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FREIVOGEL ON CONFLICTS WHAT'S NEW 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 Class Action (posted February 2, 2023) Hall v. Adelphia Three Corp., 2023 WL 869232 (D.N.J. Jan. 27, 2023). Class action by "tipped employees" against a restaurant company. In this opinion the court granted a motion to certify the class. Defendant had objected to certification on adequacy grounds. Evidently, class counsel was representing a class representative in an individual action against the same defendants. But, that action has terminated. In any event, the court found that the separate action, without more, would not be grounds for denial of class certification. Former Client; Playbook; Insurance Defense (posted February 2, 2023) Reid v. Samsung SDI Co., Ltd., 2023 WL 1096333 (Ga. App. Jan. 30, 2023). A Samsung SDI lithium-ion 18650 battery exploded in Plaintiff's pocket. Plaintiff, represented by Lawyer, is suing Samsung SDI for Plaintiff's injuries. Samsung moved to disqualify Lawyer because Lawyer had for a number of years worked in-house for the insurance company ("Insco") that insured Samsung SDI for product liability. (The name Samsung appears in Insco's name, but the court does not explain that coincidence.) In Lawyer's Insco role Lawyer supervised, or otherwise handled, many cases against Samsung SDI, including cases involving the 18650 battery. The very fact-specific opinion contains way more information about how Lawyer interacted with Samsung SDI lawyers. We will leave it at that. In this opinion the appellate court affirmed the trial court's order disqualifying Lawyer. The opinion does three things. First, the court found that Lawyer's role at Insco was tantamount to representation of Samsung, thus triggering Rule 1.9. Second, the court found that the earlier work at Insco was substantially related to this case. Last, while not mentioning it by name, the court seemed to be applying the "playbook doctrine," emphasizing Lawyer's familiarity with 18650 battery litigation and with Samsung SDI's personnel and procedures. Joint Representation (posted January 30, 2023) Veloz v. Jiddou, 2023 NY Slip Op 00292 (N.Y. App. Div. 1st Dept. Jan. 24, 2023). Plaintiff was driving an auto, and her young daughter was a passenger. They were allegedly rear-ended, and both, represented by Lawyer, sued the driver of the other vehicle. The defendant counterclaimed that the accident was the fault of the plaintiff/driver. The trial court disqualified Lawyer from representing both plaintiffs. In this opinion the appellate court noted that the plaintiffs did not appeal the disqualification and said "plaintiffs have been advised to retain new and separate counsel." Former Client; Accommodation Client? (posted January 26, 2023) D Stadtler 2015 Trust v. Gorrie, 2023 WL 355887 (D. Ariz. Jan. 23, 2023). The plaintiffs moved to disqualify Lawyer for the defendants. In this opinion the court denied the motion. The analysis is fact-intensive and, quite frankly, legally questionable. This case arises out of an earlier transaction. In the transaction Lawyer represented the plaintiffs and at least one of the defendants. Lawyer is representing the defendants in this case. The basis of the motion to disqualify is that Lawyer is being adverse to his former clients, the plaintiffs in this case. The court assumed arguendo that Lawyer actually represented the plaintiffs in the earlier transaction. The court said that under Arkansas law the parties were deemed to know everything during the transaction and, thus, the duty of confidentiality to former clients was off the table. So, what's the harm in Lawyer's opposing them? The court then embarked upon a discussion of the accommodation client doctrine as set forth in Allegaert v. Perot, 565 F.2d 246 (2d Cir. 1977). That case and those following it (some don't) recognize a distinction between a primary client and a secondary client ("accommodation client"). This opinion seems to assume the plaintiffs were "accommodation clients" during the earlier transaction without saying what made them so. Former Client (posted January 26, 2023) Dr. Gilbert AKL Inc. (& Ackel) v. Shapiro, 2023 QCCS 78 (CanLII) (Quebec Super. Ct. Jan. 17, 2023). Shapiro agreed to sell his dental practice to Ackel. Shapiro recommended that they be jointly represented by Lawyer to save on fees. In this case Ackel is suing Shapiro to cancel the sale. Lawyer appeared for Shapiro. Ackel moved to disqualify Lawyer. In this opinion the court granted to motion and disqualified Lawyer’s firm, as well. Very fact-specific analysis. It appears doubtful that Lawyer learned any confidences from Ackel during the transaction. Nevertheless, the Lawyer’s duty of loyalty to Ackel was determinative. Joint Representation (posted January 26, 2023) Jason M. Hatfield, P.A. v. Ornelas, 2023 WL 361558 (W.D. Ark. Jan. 23, 2023). The opinion does not say what this case is about. Here is what we know. One of the defendants is a lawyer ("Lawyer"). In