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FREIVOGEL ON CONFLICTS WHAT'S NEW Home/Table of Contents 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 16, 2019) Youngevity Int'l v. Smith, 2019 WL 2918161 (S.D. Cal. July 5, 2019). In this Lanham Act case Plaintiff moved to exclude expert testimony of Expert, primarily on Daubert grounds. One basis for the motion was that Expert was an owner of a related company. In denying the motion, the court said whether Expert has a conflict "goes to the weight and credibility" of his testimony, "rather than its admissibility." [Our note: Almost all expert disqualifications turn on the expert's current or former relationship with the opposing party. In those cases admissibility is the test.] Insurance Defense; Excess Verdict Probable (posted July 16, 2019) Magnetek, Inc. v. The Travelers Indem. Co., 2019 WL 3037080 (N.D. Ill. July 11, 2019). Insured sued InsCo for defense and indemnification. In this opinion, among other findings, the court held Insured could control its defense in related litigation because Insured's exposure in that litigation "far exceed the policy limits." Conflict Uncategorized (posted July 10, 2019) Stevenson v. Stanyer, 2019 WL 2895378 (Wash. App. Unpub. July 3, 2019). Lawyer prepared estate plan for Decedent. Upon Decedent's death, Beneficiaries realized arguably negative tax treatment, given the structure of the plan. The PR of the estate brought this suit against Lawyer for malpractice. The trial court denied Lawyer's motion for summary judgment. In this opinion the appellate court reversed. It held that an estate planning lawyer has no duty to beneficiaries to address their tax consequences unless the lawyer is explicitly directed to do so. One of the reasons is that a contrary holding "could easily create a conflict of interest" for a lawyer attempting to represent the interests of both the testator and the beneficiary (citing no authority). 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.] 4.2 (posted June 19, 2019) Doe v. Superior Court, 2019 WL
2480029 (Cal. App. June 13, 2019). This is a suit for sexual harassment
and sexual assault against College and several employees. One of
Plaintiff's lawyers ("Lawyer") contacted a female employee (not a party)
of College about her experience in an alleged similar matter.
Defendants moved to disqualify Lawyer for violating California Rule 4.2.
California has seemingly codified Comment [7] of ABA Rule 4.2 as
California Rule 4.2(b)(2). The trial court granted the motion. In this
opinion the appellate court reversed (granted mandamus). The court held
that the interviewed employee was not in a position to bind College or
impute liability to College as required by Rule 4.2(b)(2). CONFLICTS - UNCATEGORIZED [Note: These, too, will appear at the This and That pages.] (posted July 10, 2019) Stevenson v. Stanyer, 2019 WL 2895378
(Wash. App. Unpub. July 3, 2019). Lawyer prepared estate plan for
Decedent. Upon Decedent's death, Beneficiaries realized arguably
negative tax treatment, given the structure of the plan. The PR of the
estate brought this suit against Lawyer for malpractice. The trial court
denied Lawyer's motion for summary judgment. In this opinion the
appellate court reversed. It held that an estate planning lawyer has no
duty to beneficiaries to address their tax consequences unless the
lawyer is explicitly directed to do so. One of the reasons is that a
contrary holding "could easily create a conflict of interest" for a
lawyer attempting to represent the interests of both the testator and
the beneficiary (citing no authority). Nothing current. BANKRUPTCY (To read full article, click here) (posted June 28, 2019) In re Kretchmar, 2019 WL 2612731 (W.D.
Okla. June 25, 2019). Chapter 7. Law Firm is representing both the
trustee and the estate's largest creditor ("Creditor") in making various
claims against Debtor's parents and a farm partnership, in which Debtor
is a partner. This includes a claim that the farm should be
substantively consolidated with Debtor for purposes of this estate. The
parents moved to disqualify Law Firm, in part because it has a conflict
of interest. In a fact intensive analysis the court found that the
trustee's and Creditor's interests were aligned. Nothing current. BOARD POSITIONS (To read full article, click here.) Nothing current. CHANGING FIRMS - SCREENING (To read full article, click here.) Non-Lawyer (posted June 29, 2019) Abt v. Abt, 2019 ABQB 454
(CanLII)(Ct. Q.B. Alb. June 21, 2019). Matrimonial matter. Lawyer No. 1
represented W for 15 months until he became a judge. Lawyer 1's legal
assistant ("LA") was with him that entire time. LA worked on that file
and communicated with W. LA worked for H's lawyer, Lawyer No. 2, for
three weeks earlier this year and had "direct involvement" with H's
file. W moved to disqualify Lawyer No. 2. In this opinion the court
denied the motion. LA swore she remembered nothing about the case from
her time with Lawyer No. 1. Lawyer No. 2 declared that he learned
nothing about the case from LA. CLASS ACTIONS (To read full article, click here.) Nothing current. Nothing current. CO-COUNSEL/COMMON INTEREST (To read full article, click here.) Nothing current. COMMERCIAL NEGOTIATIONS (To read full article, click here.) (posted June 21, 2019) Wagner v. Gould, 2019 WL 2524600 (Pa. App.
