Freivogel on Conflicts
FREIVOGEL ON CONFLICTS
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Items posted here during the past thirty days will also appear on this What's New page.  Items posted within the past ten days will appear In Ten Day Bulletin immediately below.  Items older than ten days but less than 30 days will be posted in the Thirty-Day Holding Area, which follows.

Ten Day Bulletin

Expert Witness (posted July 27, 2017) In re Namenda Direct Purchaser Antitrust Litig., 2017 WL 3085342 (S.D.N.Y. July 20, 2017). This opinion by a magistrate judge recommends denial of motions to disqualify two different expert witnesses. The opinion is so fact-specific as to be of little precedential value. The opinion is, however, a good review of authorities regarding disqualification of expert witnesses, who, to one degree or another, had been associated with the other side.

Conflict Uncategorized
(posted July 24, 2017) Export Dev. Canada v. ESE Elecs. Inc., 2017 WL 3122157 (C.D. Cal. July 10, 2017). A dispute arose over whether a party or his lawyer was responsible for failure to produce a document required in discovery. The court raised on its own motion whether that created a conflict between the party and his lawyer. The court, in this opinion, held that it was an unwaivable conflict and that, if an opposing party made a motion for sanctions, the party would have to get other counsel on sanctions issues. However, the court allowed the lawyer to remain as to all other issues because the party signed a conflicts waiver, which appeared to explain adequately all the above.

Malpractice Liability (posted July 24, 2017) Bahoda v. Kaplan, 2017 WL 3090774 (Mich. App. Unpub. July 20, 2017). Legal malpractice case brought by Plaintiff against Lawyer. Lawyer had represented Plaintiff in a criminal case and lost. Plaintiff sought to overturn his conviction, alleging ineffective assistance of counsel. Among Lawyer's alleged deficiencies were conflicts of interest. The court refused to overturn the conviction. In this opinion the court dismissed the malpractice case on grounds of collateral estoppel (preclusion). The finding of effective assistance of counsel in the criminal case amounted to adjudication of no malpractice in this civil case.

Changing Firms; Screening
(posted July 21, 2017) Yeomans v. Gasket, 2017 WL 3080108 (N.Y. App. Div. July 20, 2017). Child custody dispute between H and W. In an earlier matter involving the same child Lawyer A represented H. Now, Lawyer A works part time for Lawyer B, who is representing W in this case. H moved to disqualify A and B. The trial court granted the motion. In this opinion the appellate court affirmed. Although B attempted to screen A from this case, unfortunately A had unwittingly signed a bill of particulars for W. Moreover, the court felt that under the circumstances, given the "small" and "informal" nature of B's firm, the screen would not work here.

Changing Firms; Screening (posted July 19, 2017) NexGen Energy Partners v. Reflecting Blue Techs., Inc., 2017 WL 3023520 (Ohio App. July 17, 2017). Lawyer worked on this case for Defendant. He played an important role and learned a lot about Defendant. Lawyer wound up in the firm representing Plaintiff. He was screened. The trial court granted Defendant's motion to disqualify Plaintiff's law firm. In this opinion the appellate court affirmed. The court noted that Ohio's version of Model Rule 1.10 superseded Kala v. Aluminum Smelting & Refining Co., Inc., 81 Ohio St. 3d 1 (Ohio 1998), and that a non-consensual screen will not work where the screened lawyer had "substantial responsibility" for the matter on the other side.

Former Client (posted July 19, 2017) Stone v. Bowen, 2017 WL 3017709 (S.D. Fla. July 14, 2017). This case is a dispute over the meaning of a pre-marital agreement between H and W. W is the plaintiff. H is deceased. The defendants are trustees of a trust created by H. Law Firm, representing W in this case, had done considerable estate planning work, much of it related to the issues in this case, for H before he died. The defendants moved to disqualify Law Firm. In this opinion the magistrate judge granted the motion. H had been trustee of the trust, which is the subject of this case. The defendants are successor trustees. Thus, the court held that the defendants are former clients of Law Firm, within the meaning of Rule 1.9. On this point the court cited only Daniel Ebner, Does the Duty to Not Act Materially Adverse to the Interests of a Former Trusts & Estates Client in a Substantially Related Matter Survive the Client's Death?, ABA Section of Real Property & Estate Law eReport (June 2011).

                                                               Thirty Day Holding Area

MISCELLANEOUS ETHICS AND LIABILITY NEWS

[Note: Items that do not fit under the conflicts categories below, but which we believe will be of interest to this audience will appear here and on the This and That pages.]

