David R. Samnick v. Yaacova I. Goodman

FIRST DIVISION
BARNES, P. J.,
GOBEIL, J., and SENIOR APPELLATE JUDGE PHIPPS
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
April 1, 2020
In the Court of Appeals of Georgia
A20A0562. SAMNICK v. GOODMAN.
BARNES, Presiding Judge.
This is a divorce action between Yaacova I. Goodman and David R. Samnick
in which Goodman filed a motion to disqualify Samnick’s lawyer, Miles W. Rich, on
the grounds that Rich had an attorney-client and social relationship with Goodman
that created a conflict of interest and made him a necessary witness in the case. The
trial court granted Goodman’s motion to disqualify Rich but also granted Samnick a
certificate of immediate review. Samnick then filed an application for interlocutory
appeal, which this Court granted, resulting in the present appeal in which he
challenges the disqualification of his counsel in the divorce proceedings. For the
reasons discussed below, we discern no abuse of discretion by the trial court and
affirm.
“The ultimate determination of whether an attorney should be disqualified from
representing a client in a judicial proceeding rests in the sound discretion of the trial
judge. This Court will not interfere with a trial court’s ruling absent abuse of that
discretion.” (Citation and punctuation omitted.) Befekadu v. Addis Intl. Money
Transfer, 339 Ga. App. 806, 807 (1) (795 SE2d 76) (2016). In ruling on a motion to
disqualify counsel, the trial court sits as the trier of fact, resolving conflicts in the
evidence and assessing witness credibility. See WellStar Health System v. Kemp, 324
Ga. App. 629, 635 (1) (b) (751 SE2d 445) (2013).
Mindful of these principles, we turn to the record in the present case, which
reflects that Goodman and Samnick were married in December 2016 but later
separated. They have no children together, but both of them had children from
previous marriages.
At the center of the dispute in this appeal is Goodman’s relationship with Rich,
an attorney licensed to practice in Georgia who sought to represent Samnick in the
pending divorce proceedings. Goodman and Samnick knew Rich before they were
married. Rich had been Samnick’s personal attorney for many years, representing him
in family law and business matters. Goodman met Rich in August 2016 when she
agreed to pay him to represent Samnick’s son in a criminal case.
2
According to Goodman, she subsequently developed a personal friendship with
Rich and Rich’s wife, and she also sought advice from Rich about legal matters on
several occasions. In late September 2016, a few months before Goodman and
Samnick married, Goodman asked Rich for his advice regarding a dispute she was
having with her former employer. Goodman was concerned that her former employer
would not pay her the full commission that she was owed on her last sale with the
company, and she sent an email to Rich that read in pertinent part:
I hope you are well. I am having an issue with my previous employer
paying my final commission check. According to our compensation
plan, they have 60 days to pay my final check. Today was the end of the
60 days and they have not paid me. It has been one excuse after another.
They are now telling me it will be a few more days. They are
withholding about $80,000 and could be more, depending on how you
read the plan. What would your fee be to review the documents and
write them a letter? I think they need a nudge to get this resolved.
Rich responded by email:
Yaacova. Sure, I will be glad to look at it. Please also send me a detailed
explanation of how you determined what they owe you. Is the company
located in Georgia? Does the employment contract specify you have to
sue them in their jurisdiction or does it have an arbitration clause?
Because it is commissions, it may not be subject to wage and hour laws,
and usually these contracts have jurisdiction restrictions as well as
3
binding arbitration clauses. I am not an employment law expert. And we
are talking about a lot of money. I will be glad to give you an opinion,
and then we can decide how to proceed or go to an employment
litigation attorney. Also, you said they are telling you. Are they telling
you in writing or verbally. If verbally, I would call them and leave a
message, in other words, get them to call you back, and then record the
call, as we are a one party state and you can surreptitiously record them
and then use it in court. We can discuss this later. . . .
