Peter v Gouland [2019] FMCSC 2; 22 FSM R. 404 (Chk. S. Ct. Tr. 2019) (4 March 2019)

CHUUK STATE SUPREME COURT TRIAL DIVISION
CSSC-CIVIL ACTION NO. 007-2019

EZIKIEL PETER,
Plaintiff,

vs.

VICTOR GOULAND and RESLEEN AITEL,
Defendants.
__________________________________________

ORDER CONCERNING DISQUALIFICATION OF COUNSEL MOTION

Midasy O. Aisek
Associate Justice

Hearing: March 1, 2019
Decided: March 4, 2019

APPEARANCES:

For the Plaintiff: Salomon M. Saimon, Esq.
P.O. Box 911
Kolonia, Pohnpei FM 96941

For the Defendants: Daniel Rescue, Jr., Esq.
Directing Attorney
Micronesian Legal Services Corporation
P.O. Box D
Weno, Chuuk FM 96942

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HEADNOTES

Attorney and Client
The Chuuk State Supreme Court adopted the 1983 ABA Model Rules of Professional Conduct as the code of ethics and model for professional conduct. These Model Rules lack a provision concerning "prospective clients." Thus, a person who approaches a firm and has a consultation with its attorneys is classified as either a former client, current client, or perhaps as a non-client. Peter v. Gouland, 22 FSM R. 404, 406 (Chk. S. Ct. Tr. 2019).

Attorney and Client - Disqualification of Counsel
A lawyer who formerly represented a client in a matter must not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the former client’s interests unless the former client consents after consultation. When lawyers are associated in a firm, none of them can knowingly represent a client if any one of them practicing alone would be prohibited from doing so. A legal services organization is considered one such firm. Peter v. Gouland, 22 FSM R. 404, 407 (Chk. S. Ct. Tr. 2019).

Attorney and Client - Disqualification of Counsel
A motion for disqualification of counsel solely because the client is a wealthy senator whose income exceeds the income level of a person that the legal services organization may represent is improper. A more proper remedy is to complain to the legal services organization’s executive director instead. Peter v. Gouland, 22 FSM R. 404, 407 (Chk. S. Ct. Tr. 2019).

Attorney and Client - Disqualification of Counsel
A litigant qualifies as a former client when he spoke with two different counselors from the firm, handed over papers, discussed his case’s merits, and shared confidential information which may have resulted in an internal discussion before he was referred to another law firm. Thus, when the litigant approached the firm about representing him as a plaintiff in the very same trespass action in which the firm now defends two persons with positions adverse to him and he objects to the firm’s representation of one of the defendants, the court need not ponder the reasons behind the litigant’s objection because the firm’s continued representation of that defendant violates Rule 1.9, which prohibits a lawyer from knowingly representing a client against a former client in the same matter if the clients’ interests are adverse and if the former client has not consented after consultation. Peter v. Gouland, 22 FSM R. 404, 407-08 (Chk. S. Ct. Tr. 2019).

Attorney and Client - Disqualification of Counsel
Conflicts of interest regarding former clients are imputed to all the lawyers within a law firm. Thus, even if the former client spoke with two of the firm’s counsel without their sharing any information with the lawyer currently representing an adverse party in the matter, those conflicts are still imputed onto the current counsel since he is part of the same legal services organization. Even if current counsel lacked prior knowledge of the former client’s interactions with the firm, once he knows of this circumstance, it is unethical for him to continue to represent the adverse party in the case. Peter v. Gouland, 22 FSM R. 404, 408 (Chk. S. Ct. Tr. 2019).

Attorney and Client - Disqualification of Counsel
When a former client has consented on the record to the law firm’s continued representation of one adverse co-defendant, the current representation of that party does not appear to violate the Model Code, although, under at least one possible future circumstance, that continued representation might do so, even after its withdrawal from representing the other adverse co-defendant. The court will therefore give counsel time to determine whether, after withdrawing from representing that client’s co-defendant, he can continue to represent that client in compliance with the code of conduct after which counsel will either file a motion to withdraw from that representation as well or do nothing and remain the counsel of record. Peter v. Gouland, 22 FSM R. 404, 408 (Chk. S. Ct. Tr. 2019).

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COURT’S OPINION

MIDASY O. AISEK, Associate Justice:

I. INTRODUCTION AND PROCEDURAL HISTORY

This written order clarifies this Court’s oral statements and reasoning from the March 1, 2019 hearing.

Prior to the Preliminary Injunction hearing on March 1, 2019, the parties filed several motions. Plaintiff Peter filed the following:

1. 1. Motion to disqualify MLSC as counsel for Defendants due to violation of Rule 1.9 of Professional Code of Conduct (conflict of interest between former and current client) and allegations that it is fundamentally unfair for MLSC to represent Gouland, a wealthy senator.
   
2. 2. Motion to disqualify memo re: boundaries of Nengach and Sanuwo, submitted by Iowas Simina due to conflict of interest.
   
3. 3. Motion for Show Cause as to why Defendants should not be held in contempt of violating injunction against dumping in taro patch.
   

Defendant Aitel submitted a motion for continuance to file an answer to a motion from February 26 to February 28, 2019. Aitel argued excusable neglect as the reason for the late filing - that resulted from the disruption caused by a typhoon which passed through Chuuk earlier last week. Peter did not oppose the motion. The Court found excusable neglected existed and found good cause to grant the motion under Rule 6(b) of the Chuuk State Rules of Civil Procedure. In his February 28, 2019 filing, Aitel responded to Peter’s three motions.

Prior to the hearing, the parties stipulated that Sanuwo should be formally surveyed prior to the preliminary injunction hearing - since a formal survey of Sanuwo has not occurred up to this date. Since Aitel and Gouland did not oppose a survey of Peter’s Sanuwo parcel, Peter agreed to withdraw his motion to regarding the disqualification of Iowas Simina.

