Freivogel on Conflicts
 
 
 
 

Current Client - Part II
(“Other” Cases)

Home/Table of Contents
Current Client - Part I

       Union Organization; Who's the Client?   Operative Plasterers' & Cement Masons' Int’l Assoc. of the United States and Canada, Local 222 v. Alberta, 2008 ABQB 225 (CanLII) (Alberta Ct. Q. B. April 16, 2008).  Only the local involved.       

        Donaldson v. City of Walterboro Police Dept., 2008 U.S. Dist. LEXIS 26801 (D.S.C. March 31, 2008).  The court applied Rule 1.7 as written and disqualified law firm.

        Post-Estate Planning Ministerial Work not Current Representation.  Yang Enterprises, Inc. v. Yang, 2008 Fla. App. LEXIS 11865 (Fla. App. Aug. 7, 2008).  This is an unremarkable opinion affirming the trial court’s denial of a motion to disqualify.  The movant had waited years to make the motion.  While the decision was based largely on a waiver by passage of time, the court made this interesting statement as to whether the client was current or former:

Petitioners argued below that they are current clients of Broad and Cassel and relied primarily on two cover letters sent from a paralegal in Broad and Cassel's Orlando office in 2004 and a paralegal's bill for minor changes to their estate file in 2007. None of these acts indicated a continuing legal representation, but rather they were ministerial tasks performed to update the completed estate planning documents.

        Hill v. Hunt, 2008 U.S. Dist. LEXIS 68925 (N.D. Tex. Sept. 4, 2008).  In this opinion the court granted a motion to disqualify the plaintiff’s law firm, Bickel & Brewer (“B&B”).  This suit involves allegations of mismanagement of two Hunt family trusts.  Two issues were whether B&B currently represented one of the defendants or whether B&B had formerly represented that defendant.  This decision is very fact intensive and, as far as we can tell, has no precedential value.  But, it is interesting.  Some of the factors discussed include who paid what fees, what bills were sent to whom, the significance of E-mails, the significance of who appeared at what meetings and what was discussed at the meetings, who sought legal advice, who directed the activities of B&B, and so forth.  The court frequently used the term “appearance of impropriety,” even though both the ABA Model Rules and the Texas rules dropped that expression when they were adopted.  The court did not discuss the fact that Texas is the only state whose version of Model Rule 1.7 allows a lawyer to represent a client on one matter and be adverse to that client on an unrelated matter, but the court did acknowledge that the Fifth Circuit in both American Airlines and Dresser Industries held that the ABA rules, and not the Texas rules, would apply in this context in the Fifth Circuit.  That distinction would not have changed the result in this case because the court held that the matters in question were related.

        Goodman v. Goodman, 2008 Mo. App. LEXIS 1375 (Mo. App. Oct. 7, 2008).  Husband and Wife met with Lawyer to discuss a divorce.  Lawyer was married to Husband's mother.  As a result of the meeting Lawyer prepared a petition for dissolution, in which Wife was petitioner and Lawyer was Wife's lawyer.  Wife never signed the petition, and it was never filed.  Husband then hired another lawyer who filed a petition for Husband (this case).  Before trial of this case Lawyer appeared for Husband.  Wife moved to disqualify Lawyer, which the trial court denied.  In this opinion the appellate court affirmed.  The court said that the result would be the same whether Rule 1.7 or Rule 1.9 applied because, in either case, Wife was not able to show that the conflict did "clearly call in question the fair or efficient administration of justice."  Among other things the court noted that Wife never met separately with Lawyer, except for a phone call to schedule a meeting during which she indicated she might go see another lawyer.

        Styles v. Mumbert, 79 Cal. Rptr. 3d 880 (Cal. App. 2008).  Creditor sued Debtor.  Lawyer represented Debtor.  After default judgment, and during pendency of an appeal of the default, Debtor sued Lawyer for malpractice, and Lawyer counterclaimed for fees.  Lawyer then purchased Creditor's judgment (judgment assigned) and sought leave to substitute for Creditor in the appeal of the default.  In this opinion the appellate court held that Lawyer had a serious conflict and should not be allowed to substitute.  The court stressed Lawyer's duty of confidentiality to Debtor.

        Avink v. SMG, 2009 Mich. App. LEXIS 97 (Mich. App. Jan. 20, 2009).  A door panel fell on Plaintiff's decedent, killing him.  Plaintiff sued the general manager ("Manager") of the property and several companies associated with manufacturing and selling the door.  The defendants included Overhead Door, which had installed the door.  Manager filed a cross-claim against Overhead Door.  Manager moved to disqualify Overhead Door's law firm ("Law Firm") because Law Firm was currently representing Manager in a different injury case.  The trial court denied the motion.  In this opinion, the appellate court reversed.  The court spent some time on what is direct adversity.  It also said that the fact that different lawyers at Law Firm worked on the two matters would not affect the outcome, noting that screens only work in the context of former clients.

        Waiver as to Unrelated Matter; Standing.  Camel v. Nijjar, 2009 N.Y. Misc. LEXIS 269 (N.Y. Misc. Feb. 11, 2009).  Auto accident case.  The plaintiff sued two individuals and two companies.  The plaintiff's lawyer ("Lawyer") is also representing one of the individual defendants ("Agins") in an unrelated workers' compensation matter.  Two other defendants moved to disqualify Lawyer.  In this opinion the court denied the motion because Agins and the plaintiff had waived the conflict, and because the moving defendants did not have standing to make the motion.

        Owning and Representing Competing Business.  Florida Bar v. Herman, 2009 Fla. LEXIS 244 (Fla. Feb. 19, 2009).  Disciplinary proceeding.  While representing Company A Lawyer established a competing Company B.  Lawyer represented Company B and ultimately became sole owner of Company B.  Lawyer never disclosed his interest in Company B to the owner of Company A.  In this opinion the court found that Lawyer violated Florida's versions of Model Rules 1.7(a)(1), 1.8(a), and 8.4(c).  As to 1.7, the court said that it does not just apply in litigation.  What Lawyer did was directly adverse to his client, Company A.  As to 1.8(a), the court applied the second prong of the rule about acquiring an interest adverse to a client.  As to 8.4(c), the court said that Lawyer's failure to request Company A's consent to his competing business was deceitful.  The bottom line: Lawyer was suspended for 18 months.

        Palgut v. City of Colorado Springs, 2009 U.S. Dist. LEXIS 21698 (D. Col. Mr. 3, 2009).  This opinion involves a motion to withdraw by the plaintiff's law firm because the plaintiff had stopped paying fees.  During a hearing on the motion an expert witness for the plaintiff testified that the law firm should not be permitted to withdraw because there was a "genuine dispute" between the plaintiff and her law firm over the propriety of the fees it was charging.  After that testimony the law firm amended its motion to withdraw claiming that the negative testimony by the expert created a conflict between the plaintiff and her law firm.  In this opinion the court denied the motion to withdraw, saying, in part, that a fee dispute does not automatically constitute a conflict of interest.

        Hillis v. Heineman, 2009 U.S. Dist. LEXIS 29914 (D. Ariz. Mr. 25, 2009).  Plaintiff sued the defendants and their lawyer ("Lawyer") for fraud and related causes of action.  Lawyer appeared for all defendants, including himself.  Plaintiff moved to disqualify Lawyer because he should be a witness.  The court denied the motion without prejudice because it was not yet clear whether Lawyer should be a witness.  What the court did not mention, and what the parties apparently did not raise, was the propriety of Lawyer defending himself as well as the other defendants, especially in light of Lawyer's having earlier represented the company involved in the case.

        Employers Mut. Cas. Co. v. Al-Mashhadi, 2009 U.S. Dist. LEXIS 75442 (E.D. Mich. Aug. 24, 2009).  An employee at a filling station ("Employee"), at about the time he was getting off work, was horsing around with a rifle owned by the filling station.  The rifle accidentally discharged injuring a friend of Employee ("Friend").  Friend sued the filling station and several individuals, including Employee, in state court.  The plaintiff in this case ("EMC") issued an insurance policy covering the filling station for liability.  EMC is seeking in this case a declaration that its policy does not cover the shooting accident.  The law firm representing EMC in this case ("Law Firm") also represents the filling station and individual defendants in the state court case.  However, EMC retained a different law firm to represent Employee in the state court case.  Employee moved to disqualify Law Firm in this case.  In this opinion the court denied the motion, finding no conflict of interest.

