XYZ, D.O. v. Robin Sykes and Thomas Williams, and ABC Hospital

Nov 13 2014, 10:25 am
FOR PUBLICATION
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
DAVID J. BEACH KEVIN P. McGOFF
MALLORY R. INSELBERG KARL L. MULVANEY
Eichhorn & Eichhorn, LLP ALEX E. GUDE
Hammond, Indiana Bingham Greenebaum Doll, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
XYZ, D.O., )
)
Appellant-Defendant, )
)
vs. ) No. 41A01-1402-CT-85
)
ROBIN SYKES and THOMAS WILLIAMS, )
)
Appellees-Plaintiffs, )
)
and )
)
ABC HOSPITAL, )
)
Defendant. )
APPEAL FROM THE JOHNSON SUPERIOR COURT
The Honorable Lance D. Hamner, Judge
Cause No. 41D03-1212-CT-156
November 13, 2014
OPINION - FOR PUBLICATION
CRONE, Judge
Case Summary
XYZ, D.O. (“Doctor”) brings an interlocutory appeal from the trial court’s denial of
his motion to disqualify attorney Michael S. Miller and the law firm of Montross, Miller,
Muller, Mendelson & Kennedy (collectively “MMMMK”) from representing Robin Sykes
and Thomas Williams (“the Plaintiffs”) in their suit for negligence and loss of consortium
against Doctor and ABC Hospital (“the Hospital”). Doctor moved to disqualify MMMMK
arguing that MMMMK has an imputed conflict of interest because one of its current
employees, attorney Kathleen Clark, previously represented Doctor as his primary lawyer in
six medical malpractice cases. Doctor asserts that the trial court abused its discretion in
denying the motion to disqualify. We agree with Doctor and therefore reverse the trial
court’s decision and remand for further proceedings.
Facts and Procedural History
The relevant facts indicate that Clark is an attorney currently employed at MMMMK.
In 2003, prior to working at MMMMK, Clark maintained a practice as a civil defense
attorney at her own law firm, Clark & Associates. It was during that time that Clark began
her attorney-client relationship with Doctor after he was named as a defendant in the medical
malpractice matter of Timbrook v. XYZ, D.O., et al. On June, 26, 2003, Clark entered her
appearance as Doctor’s sole attorney in that case. On August 1, 2003, Clark entered her
appearance as Doctor’s sole attorney in another medical malpractice case, Couch v. XYZ,
D.O., et al. By May 2004, Clark had moved to the law firm of Eichhorn & Eichhorn, and she
proceeded to represent and defend Doctor in Timbrook and Couch, as well as four additional
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medical malpractice cases. In the course of her representations of Doctor, it was Clark’s
practice and routine to obtain Doctor’s thoughts and mental impressions about each case,
discuss and formulate discovery responses, and prepare Doctor for depositions. Clark’s
representation of Doctor concluded in April 2005, after she left her employment at Eichhorn
& Eichhorn. In each of the six cases, a medical review panel eventually found in favor of
Doctor.
Clark began her full-time employment at MMMMK in February 2010. Clark
currently works as an “intake attorney,” conducting initial interviews with potential clients to
obtain case summaries and relevant information to determine if MMMMK will pursue
representation. Tr. at 83. Clark prepares reports of the information she obtains regarding
these potential cases and presents them at bimonthly meetings with other law firm members.
In the summer of 2012, Clark conducted the intake interview for the Plaintiffs’
medical malpractice injury claim in this case. Clark recognized the name of the physician
involved as that of Doctor, her former client whom she had represented and defended in
multiple medical malpractice cases. Nevertheless, she obtained information from the
Plaintiffs and later presented the summary of the Plaintiffs’ claim during a firm meeting.
Thereafter, MMMMK attorney Miller elected to take the case. MMMMK gathered the
relevant medical records, and, at Miller’s direction, Clark prepared a timeline of events for
his review regarding the circumstances surrounding the Plaintiffs’ injuries.
MMMMK filed a proposed complaint on behalf of the Plaintiffs with the Indiana
Department of Insurance on August 15, 2012, and a complaint for damages against Doctor
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and the Hospital in Johnson Superior Court on December 13, 2012. Count I of the complaint
states a negligence claim against both Doctor and the Hospital, alleging that Doctor
negligently performed spinal surgeries on Sykes and that the Hospital “negligently
credentialed” Doctor with respect to those surgeries. Appellant’s App. at 11. Count II of the
complaint raises a loss of consortium claim on behalf of Williams.