Goodman thereafter forwarded to Rich several emails from her former
employer that pertained to the commission issue, as well as a copy of her commission
plan and the contract that she “sold” to her final customer under the plan. In the email
forwarding the documents to Rich, Goodman answered some of Rich’s questions
about her employment and stated that she “would welcome [his] advice” about how
to handle the matter. According to Goodman, as part of her consultation with Rich
about the commission issue, she shared detailed, confidential information about her
earnings and employment and sent him a copy of her employment contract, and she
discussed with him whether writing a letter to her former employer would be the
appropriate course of action. In an October 2016 email to Goodman, Rich stated that
he had looked at the documents that Goodman sent to him, and he asked several
follow-up questions regarding the calculation of the commission and agreed to write
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a letter to her former employer, but stated that he was leaving town and would need
to write the letter when he returned. Rich, however, never wrote the letter.
Before and during Goodman and Samnick’s marriage, Rich and Rich’s wife
attended social gatherings at their home and went out to dinner with them. Goodman
and Samnick also spent time on Rich’s houseboat on several occasions. Additionally,
Rich invited Goodman and Samnick to a religious gathering for Rich’s late father.
According to Goodman, she considered Rich a family friend, and she confided in him
information about her marriage and Samnick, and Rich warned her that Samnick had
a problem with fidelity. Also, during the marriage, Goodman asked Rich about the
possibility of filing an action against her ex-husband for a modification of child
support and of pursuing a personal injury action against a hotel for an injury sustained
by her son on a trip abroad, and she testified that Rich provided her with advice
regarding how to address those issues.
Goodman filed a petition for divorce in December 2018, seeking an equitable
division of the marital property and debts and an award of attorney fees. Samnick,
represented by Rich, filed an answer and counterclaim for divorce and an award of
attorney fees under OCGA § 19-6-2. In his answer, Samnick asserted that Goodman
was employed in the information technology sector and earned in excess of $500,000
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annually, and in a supplemental filing, he indicated that he sought alimony from
Goodman based on her current earnings.1
Goodman filed a motion to disqualify Rich from representing Samnick,
contending that she had a former attorney-client relationship with Rich with respect
to various matters that were substantially related to the divorce and had not consented
to Rich representing Samnick in the divorce proceedings. She also contended that
Rich was a necessary and material witness because of his social relationship with the
parties and his observations and conversations with them that occurred over several
years. Samnick opposed the motion, denying that an attorney-client relationship had
ever formed between Goodman and Rich or that Rich had been privy to any
information that would make him a necessary witness. Samnick submitted the
affidavit of Rich in support of his position.2
1
Goodman’s counsel referred to Samnick’s supplemental filing during the
hearing on the disqualification motion and noted that Samnick had made clear in the
filing that he sought alimony, but the filing was not included in the appellate record.
In its order disqualifying Rich, the trial court found that the record reflected that
alimony was one of the issues to be resolved in this case. In light of the incomplete
record, we must presume that the trial court’s determination that alimony was at issue
in the case was correct. See Krayev v. Johnson, 327 Ga. App. 213, 222 (2) (757 SE2d
872) (2014).
2
The parties also filed cross-motions for contempt. Those motions remained
pending before the trial court when it entered its ruling on the disqualification motion
6
The trial court conducted a two-day hearing on the disqualification motion.
Goodman testified to events as set out above and introduced emails reflecting
communications between her and Rich and documents she submitted to him about the
commission issue. Samnick and Rich’s wife also testified at the hearing in opposition
to disqualification. Additionally, the parties agreed that the trial court could consider
Rich’s affidavit submitted in opposition to the disqualification motion.
Following the hearing, the trial court entered its order disqualifying Rich from
representing Samnick in the divorce proceedings, citing to, among other things, Rules
1.7 (a),3 1.9 (a),4 and 3.7 (a)5 of the Georgia Rules of Professional Conduct, found in
and are not addressed in this appeal.
3
State Bar Rule 1.7 (a) provides: “A lawyer shall not represent or continue to
represent a client if there is a significant risk that the lawyer’s own interests or the
lawyer’s duties to another client, a former client, or a third person will materially and
adversely affect the representation of the client, except as permitted in (b) [addressing
obtaining informed consent from the affected client].”
4
State Bar Rule 1.9 (a) provides: “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 gives informed consent, confirmed
in writing.”