        Merck Eprova AG v. Pro Thera, Inc., 2009 WL 4067209 (S.D.N.Y. Sept. 17, 2009).  Patent infringement action.  For a time Law Firm was representing Merck as co-counsel in a patent prosecution while representing Pro Thera in this case.  The prosecution matter involved some of the same chemicals that are involved in this case.  Those relationships caused Merck to file a disqualification motion against Law Firm in this case.  The motion was filed after Merck had changed counsel in the prosecution matter.  In this opinion the magistrate judge granted the motion.  The judge treated the conflict as a current-client conflict, following those decisions that said that the situation had to be judged as of the time of the conflict, rather than at the time the motion was filed.

        Encompass Holdings Inc. v. Daly, 2009 U.S. Dist. LEXIS 93197 (N.D. Cal. Sept. 23, 2009).  Court enforces current client rule under California Rule 3-310(C).

        National Envelope Corp. v. American Pad & Paper LLC, No. 06 Civ. 12988 (S.D.N.Y. Nov. 5, 2009).  Law Firm represents the plaintiff in this matter.  Intervenor, not a party to this case, has moved to disqualify Law Firm because Law Firm represents Intervenor in another matter not related to this case.  Intervenor evidently claims that Law Firm's position in this case may affect Intervenor adversely in yet another case in which Law Firm is not involved.  In this opinion the district judge has affirmed the order of the magistrate judge denying the motion.

        Lincoln Associates & Construction, Inc. v. Wentworth Construction Co., Inc., 2010 Fla. App. LEXIS 121 (Fla. App. Jan. 12, 2010).  In a current client situation the trial court denied a motion to disqualify because the conflict was not "material."  In this opinion the appellate court reversed, holding that materiality has nothing to do with it.

        Feld v. Feld, 2010 U.S. Dist. LEXIS 4743 (D.D.C. Jan. 21, 2010).  This is an action by a beneficiary of a trust to remove the trustee.  In this opinion the court held that the lawyer for the trustee could stay in this case even though that lawyer also represented the trustee in his personal capacity in another suit by the beneficiary, and even though the lawyer also represented some of the trustee's children.

        Bals v. Metedeconk Nat'l Golf Club, Inc., 2010 U.S. Dist. LEXIS 32557 (D.N.J. March 31, 2010).  In this case Plaintiff sued Golf Club, Plaintiff's former employer, for age discrimination.  Law Firm represented Plaintiff.  A senior partner at Law Firm was on the board of Golf Club when Plaintiff was hired.  The senior partner and Plaintiff became friends, but, evidently, the senior partner while on the board of the Golf Club was not privy to any of the facts relevant to this case.  The senior partner turned this case over to another partner to handle.  Golf Club moved to disqualify Law Firm.  In this opinion the magistrate judge denied the motion.  First, she found no current-client or former-client conflict because neither the senior partner nor Law Firm had ever represented Golf Club.  Second, she found that under Rule 1.10 whatever personal interest the senior partner had in Plaintiff or Golf Club was not imputed to the partner handling the case.  Last, the judge found that Law Firm was not in violation of the lawyer-as-witness rule.

        Marks Constr. Co., Inc. v. The Huntington Nat'l Bank, 2010 U.S. Dist. LEXIS 32998 (N.D. W. Va. April 2, 2010).  This is an action by ERISA plan fiduciaries and participants against plan administrators.  The defendants moved to disqualify the law firm representing all the plaintiffs because there was a conflict between the plaintiff/fiduciaries on the one hand and the plaintiff/participants on the other.  The court found there was no conflict based upon somewhat arcane ERISA law principles.  (If you do ERISA litigation, you might want to read the opinion.)  The court also found that a four-year delay in bringing the motion was grounds, alone, to deny the motion.  Last, the court held that the conflict, if any, was waivable, and that the plaintiffs had proven to the court's satisfaction that there was a waiver.

        In re Savin, 2010 Minn. LEXIS 185 (Minn. April 7, 2010).  In this one-page opinion, containing no background, the court publicly reprimanded Lawyer for having a "1.7" "directly adverse" conflict of interest.  We got hold of the disciplinary authority's petition.  This is a crude attempt to summarize the allegations.  Lawyer represented a business person in setting up a joint venture to develop real estate.  This would be the same real estate the county planned to use for a baseball stadium.  Lawyer's partners, the county's bond counsel, represented the county in obtaining legislation authorizing the purchase of the land.

        California Earthquake Auth. v. Metropolitan West Securities, LLC, 2010 U.S. Dist. LEXIS 44016 (E.D. Cal. May 5, 2010).  In 2002 Law Firm and a state agency ("Agency") entered into a written retainer agreement.  Among other things, the agreement provided that Law Firm would have to give Agency thirty days written notice if it intended to terminate the relationship.  Law Firm did three hours work for the Agency during 2002 and did no work for Agency after that.  Law Firm never gave Agency written notice of termination.  In 2009 Law Firm appeared for the defendant in this case adverse to Agency.  Agency moved to disqualify Law Firm, and in this opinion the court granted the motion.  Basically, the court said that the absence of written notice of termination meant that Agency was a current client of Law Firm.  The court further said that written contracts between lawyers and clients should be "read expansively and not parsed to favor the lawyer."

        Filippi v. Elmont Union Free School Dist. Bd. of Educ., 2010 U.S. Dist. 66352 (E.D.N.Y. July 2, 2010).  This is an employment-related action against a school board and several of its administrators.  An associate at the plaintiff's law firm ("Law Firm") is a member of the school board.  For this reason the defendants moved to disqualify Law Firm.  In this opinion the court granted the motion.  First, the court held that there was a conflict under N.Y. Rule 1.7(a)(1).  Second, although Law Firm screened the board member from this case, the court held that Law Firm was too small for the screen to be trusted.  Although the board had initially approved of the board member joining Law Firm, the court held that there should have been a written waiver.  The court also expressed doubts about whether the conflict was waivable.  The court also discussed N.Y. Rule 1.11, saying that the rule offered no help to Law Firm.  Last, the court found an "appearance of impropriety."

        Robinson v. State of New York, 2010 U.S. Dist. LEXIS 70715 (W.D.N.Y. July 14, 2010).  This is an employment discrimination case against the state.  The plaintiff moved to disqualify the N.Y. Attorney General ("AG") from representing the defendants in this case because the AG is also, in another case, defending an action in which one of the defendants in this case is the plaintiff.  In this opinion the magistrate judge denied the motion, relying primarily on the fact that different personnel in the AG's office are handling the two matters and the AG's office promised to set up a screen between the teams of lawyers.

        North Carolina State Bar v. Sossomon, 2010 N.C. App. LEXIS 1768 (N.C. App. Sept. 7, 2010).   Discipline.  Fact-specific.  Complex.  Lawyer was suspended for one year for being insensitive to conflict and confidentiality rules.  If you want to know how not to handle the sale and resale of undeveloped real estate, read the opinion.

        Dimenco v. Service Empoyees Int'l Union, 2011 U.S. Dist. LEXIS 4068 (N.D. Cal. Jan. 10, 2011).  The court held that where a law firm is adverse to a labor union in an NLRB certification proceeding, that law firm is disqualified from bringing an action for several union members on behalf of that union.

        “Framework” Retainer Agreements.  Banning Ranch Conservancy v. Superior Court, No. G044223 (Cal. App. March 22, 2011).  Banning Ranch sued City to prevent City from building a highway on the ranch.  City moved to disqualify the ranch's law firm ("Law Firm") because City was a  current client of Law Firm on other matters.  In fact, Law Firm had done no work for City for about five years.  The City pointed to its written retainer agreement (actually, there were two) with Law Firm, which contemplated that the terms of the agreement (fees, etc.) would remain in force for each new matter that Law Firm handled for City.  The appellate court termed the agreement a "framework" agreement.  The trial court granted the motion to disqualify.  In this opinion the appellate court reversed (granted writ of mandate).  The court, in construing the "framework" agreement as a matter of contract law, held that the agreement did not extend out the lawyer-client relationship beyond the rendering of the services Law Firm performed for City.

        Alayoff v. Alayoff, 2011 N.Y. Misc. LEXIS 1957 (N.Y. Sup. Ct. April 27, 2011).  Daughter sued Father over a property dispute.  Daughter moved to disqualify Father's lawyer, alleging that she is a former client of the lawyer.  In this opinion the court denied the motion.  Daughter offered no specific evidence that she was a client, stating merely that the lawyer was a "family attorney" for many years.  That, the court said, was not enough.

