Opinion 17-143
October 19, 2017
Please Note: As of January 1, 2019, section 100.3(F) also prohibits remittal of disqualification in a fifth scenario, i.e., where the judge “knows that the judge or the judge’s spouse, or a person known by the judge to be within the [second] degree of relationship to either of them, or the spouse of such a person, is acting as a lawyer in the proceeding or is likely to be a material witness in the proceeding,” and “such person personally appears in the courtroom during the proceeding or is likely to do so” (22 NYCRR 100.3[E][1][e][i]; 100.3[F]).
Please Note: This opinion has been modified by Opinion 21-22(A) concerning a judge’s obligations when a party is appearing without counsel. As stated in Opinion 21-22(A), “we no longer prohibit remittal of disqualification merely because a party is unrepresented. We hereby modify our prior opinions to abolish that requirement.” This also affects opinions “where disclosure (or disclosure and insulation) is mandated in lieu of outright disqualification” (see id. fn 3).
Digest: (1) A judge who co-owns real property with an attorney is disqualified,
subject to remittal, from cases in which that attorney appears, for the
duration of the co-ownership relationship and for two years after it
completely terminates. (2) Where the co-ownership interest is not
likely to result in frequent disqualification, the judge need not divest
him/herself of the interest. (3) The judge may accept rent from an
attorney tenant, but must disqualify him/herself, subject to remittal,
for the duration of the landlord/tenant relationship. This obligation
ends when the landlord/tenant relationship completely terminates. (4)
Transfer of the judge’s interest to his/her spouse or close family
member slightly diminishes, but does not end, the judge’s obligations:
The judge is disqualified, subject to remittal, when the attorney co-owner appears before the judge as an attorney or a party, but not when
he/she appears as a witness. (5) Transfer of the judge’s interest to a
third party who is not a member of the judge’s family constitutes
divestment of the judge’s interest. Thus, the judge is disqualified,
subject to remittal, whenever the former co-owner appears for two
years from the date the former co-ownership relationship completely
terminates, meaning after the sale is complete and final payment has
been made. After the two-year period, the judge has no further
obligation.
Rules: 22 NYCRR 100.2; 100.2(A); 100.2(B); 100.3(E)(1); 100.4(D)(1)(c); 100.4(D)(2)-(4); Opinions 16-130; 15-63; 13-64; 13-24; 12-13; 10-203(B); 10-193; 06-111; 06-109; 06-62; 05-130(B); 00-67.
Opinion:
A full-time judge and his/her spouse have a 50% interest in certain real property. The other 50% interest is held by a sole practitioner attorney. The judge asks if he/she may continue to maintain this ownership interest and whether he/she may preside in matters involving his/her co-owner and/or an attorney-tenant. The judge is also considering transferring his/her interest to a family member or a third party, and asks how that will affect his/her obligations.
A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2), and must always promote public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). A full-time judge must not “serve as an officer, director, manager, general partner, advisor, employee or other active participant of any business entity” (22 NYCRR 100.4[D][3]), but nonetheless “may hold and manage investments of the judge and members of the judge’s family, including real estate” (22 NYCRR 100.4[D][2]). A judge must not allow family, social, political or other relationships to influence the judge’s judicial conduct or judgment (see 22 NYCRR 100.2[B]), must not engage in “continuing business relationships with those lawyers ... likely to come before the court on which the judge serves” (22 NYCRR 100.4[D][1][c]), and must disqualify him/herself when the judge’s impartiality might reasonably be questioned (see 22 NYCRR 100.3[E][1]). A judge also must manage his/her investments and other financial interests to minimize the number of cases in which he/she is disqualified (see 22 NYCRR 100.4[D][4]).
1. May the Judge Continue to Co-Own a Building with an Attorney?
We believe the judge need not divest him/herself of his/her investment interest in the real estate, even though his/her co-owner is not a family member (see Opinion 10-193). However, a full-time judge may not take “an active role in the management or operation” of real property jointly owned with a non-family member (id.; 22 NYCRR 100.4[D][3]).
In reaching this result, we expressly distinguish Opinion 06-109 on its facts. In Opinion 06-109, we advised that a full-time judge must divest him/herself of race horses he/she jointly owned with attorneys who appeared before him/her. There, however, the judge’s business partners were an assistant district attorney and a Legal Aid attorney; the relationship would have required frequent disqualification (see 22 NYCRR 100.4[D][4] [requiring a judge to “divest himself or herself of investments and other financial interests that might require frequent disqualification”]). Here, by contrast, the judge’s co-owner is a solo practitioner in private practice who is unlikely to be involved in a substantial number of cases in the judge’s court.
