Douglass v. Priddy
2014 Ohio 2881
Ohio Ct. App.2014Background
- Douglass, court-appointed receiver for MyriadHealth, sued Pamela Priddy and Health Plan Administrators, LLC (HPA) in Geauga County; trial court disqualified defense counsel Bell due to prior representation of Myriad; judgment affirmed on appeal.
- MyriadHealth, LLC developed health care software; Priddy negotiated and signed a Myriad employment contract as president, which contained non-compete and non-solicit provisions.
- Bell, previously Myriad’s outside counsel, advised on the employment agreement and the Operating Agreement; Myriad retained Bell to negotiate Priddy’s employment contract in 2008.
- Myriad filed a six-count complaint (breach of contract, tortious interference, conversion, unjust enrichment, fiduciary duty, and UTSA) on September 20, 2012; Bell then represented appellants beginning November 2012.
- Myriad moved to disqualify Bell on June 28, 2013; hearing October 24, 2013; November 5, 2013 judgment disqualified Bell; appellate appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court properly found substantial relation under Dana test | Myriad argues Bell’s prior work on Priddy contract is substantially related | Priddy argues no substantial relation and no waiver | No abuse; three-prong test satisfied; Bell disqualified. |
| Whether prejudice evidence was required | Myriad need not show prejudice; confidences presumed with substantial relation | Myriad must show prejudice | Prejudice need not be shown; confidences presumed under substantial relation. |
Key Cases Cited
- Dana Corp. v. Blue Cross & Blue Shield Mut. Of N. Ohio, 900 F.2d 882 (6th Cir. 1990) (test for attorney disqualification (three prongs))
- Cleveland Elec. Illuminating Co. v. Cleveland, 440 F. Supp. 193 (N.D. Ohio 1976) (confidential information may be presumed in related matters)
- T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F. Supp. 265 (S.D.N.Y. 1953) (conflicts and disqualification framework cited by courts)
- Westfall v. Cross, 144 Ohio App.3d 211 (7th Dist. 2001) (finality of disqualification orders; discretionary standard)