addition to representing himself, Lawyer represents a co-defendant ("Client"). Plaintiff moved to disqualify Lawyer from representing Client in this case. In this opinion the court denied the motion "without prejudice." The court considered all the ways this representation could be a problem, but on balance found Lawyer's and Client's interests aligned, at least for now. The court cautioned Lawyer that Lawyer "appears to be on shaky ethical ground" and encouraged Lawyer to seek Client's "informed consent to continued representation as detailed" in Arkansas Rule 1.7(b). Conflict Uncategorized (posted January 24, 2023) Interstate Indem. Co. v. East 77 Owners Co., LLC, No. 650794/2022 (N.Y. Sup. Ct. Jan. 6, 2023). Interstate insured Owner for property damage. As the result of a loss, Interstate, as Owner's subrogee, sued others alleged to be responsible for the loss ("the underlying case"). The underlying case was settled. A dispute arose between Interstate and Owner as to who gets what share of the settlement proceeds. In this case Interstate is suing Owner for what Interstate believes Owner owes Interstate. Owner moved, in this case, to disqualify Law Firm from representing Interstate because, in the underlying case, Law Firm represented Interstate as Owner's subrogee. In denying the motion to disqualify the court held that a lawyer's representing the subrogee does not make that lawyer a lawyer for the subrogor. Partnership; 4.2 (posted January 24, 2023) Pettis v. Simrall, 2023 WL 311342 (Miss. Jan. 19, 2023). The facts and relationships are complex and not necessary to getting the gist of this holding. Plus, a lot of the analysis relies heavily on Mississippi partnership law. We will leave it to our Mississippi friends to read and understand those aspects. Lawyer was involved in a matter adverse to a general partnership. Lawyer met with one of the partners without notifying the lawyer for the partnership. The partnership moved to disqualify Lawyer for violating Rule 4.2. The trial judge granted the motion. In this opinion the Mississippi Supreme Court reversed the trial judge. The partner involved swore that she did not retain the lawyer for the partnership to represent her individually. In brief, the court found that a lawyer for a general partnership does not, without more, represent the individual partners. Thus, Lawyer, in meeting with the partner, was not meeting with a represented person, and thus not violating Rule 4.2. 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 at This and That. 4.2 (posted January 24, 2023) Pettis v. Simrall, 2023 WL 311342
(Miss. Jan. 19, 2023). To read about the case, go to "Partnership," below. [Note: These, too, will appear at the This and That pages.] (posted January 24, 2023) Interstate Indem. Co. v. East 77 Owners Co., LLC,
No. 650794/2022 (N.Y. Sup. Ct. Jan. 6, 2023). Interstate insured Owner
for property damage. As the result of a loss, Interstate, as Owner's
subrogee, sued others alleged to be responsible for the loss ("the
underlying case"). The underlying case was settled. A dispute arose
between Interstate and Owner as to who gets what share of the settlement
proceeds. In this case Interstate is suing Owner for what Interstate
believes Owner owes Interstate. Owner moved, in this case, to disqualify
Law Firm from representing Interstate because, in the underlying case,
Law Firm represented Interstate as Owner's subrogee. In denying the
motion to disqualify the court held that a lawyer's representing the
subrogee does not make that lawyer a lawyer for the subrogor. APPEALABILITY (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.) (posted January 4, 2023) In re CPESAZ Liquidating, Inc., 2022 WL
18067792 (9th Cir. Bankr. App. Panel Dec. 29, 2022). Law Firm was
debtors' counsel for the Chapter 11 debtors. The bankruptcy court
approved Law Firm's fee and costs request of some $2 million. ESOP
Participants objected to the fees, in part because Law Firm had a
conflict, and moved to disqualify Law Firm. The ESOP had needed a new
trustee. Law Firm had recommended Mr. Paredes, and the debtors accepted
the recommendation. The problem was that Law Firm had represented
Paredes in other cases but did not disclose those representations in Law
Firm's Rule 2014 filings in this case. For this violation the
bankruptcy judge reduced Law Firm's fees by $120,000. There were other
issues with the billings, and the court made further adjustments
downward. The bankruptcy judge also denied the motion to disqualify Law
Firm. In this opinion the Bankruptcy Appellate Panel affirmed as to the
fee approval and denial of disqualification, holding that the bankruptcy
judge had not abused her discretion. 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 January 9, 2023) Cole-Palmer Instrument Co. v. Prof'l Labs., Inc.,
No. 0:21-cv-61756-GOODMAN[CONSENT] (S.D. Fla. Jan. 6, 2023). Florida
Rule 1.10(c)((1)&(2) appears to be identical to Model Rule
1.10(b)(1)&(2). This is a rare reported decision applying that rule.
