OSCN Found Document:BD. OF COUNTY COMM'RS v. ASSOC. OF COUNTY COMM'RS OF OKLA. SELF-INSURED GROUP
¶1 The dispositive issue presented is whether the plaintiff's chosen counsel, and his law firm are disqualified from representing the plaintiff because of an alleged prior association with the defendant. We hold that under the facts presented, disqualification is not required.
ALLEGED FACTS
¶2 On September 3, 2014, a former inmate of the Harmon County Jail sued the Sheriff of Harmon County in federal court for an alleged sexual assault/rape by a City of Hollis Police officer while the inmate was incarcerated. At the time, the plaintiff/appellee, Board of County Commissioners of Harmon County, Oklahoma (Board), had a Liability Protection Agreement with the defendant/appellant, Association of County Commissioners of Oklahoma Self-Insured Group (ACCO-SIG).
¶3 The agreement provided for $2,000,000.00 in liability protection for claims against the Sheriff if he was sued in his official capacity. Pursuant to the agreement, ACCO-SIG hired legal representation for the Sheriff, the law firm of Collins, Zorn, and Wagner, P.C. and Stephen L. Gerries (collectively the firm). During more than a year of mediation/settlement negotiations, the firm made various settlement offers ranging from $7,500.00, to $25,000.00, to $125,000.00, to $150,000.00, and finally $225,000.00. The offers were refused.
¶4 On September 23, 2016, the federal court entered a judgment against the Sheriff in the amount of $6,500,00.00 with interest. On December 12, 2016, the court awarded $512,687.00 in attorney fees. Consequently, ACCO-SIG paid the $2,000,000.00 in benefits under the agreement.
¶5 On February 1, 2018, the Board filed a lawsuit in Oklahoma County District Court against ACCO-SIG and the firm. The lawsuit centered around the Liability Protection Agreement, and ACCO-SIG's lawyers, and the firm's failed settlement negotiations in the Sheriff's federal lawsuit. The Board alleged breach of contract by ACCO-SIG, and professional negligence/malpractice by the firm. On February 5, 2018, attorneys Douglas Jackson and Julia Rieman of the law firm of Gungoll, Jackson, Box & Devoll, P.C. of Enid, Oklahoma, filed their entry of appearance in this cause to represent the Board.
¶6 On May 10, 2019, Erin Rooney (Rooney) also of the law firm of Gungoll, Jackson, Box, and Devoll of Oklahoma City filed an entry of appearance on behalf of the Board. On June 22, 2019, the Board filed an Amended Petition adding a claim of breach of fiduciary duty against ACCO-SIG's lawyers who represented the Sheriff.
¶7 On November 12, 2019, six months after Rooney filed his entry of appearance, ACCO-SIG filed a Motion to Disqualify him from representing the Board. It sought to disqualify Rooney, and the other lawyers at Gungoll, Jackson, Box and Devoll, from representing the Board due to an alleged conflict of interest. ACCO-SIG asserted that Rooney had represented ACCO-SIG in a nearly identical matter four years prior to his entry of appearance in this cause. According to ACCO-SIG, Rooney's participation in the litigation, and thus the Gungoll firm's participation in this cause, is contrary to the Oklahoma Rules of Professional Conduct.1 ACCO-SIG argues that Rooney is forced to choose between zealous representation of the Board, or exposing confidential information to the detriment of his former client, now opponent, ACCO-SIG. The Board objected to the Motion to Disqualify, arguing that it was meritless.
¶8 The trial court held disqualification hearings on December 18, 2019, and January 3, 2020. On February 3, 2020, the trial court filed an order denying the Motion to Disqualify. It noted that while it was a "close call," disqualification was not required. ACCO-SIG filed an appeal the same day. We retained the appeal on February 12, 2020, and the cause was assigned to this chamber for an opinion on January 28, 2021.
STANDARD OF REVIEW
¶9 The denial of a motion to disqualify is immediately appealable as a final order because it affects the substantial rights of a party.2 When reviewing the order, we review the trial court's findings of fact for clear error and carefully examine de novo the trial court's application of ethical standards.3 The standard for disqualifying counsel is whether real harm to the integrity of the judicial process is likely to result if counsel is not disqualified.4 This is a high standard to meet.5 The burden rests with the moving party to establish the likelihood of harm by a preponderance of the evidence.6
UNDER THE FACTS PRESENTED,
DISQUALIFICATION IS NOT REQUIRED.