June 19, 2019). To read about the case, go to Malpractice Liability, below. CORPORATIONS (To read full article, click here.) CORPORATE FAMILIES (To read full article, click here.) 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. (posted July 3, 2019) Sarkis v. Angels Gun Club, 2019 WL 2754767
(Cal. App. Unpub. July 2, 2019). Gun Club is a "nonprofit mutual benefit
corporation" with 17 directors. Gun Club expelled Sarkis as a member.
Sarkis, in turn, sued Gun Club and Director No. 1 directly for unlawful
expulsion ("Direct Action"). Law Firm appeared for both defendants in
the Direct Action. Sarkis then filed a derivative action against Gun
Club and most of the board members, including Director No. 1
("Derivative Action"). In the Derivative Action Law Firm appeared for
Gun Club only, and another firm appeared for the director defendants
(including Director No. 1). Sarkis moved to disqualify Law Firm in both
actions. The trial court granted both motions. In this opinion the
appellate court reversed as to the Direct Action, holding that Sarkis
had no standing to bring the motion. As to the Derivative Action, the
appellate court affirmed the trial court, holding that Law Firm should
be disqualified. Put simply - perhaps too simply - the court could not
see how Law Firm could look out for the interests of Gun Club in the
Derivative Action when it was representing Director No. 1 as a defendant
in the Direct Action. [Our note: This opinion contains an extensive
discussion of conflicts in derivative actions. And, while we do not know
enough to know whether the discussion is correct on all points, we are
puzzled why it was deemed "Not to Be Published."] 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 16, 2019) Youngevity Int'l v. Smith, 2019 WL 2918161
(S.D. Cal. July 5, 2019). In this Lanham Act case Plaintiff moved to
exclude expert testimony of Expert, primarily on Daubert grounds.
One basis for the motion was that Expert was an owner of a related
company. In denying the motion, the court said whether Expert has a
conflict "goes to the weight and credibility" of his testimony, "rather
than its admissibility." [Our note: Almost all expert
disqualifications turn on the expert's current or former relationship
with the opposing party. In those cases admissibility is the test.] (posted June 19, 2019) Annie Sloan Interiors, Ltd. v. Kappel,
2019 WL 2492303 (E.D. La. June 14, 2019). Defendant, a lawyer, formerly
did trademark work for Plaintiff, Annie Sloan Interiors ("ASI"),
including registering and defending the CHALK PAINT® trademark. After
that representation terminated, Defendant began representing another
client and attacked that same trademark. ASI brought this suit against
Defendant for breach of fiduciary duty. Defendant moved to dismiss. In
this opinion the court denied the motion, relying primarily on Louisiana
Rule 1.9 (appears to be the same as MR 1.9). It remains to be seen, as
the case plays out, the extent to which, if any, confidentiality plays a
role in this case. (posted June 18, 2019) Jose Luis Pelaez, Inc. v. McGraw-Hill Global Educ. Holdings LLC,
366 F. Supp. 3d 567 (S.D.N.Y. March 13, 2019). Pelaez is suing McGraw-Hill ("M-H") for
photo copyright infringement. Pelaez' expert ("Expert") worked for M-H for several years. Her duties included determining whether certain
of M-H's activities infringed copyrights. After leaving M-H, Expert
agreed to be an expert for Pelaez' law firm ("Law Firm"). In another
similar case against M-H, hiring Expert got Law Firm disqualified, Grant Heilman Photography, Inc. v. McGraw-Hill Global Educ. Holdings, LLC,
2018 WL 2065060 (E.D. Pa. May 2, 2018). M-H moved to disqualify Law
Firm in this case, relying heavily on the earlier case. In this opinion
the court denied the motion, seeing differences between the two
situations. Among other things, the court noted that Expert did not
begin work at M-H until after the transactions in question occurred, and
left M-H two months before this case was filed. The court also rejected
M-H's "playbook" arguments. Finally, the court said that the motion to
disqualify "carries the whiff of tactical maneuvering." FORMER CLIENT (To read full article, click here.) (posted June 19, 2019) Annie Sloan Interiors, Ltd. v. Kappel,
2019 WL 2492303 (E.D. La. June 14, 2019). Defendant, a lawyer, formerly
did trademark work for Plaintiff, Annie Sloan Interiors ("ASI"),
including registering and defending the CHALK PAINT® trademark. After
that representation terminated, Defendant began representing another
client and attacked that same trademark. ASI brought this suit against
Defendant for breach of fiduciary duty. Defendant moved to dismiss. In
this opinion the court denied the motion, relying primarily on Louisiana
Rule 1.9 (appears to be the same as MR 1.9). It remains to be seen, as
the case plays out, the extent to which, if any, confidentiality plays a
role in this case. (posted June 28, 2019) Goff v. Goff, 2019 WL 2607258 (Fla. App.
