BRADLEY A. WYNVEEN v. JOSEPH G. CORSARO
No. 105538
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
December 21, 2017
2017-Ohio-9170
JUDGMENT: AFFIRMED
Civil Appeal from the Cuyahoga County Court of Common Pleas Probate Division Case No. 2016-ADV-217089
BEFORE: Boyle, J., E.T. Gallagher, P.J., and Blackmon, J.
RELEASED AND JOURNALIZED: December 21, 2017
Steven B. Beranek
28039 Clemens Road
Westlake, Ohio 44145
ATTORNEYS FOR APPELLEES
For Bradley A. Wynveen
Adam M. Fried
Holly M. Wilson
Reminger Co., L.P.A.
101 Prospect Avenue, West
1400 Midland Building
Cleveland, Ohio 44115
For Christine Wynveen, Natural Guardian of Kelly A. Wynveen, and Christine Wynveen, individually
Douglas A. Dipalma
Cavitch, Familo & Durkin Co., L.P.A.
1300 East Ninth Street, 20th Floor
Cleveland, Ohio 44114
Guardian Ad Litem for Kelly A. Wynveen
Michael R. Gareau, Jr.
5200 Dover Center Road
North Olmsted, Ohio 44070
For Joseph G. Corsaro, Executor of the Estate of Richard A. Wynveen
Shane A. Lawson
Monica A. Sansalone
Gallagher Sharp, L.L.P.
Bulkley Building, 6th Floor
Cleveland, Ohio 44115
For Joseph G. Corsaro, Trustee of the Bradley A. Wynveen Irrevocable Trust
Shane A. Lawson
Gallagher Sharp, L.L.P.
Bulkley Building, 6th Floor
1501 Euclid Avenue
Cleveland, Ohio 44115
For Ohio Attorney General s Office
Mike DeWine
Ohio Attorney General
Todd K. Deboe
Assistant Attorney General
150 East Gay Street, 23rd Floor
Columbus, Ohio 43215
For Natalie L. Wynveen
Egidijus K. Marcinkevicius
A. Sirvaitis & Associates
880 E. 185th Street
Cleveland, Ohio 44119
{¶1} Defendant-appellant, Joseph G. Corsaro, appeals from the trial court s order disqualifying his counsel, Attorney Steven B. Beranek, in relation to his counterclaim against plaintiff-appellee, Bradley A. Wynveen ( Bradley ). He raises one assignment of error for our review:
Did the Trial Court abuse its discretion when it disqualified Attorney Steven Beranek from continuing to represent Joseph G. Corsaro, as Trustee of the Bradley A. Wynveen Irrevocable Trust, with regard to the counterclaim filed in the action below?
{¶2} For the reasons that follow, we affirm.
I. Procedural History and Factual Background
A. Corsaro & Associates Prior Representations of the Wynveen Family
{¶3} Corsaro is the founder and senior managing partner of Corsaro & Associates Co., L.P.A. and has been a practicing attorney, specializing in federal tax law, for over 30 years. One of Corsaro s clients was Dr. Richard A. Wynveen ( Dr. Wynveen ), who Corsaro represented in numerous matters and dealings for over 20 years. During his representations, Corsaro helped Dr. Wynveen establish the Richard A. Wynveen Revocable Trust ( RAW ), the Bradley A. Wynveen Irrevocable Trust ( BAW Trust ), and the Jeffrey C. Wynveen Irrevocable Trust ( JCW Trust ), organize numerous business entities, and plan his estate.
{¶4} In addition to his services for Dr. Wynveen, Corsaro, as well as other members of Corsaro & Associates, offered legal assistance to Bradley, providing estate planning and representation for matters concerning property owned by Bradley and the
{¶5} On April 1, 2013, Dr. Wynveen passed away and was survived by his two sons, Bradley and Jeffrey C. Wynveen ( Jeffrey ). Two and one-half months later, Jeffrey also passed away. Prior to his passing, Dr. Wynveen appointed Corsaro as trustee of the RAW, BAW, and JCW trusts. In addition, according to the terms of Dr. Wynveen s will, Corsaro was named the executor of Dr. Wynveen s estate.
