Opinion 20-138

September 10, 2020

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:    Where a judge rents an apartment to a not-for-profit organization that provides free transitional housing to homeless individuals, the judge is disqualified, subject to remittal, in matters involving a litigant who is currently residing in that apartment. If the judge’s tenant’s placements result in frequent disqualifications, the judge must terminate this landlord/tenant relationship or divest him/herself of the investment.

Rules:     22 NYCRR 100.2; 100.2(A); 100.3(E)(1); 100.3(E)(1)(c); 100.3(E)(1)(d)(iii); 100.3(E)(2); 100.4(D)(1)(a)-(c);100.4 (D)(2); 100.4(D)(4); Opinions 20-82/20-86; 17-143; 04-51; 97-55; 96-90; People v Moreno, 70 NY2d 403 (1987).

Opinion:

         A judge and their spouse own and rent residential space in a building. One long-term tenant is a not-for-profit organization which provides housing to homeless individuals to help them transition to self-sufficiency. The organization remains fully responsible for paying the rent and maintaining the security deposit, as well as screening, selecting and managing the homeless individuals who will live rent-free in the unit and providing them with certain essential residential supplies. For the first time in this ongoing landlord/tenant relationship, the judge has learned that an individual selected by the organization to live in the judge’s building was also recently accepted into the problem-solving treatment court in which the judge presides. The judge disclosed this fact to both sides, and one side argues that the judge is conflicted. The judge now requests ethical guidance.

         A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act in a manner that promotes public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). While judges may “hold and manage investments of the judge and members of the judge’s family, including real estate” (22 NYCRR 100.4[D][2]), they must not engage in financial and business dealings that (a) may reasonably be perceived to exploit their judicial position; (b) involve them with any business, organization or activity that ordinarily will come before them; or (c) involve them in frequent transactions or continuing business relationships with those lawyers or other persons likely to come before the court on which they serve (see 22 NYCRR 100.4[D][1][a]-[c]). A judge must “keep informed” about his/her own economic interests and “make a reasonable effort to keep informed” about those of his/her spouse (22 NYCRR 100.3[E][2]) and must further “manage the judge’s investments and other financial interests to minimize the number of cases in which the judge is disqualified (22 NYCRR 100.4[D][4]). In turn, judges must disqualify themselves in any proceeding in which their impartiality “might reasonably be questioned” (22 NYCRR 100.3[E][1]), including where the judge or their spouse has an interest that might be substantially affected by the proceeding (see 22 NYCRR 100.3[E][1][c], [d][iii]). Where a judge’s “investments [or] other financial interests ... might require frequent disqualification,” the judge must divest them “[a]s soon as the judge can do so without serious financial detriment” (22 NYCRR 100.4[D][4]).

         We have said a judge is disqualified in any proceeding which involves a drug and alcohol evaluation and treatment center that accepts referrals from the court and is the lessee of a building the judge co-owns (see Opinion 97-55 [noting that if disqualification is required “in a substantial number of cases,” the judge must divest the interest]).¹ Here, by contrast, the relationship is far less direct. The judge’s tenant does not ordinarily appear before the judge or provide services to litigants in the judge’s court. The judge’s business relationship is not with the litigant but entirely with the organization that has placed this individual into an apartment leased by the organization. Indeed, the litigant stays in the apartment for free, with the organization taking full financial responsibility.

         Nonetheless, the tenant organization’s ongoing use of the apartment, i.e. placing homeless individuals there, justifies its continued rental of the unit and thus keeps the judge’s investment profitable. We therefore conclude this judge’s impartiality might reasonably be questioned when they know a litigant appearing before them is currently residing in an apartment the judge co-owns. Accordingly, the judge is disqualified, subject to remittal, in matters involving this litigant while the litigant resides in the apartment. As always, remittal requires full disclosure on the record and the voluntary affirmative consent of the parties and their counsel; remittal is not available if the judge questions his/her impartiality or if a party is appearing without counsel (see Opinion 20-82/20-86 [explaining the three-step remittal process]).

         If this conflict is, as it appears, a rare occurrence (the first in several years of ownership), the judge need not necessarily terminate the business relationship with this not-for-profit organization tenant or divest the real property at this time. But the judge must “keep informed” about their personal economic interests (see 22 NYCRR 100.3[E][2]), and if the tenant’s placements result in frequent disqualifications, the judge must either terminate this landlord/tenant relationship or divest the investment (see 22 NYCRR 100.2; 100.4[D][4]).²

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¹ The judge in Opinion 97-55 apparently entered into the lease before receiving a copy of our Opinion 96-90 saying not to do so (see Opinions 97-55; 96-90; 22 NYCRR 100.4[D][1][b]).

² If the judge’s spouse remains an owner or co-owner of the property, the judge’s obligations may be diminished but not terminated (see e.g. Opinions 17-143 [spouse or other close relative]; 04-51 [spouse]; 22 NYCRR 100.3[E][2] [judge must “make a reasonable effort to keep informed” about his/her spouse’s personal economic interests]).