As Sanuwo is claimed only by Peter, it is Peter’s responsibility to file with the Land Commission to have Sanuwo surveyed. Peter shall request the Land Commission to conduct a survey of Sanuwo around May 1, 2019 and request that the survey finish before June 28, 2019. Notice shall be provided to all abutting land owners. Although Peter believes that the Land Commission is more likely to proceed if ordered by the Court, it is only fair for Plaintiff to carry the expense of filing for the survey of his land. Plaintiff may file a writ of procedendo if the Land Commission causes unreasonable delays in commencing the survey. Peter shall file a notice with the Court once the survey is complete. The stipulated to injunction remains in effect until a hearing for an injunction based on the survey results for Sanuwo occurs before this Court.

Peter also withdrew his motion to show cause upon a clarification of facts concerning the alleged violation. That leaves the Motion to Disqualify counsel Rescue for Rules of Profession Conduct Violations.

II. ISSUES

1. 1. Whether MLSC’s representation of Defendant Gouland and Aitel without Peter’s consent violates Rule 1.9 of the Model Code of Professional Conduct.
   

III. STANDARD

A. GCO 03-08 adopted the 1983 ABA Model Rules of Professional Conduct

Chuuk State Supreme Court adopted the 1983 ABA Model Rules of Professional Conduct as the code of ethics and model professional conduct before the Chuuk State Supreme Court. The 1983 ABA Model Rules lack the 2002 amendment concerning "prospective clients." A person who approaches a firm and has a consultation with its attorneys is thus classified as either a former client, current client, or perhaps as a non-client.

B. Model Rule of Professional Conduct 1.9 Concerning Former Clients

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 consents after consultation. [Chk. MRPC R. 1.9;] ABA Mod. R. Prof. Conduct. 1.9 (1983).

C. Model Rule of Professional Conduct 1.10 on Imputed Disqualification

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, 1.8(c), or 1.9. [Chk. MRPC R. 1.10;] ABA Mod. R. Prof. Conduct. 1.10 (1983). The commentary within this rule defines a firm as a legal services organization, amongst others.

IV. FINDINGS

Peter alleged that he approached counsels Iwo and Meika at MLSC legal services, and explained to them his grievance against Gouland. Peter also handed Iwo and Meika documents concerning his ownership history and discussed the merits of his case with the counsels. Ultimately, MLSC refused representation and helped Peter secure his current counsel, Salomon Saimon. Sometime afterwards, Gouland approached MLSC. MLSC’s directing attorney, Daniel Rescue Jr. agreed to represent Gouland and Aitel. In his answer, Aitel’s and Gouland’s counsel does not dispute these facts and the Court adopts them as true.

Counsel Rescue also worked at MLSC at the time Iwo and Meika were approached by Peter. At oral argument, Peter did not oppose to Rescue’s representation of Aitel, but did oppose Rescue’s continued representation of Gouland.

V. ANALYSIS

A. Disqualification of MLSC for representing a wealthy senator

Peter’s motion contained arguments the Court should disqualify Rescue from representing Gouland as Gouland is a wealthy senator whose income exceeds the income level of a person that MLSC may represent. A motion for disqualification on this basis alone is improper. The more proper venue for a remedy is to complain to the Executive Director of MLSC instead of such motion. Peter’s motion does show however, that Peter does not consent to MLSC’s representation of Gouland, regardless of the reason.

B. Disqualification of MLSC due to Rule 1.9 Violation

Rescue’s continued representation of Gouland will violate Rule 1.9 of the ABA Rules of Professional Conduct. Rule 1.9 prohibits a lawyer from knowingly representing a client against a former client in the same matter if the clients’ interests are adverse - unless the former client consents after consultation.

Peter qualifies as a former client of MLSC. He spoke with two different counselors from MLSC, handed over papers, and discussed the merits of his case. He shared confidential information which may have resulted in an internal discussion prior to being referred to Saimon’s law firm. As there is no Rule in the 1983 version of the code for prospective clients, Peter’s interactions with MLSC qualify him as a former client.
Second, Peter approached MLSC regarding his representation as a plaintiff in this very trespass action - the same matter where MLSC now defends Gouland and Aitel. Third, as Plaintiffs and Defendants within this action, the positions of Peter vs. Gouland/Aitel are adverse.

Finally, Peter objects to the representation of Gouland by MLSC - as so long as there is an objection, the Court need not ponder the reasoning behind it.

Rule 1.10 imputes all the lawyers within a law firm as to the conflicts of interest under Rule 1.9, so even if Peter spoke with Iwo and Meika without their sharing any information with Rescue, rule 1.9 is still imputed onto Rescue - as he is part of the same legal services organization.

Even if Rescue lacked prior knowledge of Peter’s interactions with Iwo and Meika, he now knows of this circumstance as a result of this hearing. Therefore, it is unethical for Rescue to continue to represent Gouland in this case.

Peter consented to Rescue’s continued representation of Aitel on the record. Thus, Rescue’s current representation of Aitel does not appear to violate the Model Code. However, under at least one possible future circumstance, counsel’s continued representation of Aitel after the withdrawal from representation of Gouland might.

VI. CONCLUSION

The Court will hold Plaintiff’s Motion in abeyance for 20 days. During that time, Counsel Rescue shall file for a motion to withdraw his representation of Defendant Gouland. Further, Rescue shall determine whether he can continue to represent Aitel in compliance with the code of conduct after withdrawing representation from Gouland. Counsel Rescue shall then either file a motion to withdraw from Aitel’s representation or do nothing to remain the counsel of record for Aitel.

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