Lateral Hire’s Brief Role in ‘Dormant’ Case Doesn’t Require New Firm’s Disqualification

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May 15 — A law firm representing defendants in a copyright infringement suit need not be disqualified even though one of its lawyers never formally ended her representation of the opposing party in a “long dormant” matter at her former firm, the U.S. District Court for the Middle District of Florida ruled May 12 .  

The plaintiff, AppSoft Development Inc., made two arguments to disqualify defense counsel, the Marks Gray law firm, based on laterally hired attorney Jill Bechtold's involvement in a 2011 employment-related suit that AppSoft filed against a fired worker.

The first was that a “current client” conflict existed under Florida Rule of Professional Conduct 4-1.7(a) because the 2011 case “remained open,” even though it sat unattended for two years.

Alternatively, AppSoft said the infringement action is “substantially related” to the employment case, and that a conflict thus exists under Rule 4-1.9 even if the software company is a former client of Bechtold's.

Judge Timothy J. Corrigan rejected both arguments.

No Current-Client Conflict

The Rule 4-1.7 claim was based on Bechtold's appearance on AppSoft's behalf in a 2011 lawsuit against a web designer who allegedly breached a noncompete agreement after he was fired.

Bechtold, who was working at another firm at the time, filed that complaint in September 2011. The defendant moved to dismiss a month later, and no other documents were filed for more than two years, leading to a motion to dismiss based on lack of prosecution.

“Until that time, AppSoft was unaware that the case remained open,” Corrigan said.

Shortly thereafter, Bechtold—who had not formally withdrawn from the case—switched firms, joining Marks Gray. She brought over a list of clients that did not include AppSoft.

Those facts indicate that Bechtold “lacks a current attorney-client relationship with AppSoft,” Corrigan said.

He noted that although “no case law explicitly defines when an attorney-client relationship ends,” the “most applicable comment” in the ethics rules states: “If a lawyer's employment is limited to a specific matter, the relationship terminates when the matter has been resolved.”

Applying that comment, Corrigan said: “For all intents and purposes, the long dormant [employment] case was ‘resolved' before the instant cases were initiated in December 2013 because AppSoft … believed it was resolved.”

A Rule 4-1.7 conflict would not exist even if the case were revived, he added, because the attorney-client relationship in that scenario would be with Bechtold's former firm, not with her.

“Even if Bechtold sought to take AppSoft as a client when she left [her former firm], under [Florida Rule] 4-5.8(c)(1), she would not have been allowed to unilaterally contact AppSoft to inform them of her departure or solicit their business unless she had engaged in bona fide negotiations with [the firm] that were unsuccessful,” Corrigan pointed out.

No Former-Client Conflict

The court also rejected AppSoft's Rule 4-1.9 argument.

The company's assertion that it “held extensive discussions with Ms. Bechtold regarding its software and websites” at her former firm was insufficient to establish that the employment matter was “substantially related” to the present dispute, Corrigan said. “It is not apparent from a comparison of the complaints, nor has AppSoft submitted any other evidence suggesting, that this case is at all related to the [prior] case.”

Allen, Dyer, Doppelt, Milbrath & Gilchrist P.A. represents AppSoft. Marks Gray represents the defendants.

Full text at http://www.bloomberglaw.com/public/document/AppSoft_Dev_Inc_v_Diers_Inc_Case_No_313cv1520J32JBT_Case_No_313cv

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