¶10 The Board argues that the attempt at disqualification is without merit, and nothing more than a delay tactic. ACCO-SIG argues that the integrity of the judicial process is at stake, and that it will suffer irreparable harm if Rooney and his law firm are not required to disqualify.
A.
Disqualification Under The Oklahoma Rules Of Professional Conduct,
And The Standards Set Forth By Our Previous Decisions.
¶11 Three rules of The Oklahoma Rules of Professional Conduct, 5 O.S. 2011 Ch. 1, App. 3A are implicated in this cause:
1) unless a client gives informed consent, Rule 1.9 prohibits a lawyer who, or a lawyer whose former firm, has formerly represented a client from representing another person in the same or a substantially related matter if that person's interests are materially adverse to the interests of the former client;7
2) when any lawyer practicing alone would be prohibited from representing a client, none of the lawyers associated their firm shall knowingly represent the client;8 and
3) Rule 1.6 prohibits a lawyer from revealing confidential information or unauthorized disclosures of a former client.9
Consequently, the focus of our inquiry is whether: 1) the former cause in which Rooney represented ACCOC-SIG and the current cause are substantially similar; and 2) Rooney obtained any confidential information from ACCOC-SIG by his representation of them in the former cause which would require disqualification.
¶12 We discussed the proper process and standards for disqualification of an opponent's attorney in Arkansas Valley State Bank v. Phillips, 2007 OK 78, 171 P.3d 899 and Miami Business Services, LLC. v. Davis, 2013 P.3d 477. In Arkansas Bank, supra, the plaintiff Bank sought to disqualify the defendant's counsel, alleging that he had received confidential work product information from one of the Bank's former employees. In deciding the disqualification, the trial court applied an "appearance of impropriety" standard, resolved all doubt in favor of disqualification, but neglected to make proper fact findings of whether the attorney received any knowledge of material and confidential information. We reversed the trial court and said that:
1) A party litigant in a civil proceeding has a fundamental right to employ counsel of his or her own choosing;10
2) The right to select one's own counsel is not absolute, and
litigant's choice may be set aside where the choice threatens the integrity of the judicial process;11and
3) Disqualification is such a drastic measure it should be utilized only if real harm is likely to result.12
We also recognized that balance must be struck between a party's right to employ counsel of choice; the moving party's right to maintain confidentiality; and the public's interest in preserving integrity of the judicial process.13
¶13 After Arkansas Bank considering these factors, we held that the proper test for granting a motion to disqualify counsel is whether real harm to the integrity of the judicial process is likely to result if counsel is not disqualified.14 In order to determine whether an attorney should be disqualified based on a conflict of interest or improper possession of confidential information, the trial court must hold an evidentiary hearing, and include in its disqualification order a specific factual finding that the attorney had knowledge of material and confidential information.15 Because the trial court had not held a hearing, nor made such findings, we reversed and remanded the matter.
¶14 In Miami, supra, the plaintiff also sought to disqualify the defendant's counsel stemming from the counsel's previous involvement with both the plaintiff and defendant. We held that preservation of the integrity of judicial process is sufficient reason to review a motion to grant or deny disqualification.16 We reaffirmed that an evidentiary hearing was necessary as well as specific factual findings that the attorney either had, or did not have, knowledge of material and confidential information.17 We reviewed those findings for clear error, after examining the record de novo.18 Because the trial court had not held an evidentiary hearing, we again reversed and remanded.
B.
Similarity Of The Previous Cause To This Cause And
Obtaining Confidential Information.