5
State Bar Rule 3.7 (a) provides: “A lawyer shall not act as advocate at a trial
in which the lawyer is likely to be a necessary witness except where: (1) the testimony
relates to an uncontested issue; (2) the testimony relates to the nature and value of
7
Bar Rule 4-102 (d) (the “State Bar Rules”). The trial court determined that
“[a]lthough [Goodman] presented several other instances in which she may have
received legal advice from Mr. Rich,” it was clear from the evidence that Rich formed
an attorney-client relationship with her for purposes of addressing her commission
issue with her former employer, and that as part of the representation, Goodman
provided Rich with detailed information about her commission structure and thus her
earning capacity. The trial court noted that the issues to be resolved in the divorce
included alimony and equitable division of property and debt, and that information
about Goodman’s earning capacity would inform the court’s determination of those
issues. Hence, the trial court concluded that there was a substantial relationship
between matters involved in Rich’s prior representation of Goodman and the divorce
proceedings, and that Rich’s knowledge of Goodman’s earning capacity was likely
to be used against Goodman in the trial of the case. The trial court also concluded that
Rich was a necessary witness based on knowledge he had gained from his social
relationship with Goodman and Samnick.
legal services rendered in the case; or (3) disqualification of the lawyer would work
substantial hardship on the client.”
8
1. Samnick contends that the trial court erred in disqualifying Rich from
representing him in the divorce proceedings based on the court’s conclusion that Rich
represented Goodman in her commission dispute with her former employer and that
matters involved in the previous representation and the divorce action were
substantially related.
It is a “long-standing rule [under Georgia law] that a lawyer is disqualified
from representing a party against a former client in a matter that is ‘substantially
related’ to the lawyer’s prior representation.” Crawford W. Long Memorial Hosp. of
Emory Univ. v. Yerby, 258 Ga. 720, 721 (1) (373 SE2d 749) (1988). See State Bar
Rule 1.9 (a); Rescigno v. Vesali, 306 Ga. App. 610, 612 (1) (703 SE2d 65) (2010).
While there is an exception to this rule where the lawyer obtains the informed written
consent to the representation from the former client, see State Bar Rule 1.9 (a), it is
undisputed that Goodman did not provide written consent for Rich to represent
Samnick in the divorce proceedings.
In determining whether disqualification is warranted, courts must remain
cognizant that
[t]he right to counsel is an important interest which requires that any
curtailment of the client’s right to counsel of choice be approached with
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great caution. In determining whether to disqualify counsel, the trial
court should consider the particular facts of the case, balancing the need
to ensure ethical conduct on the part of lawyers against the litigant’s
right to freely chosen counsel.
(Citation and punctuation omitted.) Befekadu v. Addis Int. Money Transfer, 332 Ga.
App. 103, 106 (1) (c) (772 SE2d 785) (2015). “Because of the right involved and the
hardships brought about, disqualification of chosen counsel should be seen as an
extraordinary remedy and should be granted sparingly.” (Citations and punctuation
omitted.) Bernocchi v. Forcucci, 279 Ga. 460, 462 (2) (614 SE2d 775) (2005). But,
as previously noted, the decision over whether to disqualify counsel ultimately falls
within the sound discretion of the trial court. See Befekadu, 339 Ga. App. at 807 (1).
(a) Samnick argues that the trial court erred in finding that Rich formed an
attorney-client relationship with Goodman with respect to the commission issue and
thus in concluding that Goodman was a former client of Rich. We disagree.
Although attorney-client relationships are typically matters of
express contract, such a relationship can also be implied from the
parties’ conduct. And the employment of an attorney is sufficiently
established when it is shown that the advice or assistance of the attorney
is sought and received in matters pertinent to his profession.
Additionally, while the payment of a fee is relevant to the inquiry and
may in some circumstances be controlling, an attorney-client
10
relationship may be found to exist when no fee is paid, and the payment
of a fee does not necessarily demonstrate the existence of the
relationship. All that is necessary is a reasonable belief on the part of the
would-be client that he or she was being represented by the attorney. A
reasonable belief is one which is reasonably induced by representations
or conduct on the part of the attorney.