In April 2013, Doctor’s attorney sent a letter to MMMMK asserting that MMMMK
had violated the Indiana Rules of Professional Conduct by representing Plaintiffs in this case
and indicating that MMMMK should withdraw from representation. In response to that
letter, on June 1, 2013, MMMMK implemented “internal security procedures” to screen
Clark from participation in the case even though MMMMK believed that such a “screen was
unnecessary under the circumstances.” Tr. at 48-49. By this time, MMMMK had already
represented Plaintiffs for approximately eleven months.
On June 27, 2013, Doctor filed a motion to disqualify MMMMK from representing
the Plaintiffs in this case based upon Clark’s prior six representations of Doctor and
MMMMK’s stated intent to rely, in part, on the medical malpractice cases in which Clark
represented Doctor to prove its negligent credentialing claim. The Hospital joined in the
motion to disqualify. Following a hearing, the trial court entered its order denying the
motion. Doctor subsequently petitioned the trial court to certify its order for interlocutory
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Appeal.1 The trial court granted that request, and this Court accepted jurisdiction.
Additional facts will be provided in our discussion as necessary.
Discussion and Decision
Doctor contends that the trial court abused its discretion when it denied his motion to
disqualify MMMMK from representing the Plaintiffs in their case against Doctor and the
Hospital. Specifically, Doctor argues that attorney Clark’s prior representation of him in six
medical malpractice cases creates a conflict of interest pursuant to Indiana Rule of
Professional Conduct 1.9 that should be imputed to her new law firm, MMMMK, pursuant to
Indiana Rule of Professional Conduct 1.10. MMMMK responds that the current matter is not
substantially related to the prior representations, and therefore no conflict of interest is
implicated. MMMMK maintains that even assuming a conflict exists, MMMMK has
adequately rebutted any presumption in favor of disqualification. We will evaluate these
assertions in turn.
Our supreme court has stated that a trial court may disqualify an attorney for a
violation of the Indiana Rules of Professional Conduct that arises from the attorney’s
representation before the court. Cincinnati Ins. Co. v. Willis, 717 N.E.2d 151, 154 (Ind.
1999). This authority to disqualify “has been described as necessary to prevent ‘insult and
gross violations of decorum ….”’ Id. We review a trial court’s decision regarding
disqualification for an abuse of discretion. Reed v. Hoosier Health Sys., Inc., 825 N.E.2d
1
We note that although the Hospital joined in Doctor’s motion to disqualify, the Hospital does not join
in this interlocutory appeal of the trial court’s denial of the motion. We attach no significance to this decision
by the Hospital.
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408, 411 (Ind. 2005). “An abuse of discretion occurs when the trial court’s decision is
clearly against the logic and effect of the facts and circumstances before it or it has
misinterpreted the law.” Id.
This case involves the conflicts that arise and obligations that remain when lawyers
move from one law firm to another. As we consider the duties owed to former clients by
those who some have aptly described as “migratory lawyers,”2 we look first to Indiana
Professional Conduct Rule 1.9, which 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 has 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
See Donald R. Lundberg, Migratory Lawyers and Other Exotic Species, 49 RES GESTAE 27 (June
2006).
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(2) reveal information relating to the representation except as these
Rules would permit or require with respect to a client.
Professional Conduct Rule 1.10, which was substantially amended in 2005, entitled
“Imputation of Conflicts of Interest: General Rule” provides in relevant part:
(c) When a lawyer becomes associated with a firm, no lawyer associated in the
firm shall knowingly represent a person in a matter in which that lawyer is
disqualified under Rule 1.9 unless:
(1) the personally disqualified lawyer did not have primary
responsibility for the matter that causes the disqualification under Rule
1.9;
(2) the personally disqualified lawyer is timely screened from any
participation in the matter and is apportioned no part of the fee
therefrom; and
(3) written notice is promptly given to any affected former client to
enable it to ascertain compliance with the provisions of this rule.
The above-cited language encompasses the basic principle that, except under very
specific conditions, if an individual lawyer is personally disqualified from a client
representation, his or her new law firm is also disqualified. In Gerald v. Turnock Plumbing,
Heating, & Cooling, LLC., 768 N.E.2d 498, 502 (Ind. Ct. App. 2002), we were called upon to
consider the issue of imputed disqualification due to the migration of lawyers between firms
pursuant to Professional Conduct Rule 1.9 and the former version of Rule 1.10.3 Consistent
3
Formerly, Rule 1.10 read in pertinent part:
(b) When a lawyer becomes associated with a firm, the firm may not represent a
person in the same or a substantially related matter if it knows or reasonably should
know that that lawyer, or a firm with which the lawyer was associated, had previously
represented a client whose interests are materially adverse to that person and about
whom the lawyer had acquired information protected by Rules 1.6 and 1.9(b) that is
material to the matter.
