Opinion
21-P-1174
12-28-2022
FLEXIBLE FUNDAMENTALS, INC., & another v. Errion MCGRATH & others.
MEMORANDUM AND ORDER PURSUANT TO RULE 23.0
Attorney John F. Tocci and his law firm represented plaintiff Flexible Fundamentals, Inc. (company) by, inter alia, drafting noncompetition agreements to be signed by company employees. When the company filed suit in Superior Court alleging, inter alia, that the individual defendants breached those agreements, Attorney Tocci appeared on behalf of defendants Errion McGrath, Lindsey Beaird, Travis Hopper, Travis Turner, and their new employer, Social Perspectives 4 Everyone, LLC (collectively, the Tocci defendants). The Tocci defendants now appeal from an order of a Superior Court judge disqualifying Attorney Tocci and his law firm from representing the defendants in this lawsuit. As Attorney Tocci's representation of these defendants against his former client in this lawsuit violates the ethical rules, we affirm.
1. Standard of review. "[W]e review disqualification orders for an abuse of discretion." Smaland Beach Ass'n v. Genova, 461 Mass. 214, 220 (2012). "Our consideration of the motion is informed by the principle that courts ‘should not lightly interrupt the relationship between a lawyer and her client.’ " Bryan Corp. v. Abrano, 474 Mass. 504, 509 (2016), quoting Adoption of Erica, 426 Mass. 55, 58 (1997). "Nonetheless, the right to representation by an attorney of one's choosing is not absolute, and must, in some circumstances, yield to other considerations." Bryan Corp., supra. "Under the present execution doctrine, a disqualification order, as we have here, is treated as a final judgment that is immediately appealable." Steinert v. Steinert, 73 Mass. App. Ct. 287, 287 n.1 (2008), quoting Slade v. Ormsby, 69 Mass. App. Ct. 542, 544 (2007).
2. Disqualification. "A lawyer who has formerly represented a client in a matter shall not thereafter 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 gives informed consent, confirmed in writing." Mass. R. Prof. C. 1.9 (a), as appearing in 471 Mass. 1359 (2015). When invoking this rule to support disqualification, "[a] moving party must show, first, that the current representation is adverse to the interests of the former client,[ ] and second that the matters of the two representations are substantially related." Wessell v. Mink Brook Assocs., 87 Mass. App. Ct. 747, 751 (2015). "For matters to be ‘substantially related,’ courts have consistently found that counsel must possess confidential information that could be used against the former client in the current representation." Id. at 752. "Under the ‘substantial relationship’ test, a subsequent representation is proscribed ‘on the sole ground that the later suit, simply because of its substantial relation to the former one, exposes the attorney to an intolerably strong temptation to breach his duty of confidentiality to the former client.’ " Bays v. Theran, 418 Mass. 685, 691 (1994), quoting Note, Developments in the Law: Conflicts of Interest in the Legal Profession, 94 Harv. L. Rev. 1244, 1318 (1981). "The [former] client need never prove that the attorney actually misused the confidences to the client's disadvantage," but rather must prove a "tempting situation" to use such confidences. G.D. Mathews & Sons Corp. v. MSN Corp., 54 Mass. App. Ct. 18, 21 (2002), quoting Bays, supra. "Thus, the ‘substantial relationship’ test operates by assuming that confidences were transmitted in the former attorney-client relationship." Bays, supra. Accord R & D Muller, Ltd. v. Fontaine's Auction Gallery, LLC, 74 Mass. App. Ct. 906, 908 (2009) (question is whether counsel "had been exposed to confidential information germane to the present dispute"). "When determining whether matters are substantially related, a judge should make a factual determination by comparing ‘the overlap and similarity’ between the former and current representations." Wessell, supra at 752, quoting Slade, 69 Mass. App. Ct. at 547.
The Tocci defendants properly do not dispute that the current representation is adverse to the company; Attorney Tocci is representing persons that the company is suing. See Bryan Corp., 474 Mass. at 511.
