Sullivan Construction Co., LLC v. Seven Bridges Foundation, Inc. et al.
MEMORANDUM OF DECISION
Presently before the court is a motion to disqualify filed by defendant Seven Bridges Foundation, Inc. (# 103). That motion asks the court to disqualify the plaintiff's counsel, Attorney John F. Slane Jr., of the law firm, Heagney, Lennon & Slane, LLP, claiming that his representation of the plaintiff is barred by rules 1.7, 1.9 and 1.0 of the Rules of Professional Conduct. The motion was heard on short calendar on December 20, 2010.
This action was commenced on June 6, 2010, when the plaintiff, Sullivan Construction Co., LLC, filed a three-count complaint against defendant, Seven Bridges Foundation, Inc. (Seven Bridges), seeking to foreclose a mechanic's lien on property owned by Seven Bridges located at 71 North Porchuck Road in Greenwich (the “property”). Also named as defendants in the action are: Birch Landscape & Home lmprovement LLC; Bojadzic Masonry, LLC; Carlos De La Cruz; Hugo Vida; Cristobal Santiago; Alvaro Alfaro; Elmer Alfaro; Ideal Stoneworks, Inc.; O & G Industries, Inc.; Kostas Customer Iron Fabrication; Camsan, Inc.; Yumbla's Construction LLC; Westwood Flooring Supply Inc.; Luis Delgado; and Trademarc Construction, Inc. Each of those defendants is alleged to claim an interest in the property by virtue of their own mechanic's liens, which may be affected by the plaintiff's lawsuit.
Count One of the plaintiff's complaint alleges that on June 24, 2008, the plaintiff entered into a contract with Seven Bridges by which the plaintiff was to provide as general contractor, labor and materials for the improvement of the property. Between June 24, 2008 and January 26, 2010 the plaintiff furnished labor and materials for the project worth $6,232,816.37. Of that amount, Seven Bridges still owes the plaintiff $259,457.93. On March 24, 2010, the plaintiff had a Connecticut state marshal serve on Seven Bridges a notice that the plaintiff had started to provide labor and materials and intended to claim a lien upon the property. On the same day, the plaintiff filed a certificate of mechanic's lien with the Greenwich town clerk on the property for $259,457.93.
In Count Two, the plaintiff alleges that Seven Bridges has been unjustly enriched in the amount of $259,457.93. In Count Three, the plaintiff alleges that pursuant to the contract, Seven Bridges owes the plaintiff $259,457.93 in addition to interest on that amount at the rate of one and one-half percent per month. In its prayer for relief, the plaintiff seeks: 1) a strict foreclosure of its mechanic's lien; 2) possession of the property; 3) money damages in excess of $15,000 exclusive of interest and costs; 4) interest; and 5) reasonable attorneys fees.
On September 7, 2010, Seven Bridges filed an answer and special defenses to the plaintiff's complaint. In its special defenses, Seven Bridges alleges that the plaintiff's work was defective, that the plaintiff failed to pay subcontractors and that the plaintiff's deficient supervision and management was responsible for the fire. On the same day, Seven Bridges filed a motion to disqualify the plaintiff's counsel, Attorney John F. Slane Jr., of the law firm, Heagney, Lennon & Slane, LLP, on the grounds that his partner, Attorney Thomas J. Heagney, either was currently representing or had represented Seven Bridges regarding the project that is now the subject of the present case and that therefore an impermissible conflict of interest existed. In support of its motion, Seven Bridges filed an affidavit by Richard C. McKenzie, Jr., the president and chief executive officer of Seven Bridges, dated September 1, 2010.
On September 15, 2010, the plaintiff filed a memorandum in opposition to Seven Bridges' motion to disqualify. In support of its memorandum in opposition, the plaintiff filed: the affidavit of Heagney dated September 10, 2010; a letter written by Attorney Lincoln W. Briggs of Gilbride, Tusa, Last & Spillane, LLC, general counsel for Seven Bridges, to the plaintiff dated March 10, 2010; and a letter written by Slane to Briggs dated March 18, 2010.
