Opinion
No. CV 04-0834591
August 31, 2005
DECISION ON PLAINTIFF'S APRIL 22, 2005 MOTION TO DISQUALIFY
Pursuant to an April 22, 2005 motion, the plaintiff, Innovative Financial Services, LLC ("IFS") has moved to disqualify the Defendant Law Office of William A. Snider, LLC a/k/a The Law Barn, Inc. ("Law Office") from representing defendant Dawn Angel in this case.
IFS bases its motion on two arguments. First, it claims that the Law Office has represented another client whose interests are directly adverse to Ms. Angel's, in violation of Rules 1.7(a)(1) and 1.9 of the Connecticut Rules of Professional Conduct. Second, it claims that the Law Office's representation of Ms. Angel is limited by its own interest, as well as the interest of its owner, defendant William A. Snider, in violation of Rule 1.7(b).
These rules provide as follows:
Rule 1.7. Conflict of Interest: General Rule
(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
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(1) The lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) Each client consents after consultation.
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless:
(1) The lawyer reasonably believes the representation will not be adversely affected; and
(2) The client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.Rule 1.9. Conflict of Interest: Former Client
A lawyer who has formerly represented a client in a matter shall not thereafter:
(1) Represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation; or
(2) Use information relating to the representation to the disadvantage of the former client except as Rule 1.6 would permit with respect to a client or when the information has become generally known.
Oral argument was held on June 21, 2005. Following argument, the Court ordered the parties to submit additional memoranda, which has been done. Further argument was held on August 22, 2005. Having considered the full record, the Court concludes that the motion should be denied, without prejudice to it being renewed at a later time.
Factual Background
The facts relevant to the decision in this case are as follows.
IFS provides outsourced booking, accounting and administrative services to various businesses. Defendant Dawn Angel, formerly employed by IFS, entered into employment contracts with IFS. IFS and Angel also signed a non-compete agreement that prohibited her from working for an IFS client for a year after leaving IFS. Similar agreements were signed by coworker Shelly Anne Urban a/k/a Shelly Cox.
According to plaintiff, Urban and Angel resigned from IFS on a Friday and started working for the defendant The Law Office the following CT Page 11768-kl Monday. IFS informed Urban that it believed she was in violation of her contracts with IFS and alleges that it informed defendant William A. Snider of the existence of the agreements with Urban. Only later, IFS asserts, did it learn that Angel also had left IFS to work for The Law Office.
IFS initially brought suit against Urban, Snider, and the Law Office of William A. Snider, LLC. Docket No. CV 04-0832322S. On February 23, 2005, Judge Wagner issued a ruling in that case and made factual findings. Judge Wagner ruled against the Law Office and Snider, found that Urban violated the employment agreement, and also concluded that Urban had not violated the non-compete agreement because "Urban's employment with Law Office has not been proven to be similar to that in which Urban engaged while an employee of IFS . . ." However, ira deposition, Urban testified that Dawn Angel was doing some of the work for her new employer that IFS previously did.
Judge Wagner ordered that punitive damages be awarded against Snider and The Law Office after concluding that they had engaged in tortious interference with a contractual relationship and fraud.
The defendants in this case are Dawn Angel, William A. Snider, and Law Office of William A. Snider.
Concerned that the Court lacked sufficient information about the relationship between present counsel for the defendants — Toce Associates, LLC — and Snider and The Law Office, the Court ordered counsel for the defendants to file a supplemental memorandum clarifying the nature of the relationship. According to the July 6, 2005, supplemental memorandum, on or about April 27, 1999, William A. Snider formed The Law Offices of William A. Snider, LLC. On or about January 1, 2004, The Law Office of William A. Snider was changed from a member/owner limited liability company to an S-Corporation, most recently known as The Law Barn, P.C. On or about February 15, 2005, Snider was suspended from the practice of law for a period of nine months. Following Snider's suspension, according to the July 6, 2005 Supplemental Memorandum, Danielle B. Toce, an attorney employed by The Law Office of William A. Snider and the subsequent Law Barn created a successor entity, Toce Associates, LLC. Snider is not presently practicing law and, according to the memorandum, has no financial interest in Toce Associates. The memorandum states on page three: "Although the parties cannot predict the future, there has been no indication that Snider will be actively involved with Toce Associates, LLC upon the conclusion of his suspension." Plaintiff in its July 12, 2005, reply memorandum, argues that the Toce firm is legally distinguishable from the Law Office; that the Toce firm is only a "temporary steward" of the Law office's files; and that the Toce firm, as a successor entity of the law office, should be disqualified. CT Page 11768-km
It is noted that Dawn Angel executed a dual representation form, which is attached to the July 6, 2005, supplemental memorandum. It is further noted that on August 22, 2005, Attorney Alison Lanone of Toce Associates indicated that she was representing Ms. Urban on appeal.
