R & D Muller, Ltd. v. Fontaine’s Auction Gallery, LLC

American Investment Properties, Inc. (AIP) consigned a 1,500-ounce solid-gold Mickey Mouse statute called Celebration Mickey to Albany Auction Gallery (defendant) and two businesses owned by John and Dina Fontaine (defendants): Dina’s Antiques, Inc. and Fontaine’s Auction Gallery, LLC (defendants). The highest bidder left with Celebration Mickey without paying for it. AIP assigned its interest in Celebration Mickey and any relevant claims to R & D Muller, Ltd. (R & D) (plaintiff). R & D spent nearly $300,000 to retrieve Celebration Mickey and then sued the defendants to recover the costs. Part of R & D’s lawsuit sought to pierce the corporate veil to hold the Fontaines personally liable for their businesses’ actions. R & D’s counsel, the firm Cain, Hibbard, Myers & Cook (Cain Hibbard), had represented the Fontaines in personal and business matters between 1980 and 1990. Notably, Cain Hibbard helped Dina Fontaine incorporate Dina’s Antiques and advised her regarding the proper maintenance of its corporate records so that she could avoid personal liability. The defendants moved to disqualify Cain Hibbard from representing R & D in the lawsuit, arguing that Cain Hibbard’s prior representation of the Fontaines created a conflict of interest in the current lawsuit. The motion judge granted the motion, and R & D appealed.