On October 8, 2010, Seven Bridges filed counterclaims against the plaintiff in which it alleges that the plaintiff's work was defective, that the plaintiff failed to pay subcontractors, and that the plaintiff's deficient supervision and management was responsible for the fire. On November 3, 2010, Seven Bridges filed a memorandum in support of its motion to disqualify. On November 4, 2010, the plaintiff filed a reply memorandum in opposition to Seven Bridges' motion to disqualify.
“In determining whether an attorney must be disqualified, a court may hold an evidentiary hearing.” Patchell v. Automobile Ins. Co., Superior Court, judicial district of New Haven at New Haven, Docket No. CV 94 0368147 (August 30, 1995, Hartmere, J.). The material facts concerning Heagney's representation of Seven Bridges are not in dispute. The parties only disagree on the characterization of those facts. Neither party requested the court to hold an evidentiary hearing. Accordingly, the court finds that such a hearing is not necessary to resolve the dispute.
The parties submitted the following material facts by affidavit. Attorneys Heagney and Slane practice law together under the law firm. name of Heagney, Lennon & Slane, LLP (Heagney Aff. ¶¶ 1-2.) In 2007, Seven Bridges decided to undertake a project for the development and construction of a building on land owned by the Seven Bridges in Greenwich, Connecticut (the project). (McKenzie Aff. ¶ 1, ¶ 3.) In July of that year, Heagney began to meet with, counsel and represent Seven Bridges in connection with obtaining municipal approvals of the project. (McKenzie Aff. ¶ 4; Heagney Aff. ¶ 3.) Heagney reported to the project representative and worked closely with him and the project's architects and engineers in the project's design and compliance with local permitting requirements. (McKenzie Aff., ¶¶ 4-11.)
From September 14, 2007, through March 2008, attorney Heagney and his law firm represented Seven Bridges before various agencies of the Town of Greenwich, including its land use department, inland wetlands & watercourses agency and planning and zoning commission pursuant to a written attorney-client retainer letter and an authorization letter from Seven Bridges to the planning and zoning commission both of which were dated September 14, 2007. (McKenzie Aff. ¶ 6; Heagney Aff ¶ 3.) Throughout this permitting phase of the project, Heagney worked closely with Seven Bridges' project representative, architectural firm and engineers, in preparing for and attending the hearings. (McKenzie Aff. ¶ 7.) The project representative and architects, along with the contractors, would be responsible for the construction phase. (McKenzie Aff. ¶ 7.)
The inland wetlands & watercourses agency held one public hearing and the planning and zoning commission held four public hearings, on Seven Bridges' applications for a final site plan and special permit for the Project. (McKenzie Aff. ¶ 7.) On March 4, 2008, the planning and zoning commission approved the site plan and special permit, with conditions to be complied with by Seven Bridges before the issuance of a building permit or final approval. (McKenzie Aff. ¶ 8; Heagney Aff. ¶ 3.) On June 24, 2008, Seven Bridges entered into a contract with the plaintiff to build the project. (McKenzie Aff. ¶ 10.) Neither Heagney nor Slane represented either side in connection with the negotiation or preparation of the contract between the plaintiff and Seven Bridges. Heagney continued to counsel and represent Seven Bridges on matters relating to the approval and permitting of the project through July 2008. (McKenzie Aff. ¶ 9; Heagney Aff. ¶ 3.) After that, Heagney heard nothing from Seven Bridges until October 2009, when the project representative contacted him by phone and questioned him about certain terms of the site plan approval for the project. (McKenzie Aff. ¶ 11; Heagney Aff. ¶¶ 4-5.) That phone call was the last contact that Heagney had with Seven Bridges. (Heagney Aff. ¶ 5.)
On January 27, 2010, when the project was within days of completion, a fire destroyed about two-thirds of the building. (McKenzie Aff. ¶ 12; Heagney Aff. ¶ 6.) Subsequently, after discussions between Attorney John K. Cohane of Fairfield, who at that time was the plaintiff's attorney, and Attorney Lincoln W. Briggs, Seven Bridges' outside general counsel, Seven Bridges terminated its contract with plaintiff and hired a new contractor to clear, rebuild and complete the project. (McKenzie Aff. ¶¶ 13-14.) On March 10, 2010, Briggs wrote a letter to the plaintiff regarding contract termination, subcontractor payment problems and related disputed issues. (McKenzie Aff. ¶ 16; Heagney Aff. ¶ 7.) On March 18, 2010, Slane wrote a letter to Briggs in response to the letter dated March 10, 2010, in which Slane stated that he was the attorney retained to represent the plaintiff in connection with disputes concerning the project. (McKenzie Aff. ¶ 16; HeagneyAff. ¶ 10.)