Liability Not Conflicts Related

(posted July 5, 2017) Oakland Police & Retirement Sys. v. Mayer Brown, LLP, 2017 WL 2791101 (7th Cir. June 28, 2017). Law Firm represented Borrower in a $1.5 billion financing involving numerous banks. In a subsequent deal Law Firm's lawyers and staff accidentally released the security interest in the $1.5 million financing. Nobody caught the mistake, including the law firm for the agent for the lenders. Lenders sued Law Firm. The trial court dismissed the case. In this opinion the 7th Circuit affirmed. Fatal to the case was that only Borrower was Law Firm's client in the financing, and Borrower was not suing. The court reviewed various theories under Illinois law where non-clients could recover against law firms, holding none fits here. The court also held that it made no difference that Law Firm represented the agent on matters not related to this one.

CONFLICTS - UNCATEGORIZED

[Note: These, too, will appear at the This and That pages.]

(posted July 24, 2017) Export Dev. Canada v. ESE Elecs. Inc., 2017 WL 3122157 (C.D. Cal. July 10, 2017). A dispute arose over whether a party or his lawyer was responsible for failure to produce a document required in discovery. The court raised on its own motion whether that created a conflict between the party and his lawyer. The court, in this opinion, held that it was an unwaivable conflict and that, if an opposing party made a motion for sanctions, the party would have to get other counsel on sanctions issues. However, the court allowed the lawyer to remain as to all other issues because the party signed a conflicts waiver, which appeared to explain adequately all the above.

(posted July 5, 2017) State of New Hampshire v. Actavis Pharma, Inc., 2017 WL 2830715 (N.H. June 30, 2017). State AG hired Law Firm, in a continent fee contract, to investigate and prosecute claims for possible illegal opiode sales practices. In responding to discovery and related activities Defendants resisted, claiming the AG's retention of Law Firm was illegal because it created a conflict of interest for Law Firm. In this opinion the court rejected that claim, noting that under the retention agreement the AG retained complete control of all decision-making in the proceedings.

APPEALABILITY OF DISQUALIFICATION (To read full article, click here.)

Nothing current.

ARBITRATION OF MALPRACTICE CLAIMS (To read the full article, click here.)

Nothing current.

BANKRUPTCY (To read full article, click here)

Nothing current.

BANKS/TRUST DEPARTMENTS (To read full article, click here.)

Nothing current.

BOARD POSITIONS (To read full article, click here.)

Nothing current.

CHANGING FIRMS - SCREENING (To read full article, click here.)

(posted July 21, 2017) Yeomans v. Gasket, 2017 WL 3080108 (N.Y. App. Div. July 20, 2017). Child custody dispute between H and W. In an earlier matter involving the same child Lawyer A represented H. Now, Lawyer A works part time for Lawyer B, who is representing W in this case. H moved to disqualify A and B. The trial court granted the motion. In this opinion the appellate court affirmed. Although B attempted to screen A from this case, unfortunately A had unwittingly signed a bill of particulars for W. Moreover, the court felt that under the circumstances, given the "small" and "informal" nature of B's firm, the screen would not work here.

(posted July 19, 2017) NexGen Energy Partners v. Reflecting Blue Techs., Inc., 2017 WL 3023520 (Ohio App. July 17, 2017). Lawyer worked on this case for Defendant. He played an important role and learned a lot about Defendant. Lawyer wound up in the firm representing Plaintiff. He was screened. The trial court granted Defendant's motion to disqualify Plaintiff's law firm. In this opinion the appellate court affirmed. The court noted that Ohio's version of Model Rule 1.10 superseded Kala v. Aluminum Smelting & Refining Co., Inc., 81 Ohio St. 3d 1 (Ohio 1998), and that a non-consensual screen will not work where the screened lawyer had "substantial responsibility" for the matter on the other side.

CLASS ACTIONS (To read full article, click here.)

(posted July 6, 2017) Chieftain Royalty Co. v. Enervest Energy Inst'l Fund XIII-A, 2017 WL 2836806 (10th Cir. July 3. 2017). In a side issue mentioned only in a footnote (fn. 5) the court said that the fact that class counsel and lead class representative have, over a long period of time, been filing class actions together is not without more such a conflict as to deny class counsel's fee.

(posted July 5, 2017) Burges v. Bancorpsouth, Inc., 2017 WL 2772122 (M.D. Tenn. June 26, 2017). Securities class action. Law Firm seeking to be class counsel had earlier entered into a monitoring agreement with lead plaintiff. Because that agreement did not require the plaintiff to hire Law Firm to bring any ensuing action, there was no conflict of interest. Thus, Law Firm passed the adequacy requirement for class certification.

CLIENT MERGERS/ASSET SALES (To read full article, click here.)

