, specifically refute the jurisdictional allegations of the complaint in that action. The Florida memorandum of law references a supporting declaration from Kristen Bodden, defendant MFC's CEO, who represented that MFC's principal place of business was never in Florida. (NYSCEF No. 17 at 11.) Defendants' Florida motion to dismiss argued that Bodden's declaration had demonstrated that there was no general personal jurisdiction over any defendant and that the complaint's claims did not arise out of MFC's business in Florida. (Id.) But Bodden's representations do not refute the jurisdictional allegations in the complaint that implicate other grounds for specific personal jurisdiction. Nor do they refute any jurisdictional allegations specific to defendant AMA.

In their Florida motion to dismiss, defendants also argued that the complaint was insufficient because it contained only "vague and conclusory" jurisdictional allegations. (NYSCEF No. 17 at 13 n 4.) Florida courts have held, however, that even a complaint containing conclusory allegations will survive a motion to dismiss if the affidavits supporting the motion to dismiss fail to refute the complaint's jurisdictional allegations. (See Sayers Constr., LLC v Timberline Constr., Inc., 306 So 3d 275, 279 [Fla Dist Ct App 2020].) Although defendants' Florida motion to dismiss may create "doubt" about the Florida court's jurisdiction, it is not enough to show "clearly, by a fair preponderance of the evidence, that no jurisdiction was acquired. . . ." (Hayes, 19 AD at 110.) Therefore, plaintiff's reliance on AMA's Florida motion to dismiss is insufficient to meet the law firm's burden to overcome the presumption of jurisdiction required by the Full Faith and Credit Clause.

In any event, the Florida complaint also established a basis for personal jurisdiction arising from asserted conspiratorial tortious conduct in Florida. (NYSCEF No. 17 at 14.) The [*5]moving defendants emphasized in the Florida action that Florida Statute § 48.193 (1) (a) (2) requires that the tortious act (as opposed to the resulting injury) be committed in Florida. (NYSCEF No. 17 at 13-14.) This principle, though, is subject to an exception: A non-resident defendant in an action for conspiracy may be brought within the ambit of Florida's long-arm statute if the alleged tortious actions of a co-conspirator took place within Florida, even if the non-resident defendant did not itself commit tortious acts within Florida. (See Homeway Furniture Co. of Mount Airy, Inc. v Horne, 822 So 2d 533, 539 [Fla Dist Ct App 2002] [holding that an injury in Florida due to defendant's tortious conduct outside Florida will establish jurisdiction when plaintiff asserts a conspiracy claim "in which the actions of coconspirators taken in Florida were attributed to the nonresident defendants and thus supported asserting jurisdiction over them"], citing Wilcox v Stout, 637 So 2d 335 [Fla Dist Ct App 1994]; accord NHB Advisors, Inc. v Czyzyk, 95 So 3d 444, 449 [Fla Dist Ct App 2012] [finding no due-process violation for a non-resident co-conspirator when one conspirator committed tortious acts in and aimed at Florida, because the co-defendant could have "reasonably anticipate being haled into court in Florida"].)

The Florida complaint includes sufficiently detailed allegations to implicate long-arm jurisdiction over AMA under a co-conspirator theory. The Florida complaint alleges that defendant MFC's CEO resides in Florida, where she engaged in the acts alleged in the complaint. (NYSCEF No. 9 at ¶¶ 52, 57.) The Florida complaint also contained specific allegations of acts or communications by the CEO made about the alleged conspiracy. (Id. at ¶¶ 118, 126.) Although in the motion to dismiss MFC rebutted the allegation that its principal place of business was in Miami, MFC did not rebut allegations that its executives lived in Florida. (NYSCEF No. 17 at 12.) Taken together, the allegations in the Florida complaint established prima facie that at least one defendant acted in furtherance of the alleged conspiracy from within Florida.^[FN3]