“The trial court has the authority to regulate the conduct of attorneys and has a duty to enforce the standards of conduct regarding attorneys ․ Since October 1986, the conduct of attorneys has been regulated also by the Rules of Professional Conduct, which were approved by the judges of the Superior Court and which superseded the Code of Professional Responsibility ․ The trial court has broad discretion to determine whether there exists a conflict of interest that would warrant disqualification of an attorney ․
“Disqualification of counsel is a remedy that serves to enforce the lawyer's duty of absolute fidelity and to guard against the danger of inadvertent use of confidential information ․ In disqualification matters, however, we must be solicitous of a client's right freely to choose his counsel ․ mindful of the fact that a client whose attorney is disqualified may suffer the loss of time and money in finding new counsel and may lose the benefit of its longtime counsel's specialized knowledge of its operations ․ The competing interests at stake in the motion to disqualify, therefore, are: (1) the defendant's interest in protecting confidential information; (2) the plaintiffs' interest in freely selecting counsel of their choice; and (3) the public's interest in the scrupulous administration of justice.” (Citations omitted; Internal quotation marks omitted.) Bergeron v. Mackler, 225 Conn. 391, 397-98 (1993).
“A party moving for disqualification of an opponent's counsel must meet a high standard of proof ․ [B]efore permitting a party to disqualify an attorney the 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.” (Citation omitted; Internal quotation marks omitted.) Neumann v. Tuccio, Superior Court, judicial district of Danbury, Docket. No. CV 07 5002831 (July 17, 2009, Shaban, J.) (48 Conn. L. Rptr. 298, 298-99).
Seven Bridges' motion to disqualify the plaintiff's attorneys, Heagney, Lennon & Slane, LLP, particularly Slane, from any further representation of the plaintiff in the present case is founded on the claim that the law firm, through its attorney Heagney, was representing Seven Bridges in the same project that is now the subject of the lawsuit brought by the plaintiff. Specifically, Seven Bridges argues that concurrent representation, without the informed, written consent of Seven Bridges, constitutes an impermissible conflict of interest and a breach of the law firm's duty of loyalty its client in violation of rule 1.7(a) and rule 1.10 of the Rules of Professional Conduct. Alternatively, Seven Bridges argues that even if it is a former client and not a concurrent client, rule 1.9 of the Rules of Professional Conduct, which governs duties to former clients, would still require disqualification of the plaintiff's law firm because the present case is substantially related to the matter which was the subject of Heagney's former representation of Seven Bridges.
The plaintiff argues that rule 1.9 and not rule 1.7 applies. Specifically, it argues that Heagney's representation of Seven Bridges ended no later than October 2009 and therefore Seven Bridges is a former client of Heagney and Slane's firm. Additionally, the plaintiff argues the former and present matters are not substantially related. Moreover, the plaintiff argues that neither Seven Bridges' motion to disqualify nor Seven Bridges' supporting affidavit contain facts that suggest that Seven Bridges could be prejudiced by Slane's representation of the plaintiff.
Rule 1.10, imputation of conflicts of interest, provides in relevant part: “(a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.” Accordingly, the court must first determine whether Heagney and Slane's firm would be prohibited from representing the plaintiff under either rule 1.7 or rule 1.9.
A. Disqualification Pursuant to Rule 1.7
Rule 1.7, conflict of interest: current clients, provides: “(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 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 (4) each affected client gives informed consent, confirmed in writing.”
Seven Bridges argues that the March 2010 letter written by Slane and the present lawsuit against it constitutes directly adverse representation and therefore a concurrent conflict of interest that is prohibited by rule 1.7(a)(1) absent written consent from Seven Bridges, the affected client, pursuant to rule 1.7(b)(4). It argues that the project has not yet been completed and therefore its permit process, including final inspections and issuance of a certificate of occupancy remains open and incomplete as to several of the town's imposed conditions, most of which relate to matters involving the same contractor, the plaintiff, that Slane is currently representing. Additionally, Seven Bridges argues that it was expecting to consult Heagney again and that Heagney never communicated to Seven Bridges his assumption or belief that his representation had ended. Finally, Seven Bridges argues that it has not expressly discharged Heagney or his law firm and Heagney has not withdrawn his representation of Seven Bridges before the planning and zoning commission.