Legal Analysis
It is axiomatic that motions to disqualify counsel must be evaluated with extreme caution in light of the client's strong interest in being represented by counsel of his or her choice, and to avoid permitting such motions to be used to gain unfair tactical advantage in a case. American Heritage Agency, Inc. v. Gelinas, 62 Conn.App. 711, 725 (2001). (Courts must be solicitous of client's right to freely select counsel of choice.) The moving party bears the burden of demonstrating facts that indicate that disqualification is necessary. Somers Associates v. Kendall, 2001 Ct.Super 3132-be (J.D. of Windham at Putnam Feb. 23, 2001). At the same time, "when a client engages the services of a lawyer in a given piece of business, he is entitled to feel that, until the business is finally disposed of in some manner, he has the undivided loyalty of one upon whom he looks as his advocate and his champion." Grievance Committee v. Rottner, 152 Conn. 59, 65 (1964).
The commentary to Rule 1.7 states as follows in relevant part:
Consultation and Consent. A client may consent to CT Page 11768-kp representation notwithstanding a conflict. However, as indicated in subsection (a)(1) with respect to representation directly adverse to a client and subsection (b)(1) with respect to material limitations on representation of a client, when a disinterested lawyer would conclude that the client should not agree to the representation under the circumstances, the lawyer cannot properly ask for such agreement or provide representation on the basis of the client's consent. When more than one client is involved, the question of conflict must be resolved as to each client. (Emphasis added.)
Lawyer's interests. The lawyer's own interests should not be permitted to have adverse effect on representation of a client. For example, a lawyer's need for income should not lead the lawyer to undertake matters that cannot be handled competently and at a reasonable fee. See Rules 1.1 and 1.5. If the probity of a lawyer's own conduct in a transaction is in serious question it may be difficult or impossible for the lawyer to give a client detached advice. A lawyer may not allow related business interests to affect representation, for example, by referring clients to an enterprise in which the lawyer has an undisclosed interest.
Rule 1.10. Imputed Disqualification: General Rule
(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7, 1.8(c), 1.9 or 2.2.
(b) When a lawyer becomes associated with a firm, the firm may not knowingly represent a person in the same or a substantially related matter in which that lawyer, or a firm with which the lawyer was associated, had previously represented a client whose interests are materially adverse to that person and about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(2) that is material to the matter.
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(c) When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer unless:
(1) The matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and
(2) Any lawyer remaining in the firm has information protected by Rules 1.6 and 1.9(2) that is material to the matter.
(d) A disqualification prescribed by this Rule may be waived by the affected client under the conditions stated in Rule 1.7.
The commentary to Rule 1.10 states as follows, in relevant part:
Lawyers Moving Between Firms. When lawyers have been associated in a firm but then end their association, however, the problem is more complicated. The fiction that the law firm is the same as a single lawyer is no longer wholly realistic. There are several competing considerations. First, the client previously represented must be reasonably assured that the principle of loyalty to the client is not compromised. Second, the rule of disqualification should not be so broadly cast as to preclude other persons from having reasonable choice of legal counsel. Third, the rule of disqualification should not unreasonably hamper lawyers from forming new associations and taking on new clients after having left a previous association. In this connection, it should be recognized that today many lawyers practice in firms, that many to some degree limit their practice to one field or another, and that many move from one association to another several times in their careers. If the concept of imputed disqualification were defined with unqualified rigor, the result would be radical curtailment of the opportunity of lawyers to move from one practice setting to another and of the opportunity of clients to change counsel.