        Multimedia Patent Trust v. Apple Inc., 2011 U.S. Dist. LEXIS 46237 (S.D. Cal. April 29, 2011).  Law Firm represents the plaintiff in this patent infringement case.  Direct TV, a non-party, sought leave to intervene and disqualify Law Firm, because Law Firm represented Direct TV in other matters.  Direct TV claimed that this case was antagonistic to its interests in other patent cases, in which Law Firm was not involved.  In this opinion the court denied the motion to disqualify.  The court noted two similar cases with different results: Rembrandt Techs. LP v. Comcast Corp., 2007 U.S. Dist. LEXIS (E.D. Tex. Feb. 8, 2007) (finding disqualification); and Enzo Biochem. v. Applera Corp., 468 F. Supp. 2d 359 (D. Conn. 2007) (finding no disqualification).  The court found the latter more compelling in this circumstance.

        Process Controls Int'l, Inc. v. Emerson Process Mgmt., 2011 U.S. Dist. LEXIS 49876 (E.D. Mo. May 10, 2011).  For part of the time this case was pending, a lawyer ("Lawyer") in Defendant's law firm ("Law Firm") did work for Plaintiff unrelated to this case.  Because of this work, Plaintiff moved to disqualify Law Firm.  In this opinion the court granted the motion.  The court said that disqualification was appropriate even if Lawyer's work for Plaintiff consisted of short, "self-contained" assignments that had ended by the time of the motion.  The fact that this work occurred during the pendency of this case was determinative.

        Ramos v. Quien, 2011 U.S. Dist. LEXIS 64871 (E.D. Pa. June 20, 2011).  This is a medical malpractice case against several medical providers.  Pursuant to a local ADR rule the case went to arbitration.  The arbitration award found for the plaintiff against one doctor but against the plaintiff as to the other providers.  Pursuant to the local rule the first doctor moved for a trial de novo.  That meant that all the defendants had to stand trial.  Lawyer, who moved for the trial de novo, appeared for all defendants.  The plaintiff moved to disqualify Lawyer.  In this opinion the court denied the motion.

        Wink, Inc. v. Wink Threading Studio, Inc., 2011 U.S. LEXIS 82379 (E.D. Va. July 26, 2011).  Trademark infringement action and issue of willfulness.  The defendant claims its actions were not willful because it relied on an opinion of a lawyer ("Payne").  Payne was deposed and testified that he advised the defendant that its trademark was "problematic."  Owners of the defendant testified that Payne told them the trademark was not a problem.  The same two lawyers ("Lawyers") represented both the defendant and Payne.  The plaintiff moved to disqualify Lawyers.  In this opinion the magistrate judge granted the motion.

        In re Stephenson, 2011 Ill. App. LEXIS 880 (Ill. App. Aug. 12, 2011).  Pay close attention.  This is complicated.  Divorce case.  W hired Elizabeth Wakeman to represent her and file a petition for dissolution.  H hired Paulette Gray to defend and counterclaim.  Paulette was married to Robert Gray.  Robert Gray was a member of the Gummerson Rausch law firm.  Later Mark Gummerson, of Gummerson Rausch, sought leave to become additional counsel for W.  H objected and moved to disqualify Gummerson.  Two troublesome conversations had taken place, leading to the motion to disqualify.  First, Paulette, H's lawyer, had discussed the case with her husband Robert, who was the partner of Mark Gummerson (who was seeking to become W's lawyer).  Second, Paulette had a discussion with Mark Gummerson, himself, at the court house about the foibles of practicing in that county.  The trial court disqualified Gummerson.  In this opinion the appellate court reversed.  First, the court held that H had never become a client of the Gummerson Rausch firm because of those conversations.  Thus, this could not be a current client conflict, or, for that matter, a former client conflict.  The court relied on agency law and implied authority concepts to an extent not usually seen in conflict-of-interest cases.  Second, the court felt that no sensitive information had gotten through to Mark Gummerson.  Third, the court noted approvingly that the Gummerson Rausch firm had erected a screen between its partner, Robert, and the rest of the firm.

        Stewart v. VCU Health System Auth., 2011 U.S. Dist. LEXIS 95407 (E.D. Va. Aug. 25, 2011).  The plaintiff wrote a letter to the court complaining that the plaintiff's lawyer ("Lawyer") had committed various frauds and other types of professional misconduct.  The court granted Lawyer's motion to withdraw.  The plaintiff then moved the court to reconsider the order allowing withdrawal.  In this opinion the court denied the motion to reconsider.  The court said that withdrawal was compelled by the material limitation provision in Virginia Rule 1.7(a)(2).

        Conflict before IRS.  Harbin v. Commissioner, 2011 U.S. Tax Ct. LEXIS 39 (U.S. Tax Ct. Sept. 26, 2011).  H and W were going through a divorce.  Lawyer represented both.  After the IRS declared a deficiencies against both H and W, H filed for relief from joint and several liability.  Lawyer had represented both H and W before the IRS.  Because of Lawyer's conflict of interest, the Tax Court, in this opinion, ruled that H should obtain relief from joint and several liability.

        DisciplineIn re Ferraro, 2011 N.Y. App. Div. LEXIS 8594 (N.Y. App. Div. Nov. 29, 2011.  Lawyer represented a decedent's estate in the sale of Parcel No. 1.  Lawyer did not inform the executor that the broker in the transaction, who had recommended Lawyer, was the principal of Buyer.  Lawyer also failed to inform the executor that Lawyer was representing Buyer in the transaction.  Lawyer also represented Buyer in the purchase of Parcel No. 2, which was contiguous to Parcel No. 1.  Lawyer represented Buyer in selling Parcel No. 1 to another company for more money than Buyer was paying the estate.  This resale of Parcel No. 1 was contingent upon the conclusion of the sale of Parcel No. 2.  None of this was disclosed to the executor.  In this opinion the court held that Lawyer should be suspended for two years.

        Little Italy Dev. LLC v. Chicago Title Ins. Co., 2011 U.S. Dist. LEXIS 138335 (N.D. Ohio Dec. 1, 2011).  Law Firm did work for Title Co.  While still doing work for Title Co., Law Firm got into a coverage argument with Title Co. on behalf of another client.  After Law Firm's work for Title Co. ceased, Law Firm filed this action over the aforesaid coverage issue.  In this opinion, in a fact-intensive analysis, the court granted a motion to disqualify Law Firm.  [Note: the court relied substantially upon Carnegie Cos., Inc. v. Summit Props., Inc., 918 N.E.2d 1052 (Ohio App. 2009), a case we have always felt exemplified the kind of analysis a court should make under modern conflict rules.]

         Withdrawal Denied.  Alzheimer's Inst. of Am., Inc. v. Avid Radiopharmaceuticals, 2011 U.S. Dist. LEXIS 140345 (E.D. Pa. Dec. 7, 2011).  Law Firm represents the plaintiff in this patent infringement case.  When Intervenor sought to intervene adversely to the plaintiff, Law Firm, in a conflicts check, discovered it represented Intervenor in unrelated matters.  Because of this conflict, Law Firm then sought to withdraw from this case.  In this opinion the court denied the motion.  The court held that Pennsylvania's Rule 1.16(c) trumps the current client provisions contained in Rule 1.7.  The court applied a balancing test, holding, in effect that the prejudice to the plaintiff if Law Firm withdrew would outweigh any harm to Intervenor if withdrawal was denied.  The court also mentioned the disruption to the court's docket if Law Firm were to withdraw.  The Federal Circuit affirmed at In re University of So. Fla. Bd. of Trustees, 2012 U.S. App. LEXIS 821 (Fed. Cir. Jan. 12, 2012).  In a somewhat related case a magistrate judge in Alzheimer's Inst. of Am. v. Elan Corp PLC, 2011 U.S. Dist. LEXIS 147471 (N.D. Cal. Dec. 22, 2011) refused to allow Law Firm to withdraw for much the same reason as the court gave in the Pennsylvania case.

        Feingold v. Liberty Mut. Group, 2011 U.S. Dist. 140336 (E.D. Pa. Dec. 6, 2011).  This is a bad faith claim against InsCo.  In the underlying state court case Lawyer, an employee of InsCo, appeared for InsCo, adversely to the plaintiff.  Lawyer is now in the law firm representing InsCo ("Law Firm"), but is not one of the lawyers of record.  The plaintiff moved to disqualify Law Firm.  In this opinion the court denied the motion.  The court said that Lawyer's relationship to the plaintiff in state court was plainly arms-length and adversarial.  Thus, no conflict in this case.

