Life for Bank of America (BofA) continues to be a struggle. The latest drama is currently unfolding in a New York courtroom as the beleaguered bank spars with equally bedraggled American International Group Inc. (AIG) over a massive, $10 billion lawsuit.

In early August, AIG sued BofA and its subsidiaries, Countrywide and Merrill Lynch, for misrepresenting the quality of mortgages it sold to investors. As a result, AIG said it lost $28 billion in investments.

Now, BofA is asking the judge to disqualify AIG’s outside counsel, Quinn Emanuel Urquhart & Sullivan, from representing the financial services giant due to a conflict of interest with one of the law firm’s partners.

According to BofA, the firm should be removed because Quinn Emanuel Partner Marc Becker previously defended Merrill Lynch and its First Franklin Corp. unit against similar charges. Becker already stepped away from the case after BofA raised hackles, but the bank still is intend on ousting the firm.

"Becker's involvement in this case has already tainted these proceedings," Marc Dworsky, a partner at Munger, Tolles & Olson, which represents BofA and employed Becker until 2008, wrote in a filing on Monday. "Quinn cannot be in a position to use defendants' confidential information against them in the future -- particularly in a case of this magnitude."

This isn’t the first twist in the road in the case. Reports surfaced at the end of August that BofA knew far ahead of time that AIG intended to sue the company.

Despite BofA’s top lawyers supposed knowledge of the lawsuit seven months before it was filed, the bank chose to remain mum on the threat in its quarterly regulatory filing to the Securities and Exchange Commission, which it submitted just four days before AIG filed the suit. Additionally, BofA management chose not to discuss the pending litigation on conference calls about the company’s quarterly results and the other legal claims currently afflicting the bank.

For more on the conflict of interest, read Reuters.