Avco Corp v. Veronica Saltz Turner

• Court: Court of Appeals for the Third Circuit
• Decided: January 10, 2024
• Docket: 22-3448
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________

No. 22-3448 _____________

AVCO CORP, Appellant

v.

VERONICA W. SALTZ TURNER _____________

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 2:20-cv-04073) District Judge: Honorable Joshua D. Wolson _____________

Submitted Pursuant to Third Circuit L.A.R. 34.1(a) on November 8, 2023

Before: RESTREPO, SCIRICA, and SMITH, Circuit Judges

(Filed: January 10, 2024) _________

OPINION* _________ RESTREPO, Circuit Judge.

The relationship between an attorney and her client demands loyalty and

confidentiality, even after the relationship ends. See Maritrans GP Inc. v. Pepper,

* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. Hamilton & Scheetz, 602 A.2d 1277, 1283 (Pa. 1992). But it does not indefinitely

prohibit the attorney from engaging in work on the other side of the bar that does not

substantially relate to the work she did for her previous client. Javorski v. Nationwide

Mut. Ins. Co., No. 3:06-CV-1071, 2006 WL 3242112, at *7 (M.D. Pa. Nov. 6, 2006).

Appellant Avco Corporation (“Avco”) opposed Appellee Veronica W. Saltz

Turner’s representation of plaintiffs adverse to Avco and sued for breach of fiduciary

duty. But in bringing its claim, Avco had a burden to produce evidence that the subject

matter of the representation was substantially related to Turner’s previous representation

of Avco. Id. The District Court found Avco did not meet that burden and granted

summary judgment in favor of Turner and denied Avco’s motion for summary judgment.

For the reasons that follow, we will affirm.

I.

Avco manufactures and sells piston engines for aircrafts. Over the course of

twelve years, Lycoming Engines, a division of Avco, retained Turner in connection with

a number of products liability actions involving its engines. Turner terminated her

representation of Lycoming in November 2017 and ended her attorney-client relationship

with Avco completely in June 2018.

In March 2020, the Wolk Law Firm, opposing counsel in several of Turner’s

Lycoming products liability cases, retained Turner to assist in Torres v. Honeywell, Inc.,1

1 Although the Torres plaintiffs filed claims in Arizona, Delaware, California, and New Jersey, Turner was only retained for the case in Arizona. See Second Amended Complaint, Torres v. Honeywell, Inc., No. CV2017-007542 (Ariz. Super. Ct. July 31, 2018). 2 representing plaintiffs against Avco and other engine manufacturers following a plane

crash. At the time Turner was retained, the trial court had dismissed Avco from the

lawsuit for lack of personal jurisdiction. But the Torres plaintiffs were appealing Avco’s

dismissal, creating a possibility that Avco could be brought back into the case.2

Turner’s work on Torres consisted of preparing Daubert motions, responding to

the Daubert motions of two non-Avco defendants, and examining expert witnesses at a

July 22, 2020 Daubert hearing that did not involve Avco. Following the hearing, Turner

ceased her work on Torres. In August 2020, Avco sued Turner for breach of fiduciary

duty, seeking damages, disgorgement, and declaratory and injunctive relief.

II.

The District Court initially granted summary judgment to Turner without

determining the existence of a breach of fiduciary duty because it found that Avco did not

establish a dispute of fact with respect to an “actionable injury.” Avco Corp. v. Turner,

No. 2:20-cv-04073, 2021 WL 3722274, at *1–2 (E.D. Pa. Aug. 23, 2021), vacated and

remanded, No. 21-2750, 2022 WL 2901015 (3d Cir. July 22, 2022). On appeal, this

Court explained that Avco “need not show injury beyond the breach of fiduciary duty

itself.” Avco Corp. v. Turner, No. 21-2750, 2022 WL 2901015, at *2 (3d Cir. July 22,

2022) (citing Maritrans GP Inc., 602 A.2d at 1285). We remanded for consideration of

whether there was a dispute of fact as to the existence of a fiduciary relationship and

2 That appeal was ultimately denied because, inter alia, “Avco presented undisputed evidence that it did not manufacture or install the turbocharger” at issue in the litigation. Torres v. Avco Corp., No. 1 CA-CV 19-0645 (Ariz. Ct. App. Nov. 24, 2020). 3 Turner’s alleged breach, which might entitle Avco to disgorgement and injunctive relief.

Id. at *4.

On remand, the District Court allowed supplemental briefing on the issue of

disgorgement and breach of fiduciary duty. Finding that Avco failed to prove Turner

breached a fiduciary duty of loyalty, the District Court again granted Turner’s motion for

summary judgment. Avco Corp. v. Turner, No. 2:20-cv-04073, 2022 WL 17251250, at *4

(E.D. Pa. Nov. 28, 2022). Avco timely appealed.

III.3 We exercise plenary review of a grant or denial of summary judgment. Gardner v.

State Farm Fire & Cas. Co., 544 F.3d 553, 557 (3d Cir. 2008). Summary judgment is

required where there is “no genuine dispute of material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a). Avco, as the party opposing

summary judgment, must produce sufficient evidence in the record for a jury to

reasonably find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986);

see also Fed. R. Civ. P. 56(c)(1)(A)–(B).

