CI-834
October 25, 1982
SYLLABUS
A lawyer may defend a claim brought against the lawyer's firm by a former client, even if members of the firm will be called as witnesses.
The party seeking disqualification of a lawyer serving as advocate and witness has the burden of showing that the lawyer's testimony is necessary to support the claim of the lawyer's client.
A party seeking disqualification of a lawyer serving as advocate and witness has the burden of showing that the lawyer's client will be prejudiced by the lawyer's testimony.
References: MCPR DR 5-101(B), DR 5-102(A) and (B); Op 262; CI-569; ABA Op 250; Auseon v. Reading Brass Co., 22 Mich App 505 (1970); Greenebaum-Mountain Mortgage Co. v. Pioneer Nat'l Title Ins. Co., 421 F Supp 1348 (D Colo, 1976); JT Foley & Co. v. Vanderbilt, 523 F2d 1357 (CA2 1975); Ross v. Great Atl. & Pac. Tea Co., 447 F Supp 406 (SD NY 1978); Smith v. Arc-Mation, Inc., 402 Mich 115 (1978); Zions First Nat'l Bank NA v. United Health Clubs, Inc., 505 F Supp 138 (ED Pa, 1981).
TEXT
A former client sued a law firm and a particular partner of the firm, alleging breach of contract, invasion of privacy, interference with an advantageous relationship, and requesting an accounting of an escrow account. One of the firm members is representing the law firm in the matter; the partner named in the complaint is representing himself.
The former client has named the advocate as a potential witness in the litigation and has moved for disqualification. The inquiring advocate states that his involvement in the representation of the former client was minor and peripheral, that he had very little professional contact with the former client and merely received assignments from those whose involvement was primary. Furthermore, it was never contemplated that the inquirer would testify on behalf of the firm and there is no foreseeable testimony which the inquirer could offer that could be prejudicial to the firm.
The attempt by the former client to require withdrawal is based upon assertions based on MCPR Canons 4 and 5. MCPR DR 5-101 states::
"(1) The representation of the former client created a duty to preserve the confidences of that client which normally survives the termination of the attorney-client relationship; and,
"(2) An attorney must withdraw from representation of a client if it is obvious that he ought to be called as a witness."
The rule which sets forth the lawyer's duty to preserve the confidences and secrets of a client is MCPR DR 4-101. While normally a lawyer should not use the confidence or secret of his or her client to the disadvantages of that client, DR 4-101(C) indicates that:
ABA Op. 250 states:
"[T]he adjudicated cases recognize an exception to the rule [that a lawyer shall not reveal the confidences of his client], where disclosure is necessary to protect the lawyer's interest arising out of the relation of lawyer and client in which disclosure was made."
One exception that has been recognized is that an attorney may disclose information received from the client when it becomes necessary for his own protection, as if the client should bring an action against the lawyer for negligence or misconduct. Mechem on Agency, 2d Ed., Vol. 2 2313.
CI-569 authorized disclosure of protected information in the event that there is an actual controversy between the lawyer and a former client. This would limit the disclosure of confidences and secrets to the extent necessary to defend a lawyer or his employees or associates when called upon to explain his or her conduct before a court or other tribunal having jurisdiction over a pending matter.
Op 262 concluded that a member of a law firm may with propriety appear and defend an action brought against other members of such firm even though it is likely that those defendant firm members will testify as witnesses in the cause. MCPR DR 5-102(A) prohibits a lawyer from continuing employment in contemplated or pending litigation when it is obvious that the lawyer ought to be called as a witness on behalf of his client unless one of four exceptions exist as follows:
- If the testimony will relate solely to an uncontested matter;
- If the testimony will related solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony;
- If the testimony will relate solely to the nature and value of legal services rendered in the case by the lawyer or his firm to the client;
- As to any matter, if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case.
Decisions interpreting DR 5-102(A) have not been in agreement on the meaning of the word "ought." Some courts have held that the application of the Code does not depend on whether the lawyer will be called, but disqualification would be required only when testimony is necessary. See JT Foley & Co. v. Vanderbilt, 523 F2d 1357 (CA2 1975).
In Auseon v. Reading Brass Co., 22 Mich App 505 (1970), the Court considered the question as one requiring an analysis of whether the lawyer's testimony will be necessary in order to litigate the issues based on pleadings. The court stated at 512:
"While the mere allegation or assertion by a party that a counsel may be called upon to testify as a witness in the litigation cannot automatically invoke Canon 19, in this case there are indications that the testimony of both of attorneys will be necessary in order to litigate the allegations of fraud made in defendant's responsive pleadings . . . . Under these conditions, it is apparent that the testimony of the attorneys may well be essential to refute the charges." Emphasis added.
