Wednesday, May 25, 2011

Not Substantially Related

The New Jersey Supreme Court has affirmed the denial of a motion to disqualify counsel based on a consultation between the attorney and the defendant that did not lead to the attorney's retention. the court majority concluded that the two matters were not substantially related:

Defendant’s motion to disqualify Attorney Lee rightly was denied because defendant has not demonstrated that the matters disclosed during the February 2008 consultation were the same or substantially related to the subject matter of this lawsuit, or that the information disclosed during that consultation was harmful to defendant in this lawsuit. Mrs. Kang’s vague and unsubstantiated assertions that she disclosed business, financial, and legal information related to the current lawsuit does not satisfy defendant’s burden of production and persuasion. In contrast, Attorney Lee provided a detailed recitation of the consultation, accompanied by contemporaneous documents corroborating that it was limited to a particular matter. Finally, defendant’s assertion that disclosures made may become relevant should plaintiff succeed in the lawsuit and seek to enforce a judgment is illusory and premature.

The case is the first matter in which the court interpreted new RPC 1.18, which sets out duties to a prospective client.

The defendant seeking disqualification met with plaintiff's counsel for three hours on February 4, 2008 at a karaoke bar. They agree that they discussed the attorney's willingness to replace counsel in a civil case. The prospective client says (and has a witness) that they discussed quite a bit more. The attorney promptly declined the representation.

This matter involves the attorney's representation of a client who sued a business controlled by the prospective client. The court here concluded that the evidence supported the attorney's version of events, affirming the trial court and Appellate Division's denial of the disqualification motion.

The court notes the "sparse record" and the Hobson's Choice presented to a moving former prospective client to spill the confidential beans to the court deciding the motion. Nonetheless, denial of motion to disqualify affirmed herein.

A dissent concludes that the matter should not be decided on the papers and that the "hotly contested" versions of the meeting requires an evidentiary hearing. (Mike Frisch)

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