Filed: Feb. 08, 2019
Latest Update: Feb. 08, 2019
Summary: OPINION & ORDER [Resolving Docs. 13, 15] JAMES S. GWIN , District Judge . Plaintiff claims that Defendants breached an agreement to sell their home health care business. At the Court's January 8, 2019 case management conference, it came to light that Plaintiff's counsel Elizabeth Zink-Pearson previously represented Defendants. The Court asked the parties to submit position papers discussing whether Plaintiff counsel's previous representation posed an ethical issue. 1 The Court construes D
Summary: OPINION & ORDER [Resolving Docs. 13, 15] JAMES S. GWIN , District Judge . Plaintiff claims that Defendants breached an agreement to sell their home health care business. At the Court's January 8, 2019 case management conference, it came to light that Plaintiff's counsel Elizabeth Zink-Pearson previously represented Defendants. The Court asked the parties to submit position papers discussing whether Plaintiff counsel's previous representation posed an ethical issue. 1 The Court construes De..
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OPINION & ORDER
[Resolving Docs. 13, 15]
JAMES S. GWIN, District Judge.
Plaintiff claims that Defendants breached an agreement to sell their home health care business. At the Court's January 8, 2019 case management conference, it came to light that Plaintiff's counsel Elizabeth Zink-Pearson previously represented Defendants. The Court asked the parties to submit position papers discussing whether Plaintiff counsel's previous representation posed an ethical issue.1 The Court construes Defendants' response as a motion to disqualify Plaintiff's counsel.2
For the following reasons, the Court GRANTS Defendants' motion to disqualify.
I. Background
Beginning in 2010, Plaintiff counsel's firm Pearson & Bernard provided legal advice to Defendants. The firm advised Defendants regarding various Medicare-related issues and revisions to their business operating agreement.3 The parties also agree that, in 2016, Zink-Case Pearson assisted Plaintiff in negotiating and drafting the letter of intent that is at issue in this lawsuit.4
However, the parties dispute how far Zink-Pearson's representation went beyond these matters. Defendants state that they met with Zink-Pearson in 2012 to discuss revisions to their corporate records in anticipation of sale.5 Defendants also say that they shared confidential business information at this meeting, and that Zink-Pearson suggested a potential purchaser.6 The Defendants unsuccessfully discussed a potential sale with this buyer. Defendants say that they sought Zink-Pearson's advice on sale-related matters again on several occasions between 2013 and 2016.7
Zink-Pearson, on the other hand, denies that she advised Defendants after 2012.8 She admits that she did suggest a potential buyer at a May 2012 meeting with Defendants. But she denies that she otherwise advised Defendants regarding the business sale or that she had access to confidential information.
II. Discussion
The Court has inherent power to disqualify an attorney whose representation presents a conflict of interest.9 In doing so, the Court uses the Ohio Rules of Professional Conduct as a benchmark.10
Defendants argue that Zink-Pearson's continued representation violates Ohio Rule of Professional Conduct 1.9(a), which provides that "[u]nless the former client gives informed consent, confirmed in writing, 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."11
Plaintiff's interests are plainly averse to Defendants' and Defendants have not given written informed consent.12 Thus, the only issue is whether this lawsuit is "substantially related" to the matters in which Zink-Pearson and her firm represented Defendants.13
There is no dispute that Zink-Pearson advised Defendants regarding a potential sale of the business in 2012 and suggested a potential buyer. The sale of Defendants' business is the same transaction at issue in this lawsuit, albeit to a different purchaser.14 Thus, her representation violates Rule 1.9.
Courts disqualifying attorneys for conflict-of-interest violations have also required a showing that the attorney acquired confidential information from the party seeking disqualification.15 Because these matters were substantially related, the Court presumes that Defendants disclosed confidential information to Zink-Pearson in the course of her representation.16
Although Zink-Pearson asserts that her sale-related advice was limited to her suggesting a potential buyer, she was admittedly present at a meeting at which a potential sale was discussed and "any doubts as to the existence of an asserted conflict of interest must be resolved in favor of disqualification in order to dispel any appearance of impropriety."17 Further, the Court finds that Zink-Pearson's disqualification would not work any hardship to Plaintiff at this early stage of litigation.
Because the Court disqualifies Zink-Pearson on these grounds, the Court need not consider whether her representation would also violate Ohio Professional Rules 3.7 and 1.7.
III. Conclusion
For the reasons stated above, the Court GRANTS Defendants' motion to disqualify. The Court orders Zink-Pearson to withdraw from representing Plaintiff.
IT IS SO ORDERED.