Lawyer was at Firm 1 for about one year. Firm 1 represents Plaintiff.
Defendant is claiming that Lawyer briefly represented Defendant on a
matter related to this case and moved to disqualify Firm 1. In this
opinion the magistrate judge denied the motion. The analysis is so
fact-dependent, we will spare readers with a recitation of those facts.
First, the judge held that Lawyer and Firm 1 never represented
Defendant. Last, the judge held that, in any event, the matters were not
substantially related and that any information received by Lawyer and
Firm 1 from, or about, Defendant was now public. CLASS ACTIONS (To read full article, click here.) (posted February 2, 2023) Hall v. Adelphia Three Corp., 2023 WL
869232 (D.N.J. Jan. 27, 2023). Class action by "tipped employees"
against a restaurant company. In this opinion the court granted a motion
to certify the class. Defendant had objected to certification on
adequacy grounds. Evidently, class counsel was representing a class
representative in an individual action against the same defendants. But,
that action has terminated. In any event, the court found that the
separate action, without more, would not be grounds for denial of class
certification. Nothing current. CO-COUNSEL/COMMON INTEREST (To read full article, click here.) Nothing current. COMMERCIAL NEGOTIATIONS (To read full article, click .) Nothing current. CORPORATIONS (To read full article, click here.) Nothing current. 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.) Nothing current. DERIVATIVE ACTIONS (To read full article, click here.) Nothing current. ENJOINING CONFLICTS (AND OTHER NON-TRADITIONAL REMEDIES) (To read full article, click here.) Nothing current. EXPERT WITNESSES (To read full article, click here.) (posted January 18, 2023) Beaumont v. Beaumont, No. 1 CA-CV
21-0426 (Ariz. App. Unpub. Jan. 12, 2023). In this marital dispute the
parties contested the value of the marital home. W's lawyer called her
husband as an expert on valuation. The trial court ruled for W on the
valuation issue. In this unpublished opinion the appellate court
affirmed the trial court. The appellate court said that the relationship
between W's lawyer and W's expert was a credibility issue, and the
trial court did not err by considering W's expert's testimony. (posted January 17, 2023) DiCristoforos v. Fertility Solutions, P.C.,
2023 WL 157642 (D.R.I. Jan. 11, 2023). Plaintiffs are a husband and
wife suing Clinic and two doctors ("Doc1" and "Doc2") for an allegedly
negligent diagnosis resulting in the wife's losing a baby and becoming
infertile. Clinic and Doc1 (but, not Doc2) retained an obstetric
radiologist for an analysis and opinion. That expert's husband was also
an obstetric radiologist. We shall call them Expert W and Expert H.
Experts W and H worked at the "same place" and co-authored many learned
articles and books. After receiving Expert W's opinion, the lawyer for
Clinic and Doc1 decided not to proceed further with Expert W. About a
year later the lawyer for Doc2 contacted Expert H about helping in this
case. Expert H said he could not proceed because of his wife's earlier
work for Doc1. About a year after that, the lawyer for the plaintiffs
contacted Expert H about helping the plaintiffs in this case. The lawyer
did not tell Expert H who the parties were. Based upon a "'blind'
review of the ultrasound images" Expert H opined that Doc1 and others
were negligent. When "Defendants" learned that the plaintiffs were using
Expert H as an expert, "Defendants" moved to disqualify Expert H. In
this opinion the court denied the motion. First, Expert H reached his
opinion(s) without knowing who the parties were. Second, based upon the
brief communications between Expert H and the lawyer for Doc2, there
could not have been an expectation of confidentiality by that lawyer.
