I would consult with an attorney who concentrates in legal malpractice issues. Your statement has a lot of different issues that need to be addressed by someone well-versed in this area.
I am a lawyer licensed to practice in Illinois and Wisconsin. To the extent your issue arises out of the law of another jurisdiction, the information I provide should not be used as a substitute for consultation with a lawyer in the relevant jurisdiction.
Contact an attorney from your state who answers this question. Each attorney's contact information is found on their Avvo profile. This case definitely warrants further investigation.
Atty: 845-704-7777. This answer is provided for informational purposes only and does not constitute legal advice. You should not take action based upon this information without consulting legal counsel. This answer is not intended to create, and does not create, an attorney-client relationship. PLEASE REMEMBER: All claims and legal matters have statutes of limitations and/or other important time periods that apply to them. This means that you must take action on all claims or legal matters within the required time period(s) or your claims could be barred by the statute of limitations or dismissed. Contact our office or another competent attorney immediately to discuss the particular facts of any claim or legal issue you might have in order to learn what time periods apply to your particular situation.
Well, it's certainly possible that it's not an ethics violation -- my personal view on this, with the caveat that I don't practice in NY, would be that a consulting attorney for some kinds of cases (say, e.g., a med-mal case) wouldn't create a conflict of interest in the kinds of cases outside the scope of the consulting (say, if yours was a nuisance lawsuit). The consulting attorney isn't a member of the firm that's representing you for purposes of that case.
Note that if you no longer trust your attorney to represent you . . . even if there IS no conflict, you can fire him or her at any time, and pay them the fees owed to date.
Whether or not (1) this is a conflict that would prevent your lawyer from representing you and (2) whether this conflict should have been disclosed to you (or required your informed consent to proceed) is an ethics question that, at this point, should probably be addressed. Start by talking with your current attorney first, and let him explain. If it's not resolved to your satisfaction, you can fire your attorney, hire a new one, and file an ethics complaint (in that order).
Ethics complaint information (in NY) can be found here: http://www.nysba.org/Content/NavigationMenu/PublicResources/UnhappywithaNYAttorney/Unhappy_with_a_NY_At.htm
I can be reached at (913) 735-9320. Answers to legal questions are usually fact-dependent; my answers are general and based on the facts as you describe them and necessarily includes assumptions. More specific answers can be provided only after researching the appropriate law and a comprehensive consultation in which all relevant facts are disclosed. The choice of a lawyer is an important decision and should not be based solely upon advertisements. Until both a retainer agreement is executed and we have a consultation, I am not your lawyer and you are not my client. Moreover, I cannot be your attorney unless you are located in Missouri, the only state in which I am licensed. If you are not in Missouri, please consult an attorney in your state for assistance, as my advice may be incorrect or incomplete. This uncompensated answer is provided for informational purposes only, as a free public service; any reliance thereupon is at your sole risk.
It is unclear why he would agree to set aside a default judgment in that amount although he may think there is no basis to oppose it. There may be an ethical violation in the arrangement you describe between the attorneys, based upon analogous cases.
If you found this "helpful" or "best answer," please click it with my appreciation. My response is for educational purposes and does not constitute legal advice nor creates an attorney client relationship which requires all the details and a personal conference.
The fact that they work on matters together needed to be disclosed to you when you retained them. You needed to waive the potential conflict in writing. You now need to seek the advice of another lawyer who is not similarly situated.