Risk Update

(DQ Week) Disqualifications, Done (Side-switchers and Firms Fighting Themselves)

Closing the circle, we reach “Done.” First up, the day after : “Disqualified Attorney Reprimanded” —

  • “In a complaint certified to the Board of Professional Conduct on November 30, 2017, relator, Cleveland Metropolitan Bar Association, alleged that Hackerd committed several ethical violations by representing the former spouse of a former client in a child-custody case and opposing the former client’s motion to disqualify him from that representation.”
  • [Ed: Fascinating that the opposition to a motion was flagged as an additional ethical violation.]
  • “Sanction. ‘Based on our independent review of the record in this case and our precedent, we agree that Hackerd’s continued representation of Mr. Krenn in violation of the trial court’s disqualification order violated Prof.Cond.R. 8.4. Given this single rule violation, the absence of any aggravating factors, and the presence of significant mitigating factors, we agree that a public reprimand is the appropriate sanction in this case.'”

Next: “HCCA successfully moves to disqualify Southern Inyo bankruptcy attorney” —

  • “Judge Frederick E. Clement ruled on April 10 that Ashley McDow and the law firm Foley & Lardner, which she works for, would be disqualified in the district’s bankruptcy case after HCCA argued that her prior work on HCCA matters represented a conflict of interest.”
  • “‘I would direct the Court’s attention to the August 29 hearing, where Ms. McDow asked this court to order the parties to mediation, in which she made numerous negative statements about her former clients, accusing them of bad faith, accusing them of failing to provide information as necessary, accusing them of slowing down the bankruptcy proceeding,’ Brandon Krueger, a legal malpractice attorney representing HCCA, said during the April 10 proceeding.”
  • “McDow had previously worked for the Baker Hostetler law firm, including on matters related to the Management Services Agreement, the main contract between HCCA and the Southern Inyo district.”
  • “The Baker Hostetler firm was preferred by HCCA and its CEO, Dr. Benny Benzeevi, until Bruce Greene, an attorney with the firm, wrote in September 2017 that it would “commence termination” of its services to him and any of his companies. Billing statements show that McDow billed HCCA 37.2 hours for activity related to Southern Inyo, Krueger said. Those hours included negotiations with Southern Inyo regarding the contract.”

And finally, for firms fighting internally: “Fifty-Percent Owner of Partnership Has Standing to Seek Disqualification of Partnership Counsel to Protect Partnership Interests” —

  • ” A general partner has standing to seek disqualification of an attorney who was being paid and directed by the other general partner. Further, the trial court did not abuse its discretion by ordering the disqualification, because the representation may not have been in the partnership’s best interest.”
  • “The appellate court determined General Partner 2 had standing to seek the attorney’s disqualification despite the fact that General Partner 2 did not have a current or former attorney-client relationship with the attorney. The disqualification motion was based on the attorney’s lack of authority to act on behalf of the partnership, as opposed to disqualification based on a conflict of interest which would require a current or former attorney-client relationship.”
  • ” Significance of Decision. Lawyers and law firms should have a baseline understanding of the partnership’s requisite authority to hire counsel prior to consenting to represent the partnership. This baseline inquiry and understanding will minimize the likelihood of a lawyer or law firm consenting to represent a partnership without the proper authorization from the partnership and risking a dispute and potential disqualification at a later date.”