Nothing current.

CO-COUNSEL/COMMON INTEREST (To read full article, click here.)

Nothing current.

COMMERCIAL NEGOTIATIONS (To read full article, click here.)

Nothing current.

CORPORATIONS (To read full article, click here.)

(posted June 28, 2017) Guehl v. Carrillon House Ass’n, Inc., 2017 WL 2729618 (Ohio App. June 23, 2017). In this case CondoOwner sued CondoCorp for various mismanagement wrongs. CondoOwner was a shareholder of CondoCorp and at various times sat on its board. CondoOwner added a malpractice count against CondoCorp’s law firm (“Law Firm”). Law Firm moved to dismiss. The trial court granted the motion. In this opinion the appellate court affirmed. First, the court held that CondoOwner did not plead sufficient facts establishing that he was ever a client of Law Firm. The second holding applies to the doctrine of privity as applied in Ohio. After finding that none of the conditions creating privity was present here, the complaint should be dismissed on that basis, as well. [Our note: This privity business appears largely unique to Ohio. Rather than pick it apart here, we will leave it to Ohio lawyers to read the opinion.]

CORPORATE FAMILIES (To read full article, click here.)

Nothing current.

CRIMINAL PRACTICE (To read full article, click here.)

Nothing current.

CURRENT CLIENT (To read full article, click here.)

Third-Party Action

(posted July 12, 2017) Saint Luke Lutheran Church v. McGregor, 2017 ONSC 4060 (CanLII) (Super. Ct. Ont. June 30, 2017). Church Treasurer embezzled $600,000 from Church. Church got a judgment against Treasurer in an earlier case. In this case Church is suing Financial Advisor and the Advisor’s employer arising out of an investment Advisor had with Treasurer. Advisor brought a third-party action against Church members. Law Firm, which represented Church, appeared for the members. Advisor moved to disqualify Law Firm from representing Church. Law Firm immediately withdrew from representing the members. In this opinion the court denied the motion to disqualify. The court noted that Law Firm had not acquired confidential information about Advisor, that members were not joining in the motion to disqualify, and that Advisor had never been a client of Law Firm.

Possessing Confidences of Non-Clients

(posted June 28, 2017) Gobar v. Gong, 2017 WL 2729537 (Cal. App. Unpub. June 26, 2017). In this case Gobar sued Gong for fraudulent conveyance. Gobar is represented by Firm 1. In an earlier case Gong hired Firm #2 to represent him in a corporate dissolution matter. Gong failed to pay all of Firm #2’s fees. Firm #2 hired Firm #1 to sue Gong for unpaid fees, among other things (“Other Case”). Other Case settled. In this case Gong moved to disqualify Firm #1 because of what Firm #1 might have learned about Gong in the Other Case that would be relevant to this case. Firm #1 had never represented Gong. The trial court denied the motion to disqualify. In this opinion the appellate court affirmed. A principal focus of the opinion was an earlier case, Acacia Patent Acquisition, LLC v. Superior Court, 234 Cal. App. 4th 1091 (2015). The holding in Acacia was that a lawyer who learns privileged information about a party - not her client - may be precluded from opposing that non-client in a different but substantially related matter. This opinion was long and fact-specific, particularly on what Firm #1 might have learned in the Other Case. On balance the court held that Firm #1 did not learn protected information about Gong that was substantially related to this case.

DERIVATIVE ACTIONS (To read full article, click here.)

(posted July 5, 2017) Beachcomber Mgmt. Crystal Cove, LLC v. Superior Court, 2017 WL 2823001 (Cal. App. Unpub. June 28, 2017). Law Firm had represented LLC on various matters. When Plaintiffs brought this derivative action against top management insiders, Law Firm appeared for the insiders, while LLC hired independent counsel. Plaintiffs moved to disqualify Law Firm, and the trial court granted the motion. In this opinion the appellate court vacated the disqualification order and remanded so the trial court could determine whether the insiders were, in fact, privy to all of LLC's information. The court noted that the usual rules of former client conflicts do not apply in derivative actions because confidentiality concerns are ameliorated by insiders' having the information during the normal course of operations.

ENJOINING CONFLICTS (AND OTHER NON-TRADITIONAL REMEDIES) (To read full article, click here.)

Nothing current.

EXPERT WITNESSES (To read full article, click here.)

(posted July 27, 2017) In re Namenda Direct Purchaser Antitrust Litig., 2017 WL 3085342 (S.D.N.Y. July 20, 2017). This opinion by a magistrate judge recommends denial of motions to disqualify two different expert witnesses. The opinion is so fact-specific as to be of little precedential value. The opinion is, however, a good review of authorities regarding disqualification of expert witnesses, who, to one degree or another, had been associated with the other side.

