Kamco Supply Corp. v. SP LLC (2011)

MEMORANDUM OF DECISION

On May 18, 2011, Parrett, Porto, Parese & Colwell, P.C., the law firm for the defendants, SP Drywall, LLC, Yaacov Chourun and Yanir Pesok, filed a motion to withdraw its appearance in the above-captioned case on the ground that an irreconcilable conflict of interest exists due to pending litigation between two of the defendants, Chourun and Pesok.   No objections were filed, but one of the defendants appeared at oral argument which was heard at short calendar on June 6, 2011.

An attorney's ethical obligations to his clients are described in the Rules of Professional Conduct which are found in the Connecticut Practice Book. Rule 1.16(a) requires the withdrawal of representation if “[t]he representation will result in violation of the Rules of Professional Conduct or other law ․” One applicable rule would be Rule 1.7 which deals with conflicts of interest between current clients.   It provides, in relevant part, “(a) Except as provided in subsection (5), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest.   A concurrent conflict of interest exists if:  (1) the representation of one client will be directly adverse to another client;  or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, former client or a third person or by a personal interest of the lawyer.”   The commentary to the rule states that “[u]nforeseeable developments such as changes in corporate and other organizational affiliations or the addition or realignment of parties in litigation, might create conflicts in the midst of a representation, as when a company is sued by the lawyer on behalf of one client is bought by another client represented by the lawyer in an unrelated matter.”

In the present case, Parrett, Porto, Parese & Colwell, P.C. represents SP Drywall, LLC, a corporate client as well as the two individual clients who own the company.   In addition, the firm has separately represented the individual clients in bankruptcy proceedings.   At this time, the individual clients are involved as proxy adversaries in litigation related to the distribution of proceeds of the corporate client, SP Drywall, LLC. Attorney Porto for the law firm represented during oral argument that the breakdown in relationship between the two individual clients has caused a breakdown in the attorney-client relationship in the present case.   Given the information of which the law firm is aware due to its representation for the present case as well as the bankruptcy actions and the possibility that one of the individual clients may seek to use that information to his advantage in the related, pending litigation, the court concludes that “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client.”  Rule of Professional Conduct 1.7(a).   The attorneys of Parrett, Porto, Parese & Colwell, P.C. cannot effectively advocate for all of the clients since the individual clients have now become adversaries.   Therefore, the court grants the motion to withdraw appearance.

Woods, J.

Woods, Glenn A., J.