Seven Bridges also points out that the official commentary to rule 1.7 provides in relevant part that “absent consent, a lawyer may not act as advocate in one matter against a person the lawyer represents in some other matter, even when the matters are wholly unrelated.” It argues that in the present case, the matters are not “wholly unrelated” but involve the same project and the same project representative, architects and other potential witnesses with whom Heagney dealt.
The plaintiff claims that Heagney's representation of Seven Bridges ended no later than October 2009 and therefore Seven Bridges is a former client of Heagney and Slane's firm. Additionally, it claims that after the last communication between Heagney and the project representative in October 2009, Seven Bridges did not contact Heagney to inquire about zoning or any other issues, even when the fire destroyed the building which was central to the project.
The plaintiff does not deny that Heagney represented Seven Bridges during the zoning and permitting process of the project. The material issue is whether that representation had terminated before the start of Slane's representation of the plaintiff. If Heagney was not representing Seven Bridges when Slane began representing the plaintiff, there would be no concurrent conflict of interest under rule 1.7.
There is no judicial authority addressing the issue of determining the date representation terminates for purposes of rule 1.7 when that question is in dispute. However, our Supreme Court has discussed when representation has terminated for purposes of tolling the statute of limitations for a malpractice action against an attorney under the continuous representation doctrine. DeLeo v. Nusbaum, 263 Conn. 588, 597 (2003). In that context, the Supreme Court held: “The formal termination of the relationship occurs when the attorney is discharged by the client, the matter for which the attorney was hired comes to a conclusion, or a court grants the attorney's motion to withdraw from the representation. A de facto termination occurs if the client takes a step that unequivocally indicates that he has ceased relying on his attorney's professional judgment in protecting his legal interests ․” Id.
In this case the evidence suggests that that Heagney's representation of Seven Bridges terminated in March 2008, when the planning and zoning commission approved the site plan and granted a special permit. The communications between Heagney and Seven Bridges representatives between March 2008 and October 2009 were incidental to Heagney's engagement. In his affidavit McKenzie asserts that “[t]hroughout [the] post-fire transitional period [Seven Bridges] continued to consider attorney Heagney to be one of its project lawyers and was planning to consult with him regarding whether there were any land use or zoning issues related to the January 2010 fire, the two existing 2008 [planning and zoning commission] approvals, and the repair and completion of the project.” (McKenzie Aff. ¶ 15). However, in his affidavit McKenzie does not claim that it had engaged Heagney as counsel with respect to issues arising out of the fire. The court finds that the evidence shows that the matter for which Heagney was hired, obtaining zoning approval for the project, came to a conclusion in March 2008 when the planning and zoning commission approved the site plan and special permit. Heagney's representation had been terminated two years prior to Slane's March 2010 letter to Briggs, in which Slane indicated that he was representing the plaintiff. In light of the court's finding, rule 1.7 does not apply.
B. Disqualification Pursuant to Rule 1.9
Rule 1.9, duties to former clients, provides: “(a) 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. (b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client (1) whose interests are materially adverse to that person; and (2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing. (c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client.”
Our Supreme Court has held that “[r]ule 1.9(a) expresses the same standard that we had applied under the Code of Professional Responsibility when a claim of disqualification based on prior representation arose. Thus, an attorney should be disqualified if he has accepted employment adverse to the interests of a former client on a matter substantially related to the prior representation ․ This test has been honed in its practical application to grant disqualification only upon a showing that the relationship between the issues in the prior and present cases is ‘patently clear’ or when the issues are ‘identical’ or ‘essentially the same.’ ․ Once a substantial relationship between the prior and the present representation is demonstrated, the receipt of confidential information that would potentially disadvantage a former client is presumed ․”Unlike Canon 9 under the Code of Professional Responsibility, however, the Rules of Professional Conduct do not expressly state that a lawyer should avoid the appearance of impropriety. Even when Canon 9 was applicable, we rejected the notion that an appearance of impropriety was alone a sufficient ground for disqualifying an attorney ․ [W]e [have] stated that the appearance of impropriety alone is simply too slender a reed on which to rest a disqualification order except in the rarest of cases ․ Although considering the appearance of impropriety may be part of the inherent power of the court to regulate the conduct of attorneys, it will not stand alone to disqualify an attorney in the absence of any indication that the attorney's representation risks violating the Rules of Professional Conduct.” (Citations omitted; internal quotation marks omitted.) Bergeron v. Mackler, supra, 225 Conn. 398-400.