The Florida court's order is thus entitled to full faith and credit. To determine the resulting preclusive effect of the Florida order here, this court must apply Florida preclusion law.^[FN4] (See Bruno v Bruno, 83 AD3d 165, 169 [1st Dept 2011] ["New York courts apply the law [*6]of the rendering jurisdiction to determine the preclusive effect of the decisions of sister states."].) In Florida, issue preclusion requires "that the parties and issues be identical, and that the particular matter be fully litigated and determined in a contest which results in a final decision of a court of competent jurisdiction." (Mobil Oil Corp. v Shevin, 354 So 2d 372, 374 [Fla 1977].) Plaintiffs do not contend that any of these requirements is unsatisfied here. The Florida court's determinations that (among other things) Quinn Emanuel had formed an attorney-client relationship with AMA through the arbitration matter, and that the attorney-client relationship between Quinn Emanuel and AMA required Quinn Emanuel's disqualification (see NYSCEF No. 8), are binding in this action.

II. Whether Disqualification is Required if the Florida Court Order is Given Issue-Preclusive Effect

Plaintiffs argue that moving defendants' request to disqualify should be denied, even assuming that the Florida order is given issue-preclusive effect, for two reasons. (See NYSCEF No. 33 at 20.) First, plaintiffs contend that disqualification is not required because it terminated any attorney-client relationship with AMA before bringing this action—and thus that this court's disqualification inquiry is governed by the less-stringent ethical rules governing conflicts with former clients, not current clients. (See id.) Second, plaintiffs assert that the effect of the Florida order does not require disqualification as to defendant Leand, who was not a party to the Florida action. These two arguments are considered in turn.

A. AMA's Request to Disqualify Quinn Emanuel

Plaintiffs claim that on October 26, 2023, three weeks after the Florida court's order, Quinn Emanuel terminated its relationship with AMA by letter. (NYSCEF No. 33 at 19-20 [mem. of law]; NYSCEF No. 31 [letter].) Consequently, plaintiffs argue, rules related to conflicts of interest with former clients—not current clients—apply. (NYSCEF No. 33 at 20.) AMA responds that as a practical matter, it should be treated as a current client for purposes of this motion, notwithstanding the October 2023 letter. (NYSCEF No. 6 at 15-16; NYSCEF No. 40 at 11.)

Florida courts have applied issue preclusion narrowly, to preclude parties from relitigating "identical factual issue[s]." (Provident Life and Acc. Ins. Co. v Genovese, 138 So 3d [*7]474, 477-478 [Fla Dist Ct App 2014].) Even when later events create new issues to be litigated, Florida courts have given preclusive effect to any issue already decided in a prior action. (See e.g. Essenson v Polo Club Assoc., 688 So 2d 981, 983 [Fla Dist Ct App 1997].) The Florida court's finding that Quinn Emanuel had established an attorney-client relationship is still accorded preclusive effect. But the court must independently determine whether Quinn Emanuel effectively altered the status of its relationship with AMA through the October 26, 2023, letter.

Whether AMA is a current or former client will determine which New York Rule of Professional Conduct governs this dispute. A conflict of interest with a former client is governed by RPC Rule 1.9. If AMA is treated as a former client for conflict purposes, then AMA would bear the burden of proving (1) the existence of a prior attorney-client relationship; (2) that the matter in the prior representation is "substantially related" to the current matter; and (3) that the interests of the former client are "materially adverse" to the interests of the current client. (See Graziano v Andzel-Graziano, 169 AD3d 1195, 1195-1196 [3d Dept 2019].) If, on the other hand, AMA is considered to be a current client of Quinn Emanuel, the conflict question is governed by RPC Rule 1.7. Under that rule, disqualification is presumptively warranted; to avoid disqualification, Quinn Emanuel would bear the burden to show that there is no "actual or apparent conflict in loyalties." (Matter of Tartakoff v New York State Educ. Dept., 130 AD3d 1331, 1333 [3d Dept 2015]; 34-06 73, LLC v Seneca Ins. Co., Inc, 2014 WL 4483326, at *2-3 [Sup Ct, NY County 2014].^[FN5] )

Under New York law, the status of an attorney-client relationship must be assessed as of the time the alleged conflict arose. (See City & County Paving Corp. v Titan Concrete, Inc., 173 AD3d 518, 518-519 [1st Dept 2019].) If counsel terminates an attorney-client relationship after a conflict has become apparent, the assessment of that conflict for disqualification is still based on the more demanding current-client standard, to "'prevent attorneys from manipulating their commitments . . . and transforming a continuing relationship to a former relationship by way of client abandonment.'"^[FN6] (34-06 73, LLC, 2014 WL 4483326, at *4, quoting CQS ABS Master Fund Ltd v MBIA Inc., 2013 WL 3270322, at *9 n 5 [SD NY 2013] [alteration in original].)