       
In re McElroy, 2011 N.Y. Misc. LEXIS 5913 (N.Y. Sup. Ct. Dec. 19, 2011).  Law Firm represented Incompetent.  Law Firm also represented Executor of the estate of Incompetent's mother and is moving for probate of the will.  Under the will Incompetent would receive less than she would have intestate.  Claiming that Law Firm had a conflict, GAL, on behalf of Incompetent, moved to disqualify Law Firm.  In this opinion the court granted the motion.

        Discipline.  People v. Johnson, 2011 Colo. Discipl. LEXIS 83 (Col. Dec. 13, 2011).  In this one-paragraph order Lawyer was suspended for thirty days solely (apparently) for representing a corporation and suing it at the same time.

        Gill v. Bischoff, 2011 Guam LEXIS 23 (Guam Dec. 20, 2011).  X entered into a contract with Lawyer, which provided in part for legal services.  X filed for bankruptcy.  Y claims he succeeded to the rights of X under the contract.  Lawyer refused to work for Y, and Y filed this case against Lawyer.  The trial court dismissed the complaint.  In this opinion the supreme court affirmed, holding that a contractual right to legal services is not assignable; both the client and the lawyer must agree for the relationship to continue.  Moreover, in this case, proceeding on behalf of Y would have put Lawyer in conflict with other clients.

        Discipline.  In re Kalla, 2012 Minn. LEXIS 4 (Minn. Jan. 25, 2012).  This is one of those rare disciplinary decisions based solely on a conflict of interest.  The lawyer was given a public reprimand and put on two years supervised probation.

        Cameron v. Rohn, 2012 U.S. Dist. 12381 (D.V.I. Jan. 30, 2012).  Lawyers A and B were partners in Firm AB.  A left Firm AB and is now suing Firm AB and B.  The only count against Firm AB alleges that it discriminated against A.  There other counts against B related to control of law firm property and the like.  B's new law firm, BC, has appeared in this case for Firm AB.  A moved to disqualify Firm BC and B, and the magistrate judge granted the motion.  In this opinion the district judge reversed holding that B and Firm BC would have no motive to favor themselves over Firm AB in the discrimination count.

        Krutzfeldt Ranch, LLC v. Pinnacle Bank, 2012 Mont. LEXIS 15 (Mont. Jan. 31, 2012).  In this case Borrowers sued Bank for breach of a loan agreement.  Borrowers' lawyer retained Tax Lawyer to advise Borrowers on how to structure a possible settlement.  Without warning to Borrowers, Tax Lawyer joined the law firm representing Bank ("Bank Firm").  When Borrowers received an announcement of this change, they immediately moved to disqualify Bank Firm.  The trial court denied the motion, holding that Borrowers were former clients of Tax Lawyer and that Bank Firm's screen of Tax Lawyer prevented Bank Firm's disqualification.  In this opinion the supreme court reversed.  After analyzing what transpired when Tax Lawyer joined Bank Firm, the court concluded that the Borrowers remained clients when the move occurred.  Thus, Bank Firm's disqualification became automatic.  The court also added that even under a former client analysis, the screen erected by Bank Firm was not timely.

        Hartford Life & Accident Ins. Co. v. King, 2012 U.S. Dist. LEXIS 60308 (W.D. Va. April 30, 2012).  H is a suspect in the death of W.  H is also executor of W's estate.  InsCo insured W's life.  InsCo filed this interpleader action against H and W's mother, the only other heir.  Lawyer appeared for H individually and as executor of the estate.  Among other findings, the court held that Lawyer had a conflict and could not appear for both, given the pending issue of whether H killed W.

        In re Neely, 2012 U.S. Dist. 67743 (N.D. Ind. May 14, 2012).  H died.  The guardian of W, an incompetent, has sued two nephews of H and W, because H had defrauded W when he was alive by diverting assets from a joint account between H and W to the nephews.  The guardians of the nephews moved to disqualify the law firm for W's guardian ("Law Firm") because Law Firm also represents H's estate.  In this opinion the magistrate judge denied the motion, finding no conflict.  The court noted that Law Firm had never represented H and that H's estate is an entity separate from H.

        Raby v. Animal Welfare League, 2012 U.S. Dist. LEXIS 57023 (M.D. Fla. April 20, 2012).  In this opinion the magistrate judge recommended that the district judge approve the parties' settlement of a FLSA claim.  The court noted approvingly that the lawyer's fee was not negotiated until after the damages had been negotiated.

        Deboles v. Nat'l R.R. Passenger Corp., 2012 U.S. Dist. LEXIS 79102 (D. Nev. June 7, 2012).  Injury case.  An Amtrak passenger train occupying BNSF track hit the plaintiff.  In this opinion the court held that one law firm representing both Amtrak and the BNSF did not have a conflict of interest.

        LK Operating, LLC v. Collection Group, LLC, 2012 Wash. App. LEXIS 1435 (Wash. App. June 19, 2012).  In this opinion the court held that a lawyer's violation of Rule 1.7 in representing parties to a contract cannot be grounds for rescission of the contract.  However, the court held that a violation of Rule 1.8(a) could be grounds for rescission and upheld rescission in this case.

        Transperfect Global, Inc. v. Motionpoint Corp., 2012 U.S. Dist. LEXIS 85649 (N.D. Cal. June 20, 2012).  This is a patent infringement matter between Co. A and Co. B.  Co. B. is represented by Law Firm.  After this case began, Lawyer moved from a prior law firm to Law Firm.  While at Law Firm, Lawyer continued to do estate planning for the co-owners and co-CEOs of Co. A.  Co. A moved to disqualify Law Firm.  In this opinion the magistrate judge granted the motion.  The court said that Law Firm, in effect, was also representing Co. A, because Lawyer's services to the co-owners/co-CEOs of Co. A were inextricably related to Co. A.  Thus, Law Firm had a current client conflict and had to be disqualified.

        Pfizer, Inc. & Pharmacia Corp. v. Farr, 2012 Tenn. App. LEXIS 416 (Tenn. App. June 22, 2012).  This is a suit by two corporate taxpayers against the Tennessee Commissioner of Revenue for return of franchise and excise taxes.  The Commissioner sought to bring in, via a pro hac vici motion, a New Mexico in-house lawyer from the Multistate Tax Commission ("MTC").  The trial judge refused to admit the lawyer.  In this opinion the appellate court reversed, holding, in part, that there was no conflict of interest between the state and MTC.

        Steinhouse v. Lesser, 2012 N.Y. Misc. LEXIS 3704 (N.Y. Sup. Ct. Aug. 2, 2012).  Limited Partnership ("LP"), which owns some commercial property, is due to be liquidated at the end of 2012, pursuant to the terms of the partnership documents.  All but two limited partners wish to convert LP to an LLC, for reasons not reflected in the opinion.  This suit is to require the two hold-outs to consent to the conversion.  LP is being represented by an employee of the managing agent of LP ("Lawyer").  The hold-outs moved to disqualify Lawyer, contending that Lawyer's interest is to prevent the liquidation.  In this opinion the court denied the motion, holding that there is nothing inconsistent with converting LP to an LLC (the subject of this case) and the impending liquidation.

        Reese v. Virginia Int'l Terminals, 2012 U.S. Dist. LEXIS 109372 (E.D. Va. Aug. 2, 2012).  Reese hired Law Firm to represent him in two workers compensation matters.  While one of them was pending, Reese file this labor-related suit against his employer and his union.  Law Firm appeared for the union.  Eleven weeks later the workers compensation matter ended.  Reese moved to disqualify Law Firm in this case.  In this opinion the court found that Law Firm did violate Rule 1.7, but denied the motion.  The court quoted another court saying "disqualification is never automatic."  The matters were totally unrelated, and no harm would come to Reese if Law Firm remained in this case.  The court did order the clerk to mail the opinion to Legal Ethics Counsel at the Virginia State Bar.

        Liapis v. Second Jud. Dist. Ct., 2012 Nev. LEXIS 86 (Nev. Aug. 9, 2012).  Divorce proceeding.  Son appeared as lawyer for H.  W moved to disqualify Son.  The trial court granted the motion.  In this opinion the supreme court reversed (granted mandamus).  W argued that Son violated the material limitation provision of Rule 1.7.  The court rejected that ground because H had signed a waiver.  Moreover, the court noted that Son had never represented W.

        Fries v. Teaford Co., Inc., 2012 U.S. Dist. LEXIS 128748 (N.D. Fla. Sept. 11, 2012).  Two consolidated actions.  One is a wrongful death suit by a decedent's estate against Company.  Company had a liability insurance policy issued by InsCo.  The other action is a suit by InsCo against Company and the estate for a declaration that the death was subject to a policy exclusion.  In the latter action two lawyers ("Lawyers") are representing jointly Company and the estate.  InsCo moved to disqualify Lawyers because they have a conflict.  In this brief opinion the court granted the motion.

