Putnam Resources, Ltd. Partnership v. Sammartino, Inc.

124 F.R.D. 530, 1988 U.S. Dist. LEXIS 16439, 1989 WL 16669
CourtDistrict Court, D. Rhode Island
DecidedJanuary 15, 1988
DocketCiv. A. No. 87-0414B
StatusPublished
Cited by4 cases

This text of 124 F.R.D. 530 (Putnam Resources, Ltd. Partnership v. Sammartino, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Putnam Resources, Ltd. Partnership v. Sammartino, Inc., 124 F.R.D. 530, 1988 U.S. Dist. LEXIS 16439, 1989 WL 16669 (D.R.I. 1988).

Opinion

MEMORANDUM and ORDER

JACOB HAGOPIAN, United States Magistrate.

The instant matter has been referred to the United States Magistrate for consideration pursuant to Title 28 U.S.C. Section 636(b)(1)(A) or (B). Before the Court is defendants’, Shawmut Bank, motion to disqualify plaintiff’s counsel, Dennis J. Roberts II, Esq., the law firm of Roberts-Carroll, Feldstein & Tucker (Roberts-Carroll), and the law firm of Grutman, Miller, Greenspoon & Hendler (Grutman).

Statement of Facts

I find that the relevant facts as established by the record are these. The instant litigation was commenced by Putnam Resources (Putnam) against Sammartino, Inc., Walter Sammartino and Shawmut Bank, N.A. (Shawmut). Putnam is represented in the instant ease by the law firm of Roberts-Carroll and by co-counsel, Grutman. At all relevant times both Putnam and Shawmut were creditors of defendant Sammartino, Inc. Putnam and Shawmut are competing creditors in this matter.

In 1983 defendant Shawmut loaned money to defendant Sammartino. The law firm of Roberts-Carroll represented defendant Shawmut for the purposes of this 1983 transaction. Attorney Dennis Roberts II joined the Roberts-Carroll firm. approximately one year after the 1983 transaction. The law firm of Roberts-Carroll represents plaintiff Putnam in this matter. In August of 1987, Dennis Roberts II informed Richard MacAdams (counsel for Shawmut in the this litigation) that Roberts-Carroll had represented defendant Shawmut in connection with the original loan in 1983 from Shawmut to Sammartino, Inc. The instant motion, which seeks the disqualification of plaintiff’s counsel, Attorney Roberts and the Roberts-Carroll firm, was filed by defendants in October of 1987 following Attorney Roberts’ disclosure.

Local Rule 4(d) of the United States District Court for the District of Rhode Island adopts the standard of conduct of the Code of Professional Responsibility of the Rhode Island Supreme Court. Defendant Shawmut, primarily relying on Canons 4 and 9 of the Rules, has moved to disqualify plaintiff’s counsel, Roberts-Carroll.

The test used by the United States Court of Appeals for the First Circuit in assessing whether disqualification should be granted by reason of a breach of Canon 4 hinges upon the relationship between the prior representation and the present case, otherwise known as the “substantial relation” test. The First Circuit in Kevlik v. Goldstein, 724 F.2d 844 (1st Cir.1984), citing with approval Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263, 1266 (7th [532]*532Cir.1983) has recognized that a substantial relation is found where “... a lawyer could have obtained confidential information in the first representation that would have been relevant in the second.” Where this showing can be made, the court will assume that during the course of the former representation confidences were disclosed to the attorney bearing on the subject matter of the representation. Kevlik, supra at 851, citing T C Theatre Corp. v. Warner Bros. Pictures, Inc., 113 F.Supp. 265 (S.D.N.Y.1953). Moreover, “it is irrelevant whether ... the lawyer is a firm rather than an individual practitioner (even where) ... different people in the firm handled the two matters and scrupulously avoided discussing them.” See Analytica, Inc., supra at 1266.

I find in this case that a substantial relation exists in light of the fact that Roberts-Carroll represented defendant Shawmut as creditor in 1983 regarding Shawmut’s financial arrangement with Sammartino. Roberts-Carroll now represents plaintiff Putnam, who is also a creditor of Sammartino, Inc. In sum, Roberts-Carroll’s clients, past and present, are now adversaries in the instant action. This relationship alone creates the presumption that during the course of Roberts-Carroll’s former representation of Shawmut in 1983 (which arguably continued to May, 1987) confidences were disclosed to Roberts-Carroll’s attorneys bearing on the subject matter of the instant litigation. This presumption is irrebuttable. This holds true even if the lawyer is a firm rather than an individual practitioner. Knowledge by one Roberts-Carroll attorney must be imputed to all attorneys of the firm. Thus, Attorney Roberts’ assertion that he had not joined the Roberts-Carroll firm until more than a year after it represented Shawmut lacks merit. The fact remains that his firm did previously represent Shawmut and now the same firm, Roberts-Carroll, represents Putnam in the instant matter. In fact, Roberts-Carroll has opposed its former client, Shawmut, in the instant litigation on the same matters on which it previously represented Shawmut. Clearly, Roberts-Carroll may not permissably represent the party defendant on one occasion and the party plaintiff on another involving the same subject matter or on subject matter which is substantially related. Attorney Roberts cannot insulate himself, as he seeks to do, from disqualification by erecting a “Chinese Wall” around himself and his associate attorneys of Roberts-Carroll who represented Shawmut in 1983. Attorney Roberts misplaces reliance upon case law which holds that a new lawyer’s knowledge is not necessarily imputed to the firm which he joins thus allowing a firm to undertake representation adverse to the interests of the new lawyer’s former client by erecting around himself a “Chinese Wall.” cf. Cheng v. GAF Corp., 631 F.2d 1052 (2d Cir.1980). Controlling here is the firm’s imputation of knowledge and not the imputation of Attorney Robert’s knowledge. Here, unlike Cheng, supra, the Roberts-Carroll firm’s knowledge is imputed to all members of the firm which includes Attorney Roberts. It is and was Attorney Roberts’ duty to determine the existence and nature of any conflict, and if such is found to disclose such conflict to the clients, Putnam and Shawmut alike. Any doubts concerning the propriety of such representation should be resolved by withdrawal. Westinghouse Electric Corp. v. Gulf Oil Corp., 588 F.2d 221, 225 (7th Cir.1978); see also Fund of Funds, Ltd. v. Arthur Andersen & Co., 567 F.2d 225, 233 (2d Cir.1977). I find this consistent with the guidelines of Canon 9. A lawyer should avoid even the appearance of professional impropriety. Accordingly, pursuant to Canons 4 and 9 of the Code of Professional Responsibility, I find that Attorney Roberts and the firm of Roberts-Carroll should be disqualified from participation in the instant case.

Grutman, Miller, Greenspoon & Hendler

Defendants, by their motion, urge that since the Grutman firm has appeared as co-counsel with Roberts-Carroll in the instant action, the former stands in the shoes of the latter and should also be disqualified. I agree. Dispositive of the issue of disqualification of co-counsel is Fund of Funds, Ltd., supra, which involved a triangular relationship as we have [533]*533here.

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Bluebook (online)
124 F.R.D. 530, 1988 U.S. Dist. LEXIS 16439, 1989 WL 16669, Counsel Stack Legal Research, https://law.counselstack.com/opinion/putnam-resources-ltd-partnership-v-sammartino-inc-rid-1988.