Third, Expert H had not received information about Defendants that was
not already revealed in filings. [Our note: Something is missing, and
we cannot put our finger on it. Early on, Expert W did substantial work
for the lawyer for Doc 1 and Clinic and rendered an opinion. Although
the lawyer for Doc 1 and Clinic decided not to proceed with Expert W,
what was to keep Expert H from learning Doc1's weaknesses from his wife,
Expert W? If they had been law partners, that information might have
been deemed imputed and caused disqualification.] FORMER CLIENT (To read full article, click here.) Playbook (posted February 2, 2023) Reid v. Samsung SDI Co., Ltd., 2023 WL
1096333 (Ga. App. Jan. 30, 2023). A Samsung SDI lithium-ion 18650
battery exploded in Plaintiff's pocket. Plaintiff, represented by
Lawyer, is suing Samsung SDI for Plaintiff's injuries. Samsung moved to
disqualify Lawyer because Lawyer had for a number of years worked
in-house for the insurance company ("Insco") that insured Samsung SDI
for product liability. (The name Samsung appears in Insco's name, but
the court does not explain that coincidence.) In Lawyer's Insco role
Lawyer supervised, or otherwise handled, many cases against Samsung SDI,
including cases involving the 18650 battery. The very fact-specific
opinion contains way more information about how Lawyer interacted with
Samsung SDI lawyers. We will leave it at that. In this opinion the
appellate court affirmed the trial court's order disqualifying Lawyer.
The opinion does three things. First, the court found that Lawyer's role
at Insco was tantamount to representation of Samsung, thus triggering
Rule 1.9. Second, the court found that the earlier work at Insco was
substantially related to this case. Last, while not mentioning it by
name, the court seemed to be applying the "playbook doctrine,"
emphasizing Lawyer's familiarity with 18650 battery litigation and with
Samsung SDI's personnel and procedures. Accommodation Client? (posted January 26, 2023) D Stadtler 2015 Trust v. Gorrie,
2023 WL 355887 (D. Ariz. Jan. 23, 2023). The plaintiffs moved to
disqualify Lawyer for the defendants. In this opinion the court denied
the motion. The analysis is fact-intensive and, quite frankly, legally
questionable. This case arises out of an earlier transaction. In the
transaction Lawyer represented the plaintiffs and at least one of the
defendants. Lawyer is representing the defendants in this case. The
basis of the motion to disqualify is that Lawyer is being adverse to his
former clients, the plaintiffs in this case. The court assumed arguendo
that Lawyer actually represented the plaintiffs in the earlier
transaction. The court said that under Arkansas law the parties were
deemed to know everything during the transaction and, thus, the duty of
confidentiality to former clients was off the table. So, what's the harm
in Lawyer's opposing them? The court then embarked upon a discussion of
the accommodation client doctrine as set forth in Allegaert v. Perot,
565 F.2d 246 (2d Cir. 1977). That case and those following it (some
don't) recognize a distinction between a primary client and a secondary
client ("accommodation client"). This opinion seems to assume the
plaintiffs were "accommodation clients" during the earlier transaction
without saying what made them so. (posted January 26, 2023) Dr. Gilbert AKL Inc. (& Ackel) v. Shapiro, 2023 QCCS 78 (CanLII) (Quebec Super. Ct. Jan. 17, 2023). Shapiro agreed to sell his dental practice to Ackel. Shapiro recommended that they be jointly represented by Lawyer to save on fees. In this case Ackel is suing Shapiro to cancel the sale. Lawyer appeared for Shapiro. Ackel moved to disqualify Lawyer. In this opinion the court granted to motion and disqualified Lawyer’s firm, as well. Very fact-specific analysis. It appears doubtful that Lawyer learned any confidences from Ackel during the transaction. Nevertheless, the Lawyer’s duty of loyalty to Ackel was determinative. (posted January 16, 2023) Woroch v. Northfield Trim & Door Inc.,
2023 ONSC 218 (CanLII) (Super. Ct. Ont. Jan. 9, 2023). Company is owned
by Family Members. In 2012 Family Members entered into a shareholders'
agreement prepared by Lawyer while representing Company. The agreement
included an employment agreement for Plaintiff (also a Family Member) to
be President. The shareholders' agreement also contained a buy/sell
provision. In 2021 a transaction occurred under the buy/sell provision. A
dispute arose between Plaintiff and Company and other Family members as
to the meaning and enforcement of the shareholders' agreement. Lawyer
withdrew as counsel to Company and immediately took Plaintiff's side in
the dispute. The dispute ripened into this proceeding, in which Lawyer
is adverse to Company and Family Members. Defendants moved to disqualify
Lawyer. In this opinion the court granted the motion. The court held
that Lawyer's earlier representation of Company, including preparation
of the shareholders' agreement, was sufficiently related to this case,
which is about the interpretation and enforcement of the agreement.
