National Child Care, Inc. v. Dickinson

446 N.W.2d 810, 1989 Iowa Sup. LEXIS 326, 1989 WL 123186

• Court: Supreme Court of Iowa
• Decided: October 18, 1989
• Docket: 88-1715
• Status: Published

Opinions

CARTER, Justice.

This appeal is from an order disqualifying attorney Edward Ronwin from representing the plaintiff, National Child Care, Inc. (National), in an action alleging defendants tortiously interfered with business opportunities of National. Attorney Ron-win is National’s sole shareholder.

When it became apparent that Ronwin, in his capacity as chief executive officer of the corporation, conducted transactions which were likely to subject him to the role of a witness at trial, defendants, Janet K. Dickinson and Robert Dickinson, moved to have him disqualified pursuant to Iowa Code of Professional Responsibility DR 5-101(C). The court sustained this motion and granted National forty-five days to secure new counsel or be subject to sanctions, including dismissal. When National failed to secure new counsel within the prescribed time, the Dickinsons filed a motion to dismiss the action. The court granted that motion with the condition that the dismissal be without prejudice.

National contends that, because Ronwin owns all of National’s stock, his interests and those of the corporation coincide. From this premise, National argues that the present situation should be equated with that of an individual lawyer-litigant who may appear in court to represent his or her own interests as a party to litigation notwithstanding the fact that the lawyer-litigant may also be a witness.

In Presnick v. Esposito, 8 Conn.App. 364, 513 A.2d 165 (1986), the court held that an individual lawyer-litigant was not barred, pursuant to Connecticut’s DR 5-101(C) counterpart, from appearing as both attorney and witness in an action he brought for collection of legal fees and in defense of a counterclaim for malpractice in the same action. In refusing to impose disqualification, the court stated:

[T]he reasons underlying the general rule prohibiting an attorney from testifying in his client’s case do not apply where the attorney is the client_ One reason is that it is unfair to the client that his case be presented through a witness whom the trier of fact would necessarily view as interested because of the witness’ zeal of advocacy and likely interest in the result of the case. A second reason is one of public policy: permitting an attorney who is trying a case also to be a witness in establishing its facts will visit on the legal profession public distrust and suspicion arising from the attorney’s dual role.... The third reason for the rule is [to avoid the appearance of wrongdoing]. We do not believe that any of these reasons applies where the attorney seeks only to represent himself in his own case.

Id. at 368-69, 513 A.2d at 167 (emphasis added) (citations omitted).

The Connecticut court’s conclusion is, we believe, correct regarding the situation of the individual lawyer-litigant. We fail to see why a different result should prevail where a corporation is represented by an attorney who is its sole shareholder. In reaching this conclusion we do not rely on a corporation’s right to appear pro se. Some doubt exists as to whether that right exists. See DeVilliers v. Atlas Corp., 360 F.2d 292 (10th Cir.1966); Acme Poultry Corp. v. United States, 146 F.2d 738 (4th Cir.1944), cert, denied, 324 U.S. 860, 65 S.Ct. 865, 89 L.Ed. 1417 (1945); Paradise v. Nowlin, 86 Cal.App.2d 897, 195 P.2d 867 (1948); Tuttle v. Hi-Land Dairyman’s Ass’n, 10 Utah 2d 195, 350 P.2d 616 (1960); 19 Am.Jur.2d Corporations § 2172 (1986); Annotation, 19 A.L.R.3d 1073 (1968). It is suggested, however, in Knox Leasing v. Turner, — N.H.-, 562 A.2d 168 (1989), that pro se representation of entities, in contrast to individuals, turns on whether the self-representation is by all affected members of the entity.

We need not decide at this time whether a corporation may appear pro se in this state. Ronwin is a licensed lawyer. Moreover, National’s legal theory is not based on pro se representation as such but rather on an analogy to pro se representation by an individual lawyer-litigant. We find the suggested analogy is instructive and illustrates that the policy reasons underlying DR 5-101(C) simply do not apply to the situation involving Ronwin’s representation of National in the present litigation.

In applying disciplinary rules governing the attorney-client relationship, the paramount consideration is the interest of the client. DR 5-101(C) does not directly focus on conflicts of interest between attorney and client, but at preventing potential harm to the client because of a conflict inherent in the attorney’s dual role as advocate and witness. See ABA Comm, on Ethics and Professional Responsibility, Formal Op. 339 (1975); Sutton, The Testifying Advocate, 41 Tex.L.Rev. 477, 481 (1963). A California appellate court has adopted a standard that neither an opposing litigant nor the trial court should be able to deny a client’s choice of counsel without a convincing demonstration of detriment to the opponent or injury to the integrity of the judicial process. Lyle v. Superior Court, 122 Cal.App.3d 470, 482, 175 Cal.Rptr. 918, 926 (1981). We conclude that neither of these dangers is present in Ronwin’s representation of National.

The second issue on appeal involves the district court’s refusal to disqualify the Dickinsons’ attorney, Thomas Salsbery, upon National’s motion. That motion was based on DR 5-102(B), which provides:

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.

National alleged that Salsbery was present at some of the meetings between Ronwin and Janet Dickinson, that it intended to call Salsbery at trial, and that his testimony would be prejudicial to the interests of his clients, the Dickinsons. The district court overruled National’s motion without prejudice, asserting that the record was insufficient to allow the court to reach a conclusion on the issue.

At the time of the ruling, there was nothing in the record to indicate what Sals-bery’s testimony might be, other than the allegation by National that it would be, adverse to his client’s interests. National thus failed to carry its “burden of demonstrating the likelihood that prejudice will or might result” as a consequence of Sals-bery’s testimony. Freeman v. Kulicke & Soffa Indus., Inc., 449 F.Supp. 974, 978 (E.D.Pa.1978), aff'd, 591 F.2d 1334 (3d Cir.1979).

A final issue raised by National centers upon the court’s dismissal of its action as it relates to defendant Susan Hill. Hill was represented by separate counsel and unlike the Dickinsons did not file a motion to dismiss. National contends the court should not have dismissed its claim as to Hill sua sponte on a ground the other defendants raised but she did not. We need not answer this question. The dismissal as to all defendants was linked to the improper disqualification of attorney Ronwin. Consequently, it cannot be permitted to stand as to any of the defendants.

The judgment of the district court is reversed, and the case is remanded to the district court for further proceedings not inconsistent with this opinion.

REVERSED AND REMANDED.

All Justices concur except McGIVERIN, C.J., and SNELL, HARRIS and NEUMAN, JJ., who dissent.