Historic Macon Station Ltd. Partnership v. Piedmont-Forrest Corp. (In re Historic Macon Station Ltd. Partnership)

126 B.R. 816, 1991 Bankr. LEXIS 634
CourtDistrict Court, D. Georgia
DecidedMay 3, 1991
DocketBankruptcy No. 90-52051; Adv. Nos. 90-5109, 90-5110
StatusPublished
Cited by1 cases

This text of 126 B.R. 816 (Historic Macon Station Ltd. Partnership v. Piedmont-Forrest Corp. (In re Historic Macon Station Ltd. Partnership)) is published on Counsel Stack Legal Research, covering District Court, D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Historic Macon Station Ltd. Partnership v. Piedmont-Forrest Corp. (In re Historic Macon Station Ltd. Partnership), 126 B.R. 816, 1991 Bankr. LEXIS 634 (gad 1991).

Opinion

MEMORANDUM OPINION

ROBERT F. HERSHNER, Jr., Chief Judge.

Historic Macon Station Limited Partnership, Debtor, Movant, filed a “Motion for Disqualification” on March 25,1991.1 Mov-ant asks this Court to disqualify John W. Griffin and the law firm of Troutman, Sanders, Lockerman & Ashmore (“Trout-man, Sanders”) from representing Georgia Power Company and Piedmont-Forrest Corporation, Respondents.2 A hearing was held on April 2, 1991. The Court, having considered the record in the Chapter 11 case and the arguments of counsel, now publishes this memorandum opinion.

In June 1984, Movant entered into a land lease and a building lease with Georgia Power. Georgia Power then conveyed the land and building to Piedmont-Forrest. Piedmont-Forrest is a wholly owned subsidiary of Georgia Power. Piedmont-Forrest succeeded to Georgia Power’s interest in the leases. Thus, Movant is the lessee and Piedmont-Forrest is the lessor on the leases at issue. Movant’s interest in the leases is its sole asset. Movant subleased a portion of the land and building to Georgia Power.

Movant defaulted on the leases in February or March 1990. Respondents and Mov-ant began settlement negotiations to resolve the default.3 Respondents were represented by Mr. Griffin. Mr. Griffin is a partner in the law firm of Troutman, Sanders. Respondents agreed to several extensions, which prevented the leases from terminating.

Movant asserts that “[o]n or before April 18, 1990, John W. Griffin drafted a proposed Memorandum of Understanding evi[818]*818dencing the parties tentative Settlement Agreement.” Therefore, Movant did not request an extension of the next lease termination date, namely April 23, 1990. Respondents contend that the leases terminated on April 24, 1990. Movant contends “that it was the intent and effect of Georgia Power in sending the Memorandum of Understanding dated April 19, 1990 to have [Movant] continue its efforts towards settlement so as to prevent [Movant] from seeking an additional formal extension of the effective date of termination of the leases or from filing Chapter 11 Bankruptcy proceedings before April 23, 1990. This reliance would result in a forfeiture if an agreement is not enforced.”

Movant wants to assume the leases under section 365 of the Bankruptcy Code.4 Respondents contend that Movant cannot assume the leases because the leases were terminated before Movant’s bankruptcy case was filed.5

The issue before the Court is whether Mr. Griffin and his law firm can represent Respondents in these adversary proceedings.

Movant asserts that Mr. Griffin “should be called as a witness on behalf of Georgia Power. Mr. Griffin was integrally involved in the conversations, dealings, and decision which led to [Movant’s] alleged default on the [leases] which is the subject matter of the instant law suit. Mr. Griffin is a key witness to the issue of whether an implicit extension of the April 23, 1990 deadline resulted from the actions of those involved in the negotiations. Additionally, Mr. Griffin is the only fact witness who could be called to testify as to whether termination of the leases was proper. [Movant] contends that Georgia Power failed to reinsti-tute the notice procedure once foreclosure was instituted. Since the termination of the leases triggered [Movant’s] filing of Chapter 11 proceedings, Mr. Griffin’s testimony as to the facts surrounding termination of the leases is pivotal to the instant action.” Movant asserts that it “unequivocally intends to call Mr. Griffin as a witness in its case in chief.”

Respondents assert that it has hired Thomas C. James, III, Esq. and his law firm of Jones, Cork & Miller to serve as trial counsel in these adversary proceedings. Respondents assert that “neither Mr. Griffin nor any other lawyer from Troutman, Sanders would be advocating at the same trial in which another member of the firm might be a material witness.” Mr. Griffin and Troutman, Sanders have represented Respondents since 1984 concerning the subject matter of these adversary proceedings.

Respondents assert that Mr. Griffin and Troutman, Sanders should be permitted to serve as counsel in pretrial matters and then step aside during the trial.

This Court has held that the American Bar Association’s Code of Professional Responsibility (“ABA Code”) governs the conduct of attorneys practicing before this Court. Hunter v. Head (In re Head), 110 B.R. 621, 624 (Bankr.M.D.Ga.1990). In In re Head, this Court stated:

The Court recognizes that the American Bar Association (ABA) replaced its Code of Professional Responsibility with the ABA Model Rules of Professional Conduct in August 1983. See Waters v. Kemp, 845 F.2d 260, 263 n. 9 (11th Cir.1988). The Court notes, however, that the ABA Code is most similar to the Standards of Conduct for Attorneys adopted by the State Bar of Georgia. See Rules and Regulations for the Organization and Government of the State Bar of Georgia Part IV, Chapter 1.

110 B.R. at 624 n. 6.

Disciplinary Rule 5-101(B) of the ABA Code provides:

(B) A lawyer shall not accept employment in contemplated or pending litigation if he knows or it is obvious that he or a lawyer in his firm ought to be called as a witness, except that he may undertake the employment and he or a lawyer in his firm may testify:
[819]*819(1) If the testimony will relate solely to an uneontested matter.
(2) If the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony.
(3) If the testimony will relate solely to the nature and value of legal services rendered in the case by the lawyer or his firm to the client.
(4) As to any matter, if refusal would work a substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case.

DR 5-101(B).

Disciplinary Rule 5-102 of the ABA Code provides:

DR 5-102 Withdrawal as Counsel When the Lawyer Becomes a Witness.
(A) If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client, he shall withdraw from the conduct of the trial and his firm, if any, shall not continue representation' in the trial, except that he may continue the representation and he or a lawyer in his firm may testify in the circumstances enumerated in DR 5 — 101(B)(1) through (4).
(B) If, after undertaking employment in contemplated or pending litigation, a lawyer learns or it is obvious that he or a lawyer in his firm may be called as a witness other than on behalf of his client, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his client.
DR 5-102.

The ABA Code offers the following reasons for the restrictions on a lawyer-witness:

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Bluebook (online)
126 B.R. 816, 1991 Bankr. LEXIS 634, Counsel Stack Legal Research, https://law.counselstack.com/opinion/historic-macon-station-ltd-partnership-v-piedmont-forrest-corp-in-re-gad-1991.