Opinion
CIVIL ACTION NO: 01-2720.
April 23, 2002
HEARING ON MOTIONS
APPEARANCES: Submitted on briefs
MOTIONS:
DEFENDANTS' MOTION FOR EXPEDITED HEARING OF MOTION TO DISQUALIFY COUNSEL
At the time of the preparation of this minute entry the Clerk had not assigned document numbers to these motions.
GRANTED
DEFENDANTS' MOTION TO DISQUALIFY COUNSEL
DENIED
Two of the defendants, Lawrence A. Cohen ("Cohen") and Ringler Associates Boston, Inc. ("Ringler"), move to disqualify Joseph G. Glass ("Glass") as counsel for the plaintiffs, Michelle Crutchfield, individually and as natural tutrix and legal guardian of Samantha Lois-Joann Cooper-Crutchfield, Shirley Birtau, as natural tutrix and legal guardian of Samuel Lynel Crutchfield and Ke Shana Lanaice Crutchfield, and Aaron Thomas Dread. Cohen and Ringler seek expedited consideration of their motion to disqualify and that motion is granted.
The motion to disqualify is before the undersigned on an automatic referral pursuant to L.R. 72.1E.
On February 21, 1998, Samuel Crutchfield was killed in a motor vehicle accident and the plaintiffs made claims for his wrongful death and other damages. Glass and his law firm were counsel for the plaintiffs in that proceeding. On February 26, 2001, the plaintiffs agreed to compromise their claims against Lexington Insurance Company ("Lexington"). At Lexington's request, the plaintiffs met with Cohen on March 14, 2001 to discuss converting the February 26, 2001 settlement sums into structured settlements. Glass was present for at least a portion of these meetings.
The plaintiffs allege that Cohen presented final proposals for individual structured settlements for the plaintiffs and these proposals were approved by AIG Life Insurance Company ("AIG"). The plaintiffs allege that at the meeting they accepted the proposals offered by Cohen and there were valid contracts between them and Ringler/AIG. Cohen alleges that after the meeting he learned from MG that the proposals contained mathematical errors, and that he informed Glass of that. Cohen and Ringler contend that there was no acceptance of the proposals made on the afternoon of March 14, 2001 and, in the alternative, any contracts were null on account of error.
The plaintiffs filed this action against Cohen, Ringler and MG in state court and it was removed to this Court. Rec. doc. 1. There was a preliminary conference on November 20, 2001, at which time a pretrial conference was set for August 20, 2002 and a trial with a jury was set for September 9, 2002. Rec. doc. 15. By agreement, the plaintiffs noticed the deposition of Cohen in Boston for April 25, 2002. Rec. doc. 21.
Cohen and Ringler urged that Glass be disqualified pursuant to Louisiana Rule of Professional Conduct 3.7(a), which provides in part that: "[a] lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness . . . ." Id. In support, Cohen and Ringler rely on Rubin v. Miller, 801 F. Supp. 1101 (S.D.N.Y. 1992), where the disqualification of an attorney was ordered because of his unique knowledge about the parties' decision to create a shareholder agreement and testimony repudiating the agreement. Id. at 1103.