The Pennsylvania Rules of Professional Conduct prohibit a lawyer who has

previously represented a client from:

(a) represent[ing] another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client . . . ; or (b) us[ing] information relating to the representation to the disadvantage

3 The District Court had jurisdiction under 28 U.S.C. § 1332(a). This Court has jurisdiction under 28 U.S.C. § 1291.

4 of the former client except . . . when the information has become generally known.

Pa. R. Prof. Conduct, Rule 1.6. Avco claims Turner breached her common law fiduciary

duty, which mirrors the Rules of Professional Conduct. Under Pennsylvania law, to

establish a dispute over whether Turner breached her fiduciary duty, Avco needed to

produce evidence that Turner undertook “a representation adverse to [Avco] in a matter

‘substantially related’ to that in which [Turner] previously had served [Avco].” Maritrans

GP Inc., 602 A.2d at 1284. This appeal concerns only whether Turner’s limited

representation of the Torres plaintiffs was “substantially related” to the matters in which

she represented Avco.4 See id.

The “substantial relationship test” requires courts to determine “(1) whether the

subject matter of the former and current representations are the same and (2) whether the

attorney might have acquired confidential information related to the subject matter of the

present action.” In re Pittsburgh Corning Corp., 308 B.R. 716, 730 (Bankr. W.D. Pa.

2004).5 Avco does not argue that the first prong of the test was satisfied, so we will

discuss only the second. See Fed. R. App. P. 28(a)(8). This requires evidence showing

that (a) Avco might have disclosed confidential information to Turner and (b) issues were

4 There is no question Turner’s representation of the Torres plaintiffs was adverse to Avco. See AgSaver LLC v. FMC Corp., No. 11-cv-997, 2011 WL 2274178, at *4 (E.D. Pa. June 9, 2011) (explaining that parties’ interests could not be “more ‘materially adverse’ than when a lawyer’s former client is in a suit against that lawyer’s current client”). 5 Avco argues that the District Court erroneously applied a conjunctive test, requiring satisfaction of both prongs. But because the District Court found Avco did not establish a dispute of fact with respect to either prong, and because we agree, we need not address that argument. See Avco Corp., 2022 WL 17251250, at *3. 5 raised in the Torres matter that permitted the use of that information against Avco. Triffin

v. Disalvo, 643 A.2d 118, 120 (Pa. Super. Ct. 1994).

Although Turner had intimate knowledge of Avco’s practices, Avco points to no

evidence of how that knowledge could be used against Avco in the Torres matter. Avco

must do more than point to Turner’s “broad knowledge of [its] general strategies with

respect to its products.” AgSaver LLC v. FMC Corp., No. 11-cv-997, 2011 WL 2274178,

at *9 (E.D. Pa. June 9, 2011). It must link the confidential information Turner learned

from her work with Avco to the subject matter of the work she did in Torres. But Avco

identifies no evidence showing how the intimate knowledge she gained through her work

with Avco “would be, in any manner, detrimental” to Avco in the Torres matter. Id.

Avco assumes that because Turner had access to confidential information through

her previous representation, she must have used or had opportunity to use that

information against Avco in her assignments in Torres. But Avco points to no evidence

of the substantive work that Turner did for the Torres plaintiffs to support its argument.

See INA Underwriters Ins. Co. v. Nalibotsky 594 F. Supp. 1199, 1206 (E.D. Pa. 1984)

(“What is required is an evaluation of the substance of the prior representation as

compared with the substance of the present adverse representation.”). It points to the

Torres complaint, which alleged that defects in a turbocharger caused the plane crash,

and claims the subject matter must have necessitated an analysis of engine parts Turner

learned about through her representation of Avco. But it does not connect the allegations

in the complaint to the work Turner did with the experts. Assumptions are not fact. As the

District Court noted, “without copies of the briefing, transcripts, or some other

6 information about Ms. Turner’s work in the Torres matter, the Court has no way to know

whether she would have needed to draw upon Avco’s confidential information over the

course of that assignment.” Avco Corp., 2022 WL 17251250, at *4.

Though Turner worked with Avco’s experts in previous litigation and would

“necessarily” have developed an understanding of certain functions of Avco’s engines,

App. 476, Avco does not explain whether the work Turner did on Torres involved the

piston engines at all. It merely asserts that the Torres complaint alleged there was a defect

in an Avco turbocharging system installed on a piston engine aircraft. But it does not tie

Turner’s work to that allegation. This Court has no way of knowing what the Torres

experts were hired to do or how Turner’s work with them implicated any knowledge she

gained from Avco. In fact, Avco’s corporate designee could not identify any case that

Turner worked on involving the subject matter of the Torres litigation. Her testimony

amounted to an assumption, that human nature would make it nearly impossible for

Turner to stop herself from sharing the information she learned about Avco’s engines.

But an assumption is not enough to support a breach of fiduciary duty.

Without evidentiary support of a relationship between the confidential information

Turner obtained from Avco and the substance of the work she did for Torres, Avco’s

appeal “amounts to an argument that all [aircraft engine product liability] cases are the

same.” Javorski, 2006 WL 3242112, at *7. Accepting this overly broad principle could

handcuff attorneys to one side of the bar for their entire career. Id. Because Avco points

to no evidence that Turner’s work in Torres called for or allowed the use of confidential

7 information against Avco, it has not met its burden under the substantial relationship test.

See Triffin, 643 A.2d at 120.

IV.

For the foregoing reasons, we will affirm the District Court’s order.