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with the principles espoused in our Rules of Professional Conduct, we adopted the three-step
test used by the Seventh Circuit Court of Appeals in determining whether a migrating lawyer,
and in turn that lawyer’s new law firm, should be disqualified from a present representation
due to a prior representation. Gerald, 768 N.E.2d at 503. We explained,
First, we must determine whether a substantial relationship exists between the
subject matter of the prior and present representations. If we conclude a
substantial relationship does exist, we must next ascertain whether the
presumption of shared confidences with respect to the prior representation has
been rebutted. If we conclude this presumption has not been rebutted, we must
then determine whether the presumption of shared confidences has been
rebutted with respect to the present representation. Failure to rebut this
presumption would also make disqualification proper.
Id. (quoting Schiessle v. Stephens, 717 F.2d 417, 420 (7th Cir. 1983)).
As for the first step of the test, we noted in Gerald that when defining what constitutes
a substantially related matter within the context of Rule 1.9, our supreme court has “looked to
the facts of a case to determine if the issues in the prior and present cases are ‘essentially the
same or are closely interwoven therewith.’” Id. (quoting In re Robak, 654 N.E.2d 731, 734
(Ind. 1995)). Comment 3 to Rule 1.9 provides further guidance and explains that matters are
substantially related “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.”
Although the parties vigorously disagree as to this issue, we believe that the prior and
the present representations here are substantially related for the purposes of Rule 1.9. In her
six prior representations of Doctor, Clark defended him against allegations of medical
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malpractice. The present representation involves an allegation against Doctor for medical
malpractice as well as an allegation against the Hospital for negligent credentialing, based in
part upon the Hospital’s alleged failure to adequately investigate the circumstances
surrounding those six prior malpractice cases in which Clark represented Doctor.4 Thus, the
present case involves one claim of the same subject matter as Clark’s prior representations of
Doctor, and another claim that grew out of and is directly related to Clark’s prior
representations of Doctor. The issues in the prior and present cases are undoubtedly closely
interwoven, and despite MMMMK’s assertions to the contrary, there is a substantial risk that
confidential factual information as would normally have been obtained in the prior
representations would materially advance the Plaintiffs’ position in the present case.
MMMMK argues that Rule 1.9 is inapplicable because the only claim in the present
case that implicates Clark’s prior representations of Doctor is the Plaintiffs’ negligent
credentialing claim against the Hospital, and that the Plaintiffs’ interests are not materially
adverse to Doctor’s interests with regard to that claim since Doctor faces no monetary
liability on that claim. First, we do not agree with MMMMK that a former client cannot have
materially adverse interests in a matter merely because the former client does not necessarily
face monetary liability. Moreover, we are unpersuaded by MMMMK’s attempt to parse the
current matter into separate unrelated claims against different defendants. One complaint
was filed by one law firm in one legal forum. Indeed, both the medical malpractice claim
4
We acknowledge that MMMMK indicated to the trial court that, in support of its negligent
credentialing allegation, it planned to inquire regarding the Hospital’s alleged failure to investigate twenty-four
prior medical malpractice claims against Doctor.
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and the negligent credentialing claim are contained in count I of the complaint. This is a
single matter for purposes of Rule 1.9. The fact that Doctor and the Hospital, as
codefendants, may have some independent interests at stake is not dispositive. Plaintiffs’
interests are materially adverse to both defendants, and the defendants are united in terms of
whether Clark, and in turn MMMMK, has a conflict of interest regarding the current
representation of Plaintiffs in this single matter.
MMMMK also urges that the prior and present representations should not be
considered substantially related because any information acquired during Clark’s prior
representations of Doctor, the last of which ended in 2005, has been rendered obsolete due to
the passage of time. See Ind. Professional Conduct Rule 1.9, cmt. 3 (“Information acquired
in a prior representation may have been rendered obsolete by the passage of time, a
circumstance that may be relevant in determining whether two representations are
substantially related.”). This argument is unavailing. If the six prior medical malpractice
cases remain relevant regarding the current allegation of negligent credentialing, as
MMMMK admits, any confidential factual information gleaned during those prior
representations can hardly be deemed stale or obsolete. As stated above, the present matter is
substantially related to Clark’s prior representations of Doctor.
