Leon, Ltd. v. Carver

715 P.2d 1080, 104 N.M. 29
CourtNew Mexico Supreme Court
DecidedFebruary 26, 1986
Docket15776
StatusPublished
Cited by7 cases

This text of 715 P.2d 1080 (Leon, Ltd. v. Carver) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leon, Ltd. v. Carver, 715 P.2d 1080, 104 N.M. 29 (N.M. 1986).

Opinion

OPINION

WALTERS, Justice.

This is a suit to recover unpaid leasing commissions under an exclusive leasing agreement between plaintiff-appellee Leon and defendant-appellant Carver for the leasing of space in an office building known as First City Place. The agreement, as amended in January 1981, covered the period from April 1, 1980 through December 31, 1982.

Carver is a former client of the Sutin, Thayer & Browne law firm. Sutin represented Leon through all stages of this litigation. The trial court denied Carver’s pretrial motion to disqualify Sutin from representing Leon.

Leon’s Third Amended Complaint stated five claims for relief. Of the counts at issue in this appeal, Count I sought Leon’s commission on the October 1982 five-year extension of the first-through-fourth-floor lease held by tenant First City Financial Corporation, plus punitive damages for fraud in inducing Leon’s waiver of that commission. Count III claimed commissions for First City’s March 1983 expansion into the basement and the fifth, sixth, seventh, ninth and tenth floors of the building. Count IV asked for a commission on First City’s March 1983 extension of the first-through-fourth-floor lease from ten to twenty years, and Count V alleged commissions due for leases negotiated with three other tenants, plus punitive damages. Carver counterclaimed, alleging that Leon had breached his duty under the agreement to exercise his best efforts and to cooperate with other brokers in procuring leases.

The trial court entered directed verdicts for Leon on Count V and Carver’s counterclaim, and for Carver on the punitive damage claims of Counts I, II and V. The jury returned verdicts for Leon on Counts I and IV and part of Count III, and for Carver on Count II. Carver appeals and Leon cross-appeals. We affirm.

The issues argued by Carver are:

1. The trial court erred in denying Carver’s motion to disqualify Sutin from representing Leon.
2. The trial court erred in submitting Counts III and IV to the jury.
3. Leon neither contributed to nor properly registered the March 1983 extension of the First City lease on floors one through four. (Count IV)
4. The trial court’s instruction to the jury on waiver under Count I was erroneous.
5. The trial court erred in striking Carver’s counterclaim for failure to prove damages.

On cross-appeal, Leon claims:

1. The trial court erred in directing a verdict for Carver on Leon’s claim for punitive damages under Count I.
2. The jury erred in awarding to Leon less than the full amount claimed under Count III.
3. Leon is entitled to attorneys’ fees under Count V.

Because some of these issues are interrelated, we do not discuss them exactly in the order presented by the parties.

I. Disqualification of Sutin Firm

According to Carver, the trial court should have disqualified Sutin from representing Leon because Sutin’s prior representation of Carver is substantially related to the present litigation. See United Nuclear Corp. v. General Atomic Co., 96 N.M. 155, 243, 629 P.2d 231, 319 (1980), appeal dismissed, 451 U.S. 901, 101 S.Ct. 1966, 68 L.Ed.2d 289 (1981) (citing Westinghouse Electric Corp. v. Gulf Oil Corp., 588 F.2d 221 (7th Cir.1978)). The “substantial relationship” test expressed in Westinghouse is based on Canons 4 and 9 of the Code of Professional Responsibility, and requires a three-tiered analysis: (1) a factual reconstruction of the scope of the prior legal representation; (2) a determination of whether it is reasonable to presume that the lawyer would have received confidential information of the type alleged by his former client; and (3) a determination of whether the alleged confidential information is relevant to the issues raised in the litigation pending against the former client. Id., 588 F.2d at 225.

The trial court’s findings of fact regarding the scope of the prior representation are not challenged. Having made those findings, the court determined that Sutin had received no confidential information relevant to the issues in this case.

It is not appropriate for a trial court to inquire whether actual confidences have been disclosed during the prior representation, Westinghouse, 588 F.2d at 224, because it is difficult, if not impossible, to directly challenge such an inquiry or finding without disclosing the very confidences sought to be protected. Id. n. 3. We hold, however, that the trial court correctly concluded that there was no substantial relationship between Sutin’s prior representation of Carver and the present litigation. “A correct decision will not be reversed because the result was reached for the wrong reason.” Melton v. New Mexico Department of Human Services, 97 N.M. 102, 104, 637 P.2d 52, 54 (Ct.App. 1981).

A lawyer’s conduct should always be constrained by his duty to avoid even an appearance of impropriety. See NMSA 1978, Code of Prof.Resp., Canon 9 (Repl. Pamp.1985). The impropriety sought to be avoided by the substantial relationship test is the risk that a lawyer may inadvertently use the confidences or secrets of a former client against him. See id., Canon 4; Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 518 F.2d 751, 754 (2d Cir. 1975). It might therefore have been wiser for Sutin to decline to represent Leon in this lawsuit; nonetheless, disqualification is mandatory only when the relationship between the prior representation and present litigation is patently clear. E.g., State v. Jones, 180 Conn. 443, 449, 429 A.2d 936, 939 (1980), overruled in part, State v. Powell, 186 Conn. 547, 555, 442 A.2d 939, 944 (1982); Silver Chrysler Plymouth, 518 F.2d at 753-54, 757.

Even if the relationship between the past and present representations is not clear at the outset so as to justify disqualification, the court may later disqualify if, during trial, it appears that an attorney may be using confidential information against a former client. See Silver Chrysler Plymouth, 518 F.2d at 758 & n. 10. The trial court in this case did not deem such action necessary nor did Carver bring to the court’s attention any of the potentially-violated confidences of which he now complains on appeal. Moreover, Carver’s list of potential confidences to which Sutin might have gained access sets forth matters which are either irrelevant to this litigation or not actual confidences.

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Bluebook (online)
715 P.2d 1080, 104 N.M. 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leon-ltd-v-carver-nm-1986.