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Reconciliation of these competing principles in the past has been attempted under two rubrics. One approach has been to seek per se rules of disqualification. For example, it has been held that a partner in a law firm is conclusively presumed to have access to all confidences concerning all clients of the firm. Under this analysis, if a lawyer has been a partner in one law firm and then becomes a partner in another law firm, there is a presumption that all confidences known by a partner in the first firm are known to all partners in the second firm. This presumption might properly be applied in some circumstances, especially where the client has been extensively represented, but may be unrealistic where the client was represented only for a limited purpose. Furthermore, such a rigid rule exaggerates the difference between a partner and an associate in modern law firms.
The other rubric formerly used for dealing with vicarious disqualification is the appearance of impropriety proscribed in Canon 9 of the ABA Model Code of Professional Responsibility. This rubric has a twofold problem. First, the appearance of impropriety can be taken to include any new client-lawyer relationship that might make a former client feel anxious. If that meaning were adopted, disqualification would become little more than a question of subjective judgment by the former client. Second, since "impropriety" is undefined, the term "appearance of impropriety" is question-begging. It therefore has to be recognized that the problem of imputed disqualification cannot be properly resolved either by simple analogy to a lawyer practicing alone or by the very general concept of appearance of impropriety.
A rule based on a functional analysis is more appropriate for determining the question of vicarious disqualification. Two functions are involved: preserving confidentiality and avoiding positions adverse to a client . . .
Adverse Positions. The second aspect of loyalty to a client is the lawyer's obligation to decline subsequent representations involving positions adverse to a former CT Page 11768-ks client arising in substantially related matters. This obligation requires abstention from adverse representation by the individual lawyer involved, but properly entail abstention of other lawyers through imputed disqualification. Hence, this aspect of the problem is governed by Rule 1.9(1). Thus, if a lawyer left one firm for another, the new affiliation would not preclude the firms involved from continuing to represent clients with adverse interests in the same or related matters, so long as the conditions of subsections (b) and (c) concerning confidentiality have been met.
The trial court has broad discretion to determine whether there exists a conflict of interest that would warrant disqualification of an attorney. Disqualification of counsel is a remedy that serves to enforce the lawyer's duty of absolute fidelity and to guard against the danger of inadvertent use of confidential information . . . In disqualification matters, however, [the court] must be solicitous of a client's right freely to choose his counsel . . . mindful of the fact that a client whose attorney is disqualified may suffer loss of time and money in finding new counsel and may lose the benefit of its longtime counsel's specialized knowledge of its operations . . . The competing interests at stake in the motion to disqualify, therefore, are: (1) the [movant's] interest in protecting confidential information; (2) the plaintiffs' interest in freely selecting counsel of their choice; and (3) the public's interest in the scrupulous administration of justice." (Citations omitted; internal quotation marks omitted.) Bergeron v. Mackler, 225 Conn. 391, 397-98 (1993).
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The motion is denied, without prejudice to its renewal at a later date, for the following reasons.
First, on the present record, it is not clear that Urban and Angel are in an adverse posture toward each other. Plaintiff claims that Urban's deposition testimony necessarily puts her in an adverse posture on a key issue; but Attorney Lanoue disputes this, arguing that her two clients are not in an adverse posture. It is very difficult to determine, on the present record, the extent to which Urban and Angel's positions are at odds. In the absence of a clear indication that their positions are unambiguously adverse, this argument for disqualification must fail.
Second, while plaintiff argues that Toce Associates is merely a "temporary steward" of The Law Office's files, this may or may not be so. Again, the Court finds it difficult to determine, with any degree of certainty, that this is the case. Despite the past history and the fact that Toce Associates is a successor entity to The Law Office, the Court cannot conclude that it is simply a "temporary steward."
In sum, the Court concludes that while there are indeed potential concerns which justify plaintiff's motion, these concerns have not yet ripened to the point where Ms. Angel should be deprived of her chosen counsel. The motion to disqualify is therefore premature and is denied.
However, additional discovery, or future developments, may result in changed circumstances. For instance, should further discovery reveal that Urban's posture and Angel's posture are unambiguously adversarial, plaintiff may renew its motion. Or should Snider become involved with Toce Associates, a renewed motion might be appropriate.
Attorney Lanoue is ordered to bring this decision to Ms. Angel's attention.
Douglas S. Lavine
Judge, Superior Court