CHELSIE GWEN NEWTON, JERRICKO ROBERT NEWTON, RONALD PRESTON ISAACSON, AND SUZIE GWEN NEWTON, Aрpellants, v. STONERIDGE APARTMENTS, CHRIS EDWARD WALL, TARA COHAN WALL, WALL BROTHERS REAL ESTATE LIMITED PARTNERSHIP, AND WALL BROTHERS INC., Appellees.
No. 20150957-CA
THE UTAH COURT OF APPEALS
Filed April 12, 2018
2018 UT App 64
Fourth District Court, Spanish Fork Department
The Honorable M. James Brady
No. 120300155
D. David Lambert, Leslie W. Slaugh, and Andrew B. Berry Jr., Attorneys for Appellants
Daniel S. McConkie and Ryan Beckstrom, Attorneys for Appellees
JUDGE DAVID N. MORTENSEN authored this Opinion, in which JUDGE GREGORY K. ORME concurred. JUDGE MICHELE M. CHRISTIANSEN concurred in the result.
MORTENSEN, Judge:
¶1 The district court disqualified a law firm from representing the appellants in this case, finding that a substantial relationship existed between this and an earlier case. Prior to the law firm‘s participation and removal in the present case, it represented, in the earlier case, Tyler Lloyd Peterson—a key witness in this case. Because that finding was erroneous, we vacate the district court‘s order and remand this case for further proceedings.
BACKGROUND
¶2 Peterson was a tenant of Stoneridge Apartments.1 In exchange for reduced rent, Peterson performed various managerial duties such as collecting rent, handing out furnace filters, and cleaning the exterior of the building. In 2011, Peterson pled guilty to sexually assaulting2 a member of the Newton family;3 the Newtons were tenants of Stoneridge at the time. In 2012, the Newtons filed the present action against Peterson and Stoneridge as a result of the assault, alleging that Stoneridge should be held liable for the intentional tortious actions of Peterson.
¶3 While originally represented by a different attorney, the Newtons eventually retained D. David Lambert (Lambert) of the
¶4 Attorney filed a declaration stating that he had not received any information about Peterson in the 2002 case that could possibly be of use in the instant case. Lambert also filed a declaration, stating that he had not received any information from Attorney or from any files held by the Firm regarding the 2002 case that was relevant to the instant case. Both attorneys stated that screening measures had been implemented to ensure that Lambert would not learn any confidential information Attorney might have received. Nevertheless, the district court granted Peterson‘s motion to disqualify both the Firm and Lambert. The district court explained that the Firm had “acquired personal, private information regarding [Peterson] which is protected by Rules 1.6 and 1.9(c) [of the
¶5 Shortly after the disqualification of the Firm, the Newtons stipulated to the dismissal of Petеrson from the case with prejudice. And four months after his dismissal, the Newtons filed a motion “to determine issues regarding disqualification now that . . . Peterson has been dismissed with prejudice.”4 They argued that Stoneridge had not moved for disqualification and lacked standing to do so, and that the disqualification only prevented the Firm from representing a party opposed to Peterson. Consequently, the Newtons asked the district court to partially vаcate the order of disqualification.
¶6 The district court declined to vacate its previous order. It noted that the advisory ethics opinion on which the Newtons had relied concluded “that the cross-examination of a former client by an attorney does not create a per se disqualifying conflict of interest, but advises that the evaluation of the conflict must go further to include the specific facts and circumstances of the case.” The district court then explained that the order of disqualification had not been “conditional, provisional, or limited to whether or not . . . Peterson is a party in the present action . . . [the interests of the Newtons] are adverse to . . . Peterson‘s interests even though he is not a party in the present case.”
¶7 The Newtons timely requested leave to take an interlocutory appeal from the district court‘s decision not to vacate its order of disqualification. We granted the request.
ISSUES AND STANDARD OF REVIEW
¶8 The Newtons first contend that Stoneridge had no standing to bring a motion to disqualify Lambert or the Firm. The Newtons next contend that the district court erred in determining that the 2002 custody and support case was substantially related to the instant case. The Newtons also contend that the district court failed to properly reconsider its determination that disqualificatiоn was required after Peterson was dismissed from the case. Finally, the Newtons contend that the district court abused its discretion by failing to “weigh the beneficial and harmful effects of disqualification.” “The proper standard of review for decisions relating to disqualification is abuse of discretion. However, to the extent [an appellate court] has a special interest in administering the law governing attorney ethical rules, a trial court‘s discretion is limited.” Snow, Christensen & Martineau v. Lindberg, 2013 UT 15, ¶ 18, 299 P.3d 1058 (cleaned up).