B. The Current Lawsuit and Counterclaim
{¶6} As part of his duties as executor of Dr. Wynveen s estate, Corsaro was responsible for paying $2,000,000 of estate tax due upon Dr. Wynveen s death. To do so, Corsaro decided to convert and collect assets owned by the estate, including debts owed by Bradley personally and as a partner in Gainwell Limited Partnership. Specifically, the debts allegedly included (1) a $100,000 loan (plus interest) from Dr. Wynveen to Bradley; (2) $338,000 in estate taxes derived from loans from Dr. Wynveen s estate to Bradley for the purchase of real property; and (3) Bradley s share of debt owed to the estate by Gainwell Limited Partnership. Bradley refused to pay those debts,
{¶7} Subsequently, on June 15, 2016, Bradley filed a complaint in the court of common pleas, probate division, against a number of defendants, including Corsaro, who was sued individually, as executor of the estate of Richard A. Wynveen, and as trustee of both the RAW and BAW trusts. The complaint also identified the Wynveen Family Foundation as a defendant.
{¶8} Bradley set forth six counts in his complaint, which were related to the administration of the BAW trust, RAW trust, Richard A. Wynveen s estate, and other business interests related to those trusts. Among other relief, the complaint sought the removal of Corsaro as trustee for the RAW and BAW trusts, trust and estate accountings, disgorgement of excessive attorney fees billed by Corsaro & Associates and fiduciary fees, surcharges, damages, and attorney fees.
{¶9} On September 14, 2016, Corsaro, in all of his capacities, filed an answer as well as a counterclaim against Bradley, seeking recovery of debts owed by Bradley to the BAW trust and Richard A. Wynveen s estate. Attorney Beranek, who works for Corsaro s law firm, Corsaro & Associates, represented Corsaro on his counterclaim and as trustee of the BAW trust. Attorney Beranek also filed a notice of appearance on behalf of the Wynveen Family Foundation; however, Attorney Beranek later filed a motion to withdraw as counsel for the foundation. Corsaro retained separate counsel to defend himself against the counts alleged in Bradley s complaint.
under the three part test for determining disqualification set forth in Dana, the Plaintiff has demonstrated that (1) a past attorney-client relationship exists between Plaintiff and Corsaro & Associates, (2) a substantial relationship exists between the subject matter of past relationships and the current dispute and (3) Corsaro, through his representation of Plaintiff and Plaintiff s businesses acquired confidential information from the Plaintiff.
{¶11} It is from that order that Corsaro now appeals.
II. Law and Analysis
{¶12} In his sole assignment of error, Corsaro contends that the trial court erred in disqualifying Attorney Beranek from representing him in his counterclaim against Bradley. In support of his argument, Corsaro argues that the trial court improperly applied the three-part test for disqualification set forth in Dana Corp. v. Blue Cross & Blue Shield Mut., 900 F.2d 882 (6th Cir.1990). He specifically argues that the counterclaim and prior representations by attorneys of Corsaro & Associates are not substantially related and that Attorney Beranek did not acquire confidential information concerning Bradley. In response, Bradley argues that the trial court s order
{¶13} At the outset, we note that disqualification of counsel in a civil case is a final appealable order. See Ross v. Ross, 94 Ohio App.3d 123, 129, 640 N.E.2d 265 (8th Dist.1994); Kala v. Aluminum Smelting & Refining Co., Inc., 81 Ohio St.3d 1, 3, 688 N.E.2d 258 (1998).
{¶14} Turning to the merits, trial courts have the inherent authority to supervise members of the bar appearing before it and this necessarily includes the power to disqualify counsel in specific cases[,] such as when an attorney cannot, or will not, comply with the Code of Professional Responsibility when representing a client. Fried v. Abraitis, 8th Dist. Cuyahoga No. 103070, 2016-Ohio-934, ¶ 11, citing Royal Indemn. Co. v. J.C. Penney Co., 27 Ohio St.3d 31, 501 N.E.2d 617 (1986), and Mentor Lagoons, Inc. v. Rubin, 31 Ohio St.3d 256, 510 N.E.2d 379 (1987). Trial courts have a wide discretion in exercising that authority. Id., citing Royal Indemn.