In 2007, the rules were amended to include a definition of the term “substantially related.” The official commentary to rule 1.9 explains that “[m]atters are ‘substantially related’ for purposes of this Rule if they involve the same transaction or legal dispute or if there otherwise is a substantial risk that confidential factual information as would normally have been obtained in the prior representation would materially advance the client's position in the subsequent matter.” The official commentary also provides useful examples: “a lawyer who has represented a businessperson and learned extensive private financial information about that person may not then represent that person's spouse in seeking a divorce. Similarly a lawyer who has previously represented a client in securing environmental permits to build a shopping center would be precluded from representing neighbors seeking to oppose rezoning of the property on the basis of environmental considerations; however, the lawyer would not be precluded, on the grounds of substantial relationship, from defending a tenant of the completed shopping center in resisting eviction for nonpayment of rent.”
Seven Bridges argues that the present case is more similar to the example of the lawyer who has represented a businessperson and learned extensive private financial information about that person not being able to represent that person's spouse in seeking a divorce. It argues that the former attorney for a businessperson would be prohibited from subsequently representing the businessperson's spouse in their divorce without his consent because of the risk that confidential information, which would have been obtained in the prior representation could materially advance the wife's position in the subsequent matter.
Seven Bridges claims that Heagney was privy to its confidential information and about its project and witnesses, including the project representative and the project architect, which could be advantageous to the plaintiff in its lawsuit against Seven Bridges. Specifically, it claims that Heagney has knowledge of the intended scope of the plans and specifications to which the plaintiff was required to comply that would be unavailable to other lawyers that the plaintiff might retain. Seven Bridges argues that these are the very plans and specifications that will be a focus of the plaintiff's case and Seven Bridges' special defenses and counterclaims.
The plaintiff responds to these claims by asserting that the present case is more similar to the example of the lawyer who previously represented a client in securing environmental permits to build a shopping center who then defended a tenant of the completed shopping center in resisting eviction for non-payment of rent. The plaintiff claims that Heagney's representation of Seven Bridges to obtain land use approvals in no way relates to the present action in which the plaintiff is bringing a claim against Seven Bridges for its failure to pay for construction services the plaintiff performed. It points out that the pending litigation concerns responsibility for a fire and the amount and quality of work performed by the parties and that the claims will be evaluated based on evidence which occurred years after the town agencies which Heagney appeared before on behalf of Seven Bridges had approved the project. Moreover, the plaintiff points out that the information about the architectural plans are not confidential and are in a public file at the town's planning and zoning office.
The court finds that the issues in the present matter, a breach of contract claim, foreclosure of a mechanic's lien and related claims for relief, are not substantially related to Heagney's former engagement to obtain land use approvals. Both matters concern the same project, but the legal issues in the present matter will involve interpreting the terms of the contract between the plaintiff and Seven Bridges, not the zoning regulations of the town. Seven Bridges has not shown how any confidential factual information Heagney may have obtained while he represented it would materially advance the plaintiff's position in the present matter. Indeed, Seven Bridges has not demonstrated how information regarding the zoning approval would even be relevant to the plaintiff's breach of contract claim or Seven Bridges special defenses or counterclaims, in which it alleges the plaintiff is responsible for the fire and the damage it caused.
The court finds that Seven Bridges has not met its burden of showing that the plaintiff's counsel, Slane, should be disqualified under rules 1.7, 1.9 and 1.10. Accordingly, Seven Bridges' motion to disqualify is denied.
David R. Tobin, J.
Tobin, David R., J.