Julie M. Sowell v. Deirdre H. DiCara et al. (2014)

MEMORANDUM OF DECISION RE # 184 Motion to Disqualify Counsel and # 189 Objection to Motion to Disqualify

On January 15, 2014, Plaintiff moved to disqualify the law firm of Tinley, Nastri, Renehan and Dost (hereinafter, the “Firm”) from representing defendants Southbury—Middlebury Youth and Family Services, Inc. (YFS), Mary Jane McClay (Chairman of YFS Board of Directors), and Deirdre DiCara (YFS Executive Director).   The sole ground stated was that the Firm represented not only the corporate defendant (YFS) but also the two individual defendants (McClay and DiCara) and the corporate defendant's interest conflicts with the interests of the two named individuals and such concurrent representation violates Rule 1.7 and 1.13 of the Rules of Professional Conduct.¹

The defendants have filed a Memorandum of Law in objection to the motion.

Rule 1.7 in its entirety reads:

Rule 1.7. Conflict of Interest:  Current Clients

(Amended June 26, 2006, to take effect Jan. 1, 2007)

(a) Except as provided in subsection (b), 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, a former client or a third person or by a personal interest of the lawyer.

(b) Notwithstanding the existence of a concurrent conflict of interest under subsection (a), a lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representations to each affected client;

(2) the representation is not prohibited by law;

(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or the same proceeding before any tribunal;  and

(4) each affected client gives informed consent, confirmed in writing.

Simply put, while the Plaintiff claims the interest of YFS conflicts with the interests of the two individually named defendants, that “claim” does not sua sponte establish a conflict of interest particularly where, as here, the YFS Board of Directors subsequently ratified all of the actions taken by the individual defendants.   At this point in time, the interests of all of the named defendants are aligned.   The Rule specifically states a concurrent conflict of interest exists ONLY if either the representation of one client is DIRECTLY adverse to another or there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's representation of another client or by a personal interest of the lawyer.   The Plaintiff's claim here is that such a conflict exists because a) the individual defendants engaged in “tortious conduct and gross mismanagement of YFS” and that b) Defendant McClay has a “material financial interest in the outcome of the lawsuit” is wholly unsupported either by deposition testimony or direct evidence at this time.   Such a broad and unsupported assertion by counsel is a direct threat to the right of an individual to his/her/its choice of counsel and Plaintiff's citation to Fox v. Idea Sphere, Inc., 2013 WL 1191743 (Exh. C to her memorandum) is inapplicable because the Plaintiff in Fox was a minority shareholder who brought his action against the employer in his capacity as such shareholder ² (in claiming, i.e., that defendants, in adopting a debt-for-equity swap substantially interfered with his interests as a shareholder) while also claiming injury to himself as a result of the company's having fired him as the President and Chief Operating Officer.   While this court does not view the suit brought against Fox's former employer as a true shareholder's derivative action (as Defendants here claim), it is clearly distinguishable from the case at hand in that Ms. Sowell was not ever a shareholder in YFS and no recovery she may make in this suit shall be as a result of a wrong perpetrated against other similarly situated persons.  (In fact, there are no known such persons.)   Here, Ms. Sowell seeks a recovery for an alleged injury unique to her.   See Barrett v. Southern Connecticut Gas Co., 172 Conn. 362 (1977) in which Justice MacDonald described the Plaintiff in a derivative suit as assuming the position of a fiduciary who sues “not for himself alone but as a representative of a class comprising all who are similarly situated.”  Id., at 372.  Fox has little in common with the instant suit.   The claims made here by Ms. Sowell arose as a result of her resigning (as a social services provider) on a date to be effective four (4) months in the future and requesting payment of thirty thousand dollars ($30,000.00) for those four months' services.   YFS accepted her immediate resignation (by letter) and paid her no additional money.

