First Wisconsin Mortgage Trust v. First Wisconsin Corp.

571 F.2d 390, 24 Fed. R. Serv. 2d 1370
CourtCourt of Appeals for the Seventh Circuit
DecidedFebruary 24, 1978
DocketNo. 77-1786
StatusPublished
Cited by23 cases

This text of 571 F.2d 390 (First Wisconsin Mortgage Trust v. First Wisconsin Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Wisconsin Mortgage Trust v. First Wisconsin Corp., 571 F.2d 390, 24 Fed. R. Serv. 2d 1370 (7th Cir. 1978).

Opinions

CASTLE, Senior Circuit Judge.

This appeal presents two novel issues involving the effect of an order disqualifying counsel: whether substitute counsel is entitled to have access to the predisqualification work product of prior counsel; and, in the first instance, whether this court has jurisdiction to hear an appeal from the dis[392]*392trict court’s order denying such access. Finding that this court has jurisdiction to consider this appeal, we affirm.

I.

Plaintiff First Wisconsin Mortgage Trust (Trust) was established in 1971 under the sponsorship of defendant First Wisconsin Corporation (FWC). Trust is a real estate investment trust whose purpose is to provide investors with an opportunity to invest in a portfolio of mortgage and real estate investments. Trust was advised on the investments by defendant First Wisconsin Mortgage Company, a wholly-owned subsidiary of FWC, and was jointly involved in various loan transactions with defendant First Wisconsin National Bank, also a subsidiary of FWC.

From the time it was established until September, 1974, the law firm of Foley & Lardner was general counsel to Trust as well as general counsel to FWC and its subsidiaries. During 1973 and 1974 certain of the loan transactions became troubled when the borrowers experienced financial difficulty. Trust hired its present attorneys as special counsel regarding the problem loans in February, 1974. The present suit was filed in March, 1975 with Trust claiming that the defendants violated certain sections of the federal securities laws and regulations. Trust refused to consent to Foley & Lardner’s continuing representation of the defendants and on August 4, 1975 moved to disqualify Foley & Lardner as defendants’ counsel. That motion was granted on November 16, 1976. First Wisconsin Mortgage Trust v. First Wisconsin Corporation, 422 F.Supp. 493 (E.D.Wis.1976) (disqualification order).

On December 15, 1976, defendants’ substitute counsel entered an appearance and filed a notice of appeal of the disqualification order. On January 7, 1977, substitute counsel requested the district court to hold a pretrial conference to discuss defendants’ access to the “work product” generated by Foley & Lardner prior to their disqualification. The work product sought consists of Foley & Lardner’s analysis and review of several hundred real estate investment transactions which were prepared by 15 lawyers over a one year period and an explanation thereof. The district court declined to hold the conference reasoning that it had been deprived of jurisdiction upon the filing of the notice of appeal. The defendants moved for voluntary dismissal of the appeal of the disqualification order January 20, 1977 and entered into negotiations regarding the work product with the plaintiff.

On February 7, 1977, defendants moved the district court “For Authorization To Request Access To Certain Foley & Lardner Work Product.” This motion was denied on June 14, 1977. First Wisconsin Mortgage Trust v. First Wisconsin Corporation, 74 F.R.D. 625 (E.D.Wis.1977) (work product order). Defendants filed a timely notice of appeal of the work product order and also requested the district court to certify the order for interlocutory appeal under 28 U.S.C. § 1292(b). The certification request was denied on September 15, 1977. Plaintiff’s August 17, 1977 motion to dismiss the appeal for lack of jurisdiction was taken under advisement together with the merits at oral argument.

II.

We consider first plaintiff’s motion to dismiss this appeal for lack of jurisdiction. Plaintiff argues that defendants’ appeal from the work product order is improper since that order is not a final judgment under 28 U.S.C. § 1291.1 Moreover, plaintiff claims the defendants have failed to meet the requirements of the “collateral order” doctrine which tempers the rigidity of the final judgment rule. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). First, plaintiff argues that denial of access to the work product of prior counsel is not the [393]*393type of irreparable harm which is needed to invoke the collateral order doctrine. Second, it is contended that Cohen does not allow appellate review of the district court’s exercise of discretion in denying the work product motion. Third, plaintiff claims that the work product order merely construed the prior disqualification order and that an order construing an otherwise appealable order is not by itself appealable.2 While the work product order is obviously not a final disposition of the entire suit under the strict terms of § 1291, we find that we have jurisdiction to hear this appeal under the collateral order doctrine.

The Cohen case recognized an exception to the general rule that an order must dispose of the entire controversy between the parties before that order is appealable as a final judgment under § 1291.3 This court has interpreted Cohen and its progeny as establishing four requirements all of which must be satisfied before an interlocutory decision can be considered “final” within the meaning of the collateral order doctrine:

(1) the order must present an important and unsettled question of law;
(2) the order could not be reviewed effectively on appeal from the final judgment of the entire action since the right claimed in the order would have been lost;
(3) the subject of the order must be separate and independent from the subject of the main cause of action; and
(4) on balance, the danger of denying justice by delay outweighs the inconvenience and costs of piecemeal review.

E. g., Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 171, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974); Weit v. Continental Illinois National Bank and Trust Co., 535 F.2d 1010, 1014-15 (7th Cir. 1976); Rosenfeldt v. Comprehensive Accounting Service Corp., 514 F.2d 607, 610 n. 3 (7th Cir. 1975); Allegheny Airlines, Inc. v. LeMay, 448 F.2d 1341, 1345 (7th Cir.), cert. denied, 404 U.S. 1001, 92 S.Ct. 565, 30 L.Ed.2d 553 (1971); 9 J. Moore, Federal Practice ¶ 110.13[5], at 170 (2d ed. 1975). Applying these requirements has obtained different results with different orders. See United States ex rel. Hi-Way Electric Co. v. Home Indemnity Co., 549 F.2d 10 (7th Cir. 1977) [order denying stay of enforcement of judgment is appealable]; Anschul v. Sitmar Cruises, Inc., 544 F.2d 1364 (7th Cir.), cert. denied, 429 U.S. 907, 97 S.Ct. 272, 50 L.Ed.2d 189 (1976) [order denying class action status is not appealable]. Schloetter v. Railoc of Indiana, Inc., 546 F.2d 706 (7th Cir.

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Bluebook (online)
571 F.2d 390, 24 Fed. R. Serv. 2d 1370, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-wisconsin-mortgage-trust-v-first-wisconsin-corp-ca7-1978.