Moreover, there was no showing that Lawyer had not learned relevant
Company confidences while representing Company. The court seemed
influenced by the rather shady (not dishonest) way Lawyer went about the
business of firing Company with no advance notice and commencing to do
battle for Plaintiff. Among other things, the case has a strong whiff of
hot potato (see "Hot Potato" at this site). (posted January 4, 2023) Flexible Fundamentals, Inc. v. McGrath,
2022 WL 17971738 (Mass. App. Unpub. Dec. 28, 2022). Lawyer represented
Flexible in preparing noncompete agreements with Flexible employees.
Subsequently, Flexible filed this case against former employees for
violating those agreements. Lawyer appeared for the former employees.
Flexible moved to disqualify Lawyer. The trial court granted the motion.
In this unpublished opinion the appellate court affirmed. "Here, the
overlap between former and current representations is patent." The court
also found this appeal was "frivolous" and awarded lawyer fees and
"double costs." 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.) INVESTING IN CLIENTS/STOCK FOR FEES (To read full article, click here.) Nothing current. Nothing current. JOINT/MULTIPLE REPRESENTATION (To read full article, click here.) (posted January 30, 2023) Veloz v. Jiddou, 2023 NY Slip Op 00292
(N.Y. App. Div. 1st Dept. Jan. 24, 2023). Plaintiff was driving an auto,
and her young daughter was a passenger. They were allegedly rear-ended,
and both, represented by Lawyer, sued the driver of the other vehicle.
The defendant counterclaimed that the accident was the fault of the
plaintiff/driver. The trial court disqualified Lawyer from representing
both plaintiffs. In this opinion the appellate court noted that the
plaintiffs did not appeal the disqualification and said "plaintiffs have
been advised to retain new and separate counsel." (posted January 26, 2023) Jason M. Hatfield, P.A. v. Ornelas,
2023 WL 361558 (W.D. Ark. Jan. 23, 2023). The opinion does not say what
this case is about. Here is what we know. One of the defendants is a
lawyer ("Lawyer"). In addition to representing himself, Lawyer
represents a co-defendant ("Client"). Plaintiff moved to disqualify
Lawyer from representing Client in this case. In this opinion the court
denied the motion "without prejudice." The court considered all the ways
this representation could be a problem, but on balance found Lawyer's
and Client's interests aligned, at least for now. The court cautioned
Lawyer that Lawyer "appears to be on shaky ethical ground" and
encouraged Lawyer to seek Client's "informed consent to continued
representation as detailed" in Arkansas Rule 1.7(b). (posted January 16, 2023) N.Y. Op. 1249 (Jan. 5, 2023). Lawyer currently
represents H and W simultaneously in estate planning. It is always a
good idea to provide in an engagement document that Lawyer will keep no
secrets of one joint client from the other. Authorities (including the
Committee's opinion) suggest that even absent a written provision, there
is normally an expectation that Lawyer will share the information.
Suppose, however, Lawyer learned something from, or about, H during an
earlier single representation of H. This opinion says that the usual
duty to reveal does not apply in the current joint representation. Nothing current. Nothing current. MALPRACTICE LIABILITY/FEE FORFEITURES (To read full article, click here.) Nothing current. 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.) (posted January 24, 2023) Pettis v. Simrall, 2023 WL 311342 (Miss. Jan. 19, 2023). The facts and relationships are complex and not necessary to getting the gist of this holding. Plus, a lot of the analysis relies heavily on Mississippi partnership law. We will leave it to our Mississippi friends to read and understand those aspects. Lawyer was involved in a matter adverse to a general partnership. Lawyer met with one of the partners without notifying the lawyer for the partnership. The partnership moved to disqualify Lawyer for violating Rule 4.2. The trial judge granted the motion. In this opinion the Mississippi Supreme Court reversed the trial judge. The partner involved swore that she did not retain the lawyer for the partnership to represent her individually. In brief, the court found that a lawyer for a general partnership does not, without more, represent the individual partners. Thus, Lawyer, in meeting with the partner, was not meeting with a represented person, and thus not violating Rule 4.2. SETTLEMENT AGREEMENTS (To read full article, click here.) Nothing current. STANDING (To read full article, click here.) Nothing current. 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. Home/Table of Contents Website powered by Network Solutions® |
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