        Reeves v. City of Georgetown, 2012 U.S. Dist. LEXIS 127968 (E.D. Ky. Sept. 10, 2012).  Plaintiff, former police chief of City, in this case is suing City for wrongful discharge.  Law Firm represents City.  Plaintiff moved to disqualify Law Firm because Law Firm represents Plaintiff in his "official capacity" in a suit against Plaintiff in state court.  In this opinion the court denied the motion, noting that in the state court case Plaintiff has his own lawyer and Law Firm is really representing City.

        TransPerfect Global, Inc. v. MotionPoint Corp., 2012 U.S. Dist. LEXIS 129402 (N.D. Cal. Sept. 11, 2012).  Patent infringement case.  Owner A owns 50% of the plaintiff corporation.  Owner B owns 49%.  Owners A and B are co-CEOs of the plaintiff.  Law Firm represents the defendant.  After this suit was filed, Lawyer joined Law Firm.  She did estate planning work for Owners A and B before joining Law Firm and continued doing that work for them after joining Law Firm.  The plaintiff moved to disqualify Law Firm.  The magistrate judge granted the motion.  In this opinion the district judge affirmed.  First, the court held that by representing the defendant against the plaintiff corporation Law Firm was directly adverse to Owners A and B.  Second, the court held that it made no difference that the plaintiff corporation was the after-acquired client of Law Firm.

        Sibo v. Grey Oaks Country Club, Inc., 2012 U.S. Dist. LEXIS 129151 (M.D. Fla. Aug. 21, 2012).  Order approving the settlement of a FLSA claim.  The court noted with approval that the lawyer's fee was negotiated separately from  the amount payable to the plaintiff.

        Waithe v. Arrowhead Clinic, Inc., 2012 U.S. App. LEXIS 20161 (11th Cir. Sept. 26, 2012).  Plaintiffs were injured in an auto accident.  They were treated by a chiropractic clinic.  The clinic gave Plaintiffs forms, which had the effect of referring them to a law firm.  Plaintiffs hired that law firm to sue for their injuries.  The law firm achieved a settlement for Plaintiffs.  After the settlement Plaintiffs filed a class action against the clinic and the law firm.  The complaint included counts of negligence, fraud, and breach of fiduciary duty.  The trial court granted motions to dismiss several counts and granted summary judgment as to the remaining counts.  In this opinion the appellate court affirmed.  The arrangement between the clinic and law firm was fully disclosed.  Plaintiffs could not identify any specific wrongful conduct causing them harm.

        Berman v. Schwartz, 2012 ONSC 6851 (CanLII) (Ont. Super. Ct. Dec. 3, 2012).  We will try to keep this simple, perhaps overly so.  This case involves allegations of wrongful payments from a decedent's estate.  Ms. Garnet was litigation guardian for the decedent's widow.  Law Firm has represented Ms. Garnet for some years, both in her individual capacity and as litigation guardian.  Because there is a possible claim against Ms. Garnet's husband, the court held that she had a conflict and should be disqualified.  For the same reason the court held that Law Firm should be disqualified.  Because the motion to disqualify was brought by a defendant in this case, the court considered standing.  Because Law Firm was retained by decedent's widow when she lacked capacity to do so, the court side-stepped the standing issue.



        Duran v. City of Porterville, 2013 U.S. Dist. LEXIS 6789 (E.D. Cal. Jan. 16, 2013).  City resident brought a First Amendment case against City.  City hired a local lawyer to defend.  The resident moved to disqualify the lawyer because the lawyer was being paid by taxpayer funds, to which the resident had contributed by paying taxes.  The court denied the motion noting that no court had ever sustained such a position.

        Parallel Iron, LLC v. Adobe Sys. Inc., 2013 U.S. Dist. LEXIS 29382 (D. Del. March 4, 2013).  Patent infringement case.  Defendant moved to disqualify Plaintiff's law firm ("Law Firm") because Law Firm had quite recently done a series of patent opinions for Defendant.  In this opinion the court granted the motion.  The court found that Defendant was a current client of Law Firm because neither Defendant nor Law Firm had definitively terminated the relationship.

        Northam v. Va. State Bar, 2013 Va. LEXIS 36 (Va. Feb. 28, 2013).  Disciplinary matter.  The disciplinary board found that Lawyer had violated Rule 1.10 (imputation rule).  On appeal the supreme court, in this opinion, reversed.  There was one dissent.  While the case was ultimately decided on state law evidence principles, the facts are interesting.  H and W were fighting over various divorce issues.  On April 7 W obtained an appointment with Partner A in Law Firm, but did not meet with Partner A until April 13. On April 9 Partner B (same firm) received a call from H, during which H described the situation "in some detail."  On April 13 during his interview with W, Partner A learned from W that H had already talked to Partner B.  When he confirmed this with B, A terminated his relationship with W.  B continued representing H, and W complained to Bar authorities.  The disciplinary board found that Partner B knew that Partner A was conflicted out and that continuing to represent H was a violation of Rule 1.10.  In reversing, the majority held there was not sufficient evidence that B "knew."

        Ferguson v. Patton, 2013 Ill. LEXIS 301 (Ill. March 21, 2013).  City adopted an ordinance providing for an inspector general ("IG").  In this case IG was attempting to discover documents from City's chief lawyer ("CorpCsl").  CorpCsl resisted.  In this opinion, construing state statutes and City's ordinances, the supreme court held that IG had no right to hire outside counsel to contest CorpCsl's refusal.  The court held that IG should have gone to the mayor for relief.  To get to that conclusion the court said that IG could not have gotten relief from CorpCsl because that would put CorpCsl in a conflict of interest under Ill. Rule "1.7(a)."  The court did not say which subsection of 1.7(a) was implicated.  (Illinois' Rule 1.7(a) has a (1) and a (2), just like the Model Rule.)

        Town of Cedar Lake v. Alessia, 2013 Ind. App. LEXIS 133 (Ind. App. March 21, 2013).  Town eliminated its park board.  Members of the board filed this action against Town challenging Town's authority to do so.  This opinion is largely a discussion of what the Town had authority to do.  However, the court addressed the fact that Law Firm, which represented the park board, was representing Town in this action.  Thus, the court found that Law Firm had a Rule 1.7(a)(1) "current client" conflict and could not continue to represent park board.  [Note: we thought that the park board no longer existed, and that park board members were no longer members.  So where does "current client" come from?  Second, it appears that Law Firm was not representing the park board or its members in connection with this case.  Last, the court mentioned the capacity in which the board members brought this action, surmising that capacity was relevant to the conflict issue.  We do not understand it.]


        CQS ABS Master Fund Ltd. v. MBIA Inc., 2013 U.S. Dist. LEXIS 91257 (S.D.N.Y. June 24, 2013).  InsCo, the defendant in this case, insured mortgage-backed securities.  Because of the residential market melt-down, InsCo restructured itself to minimize its exposure.  Plaintiff, which suffered melt-down losses, brought this case to challenge the restructuring and maximize its recovery from InsCo.  Law Firm represented Plaintiff in this case.  InsCo moved to disqualify Law Firm in part because Law Firm represented InsCo in other matters when Law Firm brought this case.  InsCo also claimed that Law Firm had previously represented InsCo in substantially related matters.  In this opinion the court granted the motion, both as to the current representation and as to the former representation.  Due to the complexity of the facts we will leave it to interested audience members to read the opinion.  One interesting aspect of the current representation claim is that Law Firm represented InsCo because another client ("Other Client") insisted that Law Firm represent Other Client and InsCo jointly.  Nevertheless, because InsCo believed Law Firm represented InsCo, and because Law Firm did actually advise InsCo, the court found that InsCo was a current client.  As to the former representations, they also related to the restructuring of InsCo.  Thus, the court found a substantial relationship.  Although Law Firm claimed the files from the earlier representation were "under lock and key," Law Firm had failed to offer, to the court's satisfaction, adequate evidence of a formal screen.

        Young v. Vrechek, 2013 U.S. Dist. LEXIS 117031 (D. Hawaii Aug. 19, 2013).  Plaintiff is a beneficiary of Trust, which was set up for his mother.  After his mother's death, Plaintiff filed this action against Defendant in Defendant's individual capacity.  The suit involves funds paid to third parties out of Trust prior to the mother's death.  Plaintiff moved to disqualify Defendant's lawyer ("Lawyer") claiming that Lawyer was somehow Plaintiff's lawyer.  In this opinion the court denied the motion, finding that there was no showing that Lawyer, sued only in his individual capacity, was, in any sense, Plaintiff's lawyer.

