Current Client (posted January 16, 2021) PsyBio Therapeutics v. Corbin, No. 20 C 3340 (N.D. Ill. Jan. 13, 2021). This opinion involves two cases, the facts of which are so complex, confusing, and poorly presented, that we will not attempt any detail. The court laid out the "fundamental question" involving the following: Law Firm is shareholder of a close corporation; a named partner was a director of the corporation; and, the shareholders of the corporation removed one of the directors. The issue: May Law Firm represent the corporation in a suit against the removed director. The court said yes.

Former Client; Consent (posted January 16, 2021) 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 (posted January 13, 2021) 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.

[Note: Items that do not fit under the conflicts categories below, but which we believe will be of interest to this audience will appear here and on the This and That pages.]

Nothing current.

[Note: These, too, will appear at the This and That pages.]

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APPEALABILITY (To read full article, click here.)

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ARBITRATION OF MALPRACTICE CLAIMS (To read the full article, click here.)

(posted December 23, 2020) Delaney v. Dicky, No. A-30 Sept. Term 2019 083440 (N.J. Dec. 21, 2020). This is a malpractice action by Plaintiff against Law Firm. Plaintiff had signed an engagement agreement with a broad arbitration clause. The trial court ordered Plaintiff to arbitration. The appellate court reversed. In this opinion the N.J. Supreme Court held that Plaintiff could proceed in court. Nobody at Law Firm explained to Plaintiff the advantages and disadvantages of arbitration. The engagement agreement incorporated 30 pages of JAMS rules but only provided an online link to those pages. The supreme court also referred the arbitration issues to the Advisory Committee on Professional Ethics for "further guidance on the scope of an attorney's disclosure requirements."

BANKRUPTCY (To read full article, click here)

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CHANGING FIRMS - SCREENING (To read full article, click here.)

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CLASS ACTIONS (To read full article, click here.)

(posted December 21, 2020) Capsolas v. Pasta Res. Inc., No. 1:10-cv-05595 (SDA) (S.D.N.Y. Dec. 8, 2020). Class action by restaurant workers against restaurant operators. The only purpose of this opinion was the court's designation of a cy pres designee. Class Counsel sought approval of one designee, a not-for-profit. Defendants objected and suggested others. In this opinion the magistrate judge selected Class Counsel's candidate. Defendants claimed there was a conflict among that designee and Class Counsel because the designee had honored Class Counsel, Class Counsel had contributed to the designee, and they had been co-counsel on a number of cases. The court said none of those factors are disqualifying. The designee was dedicated to the welfare of restaurant workers, and the interests of the workers in this case were aligned with the the designee and Class Counsel.

CO-COUNSEL/COMMON INTEREST (To read full article, click here.)

COMMERCIAL NEGOTIATIONS (To read full article, click here.)

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CORPORATIONS (To read full article, click here.)

(posted January 13, 2021) 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.

(posted December 28, 2020) Capra v. Capra, No. C084032 (Cal. App. 3d Dist. Dec. 22, 2020). To read about the case, go to "Former Client," below.

CORPORATE FAMILIES (To read full article, click here.) 

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CURRENT CLIENT (To read full article, click here.)

(posted January 16, 2021) PsyBio Therapeutics v. Corbin, No. 20 C 3340 (N.D. Ill. Jan. 13, 2021). This opinion involves two cases, the facts of which are so complex, confusing, and poorly presented, that we will not attempt any detail. The court laid out the "fundamental question" involving the following: Law Firm is shareholder of a close corporation; a named partner was a director of the corporation; and, the shareholders of the corporation removed one of the directors. The issue: May Law Firm represent the corporation in a suit against the removed director. The court said yes.

(posted December 23, 2020) Phox v. 21c Mgmt., LLC, No. 20-cv-00846-SRB (W.D. Mo. Dec. 21, 2020. Plaintiff is suing Employer for not being properly compensated. In a different case Plaintiff is suing Employer for violating food safety standards and for wrongful termination. Because the same law firm is representing Employer in both cases, Plaintiff has moved to disqualify that law firm. In this opinion the court denied the motion. The court said "this is a common situation and does not create a conflict."

DERIVATIVE ACTIONS (To read full article, click here.)

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EXPERT WITNESSES (To read full article, click here.)

(posted December 28, 2020) Edwards Vacuum LLC v. Hoffman Instrumentation Supply, Inc., No. 3:20-cv-1681-AC (D. Ore. Dec. 15, 2020). This is a suit by Edwards against HIS for misappropriation of trade secrets and related causes of action. The technology involved is the design and manufacture of vacuum pumps used in computer chip fabrication. HIS seeks to use Expert as an expert witness. Edwards moved to disqualify Expert. In this opinion the court denied the motion to disqualify "subject to . . . conditions." Expert has never worked for Edwards or consulted with Edwards in any capacity. However, Expert has worked for "Company X," a major customer of Edwards and would have become privy to much of Edwards' technical information. Thus, this is not the classic case of an adversary previously hiring an expert with an expectation of confidentiality and having conveyed confidences to the expert. Moreover, any confidential technical information belonging to Edwards, but learned by Expert at Company X, would be discoverable by HIS in this case. "Conditions" include compliance with the court's "Protective Order" including the "Patent Prosecution Bar" within the Protective Order.