FORMER CLIENT (To read full article, click here.)

(posted July 19, 2017) Stone v. Bowen, 2017 WL 3017709 (S.D. Fla. July 14, 2017). This case is a dispute over the meaning of a pre-marital agreement between H and W. W is the plaintiff. H is deceased. The defendants are trustees of a trust created by H. Law Firm, representing W in this case, had done considerable estate planning work, much of it related to the issues in this case, for H before he died. The defendants moved to disqualify Law Firm. In this opinion the magistrate judge granted the motion. H had been trustee of the trust, which is the subject of this case. The defendants are successor trustees. Thus, the court held that the defendants are former clients of Law Firm, within the meaning of Rule 1.9. On this point the court cited only Daniel Ebner, Does the Duty to Not Act Materially Adverse to the Interests of a Former Trusts & Estates Client in a Substantially Related Matter Survive the Client's Death?, ABA Section of Real Property & Estate Law eReport (June 2011).

GOVERNMENT ENTITIES - SUING ONE PART/REPRESENTING ANOTHER PART (To read full article, click here.)

Nothing current.

HOT POTATO DOCTRINE (To read full article, click here.)

Nothing current.

INITIAL INTERVIEW - HEARING TOO MUCH (To read full article, click here.)

Nothing current.

INSURANCE DEFENSE (To read full article, click here.)

(posted June 28, 2017) Mt. Vernon Fire Ins. Co. v. Visionaid, Inc., 2017 WL 2703949 (Mass. June 22, 2017). This opinion responds to certified questions from the First Circuit.  In its response the Massachusetts court concludes, with two judges dissenting, that where an insurance policy provides that the insurer has the “duty to defend any claim” initiated against the insured, the insurer's duty to defend does not require it to prosecute affirmative counterclaims on behalf of its insured.

INVESTING IN CLIENTS/STOCK FOR FEES (To read full article, click here.)

Nothing current.

ISSUE OR POSITIONAL CONFLICTS (To read full article, click here.)

Nothing current.

JOINT/MULTIPLE REPRESENTATION (To read full article, click here.)

Nothing current.

LAWYER AS EXPERT WITNESS OR CONSULTANT (To read full article, click here.)

Nothing current.

LAWYERS REPRESENTING LAWYERS (To read full article, click here.)

Nothing current.

MALPRACTICE LIABILITY/FEE FORFEITURES (To read full article, click here.)

(posted July 24, 2017) Bahoda v. Kaplan, 2017 WL 3090774 (Mich. App. Unpub. July 20, 2017). Legal malpractice case brought by Plaintiff against Lawyer. Lawyer had represented Plaintiff in a criminal case and lost. Plaintiff sought to overturn his conviction, alleging ineffective assistance of counsel. Among Lawyer's alleged deficiencies were conflicts of interest. The court refused to overturn the conviction. In this opinion the court dismissed the malpractice case on grounds of collateral estoppel (preclusion). The finding of effective assistance of counsel in the criminal case amounted to adjudication of no malpractice in this civil case.

OF COUNSEL (To read full article, click here.)

Nothing current.

OPPOSING LAWYERS NEGOTIATING A LAW PRACTICE MERGER (To read full article, click here.)

Nothing current.

PARTNERSHIPS (INCLUDING LIMITED PARTNERSHIPS) (To read full article, click here.)

Joint Venture

(posted July 5, 2017) Integrity Nat'l Corp. v. DSS Servs., Inc., 2017 WL 2812807 (D. Md. June 29, 2017). At relevant times Lawyer represented Corp. 1. Corp. 1 formed a joint venture with Corp. 2. Lawyer represented the joint venture. When a dispute arose, Corp. 1 brought and won an arbitration against Corp. 2. Corp. 1, represented by Lawyer, brought this case to confirm the arbitration award. Corp. 2 moved to disqualify Lawyer. In this opinion the court denied the motion because Lawyer had never represented Corp. 2.

SETTLEMENT AGREEMENTS (To read full article, click here.)

Nothing current.

STANDING (To read full article, click here.)

Nothing current.

TRADE (AND OTHER) ASSOCIATIONS (To read full article, click here.)

Nothing current.

UNDERLYING WORK PROBLEM (To read full article, click here.)

Nothing current.

WAIVERS/CONSENTS (To read full article, click here.)

Nothing current.

WITNESS - ADVERSE - CURRENT/FORMER CLIENT (To read full article, click here.)

Nothing current.

ZERO SUM GAMES (To read full article, click here.

Nothing current.

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