        D’Andrea v. Epstein, Becker, Green, Wickliff & Hall, P.C., 2013 Tex. App. LEXIS 13523 (Tex. App. Oct. 31, 2013).  General Counsel of Company, who suspected he was about to be fired, requested that Law Firm prepare a memorandum that was highly critical of the owner of Company.  At the time of preparing the memorandum, Law Firm was representing, not only Company, but also the owner on an unrelated bankruptcy matter.  Because of the memorandum, the owner sued Law Firm on various tort theories, including breach of fiduciary duty.  The trial court granted Law Firm a summary judgment because the only matter in which Law Firm represented the owner individually was not related to the memorandum.  (Recall, Texas is the only state allowing a law firm to be adverse to a current client on an unrelated matter.)  In this opinion the appellate court reversed on that point.  The court held that Law Firm could be liable for breach of fiduciary duty even though it did not violate the letter of Texas’ unique version of MR 1.7.  At D’Andrea v. Epstein, Becker, Green, Wickliff & Hall, P.C., 2013 Tex. App. LEXIS 14961 (Tex. App. Dec. 12, 2013), the court denied rehearing but wrote a new opinion.  It seems the same on the fiduciary duty part, but we cannot tell without doing a word-for-word comparison.

        N.Y. Op. 990 (Nov. 12, 2013).  Lawyer wishes to represent Client B in lending money to Client A (represented by another lawyer).  Lawyer may later wish to represent B in collecting the loan from A.  Lawyer may also wish to take stock from B in lieu of a fee.  The gist of this opinion is that Lawyer may do all of these things so long as Lawyer complies with Rules 1.5, 1.7 and various provisions of Rule 1.8, including 1.8(a).  The opinion leads the reader through the various steps necessary to accomplish these goals.

        Lasek v. Vermont Vapor, Inc., 2014 Vt. LEXIS 31 (Vt. April 11, 2014). Tenant leased commercial space from Owner. The space was in a fire, and Tenant sued Owner for negligence (this case). Law Firm P represents Tenant. Law Firm D represents Owner. Law Firm D, retained by Law Firm P’s malpractice carrier, represented Law Firm P in an unrelated malpractice case. Law Firm P had filed a lien against Owner’s property but said it would remove it. When Owner discovered the lien had not been removed, Law Firm D wrote a letter to Law Firm P saying failure to remove the lien might cause “significant personal injury” to Owner. Tenant moved to disqualify Law Firm D. The trial court denied the motion, and, in this opinion, the Vermont Supreme Court affirmed. The court seemed to be saying that the letter was a request, not a threat. Besides, in a footnote the court noted that Law Firm D had withdrawn as Law Firm P’s counsel in the unrelated malpractice case.

        Appsoft Dev., Inc. v. Diers, Inc., 2014 U.S. Dist. LEXIS 64982 (M.D. Fla. May 12, 2014). While at Law Firm A, Lawyer did work for Appsoft on a matter involving a breach by a former employee of his employment agreement (the “earlier case”). This is a case involving other players and the tortious appropriation of Appsoft’s software. Appsoft is being opposed by Law Firm B. Several years ago Lawyer left Law Firm A and joined Law Firm B. Appsoft moved to disqualify Law Firm B in this case, citing both Rules 1.7 and 1.9. In this opinion the court denied the motion. As to Rule 1.7, the court found that Lawyer no longer represented Appsoft. Lawyer made no attempt to bring Appsoft with her to Law Firm B, and Appsoft thought the earlier matter was completed. The fact that the earlier matter remained opened, and the fact that Lawyer’s appearance for Appsoft was inadvertently still on file, did not change the reality that Lawyer no longer represented Appsoft. As to Rule 1.9, the court ruled that Appsoft had not made a showing that the earlier matter and this case were substantially related. [Note: in a footnote the court said it did not follow the rule that doubts should be resolved in favor of disqualification because the Eleventh Circuit had not yet adopted that rule.]

        7102763 Canada Inc. v. 2242869 Ontario Inc., 2014 ONSC 3819 (CanLII) (Super. Ct. Ont. July 14, 2014). Suit on a note. Plaintiff’s lawyer (“Lawyer”) has represented Defendant on a number of minor matters not related to this suit. Defendant moved to disqualify Lawyer. In this opinion, noting that Lawyer continues to represent Defendant (but barely), the court said that this case is the exceptional one where it would not have been reasonable for Defendant to have expected Lawyer not to bring this case. The court denied the motion. The court acknowledged the “bright line” rule established by Neil and McKercher, and said exceptions such as this case would be rare.

        Hamilton v. City of Hayti, 2014 U.S. Dist. LEXIS 172575 (E.D. Mo. Dec. 15, 2014). This is a civil rights action against City relating to alleged improprieties in administering fines and sentences. Lawyer represents the plaintiffs. Lawyer also represents the mayor of City in a criminal case in another county. City moved to disqualify Lawyer in this case. Because the mayor would be privy to the City’s defenses and strategies in this case, and because there is an “irrefutable presumption” that the mayor would share confidences with Lawyer, the court, in this opinion granted the motion.

        Board of Trustees of Southern Ill. U. v. Jones, 2015 IL App (5th) 140046-U (Ill. App. Jan. 16, 2015). Two plaintiffs, professors at SIU, bought this action on behalf of SIU, under the Illinois False Claims Act, against Defendant, another professor, for charging travel expenses erroneously. The SIU administration disagreed with the plaintiffs’ claim and chose not to participate in the case. Among other things, the plaintiffs moved to disqualify Defendant’s lawyer because she was an SIU staff lawyer. The trial court denied the motion. In this opinion the appellate court affirmed. The court held there was no conflict and that, in any event, the plaintiffs had no standing to make the motion because they could not show that the conflict would affect the outcome or otherwise prejudice their case.

        Hershewe v. Givens, 2015 WL 777721 (M.D. Ala. Feb. 24, 2014). Lawyer A and Lawyer B proceeded to form a law firm (“VLO”). They had a falling-out. Lawyer A brought this suit against Lawyer B, VLO, and others. One of the claims is that Lawyer B defrauded VLO. Lawyer B appeared to defend all defendants, including VLO. Lawyer A moved to disqualify Lawyer B and Lawyer B’s partners. There were Rule 3.7 issues, which we do not write about, and which the court rejected. There was also a Rule 1.7 issue. The court denied the motion. The court said that “while it may be difficult” for Lawyer B to represent VLO, disqualification “is not required at this point.”

        Isuzu Motors Am., LLC v. Jackson, 2015 WL 1349619 (D. Haw. March 24, 2015). Law Firm did a loan transaction for Lender. Law Firm prepared loan documents for Borrower to sign. Pursuant to the deal documents, Law Firm billed, and was paid by, Borrower. This is a suit by Isuzu against Borrower, arising out of the loan. Law Firm represents Isuzu. Borrower moved to disqualify Law Firm. The magistrate judge denied the motion. On appeal the district judge affirmed (this opinion). The court held that the foregoing facts, without more, do not make Borrower Law Firm’s client.

        Milwaukee Elec. Tool Corp. v. Hilti, Inc., 2015 WL 1898393 (E.D. Wis. April 27, 2015). Plaintiffs filed simultaneously eight law suits involving alleged infringement of patents relating to cordless hand-tools. Law Firm filed seven of the eight. The eighth suit was against Snap-On Inc. Snap-On is a long-time client of Law Firm on other matters. Snap-On moved to intervene in the first seven cases to move to disqualify Law Firm, claiming Law Firm was being directly adverse to Snap-On. In this opinion the court denied the motion to disqualify. While conceding the case was close, the court found no direct adversity based, in part, on the following: (1) Law Firm was not attacking Snap-On’s products; (2) Law Firm did no work for Snap-On relating to the patents in question; and (3) Markman proceedings will not necessarily overlap. Last, the court noted the ways Defendants have sought to delay the cases in other respects as well as a three-month delay in bringing these motions.

        Verein. RevoLaze v. Gap Inc. (U.S. Int’l Trade Comm’n June 30, 2015). According to a July 10, 2015 article in the online ABA Journal, on June 30, 2015, an administrative law judge ruled that the verein form of law firm organization rendered the entire organization one for conflicts purposes, thereby disqualifying a law firm. According to the article the law firm is appealing.