{¶15} Accordingly, a trial court s decision to disqualify counsel will only be reversed if it constitutes an abuse of discretion. Id., citing Centimark Corp. v. Browning Sprinkler Serv., Inc., 85 Ohio App.3d 485, 620 N.E.2d 134 (8th Dist.1993). An abuse of discretion occurs when the lower court s conclusion is unreasonable, arbitrary, or unconscionable. Id. A decision is unreasonable if there is no sound reasoning process that would support the decision. Id., citing Centimark.
{¶17} If the attorney-client relationship is a continuing one, adverse representation is prima facie improper[.] Sarbey v. Natl. City Bank, 66 Ohio App.3d 18, 24, 583 N.E.2d 392 (9th Dist.1990), citing Cinema 5, Ltd. v. Cinerama, Inc., 528 F.2d 1384 (2d Cir.1976).
{¶18} If, however, the attorney-client relationship is a former one, Ohio courts use the Dana test when considering the disqualification of counsel due to a conflict of interest. Stanley v. Bobeck, 8th Dist. Cuyahoga No. 92630, 2009-Ohio-5696, ¶ 13. Disqualification is proper when (1) a past attorney-client relationship existed between the party seeking disqualification and the attorney it seeks to disqualify; (2) the subject matter of those relationships was/is substantially related; and (3) the attorney acquired confidential information from the party seeking disqualification. Dana Corp., 900 F.2d
A. Past Attorney-Client Relationship
{¶19} The first prong of the Dana test for disqualification requires the existence of an attorney-client relationship. Corsaro argues that Bradley is only a former client of Corsaro & Associates. Bradley argues that he is both a former and current client of the firm.
{¶20} An attorney-client relationship can be created through either the express or implied conduct of the parties. New Destiny Treatment Ctr., Inc. v. Wheeler, 129 Ohio St.3d 39, 2011-Ohio-2266, 950 N.E.2d 157, ¶ 26. [A]n attorney-client relationship need not be formed by an express written contract or by the full payment of a retainer. Instead, [it] may be created by implication based upon the conduct of the parties and the reasonable expectations of the person seeking representation. Cuyahoga Cty. Bar Assn. v. Hardiman, 100 Ohio St.3d 260, 2003-Ohio-5596, 798 N.E.2d 369, ¶ 8.
The practice of law includes the representation of a client in court proceedings, advice to clients, and any action in a client s behalf that is connected with the law. * * * [A]n attorney-client relationship exists when an attorney advises others as to their legal rights, a method to be pursued, the forum to be selected, and the practice to be followed for the enforcement of their rights. An essential element as to whether an attorney-client relationship has been formed is the determination that the relationship invoked such trust and confidence in the attorney that the communication became privileged and, thus, the information exchanged was so confidential as to invoke an attorney-client privilege.
(Emphasis added.) Landis v. Hunt, 80 Ohio App.3d 662, 669, 610 N.E.2d 554 (10th Dist.1992).
While lawyers are associated in a firm, none of them shall represent a client when the lawyer knows or reasonably should know that any one of them practicing alone would be prohibited from doing so by Rule 1.7 or 1.9, unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm.
{¶22} Here, the probate court stated:
Plaintiff sets forth multiple examples, supported by attached exhibits, demonstrating that Plaintiff and/or his businesses are current and prior clients of Beranek s law firm, Corsaro & Associates. Attorney Beranek s response, while accusing Plaintiff of foolishness and linguistic deception, does not deny that Defendant Corsaro has advised Plaintiff as to his estate planning and does not adequately dispute that Corsaro & Associates continue to represent Plaintiff as the Co-Trustee and President of the Wynveen Family Foundation and as part owner in Gainwell Limited Partnership.
The probate court s observations are supported by admissions by Corsaro as to his work on Bradley s estate and the firm s continued representation of the Wynveen Family Foundation as well as evidence provided by Bradley, establishing Corsaro & Associates current representations and/or duties related to the BAW Trust, RAW Trust, Richard A.
