Prospective Client Didn't Meet Burden Of Showing Harmful Secrets Were Disclosed

The ABA/BNA Lawyers’ Manual on Professional Conduct™ is a trusted resource that helps attorneys understand cases and decisions that directly impacts their work, practice ethically, and...

A husband who consulted a lawyer about a divorce but never retained him did not establish that he gave the lawyer “significantly harmful” information during the consultation as required to block the lawyer's firm from subsequently representing the wife, the Missouri Court of Appeals, Eastern District, decided Aug. 9 (State ex rel. Thompson v. Dueker, Mo. Ct. App. E. Dist., No. ED96570, 8/9/11).

The court ruled that when a party seeks to disqualify an opponent's lawyer whom the party consulted but did not hire, the burden on the movant is higher than when a former client is seeking disqualification. Under the rule on obligations to prospective clients, the party seeking disqualification must offer evidence that during the consultation the lawyer garnered specific confidences that would be damaging to the party if used in the current matter, Judge Kathianne Knaup Crane explained for the court.

Consultation About Dissolution

John C. Thompson initiated a post-dissolution proceeding in August 2010 in hopes of reducing his $5,000 monthly maintenance obligation.

Thompson's ex-wife, Diane Thompson, retained Theodore S. Schechter of the Schechter Law Firm to represent her. That choice of counsel did not suit the husband, who had met with a different lawyer in the Schechter Law Firm, Jeffrey Schechter, back in September 2006 before the parties' marriage was dissolved.

The husband filed a motion under Missouri Rule of Professional Conduct 1.9 to stop Theodore Schechter and the Schechter Law Firm from representing the wife. He asserted that although he ultimately hired other counsel to represent him in the dissolution proceeding, he had paid the Schechter Firm $140 for a consultation that lasted about an hour in which he discussed “personal and confidential information about my business and my personal life” with Jeffrey Schechter.

Jeffrey Schechter testified that although he did not remember meeting with John Thompson, he had located an office intake form indicating that he had met with Thompson for about 30 minutes in 2006. According to Schechter, that form did not contain any secret information.

The trial court granted the husband's motion and directed the Schechter Law Firm to step aside as the wife's counsel.

The court of appeals reversed, concluding that the husband did not satisfy the requirements that a former prospective client must meet under Rule 1.18 to force the disqualification of an opponent's counsel.

Former Prospective Client

The trial court had grounded its decision on Rule 1.9(a), which governs conflicts of interest involving former clients.

The appellate court found that Rule 1.9(a) did not apply because the husband never retained the Schechter Law Firm to represent him.

An attorney-client relationship exists, the court said, when a potential client seeks and receives legal advice and assistance from a lawyer who intends to provide legal advice and assistance to the potential client in a particular matter. Along with several Missouri cases, the court cited Section 15 of the Restatement (Third) of the Law Governing Lawyers (2000).

“Mere payment of a fee without proof that the payor received legal advice or assistance from the attorney or that the attorney intended to provide the client with legal advice or assistance, does not show an attorney-client relationship,” the court said. Nor does a potential client's mere belief in an attorney-client relationship suffice, it added.

The court pointed out that in this case, no testimony established that the husband sought or received any legal advice or help from Jeffrey Schechter, or that the lawyer intended to provide the husband with legal counsel and assistance. Instead, the court said, the evidence showed that after consulting with Jeffrey Schechter, the husband hired someone else to represent him in the dissolution action.

Thus, the husband was not a “former client” under Rule 1.9, but rather a former “prospective client” under Rule 1.18, the court found.

No ‘Significantly Harmful' Information

Rule 1.18 prohibits a lawyer from representing a client with interests adverse to a former prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter.

In the context of prospective clients, the court explained, a conflict occurs not because the prospective client consulted the lawyer, but only when the prospective client has passed “significantly harmful” confidential information to the lawyer.

“Thus, one of the primary differences between Rule 4-1.9 and Rule 4-1.18 is that representation is not barred by Rule 4-1.18 ‘unless the lawyer has received from the prospective client information that could be significantly harmful if used in the matter,'” the court said, quoting Comment [6] to Rule 1.18.

To flesh out the concept of “significantly harmful” information, the court drew on O Builders & Assocs. Inc. v. Yuna Corp., 19 A.3d 966, 27 Law. Man. Prof. Conduct 353 (N.J. 2011).

In O Builders, the New Jersey Supreme Court said that to meet the standard of being “significantly harmful,” information cannot simply be detrimental in general to the former prospective client; rather, the harm suffered must be prejudicial in fact to the former prospective client in the specific matter in which disqualification is sought.

Embracing that approach, the Missouri court said that in contrast to disqualification proceedings under Rule 1.9, “specific evidence of the nature and substance of the information is required in Rule 4-1.18 proceedings to establish that it is ‘significantly harmful;' speculative or hypothetical claims of harm are not enough.”

Application of Rule 1.18 will necessarily require at least some disclosure, either by the former prospective client or by the lawyer, of the scope of information discussed, the court said. The former prospective client bears the burden of persuading the tribunal that the lawyer received significantly harmful information, it added, citing O Builders and Section 15 of the Restatement.

Applying these principles, the court found that the husband did not offer the additional evidence required to support disqualification under Rule 1.18. Because he was not a former client under Rule 1.9(a), the trial court abused its discretion in disqualifying the firm under the lesser requirements of that rule, the court concluded.

Theodore S. Schechter of Schechter Law Firm in Clayton, Mo., represented Diane Thompson. Susan E. Block of Paule, Camazine & Blumenthal in St. Louis represented John Thompson.

Full text at http://op.bna.com/mopc.nsf/r?Open=kswn-8klszx .

 

The ABA/BNA Lawyers’ Manual on Professional Conduct is a joint publication of the American Bar Association Center for Professional Responsibility and BNA.

Copyright 2011, the American Bar Association and The Bureau of National Affairs, Inc. All Rights Reserved.