FORMER CLIENT (To read full article, click here.)

(posted January 16, 2021) 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.

(posted January 1, 2021) TAL Props. of Pomona, LLC v. Village of Pomona, No. 19-CV-06838 (PMH) (S.D.N.Y. Dec. 30, 2020). Lawyer represents Pomona in this case, which involves Pomona's alleged religious discrimination related to construction of a home. In 2017-2018 Lawyer represented TAL against Pomona claiming religious discrimination related to construction of a home. TAL moved to disqualify Lawyer in this case. In this opinion the court granted the motion. The court noted that Lawyer, in opposing the motion, did not "endeavor to demonstrate" how the two matters "are not substantially related."

(posted December 28, 2020) Capra v. Capra, No. C084032 (Cal. App. 3d Dist. Dec. 22, 2020). Yes, that Capra. It is only appropriate that this case, decided during the Holiday season, should involve contested ownership and control of a dwelling ("the cabin") left by Frank Capra, producer, director, and co-writer of It's a Wonderful Life. Capra's children are squaring off against each other in this case. Son, Thomas, the defendant, is represented by Emanuel Barling. Plaintiffs, other Capra family members, moved to disqualify Barling. The trial court denied the motion. In this opinion the appellate court affirmed. One issue is whether Barling currently represents anyone other than Thomas. On the facts, no. Another issue is whether Barling previously represented any of the plaintiffs on matters substantially related to this case. On the facts, no. The last issue worth mentioning is whether Barling's alleged earlier representation of Frank Capra Productions, Inc. was tantamount to representation of the officers or shareholders (primarily family members). Answer, no. The holdings were so fact-specific, that the opinion, although surprisingly not excluded from publication, is of little, if any, precedential value.

INITIAL INTERVIEW - HEARING TOO MUCH (To read full article, click here.)

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INSURANCE DEFENSE (To read full article, click here.)

(posted December 28, 2020) Outdoor Venture Corp. v. Phila. Indem. Ins. Co., No. 20-5306 (6th Cir. Dec. 22, 2020). We do not feel it necessary to explore the facts. Three principals emerged in this opinion. In Kentucky, when an insurer hires a lawyer to defend an insured, the lawyer has only one client, the insured. A reservation of rights, without more, does not require the insurer to reimburse insured for insured's independent counsel. Last, even if independent counsel were appropriate, it may not be hired by the insured before the insurer selects counsel.

(posted December 28, 2020) Smarte Carte, Inc. v. Simon Prop. Group, Inc., No. 20A-CT-975 (Ind. App. Dec. 21, 2020). Smarte signed a lease with Simon allowing Smarte to place massage chairs in the aisles of Simon's Evansville shopping center. A shopper, John Bush, sued Smarte and Simon for injuries from a pin in one of the chairs. The lease provided that Smarte would indemnify Simon for injuries occurring in its chairs. Smarte hired counsel to defend Smarte. Smarte's duties to Simon were not resolved, and Simon hired its own counsel to defend Simon. The issue relevant to this audience is whether Smarte owes Simon's fees and costs of defending itself. The trial court said yes. In this opinion the appellate court affirmed. At bottom, Smarte's counsel would have a conflict defending Simon because Smarte was claiming that the injury was somehow attributable to Simon. Thus, Simon had the right to its own counsel.

INVESTING IN CLIENTS/STOCK FOR FEES (To read full article, click here.)

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JOINT/MULTIPLE REPRESENTATION (To read full article, click here.)

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MALPRACTICE LIABILITY/FEE FORFEITURES (To read full article, click here.)

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OF COUNSEL (To read full article, click here.)

OPPOSING LAWYERS NEGOTIATING A LAW PRACTICE MERGER (To read full article, click here.)

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SETTLEMENT AGREEMENTS (To read full article, click here.)

(posted December 23, 2020) ABA/Bloomberg Law. Man. Prof. Conduct, Conflicts of Interest, 51:375 Aggregate Settlements. This section has been updated recently and is excellent.

STANDING (To read full article, click here.)

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WAIVERS/CONSENTS (To read full article, click here.)

(posted January 13, 2021) Hanson v. CBS Constr. Servs., Inc., No. A20-0157 (Minn. App. Jan. 11, 2021). To read about the case, go to "Corporation," above.

WITNESS - ADVERSE - CURRENT/FORMER CLIENT (To read full article, click here.)

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ZERO SUM GAMES (To read full article, click here.)

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