In Federal Deposit Insurance Corporation v. United States Fire Insurance, 50 F.3d 1304 (5th Cir. 1995), the defendant sought to disqualify the FDIC's law firm as well as attorneys within the firm on the ground that the defendant would call two of the FDIC's lawyers as witnesses. The district court granted the motion to disqualify and the Fifth Circuit reversed in part. With respect to the role that the ethical canons play in the process, the Fifth Circuit said:
[W]hereas the relevant local and national ethical canons provide a useful guide for adjudicating motions to disqualify, they are not controlling. In the instant case, the district court attached unwarranted significance to the Model Rules and to the general provision on conflict of interest. Such inflexible application of a professional rule is inappropriate because frequently it would abrogate important societal rights, such as the right of a party to his counsel of choice and an attorney's right to freely practice her profession. A court must take into account not only the various ethical precepts adopted by the profession but also the social interests at stake. Among the factors that we have considered in the past are "whether a conflict has (1) the appearance of impropriety in general, or (2) a possibility that a specific impropriety will occur, and (3) the likelihood of public suspicion from the impropriety outweighs any social interests which will be served by the lawyer's continued participation in the case." As we noted in another action to disqualify counsel, "The rule of disqualification is not mechanically applied in this Circuit." All of the facts particular to a case must be considered, in the context of the relevant ethical criteria and with meticulous deference to the litigant's rights.Id. at 1314 (Citations omitted). On the issue of a party's right to counsel and the disqualification of the law firm, the Fifth Circuit said:
We have held that application of the disqualification rule requires a balancing of the likelihood of public suspicion against a party's right to counsel of choice. However, rather than indiscriminately gutting the right to counsel of one's choice, we have held that disqualification is unjustified without at least a reasonable possibility that some identifiable impropriety actually occurred. A disqualification inquiry, particularly when instigated by an opponent, presents a palpable risk of unfairly denying a party the counsel of his choosing. Therefore, notwithstanding the fundamental importance of safeguarding popular confidence in the integrity of the legal system, attorney disqualification, particularly the disqualification of an entire firm, is a sanction that must not be imposed cavalierly.Id. at 1316 (Citations omitted). After rejecting the disqualification of the entire firm, the Fifth Circuit considered the issue of the disqualification of one of the attorneys in the firm. The defendant planned to call the lawyer as a witness to testify concerning the discovery of a loss. It contended that the lawyer discovered facts about a potential loss but a proof of loss was not timely submitted. The Fifth Circuit affirmed the disqualification of the lawyer and said: "We agree that Hurt must be disqualified, because he likely will be compelled to furnish testimony that may be substantially adverse to his client." Id. at 1317.
In Michel v. B.H. Miller, 1998 WL 42887 (E.D.La.) (Sear, J.), these principles were applied to the plaintiffs motion to disqualify counsel for the defendant on the ground that the lawyer was a necessary witness. Judge Sear said:
When determining whether a lawyer, like Mr. LeBlanc, is "likely to be a necessary witness" courts have required three things to be shown to demonstrate that the "likely to be a necessary witness" factor exists:
1. The attorney will give evidence material to the determination of the issues being litigated;
2. The evidence cannot be obtained elsewhere; and
3. The testimony is prejudicial or potentially prejudicial to the testifying attorney's client.Id. at *3. The plaintiffs concede that Glass was present at the March 14, 2001 meeting but contend the evidence of what happened at that meeting can be obtained from other sources, including the plaintiffs, Lexington's representatives and Cohen. To the extent the status of the approval of the settlements of the claims of minors is an issue there are others besides Glass who can testify. Glass asserts that if compelled to testify his testimony will not be prejudicial to the plaintiffs.
In reply, Cohen and Ringler reiterate their position that Glass is a necessary witness and describe the following areas of testimony: (1) the March 14, 2001 meeting; (2) his appearances before Judge Medley at Civil District Court on March 14 and 15, 2001 concerning the approval of the settlement of claims of the minors; (3) pleadings in the state court record that are alleged to be missing from the record; and (4) contact with providers of structured settlement packages other than Cohen and Ringler. Although they allege that Glass is the only person in possession of some of this information, they do not allege that any portion of Glass' testimony will be substantially adverse to the plaintiffs.
The Fifth Circuit made clear in FDIC v. United States Fire Insurance Company that depriving a party of his or her choice of counsel is a penalty that must not be imposed without careful consideration. 50 F.3d at 1313. It rejected an inflexible application of the professional rules because it would deny the right of a party to counsel of her own choice.Id. at 1314. It found that all of the facts particular to a case must be considered in the context of the relevant ethical criteria and with deference to parties' right to choose counsel. Id. at 1314.
Cohen and Ringler seek an inflexible application of the rules of conduct. Considering all of the circumstances of this case in the context of the applicable ethical rules and in particular the failure of the defendants to show that Glass' testimony will be adverse to his clients, disqualification is not warranted. Any other result would not accord sufficient deference to the right of the plaintiffs to counsel of their choice.
Accordingly, IT IS ORDERED that the motion of Cohen and Ringler for expedited hearing is GRANTED. IT IS FURTHER ORDERED that the motion of Cohen and Ringler to disqualify counsel is DENIED.