Opinion
CIVIL ACTION NO: 03-2882
November 26, 2003
ORDER AND REASONS
The Court held a status conference with all parties of record on November 10, 2003. During the conference, the Court heard arguments regarding Defendant — City of New Orleans' Motion to Disqualify Counsel (Rec. doc. 8). After hearing arguments of counsel, reviewing the record, and the applicable law, the Court finds that Defendant — City of New Orleans' Motion to Disqualify Counsel should be granted.
BACKGROUND
The plaintiff was a consultant contracted by the City of New Orleans ("the City") to audit the practices of New Orleans Public Service, Inc. ("NOPSI") and its successor company, Entergy New Orleans, Inc. ("Entergy"), under their 1982 street — light maintenance agreement. Plaintiff's contract with the City calls for payment of 35% of any recovery the City obtained from overcharges or improprieties brought to light by Plaintiff. Plaintiff uncovered irregularities that led to settlement agreements between Entergy and the City on two occasions. The instant matter evolves from the latest settlement and Tristem's belief that the City was not fully pursuing redress of Entergy's breaches. Plaintiff claims the structure of the existing settlement agreement unfairly deprives it of a larger payment under the contingency consultant contract with the City.
DISCUSSION
The City seeks to disqualify Plaintiff's lead attorney, Michael Duran, and his law firm, He me It Foshee, L.L.C. The City contends that Duran previously, represented it in the dispute with Entergy which underlies this lawsuit. Therefore, because Duran is now representing a party adverse to the City, his former client, there is a conflict of interest under Rule 1.9 of the Rules of Professional Conduct.
The existence of an attorney client relationship turns largely on the client's subjective belief that it exists. In Re Parker — Davis, 763 So.2d 569, 571 (La. 2000). The record shows that Mr.Duran provided guidance to the third — party auditor, Ernst Young, narrated the videotape presentation created by Adams Reese, his former law firm, on behalf of the City, and received and reviewed draft settlement documents from Entergy. Furthermore, Duran's name is listed on a draft petition as counsel for the City along with Adams Reese. Moreover, on the, videotape Mr. Duran is heardreferring to himself as representing the City in the underlyingmatter. (Def.'s Second Suppl. Mem. Supp. Mot. to Disqualify, Exh. A).
Mr. Duran tries to overcome the City's weighty evidence by showing that Adams Reese had a retainer agreement with Tristem and not the City. However, Hemelt Foshee submitted an affidavit with its motion to enroll in this action disclosing that Edward Morris, another lawyer with the firm, was previously involved with the Entergy matter while serving as the City's Director of Department of Utilities. They never mentioned Mr. Duran's involvement during the same time period. Rule 1.9 prohibits a lawyer from. . . .
1) representing another person in the same or a substantially related matter in which that person's interests are materially adverse to the interest of the former client unless the former client consents; or
2) using 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.See LA ST BAR ART 16 RPC Rule 1.9.
The Court finds that Plaintiff's lead attorney, Michael Duran, should be disqualified. The evidence shows that Mr. Duran and his former law firm, Adams Reese, held themselves out as the City's attorney in the underlying dispute with Entergy and its predecessor NOPSI. Duran's current representation of Tristem is materially adverse to the City. He also possesses confidential information obtained during his representation of the City that can be used against it in this subsequent proceeding, i.e. the City's positions regarding settlement, as evidenced by the videotape he narrated in 1993. See Walker v. State, Dept. Transp. and Development, sup.2002, 817 so.2d 57, 2001-2078, 2001-2079 (la. 5/14/02).
Duran's current law firm, Hemelt Foshee, must also be disqualified. "an entire law firm, is subject to disqualification whenever grounds for disqualification exist against any of its partners or law associates." Brasseaux v. Girouard, 214 So.2d 401, 407 (La.App. 3d Cir. 1968). Because Mr. Duran is the lead attorney in this action and he possesses confidential information from his previous representation of the City, he cannot now be "walled off" as is Mr. Morris. "The courts err on the side of protecting the confidences and expectation of loyalty of the former client, as borderline cases: are resolved in favor of disqualification." Id. at 406.; Accordingly,
IT IS ORDERED that Defendant — City of New Orleans' Motion to Disqualify Counsel is GRANTED. Mr. Michael Duran and his law firm, Hemelt Foshee, L.L.C., are disqualified from acting as counsel for Tristem in this case. Tristem shall enroll new counsel of record within 10 days from entry of this order.
IT IS FURTHER ORDERED that the hearing on defendants' motion to Dismiss, presently scheduled for December 3, 2003, is continued until December 17, 2003 at 9:30 a.m.