Monday, September 22, 2008
A law firm that had been sued by a former client for a conflict of interest produced internal firm documents such as billing records, financial statements and policy manuals that disclosed the firm's conflicts checking procedures. A protective order was entered requiring that the documents would be returned at the conclusion of the litigation. The matter then was settled.
Two years later, the firm was again sued for legal malpractice by the same lawyers who had handled the earlier case. The defendant firm claimed a breach of the protective order. The trial court found no breach and declined to hold the lawyers in contempt.
On appeal, the South Carolina Supreme Court reversed, holding that the law firm's continued possession of the policy manual violated the protective order and breached the settlement agreement. Thus, the trial court erred in declining to hold the lawyers in contempt:
In the instant case, the trial court’s conclusion that Bland and Richter did not willfully violate the protective order is without evidentiary support. Leaving aside the question of whether Bland and Richter’s initial possession of the policy manual was intentional, Bland and Richter both testified at trial that upon discovering the wrongfully retained copies of the policy manual, they recalled immediately that there was a protective order in place which required the return or destruction of the documents. Bland and Richter have not disputed that they knew that confidential documents from the Myrick litigation were not to be used in any other litigation, and in this vein, the trial court’s conclusion that there was no willful violation of the protective order is not supported by the evidence.
The court declined to consider whether the use of testimonials on the law firm's web site and in their office display constituted a contempt as the issue had not been preserved for appeal. (Mike Frisch)