¶15 In this cause, the trial court held an evidentiary hearing, and made specific findings of fact before determining that disqualification was not required. Again, we must examine the trial court's findings to determine if they were in clear error. Although we are not bound by the comments of the Oklahoma Rules of Professional Conduct they may be persuasive and provide guidance.19 Comments to the rules do not add obligations to the Professional Responsibility Rules, but merely provide the lawyer with guidance, explaining and illustrating the meaning of a particular rule. Violation of a rule does not give rise to a cause of action, nor create the presumption of a legal duty, nor should such violation serve as the basis for civil liability.20
¶16 The comments to Rule 1.6 direct our consideration to all matters communicated by the client, as well as all information relating to the representation.21 A lawyer may not disclose information except as authorized or required by the Rules or other law.22 The comments to Rule 1.9 provide that the scope of a matter depends on the facts of a particular situation or transaction, and the degree of the lawyer's involvement.23
¶17 When a lawyer has been directly involved in a specific transaction, subsequent representation of other clients with materially adverse interests in that transaction is generally prohibited.24 On the other hand, a lawyer who repeatedly handled a type of problem for a former client is not precluded from later representing another client in a factually distinct problem of that type, even though the subsequent representation involves a position adverse to the prior client.25 The underlying question is whether the lawyer was so involved in the matter that the subsequent representation can be justly regarded as a changing of sides in the matter in question.26
¶18 Matters are "substantially related" if they involve the same transaction or legal dispute, or if otherwise, there is a substantial risk that confidential factual information which would normally have been obtained in the prior representation would materially advance the client's position in the subsequent matter. In the case of an organizational client, general knowledge of the client's policies and practices ordinarily will not preclude a subsequent representation. However, knowledge of specific facts gained in a prior representation that are relevant to the matter in question ordinarily will preclude such a representation.27
¶19 A former client is not required to reveal the confidential information learned by the lawyer in order to establish a substantial risk that the lawyer has confidential information to use in the subsequent matter.28 A conclusion about the possession of such information may be based on the nature of the services the lawyer provided the former client and information that would, in ordinary practice, be learned by a lawyer providing such services.29
¶20 In 2012, Rooney participated in representing ACCO-SIG in Rogers County, Oklahoma, Case No. CJ-2012-200. The lawsuit concerned:
1) breach of contract allegations against ACCO-SIG relating its failure to defend and settle lawsuits brought by seventeen inmates against a Delaware County Sheriff;
2) ACCO-SIG's alleged improper treatment of the individual allegations against the Sheriff as one occurrence for liability limits;
3) allegations of bad faith conduct by ACCO-SIG relating to its communication with the Board of County Commissioners, and the defense and settlement of the inmate lawsuits.30
The cause eventually made its way to this Court as a certified interlocutory appeal, resulting in an opinion in Board of County Commissioners v. Association of County Commissioners of Oklahoma Self-Insured. Group, 2014 OK 87, 339 P.3d 866. The opinion addressed the questions of whether the ACCO-SIG was an insurer, and whether it was protected as a governmental entity from tort liability.
¶21 This cause also involves breach of conduct and bad faith allegations against ACCO-SIG in its defense and settlement process in defense of inmate sexual assault lawsuits against a Sheriff. Although the facts of both cases may not be identical, they need not be. The nature of both lawsuits involves the same type of legal dispute, ACCO-SIG's conduct towards its policy holders, and the same type of confidential information would likely be exposed in both cases. We agree with the trial court that, at least for purposes of disqualification, this cause and the previous cause involving the Sheriff of Delaware County in which Rooney participated are similar.
¶22 Nevertheless, the similarity of the two matters does not end the inquiry. Pursuant to Arkansas Bank, supra and Miami, supra, the question for required disqualification is whether, because of the similar representation, the attorney who is alleged to be disqualified gained knowledge of any material or confidential information which would jeopardize the integrity of judicial process.
¶23 After de novo review, we determine that the trial court's conclusion that disqualification was not required was not clear error. According to Rooney's testimony, he: 1) never met with ACCO-SIG, other than one lunch meeting he attended with a firm partner; 2) never obtained any confidential information or had any personal recollection of any; 3) never met with employees of ACCO-SIG; and 4) never participated in settlement conferences or depositions. The partner of Rooney's prior law firm, who also represented ACCO-SIG, testified by deposition that Rooney obtained no confidential information from the work he did from ACCO-SIG.
¶24 We agree with ACCO-SIG that there was a risk that Rooney could have obtained confidential information because he and his prior law firm represented ACCO-SIG. A former client should not have to reveal the precise confidential information learned by the lawyer in order to establish the lawyer has confidential information to use in the subsequent matter. The evidence in this cause shows that Rooney had access to nothing more than general information about ACCO-SIG's policies, and not any knowledge of specific facts gained which should preclude representation. If Rooney is not disqualified because of his lack of knowledge of confidential information, neither is his law firm.
CONCLUSION
¶25 The trial court accurately described this cause as a "close call." Were we to apply "appearance of impartiality" which applies to judicial disqualification,31 a different result might be required. More than appearance is required to tell a party that their chosen counsel cannot be hired because of prior representation. Propinquity does not equal knowledge. In this cause the evidence falls short in showing that the attorney who is alleged to be disqualified, gained knowledge of any material or confidential information which would jeopardize the integrity of judicial process. Accordingly, the trial court is affirmed.
KANE, V.C.J., KAUGER, WINCHESTER, EDMONDSON, COMBS, GURICH, ROWE, JJ., concur.
DARBY, C.J., not participating.