Concluding that the prior and the present cases are substantially related, we proceed to
the second step of the Gerald test, namely the rebuttable presumption that Clark in fact
received confidential information from Doctor during her prior representations. See Gerald,
768 N.E.2d at 504. In other words, “we must determine whether the attorney whose change
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of employment created the disqualification issue was actually privy to any confidential
information [her] prior law firm received from the party now seeking disqualification of [her]
present firm.” Schiessle, 717 F.2d at 420. Here, MMMMK cannot and does not attempt to
rebut this presumption. A conclusion as to whether a lawyer possesses such confidential
information “may be based on the nature of the services the lawyer provided the former client
and information that would in ordinary practice be learned by a lawyer providing such
services.” Ind. Professional Conduct Rule 1.9, cmt. 3. It is undisputed that Clark was the
primary and, at times, only attorney representing Doctor in each of those prior medical
malpractice cases. As such, she was privy to much confidential information, including but
not limited to Doctor’s personal thoughts and mental impressions regarding the facts and
circumstances and the strengths and weaknesses of those cases. The presumption of shared
confidences in the prior representations has not been rebutted.
Accordingly, we turn to the final step of the imputed disqualification analysis in which
“there is a rebuttable presumption that the knowledge possessed by one attorney in a law firm
is shared with the other attorneys in the firm.” Gerald, 768 N.E.2d at 505. In Gerald, we
concluded that it was possible, under stringent circumstances, for a personally disqualified
lawyer to be screened from a substantially related matter adverse to her former client in order
to avoid imputation of her disqualification to the new firm. Id. Specifically, we stated that
the presumption of shared confidences could be rebutted by a demonstration that “Fire
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Walls” were implemented to effectively insulate against any flow of confidential information
from the “infected attorney” to any member of her present law firm. Id.5
Our supreme court agreed with this possibility for effective screening when it
amended Rule 1.10 in 2005 to specify conditions that a migrating lawyer and her new law
firm must meet to avoid imputed disqualification, including timely screening from the matter,
fee exclusion, and written notice to the former client. See Ind. Professional Conduct Rule
1.10(c). However, the amended rule makes clear that imputed disqualification is per se and
screening is not possible in cases where the personally disqualified lawyer had “primary
responsibility” for the prior “matter that causes the disqualification.” Ind. Professional
Conduct Rule 1.10(c)(1). Here, because Clark was Doctor’s primary, and at times, only
lawyer in the six prior medical malpractice cases, she cannot be screened to avoid imputation
of the conflict to MMMMK. Under such circumstances, the presumption of shared
confidences within the new law firm becomes irrebuttable. Consequently, Clark’s personal
disqualification from this matter must be imputed to MMMMK.6
5
Indeed, we encouraged migrating lawyers and their new law firms to institute some type of procedure
to catalogue prior representations so that, when migration occurs, “timely Fire Walls can be erected and the
migrating lawyers do not blindly infect their new offices.” Gerald, 768 N.E.2d at 505, n.4.
6
We note that even if Clark did not have primary responsibility for Doctor’s prior representations and
that effective screening was a possibility, the screening procedures employed by MMMMK here, which
occurred eleven months into the current representation, were untimely and would have been insufficient to
avoid imputed disqualification. See Ind. Rule of Professional Conduct 1.0(k) (defining “screened” as “the
isolation of a lawyer from any participation in a matter through the timely imposition of procedures within a
firm that are reasonably adequate under the circumstances to protect information that the isolated lawyer is
obligated to protect under these Rules or other law.”).
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We emphasize to the parties that we recognize that the imputed disqualification of an
entire law firm is a serious penalty and that we do not make our decision lightly. That said,
we must be cognizant that “public trust in the integrity of the judicial process requires that
any serious doubt be resolved in favor of disqualification.” Robertson v. Wittenmyer, 736
N.E.2d 804, 806 (Ind. Ct. App. 2000). This case squarely raises such serious doubt.
Therefore, we are constrained to conclude that the trial court abused its discretion in denying
Doctor’s motion to disqualify MMMMK. The trial court’s interlocutory order is reversed,
and this case is remanded for further proceedings consistent with this opinion.
Reversed and remanded.
BAKER, J., and MATHIAS, J., concur.
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