{¶23} Further, we find that Corsaro s statement, which was made subsequent to the firm s motion to withdraw as counsel for the foundation, supports the probate court s finding that Corsaro & Associates still represents the Wynveen Family Foundation. Therefore, Bradley, as trustee and president of the foundation, is still a current client of Corsaro & Associates. Citing In re Berger McGill, 242 B.R. 413, 420 (Bankr.S.D.Ohio 1999), Corsaro is correct in arguing that representation of a closely-held company does not inherently mean that the attorney for the corporation also represents the individual constituents. In fact, we have recognized that proposition of law many times. See Stanley v. Bobeck, 8th Dist. Cuyahoga No. 92630, 2009-Ohio-5696, ¶ 15; Stuffleben v. Cowden, 8th Dist. Cuyahoga No. 82537, 2003-Ohio-6334, ¶ 27. Nevertheless, when a corporation s officer reasonably believes that the corporation s counsel also represents him personally, an attorney-client relationship between the officer and corporation s counsel is created. See Bobeck at ¶ 16 ( [T]here is no evidence that Stanley believed that MRFL was acting as his personal attorneys when representing Sunshine I as Stanley never conferred with MRFL on legal matters. ); Abadir v. Fanous, 8th Dist. Cuyahoga No. 71871, 1997 Ohio App. LEXIS 4250, *6 (Sept. 18, 1997) ( [I]n the case of a closely
{¶24} Memoranda from Corsaro himself describe thorough conversations that he had with Bradley and Jeffrey concerning the foundation s taxes and income information. Specifically, in a memorandum from Corsaro, dated July 10, 2012, Corsaro wrote:
The Wynveen Family Foundation was the next topic explored. [I] explained that the foundation received a favorable Determination Letter from the Internal Revenue Service and therefore is already a 501(c)3 and 501(c)9. * * * Additionally, the purpose of the Foundation was to provide Mr. Brad Wynveen and Mr. Jeff Wynveen a source of income in the future. Mr. Brad Wynveen * * * may be compensated by the Foundation for services rendered such as investment advice. Also, since Dr. Richard Wynveen is no longer capable of managing his financial affairs the current Trustees of the Wynveen Family Foundation are now Mr. Brad Wynveen and Mr. Jeff Wynveen.
Further, in a memorandum dated June 4, 2013, he wrote:
The Wynveen Family Foundation. [I] indicated that one possible strategy to solve the estate s liquidity problem is for Brad and Jeff to disclaim distributions to the Wynveen Family Foundation. Removing the value of the disclaimed asset will in turn significantly reduce the estate tax due. [I] suggested that Brad and Jeff disclaim their Vitec interests * * * into the Foundation. Brad stated that he would like to disclaim his interest in Vitec into the Foundation[.]
Despite Attorney Lindsey Smith s presence, Corsaro s ongoing advice and meetings with Bradley certainly gave Bradley reasonable cause to believe that Corsaro was representing his personal interests along with the foundation s.
{¶25} We cannot say, in light of the probate court s observations and supporting evidence, that its conclusion as to Dana s first prong was unreasonable, arbitrary, or
B. Substantially Related
{¶26} Turning to the second prong, Corsaro argues that his firm s prior representations of Bradley are not substantially related to his counterclaim because it concerns transactions that were separate from the subject matter of the prior representations. Bradley argues that Corsaro & Associates prior representations involved his own estate planning, rights as a beneficiary, property rights, and business interests, all of which are directly related to Corsaro s counterclaim.
{¶27} [M]atters are substantially related if there is some commonality of issues or a clear connection between the subject matter of the former representation and that of the subsequent adverse representation. Majestic Steel, 8th Dist. Cuyahoga No. 76540, 1999 Ohio App. LEXIS 4919, at *6-7, quoting Phillips v. Haidet, 119 Ohio App.3d 322, 695 N.E.2d 292 (3d Dist.1997); see also Shawnee Assocs., L.P. v. Shawnee Hills, 5th Dist. Delaware No. 07CAE050022, 2008-Ohio-461, ¶ 21 ( [T]o have a substantial relationship, * * * the factual contexts of the two representations must be similar or related. ).