(Footnotes and punctuation omitted.) Estate of Nixon v. Barber, 340 Ga. App. 103,
106 (1) (796 SE2d 489) (2017). See Huddleston v. State, 259 Ga. 45, 46-47 (1) (376
SE2d 683) (1989);Cleveland Campers v. R. Thad McCormack, P. C., 280 Ga. App.
900, 903 (2) (635 SE2d 274) (2006).
Guided by these principles, we conclude that the trial court committed no error
in finding that Rich formed an attorney-client relationship with Goodman for
purposes of addressing the commission issue. Goodman testified that she consulted
with Rich about the dispute over her final commission payment that she was having
with her former employer and sought his advice about how to proceed, and, to that
end, shared detailed information about her compensation plan and earnings with Rich
in emails and private discussions. Goodman also introduced into evidence emails in
which she forwarded to Rich communications from her former employer about the
commission issue and documents that explained her commission structure and how
11
the commissions were to be determined, and in which she answered questions about
her former employer and sought Rich’s advice about how to handle the matter. Email
evidence presented by Goodman also reflected that Rich agreed to look at the
commission issue for Goodman and to provide her with his opinion, asked her a series
of follow-up questions regarding her employment and the calculation of her
commissions, advised her on Georgia law regarding electronic communications, and
promised to write a letter to her former employer on her behalf and told her when he
planned to write the letter.
Given this record, the trial court was authorized to find that Goodman sought
and received professional legal advice from Rich about the commission issue, and
that Rich’s representations and conduct induced Goodman to reasonably believe that
she was being represented by Rich with respect to that issue. And, while Rich in his
affidavit described his interactions with Goodman differently and claimed that he
never offered her advice, it was for the trial court, not this Court, to resolve conflicts
in the testimony and evaluate witness credibility. See WellStar Health System, 324
Ga. App. at 635 (1) (b). Consequently, there was evidence to support a finding that
an attorney-client relationship existed between Rich and Goodman under Georgia
law. See Estate of Nixon, 340 Ga. App. at 106 (1) (noting that an attorney-client
12
relationship can be inferred from conduct and does not require payment of fee by
client); Calhoun v. Tapley, 196 Ga. App. 318, 319 (395 SE2d 848) (1990) (evidence
sufficient to find attorney-client relationship where attorney discussed the legal matter
with the party and answered all of her questions, and the party received assurances
from the attorney that he was handling the matter).
(b) Samnick further argues that even if Rich formed an attorney-client
relationship with Goodman for purposes of addressing the commission issue, the trial
court abused its discretion in determining that matters involved in the previous
representation and the divorce action were substantially related so as to justify
disqualification. Again, we disagree.
As the party seeking disqualification, [Goodman] had the burden
to demonstrate to the superior court that disqualification was warranted,
and [she] had to do so by showing that the matters embraced within the
pending suit are substantially related to the matters or the cause of action
involved in the previous representation. To be “substantially related” for
the purpose of assessing the need for disqualification means that the
former case in which the lawyer was involved has both material as well
as logical connections to the pending litigation[.]
(Citations and emphasis omitted.) Cardinal Robotics v. Moody, 287 Ga. 18, 21 (694
SE2d 346) (2010). See Kamara v. Henson, 340 Ga. App. 111, 113-114 (2) (796 SE2d
13
496) (2017). By way of example, “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.” State Bar Rule 1.9 (a), cmt. 3.