Here, the inquiry is complicated by Quinn Emanuel's October 26, 2023, letter to AMA denying the existence of any attorney-client relationship (see NYSCEF No. 31)—sent approximately one month before plaintiffs brought this action on November 22, 2023 (see NYSCEF No. 1 [summons with notice]). If this court were to treat the relevant date for assessing the existence of a conflict as commencement of the New York action, as opposed to commencement of the Florida action, no conflict would exist at commencement, rendering inapplicable the current-client standard for disqualification. This court concludes, though, that [*8]the relevant date for conflict purposes is the date on which the Florida action was commenced. And on that date, the Florida disqualification order makes clear, AMA was still a Quinn Emanuel client.

This court reaches that conclusion for several reasons. The allegations in the Florida and New York complaints are substantively identical, involve identical causes of action, and are against the same defendants (with the addition of Leand in the New York action). Plaintiffs agree that the lawsuit before this court is the result their choice to "re-file" in New York after voluntarily dismissing the Florida action. (NYSCEF No. 33 at 1, 8, 10.) Indeed, plaintiffs brought this action on behalf of plaintiffs one week after voluntarily dismissing its Florida claims against AMA (see NYSCEF No. 19), and one day after voluntarily dismissing its Florida claims against the other defendants (see NYSCEF No. 20). Moreover, the notice of voluntary dismissal as against AMA states that in light of (i) the October 26 letter, and (ii) the voluntary dismissal itself, "there is no impediment to Plaintiffs proceeding in this case against the remaining [d]efendants" with Quinn Emanuel as their counsel. (NYSCEF No. 19 at 1.) And the notice asserts that "as a dismissed former defendant, AMA no longer has standing to argue that Quinn Emanuel should be disqualified from representing [p]laintiffs against the remaining [d]efendants."^[FN7] (Id. at 1-2.)

This evidence, taken together, strongly suggests that Quinn Emanuel's attempt to end its relationship with AMA, plaintiffs' voluntary dismissal of the Florida action, and plaintiffs' immediate refiling of the same action in New York, was an effort to avoid application of the current-client rule for assessing conflicts of interest—and thereby ward off Quinn Emanuel's disqualification. This court declines to permit plaintiffs and their counsel to skirt around New York's Rules of Professional Conduct in this manner. Whether Quinn Emanuel should be disqualified from representing plaintiffs against AMA, in short, is governed by the current-client rule, RPC Rule 1.7. Under that rule, Quinn Emanuel bears the burden of establishing the absence of an actual or apparent conflict between its representation of AMA and its representation of plaintiffs in their action against AMA. Quinn Emanuel has not met that burden.

Plaintiffs argue that "even if there were a technical violation or conflict," this court should exercise its discretion to overlook the conflict. (NYSCEF No. 33 at 17 [emphasis added].) That is, plaintiffs say, it would be inequitable to grant the motion to disqualify here because plaintiffs' "five-year relationship with Quinn Emanuel U.S." should count for more than "AMA's discussions with Quinn Emanuel U.K. over the course of roughly six months." (Id.) This argument is unpersuasive. In both the New York and Florida actions, AMA moved promptly to disqualify Quinn Emanuel due to a conflict. Plaintiffs provide no authority for the proposition that, absent evidence of a tactical motivation for a motion to disqualify, the court should weigh the relative duration of the conflicting attorney-client relationships in resolving the motion. To the contrary, the evident effort by plaintiffs and Quinn Emanuel to avoid counsel's disqualification by dismissing the Florida action and promptly refiling in New York points in favor of granting the current motion to disqualify, not denying it.