{¶28} Ohio appellate courts have found that an attorney s former and subsequent representations of a client are substantially related when those representations involve the same types of claims, arise out of the same case, or concern the same parties. See Litigation Mgt. v. Bourgeois, 182 Ohio App.3d 742, 2009-Ohio-2266, 915 N.E.2d 342, ¶
{¶29} In Stevens v. Grandview Hosp. & Med. Ctr., 2d Dist. Montgomery No. 14042, 1993 Ohio App. LEXIS 5092 (Oct. 20, 1993), the plaintiff sued the defendant-hospital for medical malpractice. In response, the hospital moved to disqualify plaintiff s attorney, who previously worked for the hospital for over 15 years and handled medical malpractice cases filed against it. The trial court granted the motion to disqualify the plaintiff s attorney, finding that the types of claims were similar, the attorney must have acquired confidential information regarding [the hospital] in order to defend the hospital[,] and the attorney had knowledge of hospital policies and procedures, and procedures of staff physician rules and regulations[.] Id. at *18. On review, the Second District found that the trial court set forth very sufficient reasons for disqualifying [the] attorney and the attorney s conduct present[ed] a very definite impression of impropriety, which can only bring the reputation of the legal profession into further disrepute in the eyes of the general public. Id. at *21 and 23.
{¶30} Here, similar to the attorney in Stevens, Corsaro and members of Corsaro & Associates represented and consulted with members of the Wynveen family for over 20
Seldom is the client s dependence upon, and trust in, his attorney greater than when, contemplating his own mortality, he seeks the attorney s advice, guidance, and drafting skill in the preparation of a will to dispose of his estate after death. These consultations are often among the most private to take place between an attorney and his client. The client is dealing with his innermost thoughts and feelings, which he may not wish to share with his spouse, children and other next of kin.
Because of the decisions that go into the preparation of a will are so inherently private, * * * a client is unusually dependent upon his attorney s professional advice and skill when he consults the attorney to have a will drawn.
With that in mind, it is easy to conclude that Corsaro s involvement with Bradley s estate planning revealed a great deal of private information that will certainly be at issue in the current action.
{¶31} Further, that information is imputed to other members of Corsaro s law firm, including Attorney Beranek. [U]nder the Code of Professional Responsibility, an attorney s knowledge is imputed to his firm. Majestic Steel, 8th Dist. Cuyahoga No. 76540, 1999 Ohio App. LEXIS 4919, at *10, citing Ussury v. St. Joseph Hosp., 43 Ohio
{¶32} Furthermore, Attorney Beranek was actually involved in the organization and representation of the Wynveen Family Foundation and Gainwell Limited Partnership, in which Bradley has a partnership interest. While those matters are not necessarily identical to the matter currently before this court, they concerned Bradley s assets, which are, or at the very least, will be at issue in this matter. Further, like the court found in Stevens, and in light of all of Corsaro & Associates previous representations of Bradley and his family members, Attorney Beranek s continued representation of Corsaro impresses a strong sense of impropriety that will surely look questionable to the public at large.
{¶33} Therefore, we find that the trial court did not abuse its discretion in finding that the present lawsuit is substantially related to Corsaro s prior representations, which concerned Bradley s estate planning, rights as a beneficiary, and property interests. In his counterclaim against Bradley, Corsaro seeks to recover debts owed by Bradley to the BAW Trust and Dr. Wynveen s estate. The recovery of those debts is related to
C. Confidential Information
{¶34} Finally, as to the third prong of the Dana test requiring the disqualification of an attorney who acquired confidential information during a prior representation of the moving party, Corsaro argues that Bradley does not offer one example of confidential information * * * allegedly communicated to Corsaro which Corsaro can use against him in the prosecution of the Counterclaim. In response, Bradley argues that the presumption of shared confidences applies and that confidential information has been shared, pointing to the instances when attorneys for Corsaro & Associates have handled his personal matters, advised him on his business interests, and organized and maintained trusts, under which he is a beneficiary.
{¶35} At the outset of this final prong, it is important to note that [a] mere allegation that allowing the representation presents the possibility of a breach of confidence or the appearance of impropriety is not enough. Phillips v. Haidet, 119 Ohio App.3d 322, 327, 695 N.E.2d 292 (3d Dist.1997). In other words, a court should not deny the opposing party its choice of counsel solely upon an allegation of a conflict. Centimark, 85 Ohio App.3d at 489, 620 N.E.2d 134.