        Wierzbicki v. County of Rensselaer, 2015 WL 4757755 (N.D.N.Y. Aug. 12, 2015). Lawyer represents Client A in this employment-related case against the county. Lawyer represents Clients B and B’s wife, C, in a different case against the county involving the county’s treatment of B. The county moved to disqualify Lawyer because C was employed by the county and participated in decision-making regarding A’s employment. In this opinion the court held that this relationship, without more, did not require disqualification.

        Bradshaw v. Gatterman, 2015 WL 5226275 (D. Kan. Sept. 8, 2015). Family squabble. Plaintiff, pro se, sued many people including lawyers and a judge. Lawyer, one of the defendants, appeared for himself and fifteen other defendants. Plaintiff moved to disqualify Lawyer. In this opinion the magistrate judge denied the motion, noting that, currently, those defendants’ interests were aligned.

        Woods v. Mich. Dep’t of Corr., 2015 WL 7075922 (E.D. Mich. Nov. 13, 2015). In January 2015 Woods brought this employment discrimination case against Agency and two Agency employees. One of the employees was named “Burton.” It turns out that Burton also went by the name, Swain. Law Firm represents Woods in this case. Earlier, also in January 2015, Swain retained Law Firm to file an unrelated accident case for her. In July 2015 Agency’s lawyer flagged the conflict and threatened to move to disqualify Law Firm. Agency subsequently did file a motion (date not in opinion). Shortly thereafter Law Firm terminated its representation in Swain’s accident case. In this opinion the court denied the motion to disqualify. First, the court held that because Law Firm had terminated its representation of Swain, the analysis should be under Rule 1.9, rather than Rule 1.7. Second, the court ruled that the accident case was not substantially related to this discrimination case. Next, the court found that there was no showing that Swain disclosed relevant confidences to Law Firm. Last, the court found that Law Firm’s sloppiness in not noting the conflict initially would not be a basis for disqualifying Law Firm.

        A Big Mobile Sign Co. Inc. v. Curbed Ltd., 2016 ONSC 2053 (CanLII) (Ont. Super. Ct. March 23, 2016). This is a suit by SignCo 1 against SignCo 2, its competitor, for business torts. An executive of SignCo 2 (“Exec”) is also a defendant. At a time when SignCo 1’s law firm (“Law Firm”) was preparing the claims against SignCo 2 and Exec, Exec retained a lawyer at Law Firm to handle two mortgage transactions having nothing to do with the claims in this case. Because of those representations SignCo 2 and Exec moved to disqualify Law Firm. In this opinion the court granted the motion. The opinion is interesting on several levels. First, the court noted several missed opportunities for Law Firm to have detected the conflict. Plus, Law Firm offered little in explanation for those failures. Second, the court noted that for some length of time Law Firm erected no screen between the mortgage lawyer and the lawyers in this case. Third, while noting that Exec had realized fairly early on that he was using the Law Firm that was suing him, his failure to raise it could be explained by his understandable inability to appreciate the subtleties of lawyer conflicts. While this holding turned on the “bright line” rule set forth in Neil, the court nevertheless seemed to factor in that Exec had given personal financial information to the mortgage lawyer that might have been used against him in this case.

        Shah v. May Oberfell Lorber, 2016 WL 1128259 (N.D. Ind. March 22, 2016). Fight among shareholders over management of several corporations. In this case the plaintiffs joined Law Firm as a co-defendant. Law Firm appeared for itself and the other defendants. The plaintiffs moved to disqualify Law Firm from representing the other defendants. In this opinion the magistrate judge denied the motion. The court said that a law firm representing itself and other defendants “without more” would not require disqualification.

        ABA Op. 474 (April 2016). This opinion deals with referral fees under MR 1.5(e). The opinion assumes that the referring lawyer will not work on the matter. Yet, the rule requires that the referring lawyer assume “joint responsibility” for the matter if the referring lawyer shares the fee. In that case the opinion holds that the referring lawyer must deal with conflicts just as if he were handling the matter. The opinion also discusses client consent requirements.

        Senior Business Advisor (posted May 10, 2016) Jennings v. Bazinet, 2016 QCCS 2067 (CanLII) (Super. Ct. Que. May 3, 2016). Defendant met with a “Senior Business Advisor” (“SBA”) employed by Law Firm (not a lawyer). They discussed disagreements within Company. They had several discussions. Law Firm then filed this suit against Defendant involving those disagreements. Defendant moved to disqualify Law Firm. In this opinion the court granted the motion. The court found that SBA’s position and function were sufficient to make Defendant a client of Law Firm. The court found the screen erected by Law Firm to be adequate and timely (delay of several weeks). At the end of the day the court justified disqualification because this suit was filed while Defendant was still a client, thus Law Firm breached its duty of loyalty to Defendant, thereby endangering the reputation of the legal system.

        Nustar Farms, LLC v. Zylstra, 2016 WL 2772186 (Ia. May 13, 2016). Manure easement case (our first). Lawyer filed this case for Nustar against the Zylstras to enforce a real estate contract, including a manure easement. The problem is that when Lawyer first decided to file this case, Lawyer had pending a small claims case on behalf of the Zylstras. The trial court denied the Zylstras motion to disqualify Lawyer in this case. In this opinion the Supreme Court reversed, finding that Lawyer had a current conflict of interest. The parties agreed that the small claims matter ended May 13, 2014. Lawyer’s representation of Nustar began in “early May” 2014. Thus, the duration of the conflict was at most two weeks.

        Bryan Corp. v. Abrano, 2016 WL 3245062 (Mass. June 14, 2016). Corp. is owned by A, B, and C. Law Firm represented Corp. in litigation against another company, until July 31, 2015 (“the Other Case”). In June 2015 A and B got into a dispute with C over compensation. A retained Law Firm to deal with this dispute. On July 21, 2016 Law Firm sent a demand letter to Corp. regarding A’s compensation. This litigation ensued with Law Firm representing A. Corp. moved to disqualify Law Firm. The trial court granted the motion. In this direct appeal the Supreme Judicial Court affirmed. The court held that Law Firm should have anticipated in June 2015 that it would be adverse to its client, Corp. and should not have written the demand letter to Corp. while still representing Corp. in the Other Case. Law Firm had attempted to cure the conflict by withdrawing from the Other Case on July 31, 2016, but the court held that withdrawal violated Rule 1.16. The court passed on the opportunity to apply the “hot potato” rule.

        State Comp. Ins. Fund v. Drobot, 2016 WL 3524330 (C.D. Cal. June 24, 2016). InsFund provides workers’ compensation benefits to employers. InsFund discovered that it was being defrauded by healthcare providers (“HCPs”) for over-billing and the like. InsFund, represented by Law Firm, brought civil suits against several dozen HCPs. One HCP InsFund did not sue was Paul Randall, although Randall did appear as a third-party defendant and in related civil proceedings. Randall had pleaded guilty in one of the criminal cases that arose out of the above fraud and is awaiting sentencing. Law Firm represents Randall in the criminal case. Several defendants moved to disqualify Law Firm from representing InsFund. The court granted the motion. In this very long opinion the court denied rehearing. The court rejected the standing argument given the way Law Firm’s conflict “infects the litigation.” The court describes all the ways Randall was being, or could be, whip-sawed (our word) by Law Firm in both the civil cases and in his criminal case (his upcoming “life-altering sentencing hearing”). The court also analyzed written waivers InsFund had obtained from InsFund and Randall, concluding in several instances that the waivers didn’t “cut it.” Last, the court picked apart the declarations of several ethics experts InsFund retained for purposes of the motion for rehearing.

        Willsee Holdings Ltd. v. Tim Seegmiller Holdings Inc., 2016 ONSC 4204 (CanLII) (Ont. Super. Ct. June 27, 2016). Patriarch owned 14 companies. He wanted his sons, Son 1 and Son 2 to take over. The sons could not get along, so the companies were ultimately distributed between them. Law Firm represented Son 1 and at various times represented a number of the companies. As a result of the division, Law Firm found itself with various adverse positions. So, Law Firm dropped some of the representations to remove the adversity. Son 2 moved to disqualify Law Firm in three different cases. In this opinion the court denied the motions, finding that all Law Firm’s actions, under the circumstances, were justifiable.

        Steel Workers Pension Trust v. The Renco Group, Inc., 2016 WL 3633079 (W.D. Pa. July 7, 2016). This case is a multi-employer pension plan (“MEPP”) making a withdrawal liability claim under ERISA. Law Firm represents the defendant employers in resisting the claim. The plaintiff MEPP, never a client of Law Firm, moved to disqualify Law Firm because Law Firm represents MEPPs in other cases and in other courts. Thus, Law Firm would be making arguments in this case that might adversely impact its own MEPP clients. In this opinion the magistrate judge denied the motion. First, the court held that the plaintiff had standing to make the motion under the court’s obligation to enforce lawyer ethics rules. On the merits, the court noted that this case is about waiver of defenses and adequacy of a withdrawal liability notice, issues not present in Law Firm’s cases for MEPPs. Thus, no conflict.

