Rule 3.7 Disqualification Upheld

The South Carolina Court of Appeals affirmed as modified a trial court order disqualifying counsel as a necessary witness.

The order makes clear that disqualification is for purposes of trial only and does not prevent the attorney from otherwise providing legal services to the client.

The legal malpractice case involves issues with a real estate matter

Altman, on behalf of Fine Housing, brought a legal malpractice suit against Sloan. In its complaint, Fine Housing alleged Sloan failed to identify the tax liens on the  Properties, which required Altman to negotiate and obtain payoffs for the tax liens. Fine Housing also alleged Sloan failed to discover that the Properties were subject to the Clarke lease and the Crabtree and Foster lawsuits and failed to issue the title policies correctly.

In his answer, Sloan denied Altman was required to negotiate tax lien payoffs for the Properties. Sloan alleged Fine Housing failed to mitigate damages, suffered damages due to its own negligence, and its damages were caused by the intervening and superseding acts of others. On June 9, 2016, Sloan submitted his first set of answers to interrogatories, naming Altman as a witness.

Sloan then sought disqualification citing Rule 3.7

Fine Housing argued the matters were uncontested and disqualification would cause substantial hardship to Fine Housing.

At the hearing on the motion to disqualify Altman, Sloan also asserted Altman was the only one who could explain the tax liens and whether the Crabtree and Foster settlements were fair and reasonable. Lastly, he asserted Altman was a necessary witness as to the mitigation of damages based on Clarke's offers to buy the Properties.

The circuit court granted the motion, finding that Altman was a necessary witness and that the dual roles of lawyer and witness would confuse the jury. 

The court here

We find the circuit court did not abuse its discretion by disqualifying Altman because the record supports the circuit court's conclusion he was a necessary  witness.

The basis for that conclusion is recited in the decision. 

But the circuit court's order was too broad

Because Rule 3.7 does not require Altman to be disqualified from all representation and to do so would exacerbate the hardship to Fine Housing, to the extent the order did so, we modify the order to clarify Altman is only disqualified from representing Fine Housing at the trial of this case.

(Mike Frisch)