Risk Update

Law Firm Conflicts — Recent Developments, Decisions and Disqualification Motions

Posted Dan Bressler

A few updates from the always reading, always watching Bill Freivogel:

  • Former Client; Consent; Allen v. The Hanover Ins. Group, No. 2:19-cv-12024 (E.D. Mich. Jan. 14, 2021).
    • In an auto accident, Allen was a passenger, and Watts was the driver. In this case, Allen, represented by Keel, sued Watts for injuries.
    • Initially, Keel had represented Watts in two matters arising out of the accident. One was defending Watts in a drunk driving charge. The other was a dispute with Watts’ under-insured motorist carrier. Those got resolved quickly, with little activity, and Keel’s representation of Watts ceased.
    • Keel then filed this case against Watts. Watts moved to disqualify Keel.
    • In this opinion the court denied the motion. First, Watts, after seeking the advice of another lawyer, signed a waiver of Keel’s conflict, enabling Keel to sue Watts. The court noted that although Watts was not a lawyer, the situation was not “complex,” and Watts had been advised about the waiver by another lawyer. As to Rule 1.9(c), Keel had used Watts’ drunk driving guilty plea in a summary judgment motion in this case, but that was “public record” or generally known.
  • Corporation; Passage of Time as Waiver; Hanson v. CBS Constr. Servs., Inc., No. A20-0157 (Minn. App. Jan. 11, 2021).
    • Hanson and Bestul joined in the formation of an investment business LLC. Bestul brought in his lawyer (“Lawyer”) to give advice and handle the documentation.
    • In the early days of this representation Lawyer had several contacts with Hanson at which times Lawyer may have given advice to Hanson and received Hanson’s confidences. After several of these contacts, Lawyer told Hanson that Lawyer was not representing her.
    • Hanson brought this case against Bestul and another company for “discrimination and self-dealing.” Lawyer appeared for Bestul. Hanson moved to disqualify Lawyer. The trial court granted the motion.
    • In this opinion the appellate court affirmed, saying, among other things, that Lawyer had been Hanson’s lawyer until he said he was not.
    • The court also said the trial court was reasonable in finding that Lawyer’s work for Hanson was substantially related to this case. Bestul claimed that Hanson waived the conflict by waiting “more than 600 days” to file the motion to disqualify. The court held that by objecting several times to Lawyer’s involvement during the 600 days, that was evidence that Hanson did not intend to waive the conflict.

“Goldberg Segalla Seeks To Duck DQ In Elevator IP Row” —

  • “Goldberg Segalla LLP has pushed back against a bid by the U.S. arm of a German elevator company to toss the firm from a patent infringement case in Texas, arguing that its defense of the New Jersey-based subsidiary’s subcontractor in a separate personal injury case is insufficient reason for disqualification.”
  • “The Western District of Texas should allow Murolet IP LLC to keep Goldberg Segalla as its counsel in the litigation against Schindler Holding Ltd. even as the firm is representing a subcontractor that Schindler Elevator Corp. agreed to indemnify after a worker was injured, according to Tuesday’s opposition brief.”
  • “‘In a calculated tactical move aimed at depriving Murolet of its chosen counsel, SEC appears in this action, but only as a non-party,’ according to the response to the disqualification bid. ‘SEC’s gamesmanship cannot deprive Murolet of its chosen counsel.'”
  • “Schindler Elevator sought in December to disqualify Goldberg Segalla, arguing that the firm should not be allowed to represent the subsidiary in one court while concurrently counseling a client that is suing the parent company in another court, according to its motion for disqualification.”
  • “‘That position is legally and ethically indefensible,’ Schindler Elevator told the court. ‘The conflict here is clear, and the court should disqualify Goldberg Segalla from continuing to represent Murolet in this case.'”