Here, the overlap between the former and current representations is patent. Attorney Tocci averred that he drafted the "form non-compete, non-solicit and confidentiality agreement" for the company and "directed the [company] to have management-level employees execute copies of the agreement." These agreements form a significant portion of the civil complaint, which alleges a breach of those agreements by the individual Tocci defendants. The representations are substantially related. See G.D. Mathews & Sons Corp., 54 Mass. App. Ct. at 22 (disqualification proper in suit over distribution agreement where counsel "would necessarily have needed to learn and understand what the parties intended by virtue of their ... agreement" in representing company in prior litigation).
To this, the Tocci defendants argue that they are "not defending the action based upon the non-compete agreement text." The test, however, is whether the representations are substantially related, not whether the text drafted in the first representation was defective. See Wessell, 87 Mass. App. Ct. at 751. More relevantly, the Tocci defendants argue that Attorney Tocci possesses no relevant client confidences. The record, however, refutes that claim. Before being disqualified, Attorney Tocci filed an opposition to a motion for preliminary injunction arguing that some of the agreements must be fraudulent because they are dated prior to the date Attorney Tocci drafted them. He also wrote that some of the company's "contract claims fail because [the company] has no legitimate business interests supporting any purported agreement with eight of the defendants because ... key [company] employees worked for [the company] for years with unfettered access to its database and its clients unbound by any restrictive agreement," despite Attorney Tocci's having advised the company on which employees should sign the agreements. This is not merely a situation where the attorney "possess[es] confidential information that could be used against the former client in the current representation." Wessell, supra at 752. This is a situation where the attorney appears to have already used confidential information against his former client.
3. Timing. "Courts discourage ‘eleventh hour maneuvers’ to disqualify opposing counsel where the moving party has advance notice of the representation by opposing counsel but waits to raise the issue until the eve of trial." Wessell, 87 Mass. App. Ct. at 752, quoting Masiello v. Perini Corp., 394 Mass. 842, 850 (1985). "Without a sufficient explanation for [an] extraordinary delay," a judge may deny a disqualification motion "as a dilatory tactic." Wessell, supra at 753. Here, Attorney Tocci appeared in the case on September 28, 2021, and the company moved to disqualify Attorney Tocci the same day.
The Tocci defendants’ argument, charitably construed, that the motion to disqualify was untimely because the company "had knowledge that Ms. McGrath was adverse to them as a purported competitor" several months earlier is without merit. Nobody suggests that Attorney Tocci cannot represent the Tocci defendants at all, only that he cannot represent them in a lawsuit based on an agreement he drafted for the company. Far from being on "the eve of trial," Wessell, 87 Mass. App. Ct. at 752, "[w]e conclude that there was no unreasonable delay." G.D. Mathews & Sons Corp., 54 Mass. App. Ct. at 24.
4. Appellate attorney's fees. "We may award appellate attorney's fees when we determine that an appeal is frivolous." Marion v. Massachusetts Hous. Fin. Agency, 68 Mass. App. Ct. 208, 212 (2007). "An appeal is frivolous, so as to risk potential imposition of a sanction, where there can be no reasonable expectation of a reversal under well-settled law." Abuzahra v. Cambridge, 486 Mass. 818, 829 (2021), quoting Marabello v. Boston Bark Corp., 463 Mass. 394, 400 (2012). Here, the very first example of a prohibited representation in the first comment to Mass. R. Prof. C. 1.9 is that "a lawyer could not properly seek to rescind on behalf of a new client a contract drafted on behalf of the former client." Although Attorney Tocci sought to have the contract declared fraudulent and unenforceable rather than rescinded, it requires willful blindness not to see that the scope of rule 1.9 (a) extends to the current situation. The instant appeal is frivolous, and we award the plaintiffs attorney's fees and double costs.
In accordance with the procedure specified in Fabre v. Walton, 441 Mass. 9, 10-11 (2004), the plaintiffs may, within fourteen days of the issuance of this opinion, submit an application for attorney's fees with the appropriate supporting materials. The Tocci defendants shall have fourteen days thereafter to file a response to that application. See Fariello v. Zhao, 101 Mass. App. Ct. 566, 573 n.5 (2022).
5. Conclusion. The order disqualifying Attorney Tocci and his law firm from representing any defendants in this lawsuit is affirmed.
So ordered.