The branch of defendants' motion to disqualify Quinn Emanuel as counsel to plaintiffs [*9]with respect to its claims against AMA is granted.

B. Leand's Request to Disqualify Quinn Emanuel

Plaintiffs argue that because defendant Leand is not named in the Florida action, Quinn Emanuel should not be precluded from representing plaintiffs against Leand here. (NYSCEF No. 33 at 16.) Defendants counter that the Florida order nonetheless requires disqualification with respect to plaintiffs' claims against Leand, because "virtually all of Plaintiffs' allegations with respect to AMA involve actions and communications purportedly made by Mr. Leand," leaving "is no basis to distinguish between Mr. Leand and AMA." (NYSCEF No. 40 at 12.) This court agrees with defendants.

In Florida, issue preclusion "applies when identical parties or their privies have previously litigated the same issue." (Marquardt v State, 156 So 3d 464, 481 [Fla 2015] [emphasis added].) For purposes of issue preclusion, "[a] privy is one who is identified with the litigant in interest." (Progressive Am. Ins. Co. v McKinnie, 513 So 2d 748, 749 [Fla Dist Ct App 1987].) Issue preclusion can be applied even when an individual was not formally a party in the prior proceeding if "his conduct may have been such as to give him the status of a party in actuality." (McGregor v Provident Tr. Co. of Phila., 119 Fla 718, 731 [1935].) Florida courts have thus held that issue preclusion bars an action against individual corporate officers who were not named in a prior action against the corporation, when the subsequent action "merely reiterates factual allegations and a theory of recovery presented in the former action." (Atl. Cylinder Corp. v Hetner, 438 So 2d 922, 923 [Fla Dist Ct App 1983]; accord Red Carpet Corp. of Panama City Beach v Roberts, 443 So 2d 377, 379-380 [Fla Dist Ct App 1983].)

Leand is AMA's CEO. And the factual allegations and causes of action in plaintiff's complaint in this action are nearly identical to those in the Florida complaint. (Compare NYSCEF Nos. 45, 92, with NYSCEF No. 9.) The only differences between the two pleadings are the addition of Leand as a named defendant and the insertion of Leand's name into the factual allegations relating to AMA. Applying Florida preclusion principles, therefore, the court concludes that Leand is in privity with AMA for disqualification purposes—and thus that Quinn Emanuel may not represent plaintiffs here in their claims against Leand.

III. The Proper Scope of Disqualification

Because this motion has been brought only on behalf of AMA and Leand, the question arises whether Quinn Emanuel should be disqualified with respect to plaintiffs' claims against the other defendants in the action, as well.

Moving defendants argue that given the complaint's "allegations against AMA," and the "centrality of AMA and Mr. Leand to [p]laintiffs' theories, it "would be an ethical breach of Quinn Emanuel to participate in this case in any way." (NYSCEF No. 40 at 13.) This court agrees. The court sees no meaningful way to separate the claims against AMA and Leand from the claims against the other defendants—nor for Quinn Emanuel to litigate vigorously the claims against those other defendants without affecting the interests of AMA and Leand. Given the court's conclusion that Quinn Emanuel must be disqualified as against AMA and Leand, it follows that the scope of that dismissal must extend to the other defendants in the action as well.

Accordingly, it is

ORDERED that moving defendants' request to disqualify Quinn Emanuel as counsel for plaintiffs is granted, and Quinn Emanuel is dismissed with respect to plaintiffs' claims as against all defendants; and it is further

ORDERED that plaintiffs must within 30 days of entry of service of notice of entry notify this court by letter (submitted by e-filing on NYSCEF and email to SFC-Part7-Clerk@nycourts.gov) whether plaintiffs will be represented in this action by the law firm of Coburn & Greenbaum PLLC, or by other counsel); and it is further

ORDERED that further proceedings in this action are stayed for 30 days from service of notice of entry, or until plaintiffs' notification to this court of the identity of their counsel, whichever comes first; and it is further

ORDERED that moving defendants serve a copy of this order with notice of its entry on all parties.