In Smith v. Arc-Mation, Inc., 402 Mich 115 (1978), a motion was brought to require the withdrawal of a lawyer based in part on DR 5-102(A). In that case, the lawyer had drafted a memorandum of understanding which the movant claimed was a material issue in the cause and that as the draftsman of the instrument, the lawyer ought to be called as a witness. In overruling the trial court and the Court of Appeals, the Supreme Court stated:
"[The courts] appear to be saying that if any arguable question can be raised regarding the propriety of a lawyer continuing to appear in a case, and order can be obtained disqualifying that lawyer. That constitutes, in our opinion, a dangerous doctrine. It puts in the hands of an adversary the ability to force an opponent to change counsel if the adversary can advance any arguable grounds in support of disqualification." 402 Mich 115, 118 (1978).
The court indicated that because the lawyer had filed an affidavit wherein he had stated under oath that he had no intention of being called as a witness and that there was no likelihood that he would be called as a witness since all of the allegations contained in the complaint could be proved by competent testimony and proofs from other sources, the suggestion that the defendants would call him to testify on the issue of ambiguity was not supported by the record. Furthermore, the opposing counsel had never clearly expressed an intention of calling the lawyer as witness.
Courts have often recognized that DR 5-101(B) and DR 5-102(A) are often used as unfair trial tactics. See Greenebaum-Mountain Mortgage Co. v. Pioneer National Title Ins. Co., 421 F Supp 1348 (D Colo, 1976); Zions First Nat. Bank NA v. United Health Clubs, Inc., 505 F Supp 138 (ED Pa, 1981).
"The party seeking to have opposing counsel disqualified has the burden of establishing that counsel's continuing in the case would violate the disciplinary rules. Freeman, supra, 449 F. Supp. at 979; Kroungold, supra, 521 F.2d at 766. To grant a motion to disqualify without a clear showing that continued representation is impermissible would undermine the integrity of DR 5-102, for it 'was not designed to permit a lawyer to call opposing counsel as a witness and thereby disqualifying him as counsel.'" Zions First Nat. Bank NA v. United Health Clubs, Inc., 505 F Supp 138, 140 (ED Pa, 1981).
If the inquirer has determined that his testimony is not necessary on behalf of the client firm, inquirer may want to supply the court with an affidavit indicating that fact. If the opposing party carries his burden of showing inquirer is a necessary witness, inquirer would need to fall into one of the exceptions set forth in DR 5-102(A). If inquirer can show that he is not a necessary witness, the opponent must meet the burden of showing that the testimony which inquirer would provide would be detrimental to inquirer's client under DR 5-102(B) which provides:
"If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm may be called as a witness other than on behalf of his client, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his client."
As the Freeman case pointed out, if it is asserted that prejudice would result to a client if that client's lawyer testified, the movant's assertion would not be sufficient grounds for disqualification if the assertion of prejudice is rebutted by the assertion that the testimony would not be prejudicial. The court pointed out that while testimony need not be absolutely crucial for a disqualification motion to be granted, it must not be so insignificant that it raises a suspicion that the motion is a tactical move.
In Ross v. Great Atl. & Pac. Tea Co., 447 F Supp 406 (SD NY 1978), the court indicated that the disqualification of a lawyer is a drastic remedy which should be avoided if possible. In that case, the movant had stated that the lawyer ought to be called as a witness on behalf of his client, and therefore should be disqualified under DR 5-102(B). The court held that DR 5-102(A) was inapplicable since the prima facie case could be presented through the testimony of other witnesses who had first-hand knowledge of the facts. The court stated at 408:
"The impact of DR 5-102(B), however, presents a more difficult question. Under that rule, the party seeking disqualification must show that the testimony be elicited from [its] adversary will be prejudicial to the latter's client. To disqualify an attorney on any lesser showing would sanction an intolerable tactic whereby an attorney could disqualify his adversary merely by calling him to the witness stand."
The court indicated that any testimony that would be given by the lawyer if called by the adverse party would not be prejudicial to his client, therefore he was not required to be disqualified.
The court considered the client's right to the counsel of choice to be one of the highest order. Furthermore, the court relied on DR 5-102(B) which permits the lawyer to continue to represent the client when the lawyer is to serve as a witness other than on behalf of the client, until it is apparent that prejudice to the client may or will result.
In conclusion, a lawyer may defend his law firm against a claim brought by a former client.
Furthermore, because of the right of the client to the lawyer of his or her choice, the moving party attempting to force a lawyer's withdrawal based on an assertion that it is obvious that the lawyer ought to be called as a witness, must carry the burden of showing either that the lawyer's testimony is necessary to support the current client's claim, and not within any exception established in DR 5-102(B), or that the moving party will call the lawyer as witness to elicity testimony which will be prejudicial to the client.
Finally, even if the moving party could carry the burden, inquirer may continue to represent the client if withdrawal would result in a substantial hardship on the client.