There is no evidence before this court that the interest of any named defendant is adverse to any one or more of the other defendants and, as just here stated, the YFS Board of Directors subsequently ratified the actions taken by McClay and DiCara.   To be sure, there is a claim that McClay and/or DiCara acted in ways to the detriment of YFS (i.e., in mismanaging insurance billings for services rendered);  it is at this stage, however, a “claim” only.   That accusation is not supported by any of the deposition excerpts provided this court.   If, in the course of pre-trial motions or evidence at trial, there arises such evidence as to support the claim there is a conflict of interest among the named defendants, the representation of all such clients by the Tinley firm may later require the court's reconsideration of this claim.   That is not, however, the present situation given counsel's representation that the interests of all named defendants are unified.

Rule 1.7(b) provides that a lawyer may represent a client “notwithstanding the existence of a concurrent conflict of interest” if:

1.  The lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

2. the representation is not prohibited by law;

3. the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or the same proceeding before any tribunal;  and each affected client gives informed consent confirmed in writing.

Sowell claims the Tinley Firm could not have communicated with YFS between July 2012, and December 10, 2013, because the Board did not meet during that time period and that the Tinley Firm did not communicate the multiple offers of compromise filed (Pl. Memo., at 3, 4).   No evidence to support the veracity of these claims was offered.   Again, Plaintiff fails to recognize that, though she claims McClay's authorization for Tinley's representation of YFS was null and void, the Board of YFS ratified all actions taken by McClay and/or DiCara.   Finally, Sowell claims Tinley violated the Rules of Professional Conduct when he concurrently represented the Town of Southbury at the same time Tinley represented YFS, McClay, and DiCara.   The Town of Southbury is not now—nor has it at any time been—a party to this lawsuit.   Southbury was in fact the largest source of funding to YFS. While Sowell asks the court to assume “arguendo” there are conflicting interests among the defendants, the court cannot do so.

The Official Commentary to Rule 1.7 specifically references the caution to be exercised in counsel's raising an opposing lawyer's alleged conflict of interest in representing multiple named defendants.   Such objection, the Commentary provides, “should be viewed with caution, however, for it can be misused as a technique of harassment.”   See also, Freeman v. Chicago Musical Instrument Co., 689 F.2d. 715, 772 (7th Cir.1982).   That concern is echoed in Connecticut case law.

A party moving for disqualification of an opponent's counsel must meet a high standard of proof ․ [T]he moving party bears the burden of proving facts which indicate disqualification is necessary.   The courts should act very carefully before disqualifying an attorney and negating the right of a client to be represented by counsel of choice.3

This litigation is now eighteen (18) months old.   A delay in seeking disqualification of defense counsel casts suspicion upon Plaintiff's motive since, to disqualify the Tinley Firm now, would surely result in the court necessarily having to grant a continuance of at least six to eight (6–8) months and almost certainly would mean forsaking the trial date set for October 2014.

The Motion to Disqualify Defense Counsel is hereby denied.

Sheedy, J.T.R.

FOOTNOTES

FN1. An affidavit by counsel was also attached to the twelve-page Motion as were lengthy excerpts of deposition testimony of John Reilly (a member of the Southbury Board of Finance) and Mary June McClay in addition to a twenty-four (24)-page supporting Memorandum of Law..  FN1. An affidavit by counsel was also attached to the twelve-page Motion as were lengthy excerpts of deposition testimony of John Reilly (a member of the Southbury Board of Finance) and Mary June McClay in addition to a twenty-four (24)-page supporting Memorandum of Law.

FN2. He claimed to be the fourth largest shareholder of the company..  FN2. He claimed to be the fourth largest shareholder of the company.

FN3. Neumann v. Tuccio, Superior Court, J.D. of Danbury, 48 Conn. L. Rptr. 298–99 (July 17, 2009, Shaban, J.)..  FN3. Neumann v. Tuccio, Superior Court, J.D. of Danbury, 48 Conn. L. Rptr. 298–99 (July 17, 2009, Shaban, J.).

Sheedy, Barbara J., J.T.R.