Risk Update

Conflicts and Disqualficiation Decisions — DQ Appealed, Freivogel Findings (Estate, Chapter 11, Malpractice Matters & More)

Attorneys – Disqualification Appeals Court (Unpublished) [Massachusetts]” —

  • “Where (1) a plaintiff sued the defendant, her husband, seeking separate support and (2) the defendant filed a motion to disqualify the plaintiff’s attorney from continuing to represent her, the defendant fell well short of meeting his burden of establishing the requirements necessary to disqualify the plaintiff’s counsel, so a judge’s decision to allow the motion must be reversed.”
  • “‘The Probate and Family Court judge granted the defendant’s motion, seemingly on the ground that, because the plaintiff’s attorney had previously represented the parties jointly in the defendant’s adoption of the plaintiff’s minor child, a conflict of interest in violation of Mass. R. Prof. C. 1.9(a), as amended, 490 Mass. 1305 (2022), existed. The plaintiff appeals from that decision. Concluding that the attorney should not have been disqualified, we reverse.'”
  • “‘In this instance, we conclude that the judge abused his discretion by granting the defendant’s motion to disqualify. In order to grant the motion, the judge was required to consider both branches of the substantial relationship test… It is a foregone conclusion that the first branch, inquiring whether ‘the current representation [is] adverse to the interests of the former client was satisfied, as the parties oppose each other in the present case… The judge was therefore required to turn to the second branch and consider whether the previous matter was ‘substantially related’ to the present matter such that disqualification was appropriate.'”
  • “‘Such an analysis is ‘intensely fact specific.’ Coke v. Equity Residential Props. Trust, 440 Mass. 511, 516 (2003). Here, however, there was no evidence offered in support of the motion. The defendant did not file an affidavit or other documentary evidence, and, although a hearing was held, neither party nor any other witness testified. The only support the defendant offered was a brief and conclusory statement by his attorney at the hearing that ‘there [are] some issues between [the defendant] and that particular child in this case, and so that … is going to be … extremely relevant as to parenting schedule, custody, in this case.’ We are left to wonder, as was the judge below, what those issues could be, how they could become relevant in the present case, or, indeed, what information plaintiff’s counsel possessed about them. … The defendant did not provide an answer to those questions in any of his filings or in his statements before the judge. … Without more, we agree with the plaintiff that the judge abused his discretion by granting the scantly supported motion.'”

As always, with thanks to Bill Freivogel, some of his latest findings:

In re De Cotiis Estate, 2024 BCSC 1024 (CanLII) (S. Ct. B.C. June 13, 2024).

  • “Lawyer is representing an heir in an estate proceeding. Lawyer came upon a trove of decedent’s documents in a questionable manner. Notwithstanding that it is highly likely that a number of the documents were solicitor-client communications and subject to privilege protection, Lawyer willy-nilly began using them, and publicizing them, in the estate proceeding and otherwise.”
  • “As a result, in this opinion, describing Lawyer’s conduct as “egregious,” the court disqualified Lawyer and his law firm from representing anything or anyone connected to the proceeding. Good summary of Canadian law on misuse of privileged information.”

In re Doug Gross Constr., Inc., No. 24-20166-PRW (W.D.N.Y. June 13, 2024).

  • “Chapter 11 Debtor applied to retain Law Firm A as debtor’s counsel. The U.S. Trustee objected. In this opinion the bankruptcy judge granted the application. The problem is that Law Firm A has merged with, Law Firm B. Firm B previously represented the debtor’s principal on tax matters, and the principal is a creditor of the estate. Law Firm B had ceased representation of the principal before the merger.”
  • “The court said that the disinterested standard under Sec. 327(a) of the Code is a present one, and because Law Firm A does not represent the principal at present, the standard is met. The court was critical of Law Firm A for the slip-shod way it disclosed these relationships.”

Sanfilippo v. Csombo, 2024 QCCS 1855 (Que. Super. Ct. May 21, 2024).

  • “Minority shareholders (“MSs”) are suing Husband and Wife derivatively on behalf of Corporation, claiming in effect, that H and W are looting Corporation. Wife is the majority shareholder and sole director of Corporation, and she has put Husband in charge of Corporation.”
  • “Law Firm purports to represent H and W and Corporation in this case. MSs moved to disqualify Law Firm. In this opinion the court held Law Firm may not represent Corporation in this case and ordered the parties to agree on ‘new corporate counsel” for Corporation.”
  • “The shareholders agreement could be interpreted to make MSs mere employees, but they are, nevertheless, shareholders, and W and H owed them fiduciary duties. Thus, Law Firm, representing Corporation, would have a conflict of interest.”
  • “The court made clear that it was addressing only the conflict and not the merits of the case. The court did, however, find that there was prima facie evidence of H and W’s oppressive misconduct, thus leading to the conflict finding.”

Loepp v. Ford, 2024 WL 2952208 (Wyo. June 12, 2024).

  • “Lawyer malpractice case. The trial court granted the defendants’ motion for summary judgement because the plaintiff’s standard-of-care expert was a California lawyer. In this opinion the Wyoming Supreme Court reversed and remanded.”
  • “The opinion appears to be a pretty good review of authorities nation-wide.”