        Cohen v. Rogers, 2016 WL 3854885 (Ga. App. July 14, 2016). Aye Brindle was housekeeper for Joseph Rogers. Brindle made an unauthorized video of a sexual encounter between herself and Rogers. Rogers sued Brindle to enjoin her use of the video and for various other causes of action including for damages. David Cohen and John Butters appeared for Brindle. Rogers then, in another case, sued Cohen and Butters for various torts for their participation in the planning and making of the video. Rogers moved to disqualify Cohen and Rogers from representing Brindle. The trial court granted the motion, both under Rule 1.7 (conflict) and 3.7 (lawyer as witness). In this opinion the appellate court affirmed. The reasoning was lengthy and (to us) convoluted. Basically, the court was concerned that Brindle and the lawyers would ultimately have to point fingers at each other over the origin of the video. The opinion was very Georgia-centric, with citations to Georgia cases and statutes almost exclusively (one cite to the U.S. Supreme Court). Georgia lawyers may want to give it a look.

        Frontier Prop. Invs. Ltd. v. Wellworth Homes Ltd., 2016 BCSC 1591 (CanLII)(S. Ct. B.C. Aug. 29, 2016). Lawyer and Law Firm represented Wellworth for several years. This case is about a mortgage loan from Frontier to Wellworth. Lawyer represented Frontier and was a principal of Frontier. Lawyer told Wellworth to get its own lawyer for the mortgage transaction. The loan went south, and Frontier foreclosed. This litigation ensued. Part of it was the propriety of the foreclosure, given Law Firm’s conflict of interest. The other part is a claim by Wellworth against Frontier for Law Firm’s breach of fiduciary duty. A Master upheld the foreclosure notwithstanding the conflict. In this opinion the Supreme Court judge affirmed the Master and held further that Wellworth’s claim against Frontier could proceed.

        Reyes v. Golden Krust Carib. Bakery, Inc., 2016 WL 4708953 (S.D.N.Y. Sept. 1, 2016). Employee, member of Union, sued Employer for violation of the FMLA. Lawyer represents Employee. Lawyer is also Business Manager of Union. Employer moved to disqualify Lawyer. In this opinion the magistrate judge denied the motion. Employee stated she had no claim against Union. The court called Employer’s position that Employee might have a claim against Union a “baseless hypothetical.”

        Leach v. Leach, 2016 ONSC 6140 (CanLII) (Super. Ct. Ont. Sept. 30, 2016). Marital Litigation. In the course of spousal support negotiations, W began working full time as a receptionist in the law firm representing her. H moved to disqualify W’s lawyer. In this opinion the court denied the motion. The court said there was no showing of an “emotional tie” between W and her lawyer, such as might arise in a romantic relationship. The court discussed at length the extent to which W’s salary and other financial relationship with her law firm might influence a spousal support holding, finding nothing that would require disqualification.

        Antenuptial/Postnuptial Agreements. DeCurtis v. Visconti, Boren & Campbell, Ltd., 2017 WL 253164 (R.I. Jan. 20, 2017). This is a discovery dispute involving the attorney-client privilege. In resolving the dispute in favor of discovery, the court held that a lawyer may not ethically represent both the husband and wife in preparing an antenuptial (prenuptial) or postnuptial agreement. The court cited Ware v. Ware, 687 S.E.2d 382 (W. Va. 2009).

        United States v. Blue Lake Power,LLC, 2017 WL 713145 (N.D. Cal. Feb. 23, 2017). This is a case brought by Municipal District against Power Co. under the federal Clean Air Act. The parties sought entry of a consent decree. Indian Tribe objected. One objection was that District’s lawyer also represented City, which receives rent from Power Co. District’s lawyer responded that City has no enforcement authority relating to the Clean Air Act, that City has consented to the representation, and City has hired other counsel to look out after its interests regarding this matter. In this opinion the court overruled the Tribe’s objection.

        California Ass’n of Realtors, Inc. v. PDFfiller, Inc., 2017 WL 975945 (D. Mass. March 13, 2017). Law Firm handled litigation for Plaintiff until approximately 2010. The only work subsequently was under a “general advice account” executed in 2003. The work on this account trickled out in 2015. Law Firm showed up for Defendants in this case. Plaintiff moved to disqualify Law Firm. Law Firm set up a screen and all Plaintiff files were put in custody of the “General Counsel’s Office.” A lead lawyer for Plaintiff retired from Law Firm on January 1, 2017, The lead lawyer for Defendants in this case just joined Law Firm days before this case was filed. Based upon all the above circumstances, in this opinion, the court denied the motion to disqualify.

        Akagi v. Turin Hous. Dev. Fund Co., Inc., 2017 WL 1076345 (S.D.N.Y. March 22, 2017). This is a housing discrimination case brought against two groups of defendants. We will call them Owners and Managers. Law Firm started out representing both groups. Part way into the representation Law Firm filed a state court action for Owners against Managers. That case is related to this case. In the face of a motion to disqualify, Law Firm withdrew from representing Managers in this case. Nevertheless, certain parties have moved to disqualify Law Firm from representing Owners in this case. In this opinion the court granted the motion. The court viewed this as a current client conflict even though Law Firm had dropped Managers. The parties had signed a joint defense agreement and a conflict waiver. In parsing those, the court felt neither was an adequate waiver of this current client conflict.

        Belize Bank Ltd. v. Government of Belize, 2017 WL 1193700 (D.C. Cir. March 31, 2017). In this case Bank seeks to enforce an award under the Rules of the London Court of International Arbitration (“LCIA”), rendered in London. One of the issues raised was that a barrister in the case had a conflict because another member of barrister’s chambers had earlier represented a partial owner of Bank. In this opinion the court held that this ground did not succeed because English barristers are “sole practitioners” and their chambers are not “law firms.” Thus American-type imputation rules do not apply.

        Santander Sec. LLC v. Gamache, 2017 WL 1208066 (E.D. Pa. April 3, 2017). Gamache worked at Santander as a financial advisor until 2016. He then went to work for Citizens Securities. In this case Santander is suing Gamache for taking Santander customer lists and related wrongs. Citizens has not been sued. Law Firm is representing Santander. Because Law Firm had earlier represented Citizens in similar types of cases, Gamache moved to disqualify Law Firm in this case. First, after a thorough discussion of cases on standing, the court felt “inclined” to deny Gamache’s motion on that basis. However, because “the law in this area is less than clear,” the court moved on to whether Rule 1.9(a) was implicated. In part because Law Firm had ended work for Citizens before Gamache joined Citizens, the court held Law Firm’s work for Citizens on similar cases was not substantially related to this case. This was more or less a rejection of the “playbook” theory.

        Rodriguez v. Spartan Concrete Prods., LLC, 2017 WL 1508179 (D.V.I. April 25, 2017). Plaintiffs, former employees of Defendant, represented by Lawyer, bring this action under FLSA and related statutes. Lawyer also happens to represent a high-ranking employee (“Bressi”) of, and partial owner of, Defendant, against Defendant, on matters not related to this case. Bressi had a role in hiring at least one Plaintiff and had roles in how to compensate employees. Bressi would be key witness for Defendant in this case. Defendant moved to disqualify Lawyer in this case. In this opinion the judge granted the motion, saying it would be “inherently unfair” to Defendant for Lawyer to have “untrammeled access” to Bressi, who will be a “key witness” for Defendant. The court also held that Lawyer’s communications with Bressi would violate Rule 4.2. [Our note: We are not sure about this one. It would seem the only parties potentially harmed by this situation would be the Plaintiffs in this case, and they are not complaining.]

        First NBC Bank v. Murex, LLC, 2017 WL 1536014 (S.D.N.Y. April 28, 2017). [Note: Because of our professional relationships, the following will be brief.] One of Law Firm’s offices did EPA lobbying work for Murex under an engagement letter, which said that Law Firm would not be doing “legal” work. Later, when EPA threatened legal action agains Murex, Law Firm began assisting Murex in a defense. Overlapping with this activity was this lawsuit in which Law Firm is representing Bank against Murex. Murex moved to disqualify Law Firm in this case. In this opinion the court granted the motion. [Additional note: In seventeen years of doing this site we have seen no other case discussing the extent to which lobbying has been involved in a conflict situation.]

Home/Table of Contents
Current Client - Part I