ANALYSIS
¶9 We disagree with the Newtons that traditional standing requirements demand reversal of the district court‘s order. But we agree that the district court improperly applied
I. Standing
¶10 The Newtons first contend that the district court abused its discretion by “disqualifying [the Newtons‘] counsel for the benefit of a party that had never moved for disqualification and which had never been a prior client of the firm.” They argue that Stoneridge did not have standing tо file such a motion, pursuant to Rule 1.9 of the
¶11 In typical motion practice, a party сan only oppose a motion if that party has a dog in the fight. See e.g., Packer v. National Service Indus., Inc., 909 P.2d 1277, 1278 (Utah Ct. App. 1996) (determining that a codefendant in a multiparty litigation could not oppose a summary judgment motion between other parties where no cross-claim had been brought). This principle does not pertain to issues of disqualification because such determinations do not flow from the pleadings or the parties but instead find their genesis in the inherent power оf the court to regulate the practice of law. See Featherstone v. Schaerrer, 2001 UT 86, ¶ 17, 34 P.3d 194 (stating that the trial court‘s decision to employ its inherent power to control the conduct of attorneys “operates independently of how the court learns of a potential ethical or other violation“). But
¶12 There is no indication in the language of
II. Disqualification
¶13 While we disagree with the Newtons’ contentions regarding Stoneridge‘s lack of standing, we agree that the district court erred in ultimately concluding that the Firm should be disqualified. To begin, we clarify that the district court made its order under subsection (b) of
A. The District Court‘s Order Applying Rule 1.9
¶14 We begin by discussing the district court‘s framework for our analysis. In its brief, Stoneridge repeatedly refers to subsections (a) and (c) of
¶15
(b) A lawyer shall not knowingly represent a person in the sаme or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client
(b)(1) whose interests are materially adverse to that person; and (b)(2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing.
- A member of [the Firm] has formerly represented [Peterson] in a substantially related matter.
- The interests of [the Firm‘s] current client are materially adverse to the interests of [Peterson].
- [The Firm] acquired personal, private information regarding [Peterson] which is protected by Rules 1.6 and 1.9(c), an[d] which is material to the present case.
- [The Firm] has not demonstrated that [Peterson] wаived the disqualification of [the Firm] in this case.
¶16 Subsection (b)‘s mere reference to subsection (c) cannot convert the district court‘s disqualification under subsection (b) to a disqualification under subsection (c). Thus, we are tasked with determining whether the district court properly ordered disqualification under subsection (b). It did not.
B. The District Court‘s Substantial-Relationship Finding
¶17 In its order, the district court determined that the Firm had “formerly represented [Peterson] in a substantially related matter.” This determination is a factual finding.5 See Roderick v. Ricks, 2002 UT 84, ¶¶ 52–55, 54 P.3d 1119 (upholding the district court‘s findings that the earlier instances of an attorney‘s representation were “not substantially factually related to the matter involving” the present case on appeal). We typically expect challenges to factual findings to include marshaling of the evidence supporting the findings, though this is no longer a “hard-and-fast” requirement. See State v. Nielsen, 2014 UT 10, ¶¶ 40–41, 326 P.3d 645. But even when marshaling was a
requirement for a successful challenge to a finding of fact, there was an understood exception: “If there simply is no supportive evidence, counsel need only say so and the challenge will be well-taken—counsel is not expected to marshal the nonexistent.” Kimball v. Kimball, 2009 UT App 233, ¶ 20 n.5, 217 P.3d 733.
¶18 This is essentially what we have in this case. In challenging the district court‘s substantial-relationship finding, the Newtons assert, “There is no factual overlap between the custody case and the current tort case.” And givеn the district court‘s failure to provide any support for its finding, the Newtons’ challenge is well taken for two reasons. See Woodward v. Fazzio, 823 P.2d 474, 477 (Utah Ct. App. 1991) (explaining that a “marshaling effort was largely ineffectual by reason of the conclusory nature of the trial court‘s findings of fact“); id. at 478 (concluding that affirmance was “impossible” in large part because the trial court‘s findings provided “an inadequate account of the actual facts supporting the court‘s ultimаte decision“; most of the findings were “conclusory, and reflect an intention to merge the trial court‘s ultimate factual determinations with the requirements of the [relevant legal test]“).