Applying these principles to the present case, we conclude that the trial court
acted within its discretion in finding that Goodman satisfied her burden of showing
that matters involved in the prior representation and the pending divorce proceedings
were substantially related. Goodman presented evidence that in seeking legal advice
from Rich about the commission issue, she shared detailed financial information with
him about her commission structure and earnings with her former employer, and such
information would be pertinent to a determination of her earning capacity. See
Duncan v. Duncan, 262 Ga. 872, 873 (1) (426 SE2d 857) (1993) (noting that
“numerous factors must go into a determination of a party’s earning capacity,”
including evidence of the “party’s past income”). And, earning capacity may be
considered by the trial court in determining the equitable distribution of marital
property and debt, the amount of alimony, and the attorney fees awarded under
OCGA § 19-6-2 in a divorce action. See Klardie v. Klardie, 287 Ga. 499, 503 (3)
(697 SE2d 207) (2010) (“In certain domestic cases, earning capacity is an appropriate
means to determine an award of attorney fees pursuant to OCGA § 19-6-2.”); Wier
14
v. Wier, 287 Ga. 443, 444 (4) (696 SE2d 658) (2010) (trier of fact “may consider
assets and earning capacity, in addition to income, in fixing the amount of alimony”);
Taylor v. Taylor, 283 Ga. 63, 64 (1) (656 SE2d 828) (2008) (affirming trial court’s
decision as to how to equitably distribute retirement accounts based on, among other
things, evidence of the wife’s earning potential); Duncan, 262 Ga. at 873 (1) (“In
certain circumstances, our case law has permitted earning capacity rather than gross
income to be used to determine the amounts of alimony . . . and attorney fees to award
in domestic cases.”). Consequently, the trial court was authorized to exercise its
discretion and find that matters addressed in Rich’s prior representation of Goodman
had both material and logical connections to matters involved in the pending divorce
proceeding, such that the matters were substantially related.
It is true that “the mere fact that an attorney has general financial information
about a former client does not necessarily warrant disqualification”; as we have
pointed out, the former client is “still required to show a substantial relationship
between the attorney’s knowledge of her assets and the pending suit.” (Citation,
punctuation, and emphasis omitted.) Benson v. McNutt, 289 Ga. App. 565, 566 (657
SE2d 639) (2008). See Duvall v. Bledsoe, 274 Ga. App. 256, 259 (617 SE2d 601)
(2005). However, as noted above, Goodman presented evidence that went beyond
15
showing that Rich simply had knowledge of general financial information about her;
rather, she demonstrated that Rich had knowledge of specific information about her
commission structure and earnings that bore a substantial relationship to issues being
litigated in the divorce proceedings. Hence, this is not a case where the attorney was
alleged to simply have acquired “general financial information” during the prior
representation without a further showing of a substantial relationship between the
prior and current matters. Compare Benson, 289 Ga. App. at 566 (former client failed
to show that lawyer’s general knowledge of her assets based on prior trust and estate
work was substantially related to pending lawsuit in which it was alleged that she had
misappropriated another’s assets, where former client failed to present any evidence
of “when . . . [the] prior representation occurred relative to the pending case or to
specify information that counsel may have received”); Duvall, 274 Ga. App. at 259
(former client failed to show that lawyer’s knowledge of his personal finances in
connection with representation in prior divorce proceedings and a trust matter bore
any substantial relation to the pending medical malpractice/wrongful death action).
Samnick asserts that because the commission that Goodman discussed with
Rich was earned before the marriage, it constituted separate rather than marital
property and thus was not substantially related to matters in dispute in the pending
16
divorce. But “a party’s non-marital property is a factor that may be considered in
assessing the equities of the division of marital property.” Payson v. Payson, 274 Ga.
231, 233 (1) (b) (552 SE2d 839) (2001). Furthermore, Goodman’s prior commissions
were pertinent to the issue of her earnings capacity, which in turn was pertinent to the
equitable distribution of property and the amount of alimony and attorney fees to be
awarded in the divorce, as discussed supra.
Accordingly, for all of the aforementioned reasons, we conclude that the trial
court did not abuse its discretion in determining that Rich’s prior representation of
Goodman was substantially related to the divorce proceedings and thus in
disqualifying him from representing Samnick.
2. Samnick also contends that the trial court erred in disqualifying Rich based
on his personal relationship with Goodman and on the court’s finding that Rich was
a necessary witness in the divorce proceedings. As discussed supra in Division 1, the
trial court acted within its discretion in disqualifying Rich based on his former
representation of Goodman in the dispute over her commission. Because “a ruling
right for any reason must be affirmed,” In re Estate of Williams, 241 Ga. App. 17, 17
(1) (525 SE2d 742) (1999), we need not reach Samnick’s contentions raised in this
division.
17
Judgment affirmed. Gobeil, J., and Senior Appellate Judge Herbert E. Phipps
concur.
18