June 26, 2019). Post-dissolution proceeding. W moved to disqualify H's
lawyer ("Lawyer"). Lawyer has known H since H was a child. Lawyer also
became a friend to W after H and W married. Lawyer represented W once,
in a dispute with W's sister. The trial court granted the motion to
disqualify. In this opinion the appellate court reversed. First, the
court held that W's dispute with her sister was not related to this
post-dissolution proceeding. Second, the court noted that W's financial
affairs were fully disclosed in the dissolution proceedings, so nothing W
might have disclosed to Lawyer earlier remained confidential. 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.) Excess Verdict Probable (posted July 16, 2019) Magnetek, Inc. v. The Travelers Indem. Co.,
2019 WL 3037080 (N.D. Ill. July 11, 2019). Insured sued InsCo for
defense and indemnification. In this opinion, among other findings, the
court held Insured could control its defense in related litigation
because Insured's exposure in that litigation "far exceed the policy
limits." INVESTING IN CLIENTS/STOCK FOR FEES (To read full article, click here.) Nothing current. JOINT/MULTIPLE REPRESENTATION (To read full article, click here.) Nothing current. Nothing current. Nothing current. MALPRACTICE LIABILITY/FEE FORFEITURES (To read full article, click here.) (posted June 21, 2019) Wagner v. Gould, 2019 WL 2524600 (Pa. App.
June 19, 2019). Lawyer represented both Buyer and Seller in a sale of a
"residential investment property." Because Lawyer caused Seller to lose
security in the transaction, Seller sued Lawyer. In a bench trial the
trial court found for Seller and entered judgment against Lawyer in the
amount of security lost, $500,000. In this opinion the appellate court
affirmed. The court really did not focus on Lawyer's conflict of
interest, but rather on Lawyer's ineptitude in dealing with the
security. Nevertheless, the case is an illustration of the hazards to a
lawyer who attempts to represent both parties in a real estate sale of
any complexity. 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.) Nothing current. SETTLEMENT AGREEMENTS (To read full article, click here.) Nothing current. STANDING (To read full article, click here.) (posted July 3, 2019) Sarkis v. Angels Gun Club, 2019 WL 2754767
(Cal. App. Unpub. July 2, 2019). Court required standing. To read about the case, go to "Derivative Actions," above. (posted June 26, 2019) State Farm Mut. Auto. Ins. Co. v. Elite Health Centers, Inc.,
2019 WL 2576360 (E.D. Mich. June 24, 2019). State Farm has two law
firms, Firm 1 and Firm 2, the latter being "local counsel." When State
Farm first sought the deposition of Joshua Katke (a non-party), Katke
complained that Firm 2, local counsel for State Farm, was his lawyer on
other matters. State Farm later dropped the attempt to depose Katke.
Nevertheless, the defendants moved to disqualify Firm 1 and Firm 2,
because of possible misuse of Katke's confidences. In this opinion the
court denied the motion because the moving parties could not show that
they were ever clients of the firms. The court did discuss the
unlikelihood that any harmful exchanges of confidences would occur. Nothing current. UNDERLYING WORK PROBLEM (To read full article, click here.) Nothing current. WAIVERS/CONSENTS (To read full article, click here.) Passage of Time as Waiver (posted June 26, 2019) City of Fresno v. United States,
2019 WL 2536106 (Fed. Ct. Cl. June 19, 2019). This is a suit by a group
of water users ("Group 1") against the U.S. over Group 1's entitlement
to water. Another group of users ("Group 2") moved to intervene to take
positions adverse to Group 1. Law Firm represents Group 2. Group 1 moved
to disqualify Law Firm because Law Firm currently represents a member
of Group 1 on matters unrelated to this case, and because Law Firm
formerly represented members of Group 1 on water allocation issues. In
this opinion the court denied the motion because of Group 1's delay in
making the motion. This suit started in October 2016. Law Firm filed
Group 2's motion to intervene in May 2017. Group 1 began demanding that
Law Firm withdraw in August 2018 and filed the motion to disqualify that
month. Law Firm started appearing for Group 2 adverse to Group 1 on
water allocation matters as early as 2014. Given all this, the court
ruled that Group 1 simply waited too long to bring their motion. The
court did discuss the current client and alleged former client
conflicts, presumably to establish that no harm resulted from them. The
court also discussed Law Firm's long-time (and expensive) representation
of Group 2, including the expertise on water allocation matters Law
Firm developed during that representation. WITNESS - ADVERSE - CURRENT/FORMER CLIENT (To read full article, click here.) Nothing current. Home/Table of Contents Website powered by Network Solutions® |