¶19 First, the district court provided no explanation for its ultimate finding that the two matters are substantially related. It merely stated the conclusory fact that they are. But a review of the record before us—which was also before the district court—shows that therе is insufficient evidentiary support for a finding of substantial relationship. The record provides little information regarding any possible factual link between the two cases. Instead, the district court seems to have rested its finding on the sole fact that Peterson was involved in both the prior and the current case. But the mere
¶20 Here, we know only that in 2002, the Firm represented Peterson in a domestic matter. The case involved custody and support issues, and the matter was resolved by agreement of the parties in May of that year. The present case, for which the Firm entered an appearance in 2014, rests оn allegations that Peterson committed a sexual assault in August 2011, more than nine years after the domestic matter concluded, against a victim wholly unrelated to the prior matter. As our supreme court concluded in Cheves v. Williams, 1999 UT 86, 993 P.2d 191, such “general statements concerning the prior representation [are] insufficient to support [an attorney‘s] disqualification.”6 Id. ¶ 60. We see nothing more than general statements in the record. Therefore, the district court‘s finding of a substantial relationship, along with its disqualification of the Firm—without more—is unsupported.
¶21 Second, given the facts available in the record, there appears to be no factual nexus—much less a substantial one—between the Newtons’ claims and the earlier representation. See Houghton v. Department of Health, 962 P.2d 58, 62–63 (Utah 1998), overruled on other grounds by Arkansas Dep‘t of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006).7
¶22 In Houghton, our supreme court explained:
In construing Utah‘s Rule 1.9(a),8 the federal courts and the Utah Court of Appeals have referred to the
(…continued) Services v. Ahlborn, 547 U.S. 268 (2006). That version of the rule—interpreted not only by Houghton but also at issue in much of our other
necessity for a distinct, factual link between the former and present representations. In SLC Ltd. V v. Bradford Group West, Inc., 999 F.2d 464, 467 (10th Cir. 1993), the United States Court of Appeals for the Tenth Circuit stated that Utah‘s requirement “focus[es] on the factual nexus between the prior and current representations rather than a narrower identity of legal issues.”
Houghton, 962 P.2d at 62. The court went on to explain that in the case before it, there
¶23 Like the court in Houghton, we conclude that “[t]he adjudication of” the claims against Stoneridge “[do] not involve any factual information arising out of [the Firm‘s] prior representation[].” See id. “Because the particular facts involved in the prior representation[] are not in issue here nor are they in any way even relevant in the present lawsuit,” there is no support for a finding that the two cases are substantially related. See id. at 62–63; see also Joint Sugar House, LLC v. I4 Solutions, No. 2:16-cv-00151, 2016 WL 2344220, at *3 (D. Utah May 3, 2016) (finding nо substantial relationship between a prior representation in which attorneys helped draft portions of a
(…continued)
contract and a subsequent representation where that same contract was at issue but the claims asserted dealt with copyright infringement, not breach of the contract).
¶24 In other words, we agree with the Newtons that “even if it were assumed that in the 2002 custody case [the Firm] had to deal with . . . Peterson‘s character, misconduct, abusive behavior, or criminal history,” there is no distinct factual link between that representatiоn and the present case, which turns on what Stoneridge knew or should have known when it entrusted Peterson with access to the Newtons’ apartment. “Although there may be some factual overlap between the prior and current representation, it is not the type of overlap that can be regarded as changing sides in the matter or as creating a risk that confidential factual information would materially advance any party‘s position in this current litigation.” See Ironshore Specialty Ins. v. Callister Nebeker & McCullough, No. 2:15-cv-677-RJS-BCW, 2016 WL 2858800, at *2 (D. Utah May 16, 2016). Ultimately, this case is not about Peterson‘s domestic past; it is about his criminal behavior a decade later. We therefore conclude that the district court clearly erred when it found the two matters were substantially related.9
III. Motion to Determine
¶25 We also conclude that the district court erred when it refused to alter its ruling—which rested on the existence of an attorney-client relationship—after the client was removed from the picture. It declined to amend that ruling because “[n]othing in the court‘s order of disqualification indicated it was
conditional, provisional, or limited to whether or not . . . Peterson is a party in the present action.” We acknowledge that the original disqualification order contained no such condition, provision, or limitation; however, when exercising its discretion in deciding the motion, the district court could not rely upon a faulty legal premise. Kilpatrick v. Bullough Abatement, Inc., 2008 UT 82, ¶ 23, 199 P.3d 957 (stating that an abuse of discretion may be demonstrated by showing a district court relied on an erroneous conclusion). And in this case, it was erroneous to conclude that the absence of Peterson as a party was immaterial. Peterson‘s party or non-party status is critical to a proper application of
¶26 Again,
¶27
CONCLUSION
¶28 The district court clearly erred in finding that there was a substantial relationship between the present case and Peterson‘s 2002 case and, thus, in disqualifying the Firm based on that erroneous finding. Furthermore, it abused its discretion by relying on an erroneous legal premise in declining to alter or vacate the disqualification order. We therefore reverse and remand this case to the district court.