2. May the Judge Preside in Matters Involving the Attorney Co-Owner?
A judge who will be receiving compensation from a business relationship with an attorney is disqualified, subject to remittal, from cases in which that attorney appears, for the duration of the business relationship and for two years from its conclusion (see Opinion 15-63). The relationship is not entirely severed until all financial obligations between them have completely ended, so that no further potential contingency or compensation payments, outstanding rents, or other financial connections exist between the judge and the attorney. The relationship is therefore considered concluded and the two year, post-relationship disqualification period commenced, only when any outstanding payments are tendered (see Opinions 00-67; 06-62 [sale of law practice to local attorney resulting in a continuing business relationship]; 10-203[B]; 05-130[B]).
Accordingly, the judge must disqualify him/herself, subject to remittal, whenever this attorney appears before the judge for the duration of their mutual real estate interest and for a period of two years thereafter.
3. May the Judge Preside in Matters Involving an Attorney Tenant?
A judge may accept rent from an attorney, but must disqualify him/herself, subject to remittal, for the duration of the landlord/tenant relationship (see Opinions 10-203[B]; 05-130[B]). There is, however, no two-year “tail” for a landlord/tenant relationship; that is, the judge’s obligation to disqualify him/herself ends once the landlord/tenant relationship completely terminates (see Opinion 12-13).
4. Effect of Transfer
Should the judge transfer his/her interest in the real estate to the judge’s spouse or a close family member, the judge’s obligations with respect to the attorney are only slightly diminished. The judge is still disqualified, subject to remittal, when the attorney appears before him/her, either as an attorney or as a party (see Opinions 13-24; 06-109).1 However, this prohibition does not apply when the attorney appears as a witness (see Opinion 13-24).
If the judge and his/her spouse transfer their interest to an unrelated third party, thus completely divesting themselves of any interest in the real property, the judge is disqualified, subject to remittal, from all matters involving the attorney for two years from the date the former co-ownership relationship completely terminates (see Opinions 00-67; 10-203[B]; 05-130[B]). That is, the two-year period begins to run once the transfer is complete and final payment has been made (see id.). After this two-year period, the judge has no further obligation when his/her former co-owner appears before him/her, assuming he/she can be fair and impartial.
Note on Remittal
Finally, for convenience, the Committee here repeats basic principles and procedures concerning remittal. As noted in Opinion 13-64 (citations omitted):
Rule 100.3(F) forbids remittal of disqualification in four scenarios. That is, remittal is prohibited if the judge: (1) has a personal bias or prejudice concerning a party; (2) knows that he/she served as a lawyer in the matter in controversy; (3) knows that he/she served as a material witness concerning the matter in controversy; or (4) knows that the judge or the judge’s spouse, or a person known by the judge to be within the sixth degree of relationship to either of them, or the spouse of such person, is a party to the proceeding. Because remittal is not available in these circumstances, the judge must disqualify him/herself from the proceeding.
In addition, the Committee has advised that remittal is not available if any party is appearing without counsel or if the judge is unwilling or unable to make full disclosure of the basis for disqualification on the record.
As described in Opinion 16-130 (citations omitted), where permitted, remittal is a three-step process:
As always, remittal is not permitted if any party appears pro se or if the judge doubts his/her ability to be impartial. However, assuming all parties are represented by counsel and the judge wishes to offer an opportunity for remittal, the usual three-step process applies. First, the judge must fully disclose the basis for disqualification on the record. Second, without the judge’s participation, the parties who have appeared and not defaulted and their lawyers must all agree that the judge should not be disqualified. Third, the judge must independently conclude that he/she can be impartial and be willing to participate in the case. If all three steps are satisfied, the judge may accept remittal of disqualification and must incorporate the parties’ and their attorneys’ agreement into the record of the proceeding.
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1As Opinion 13-24 only addresses first-degree relatives, such as a judge’s child or step-child, if the judge wishes to transfer his/her interest to a relative beyond the first degree of relationship by blood or marriage, he/she may write in for guidance (cf. Opinion 06-111 [suggesting that the second degree of relationship by blood or marriage denotes an “intimate and significant family connection”]).