[W]here an attorney himself represented a client in matters substantially related to those embraced by a subsequent case he wishes to bring against the former client, he is irrebuttably presumed to have benefitted from confidential information relevant to the current case. In such limited situations there is no necessity to demonstrate actual exposure to specific confidences which would benefit the present client.
Cleveland Elec. at 210, quoting Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 518 F.2d 751 (2d Cir.1975). However, when the attorney in the subsequent litigation is not the original attorney, but, instead another attorney in the same law firm, the presumption of received confidences becomes rebuttable. Stanley v. Bobeck, 8th Dist.
{¶37} Corsaro argues throughout his appellate and reply briefs that Bradley has failed to specify the confidential information that Corsaro acquired during his prior representations. In light of the above case law, however, we find that Corsaro s arguments are unconvincing because, based on the substantial relation between the prior representations and counterclaim, the presumption of acquired confidences applies, and it is Corsaro s burden to rebut that presumption.
{¶38} Further, at oral argument in this case, Corsaro interestingly argued that since Bradley is suing his attorney, Corsaro is allowed to disclose the confidential information he acquired from his prior representations of Bradley to defend himself. Corsaro is correct that while
{¶39} In Litigation Mgt., 182 Ohio App.3d 742, 2009-Ohio-2266, 915 N.E.2d 342, we reviewed a trial court s order disqualifying the defendants counsel. Discussing Dana s third prong, we found that the presumption of shared confidences applied and that the disqualified attorney failed to rebut that presumption. Id. at ¶ 22, 23. Specifically, we found that the defendant s failure to provide any evidence of a screen or Chinese wall to prevent the sharing of any confidential information was insufficient to rebut the presumption of acquired confidences. Id. As a result, we found that the trial court abused its discretion. Id.
{¶40} In Rosenblum v. Robbins, 9th Dist. Summit No. 15171, 1992 Ohio App. LEXIS 359 (Jan. 29, 1992), the plaintiff filed an action disputing the validity of a trust and hired an attorney, who previously handled the title for his property and prepared an escrow letter regarding that property. During that prior representation, the attorney knew that the plaintiff s property was to be placed in a trust, but he did not handle or organize the trust. In light of this information, the defendants moved to disqualify the plaintiff s attorney. The trial court granted the defendants motion on the presumption that the plaintiff s attorney could have obtained financial and other information concerning his former client. (Emphasis added.) Id. at *6. The Ninth District disagreed, finding that the defendants failed to supply the trial court with any facts to
[i]n fact, the evidence before the trial court demonstrates that [the attorney s] former representation of [the defendants] was merely ministerial, rather than adversary in nature. According to [the attorney s affidavit], his representation was limited to acquisition of title to the property and preparation of an escrow letter. [The attorney] did not handle any financing of the property, and he had no discussions with the [defendants] concerning the trust, its formation, or any of its terms.
Id. As a result, the Ninth District reversed the trial court s order disqualifying the plaintiff s attorney. Id.
{¶41} Like Litigation Mgt., Bradley has established that the prior matters are substantially related and, therefore, that the presumption of shared confidences applies. Unlike Rosenblum, Corsaro s and Attorney Beranek s previous representations concerning Wynveen s interests were more than ministerial and allowed him to actually obtain a great deal of information related to Bradley s finances and assets. Corsaro has not sufficiently rebutted that presumption through evidence of a screen within Corsaro & Associates or other sufficient proof. In fact, Corsaro instead argues that the confidential information he acquired is irrelevant because it would not be used against Bradley in furtherance of Corsaro s counterclaim. But that is not what the third prong of the Dana test examines, and even if that information is not used to establish liability under the counterclaim, it will surely be used in execution of judgment.
{¶42} We find that the trial court s decision is supported by law, and we are unable to conclude that the decision was arbitrary, unreasonable, or unconscionable.
{¶43} Judgment affirmed.
It is ordered that appellee recover from appellant the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common pleas court, probate division, to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
MARY J. BOYLE, JUDGE
EILEEN T. GALLAGHER, P.J., and PATRICIA ANN BLACKMON, J., CONCUR