The Florida Bar v. Dunagan

731 So. 2d 1237, 1999 WL 68487
CourtSupreme Court of Florida
DecidedFebruary 11, 1999
Docket91,753
StatusPublished
Cited by10 cases

This text of 731 So. 2d 1237 (The Florida Bar v. Dunagan) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Florida Bar v. Dunagan, 731 So. 2d 1237, 1999 WL 68487 (Fla. 1999).

Opinion

731 So.2d 1237 (1999)

THE FLORIDA BAR, Complainant,
v.
Walter Benton DUNAGAN, Respondent.

No. 91,753.

Supreme Court of Florida.

February 11, 1999.
Rehearing Denied May 21, 1999.

*1238 John F. Harkness, Jr., Executive Director, and John Anthony Boggs, Staff Counsel, Tallahassee, Florida, and Jan K. Wichrowski, Bar Counsel, Orlando, Florida, for Complainant

Michael L. Ramos, Daytona Beach, Florida, for Respondent

PER CURIAM.

We have for review the complaint of The Florida Bar and the referee's report regarding alleged ethical breaches by Walter Benton Dunagan. We have jurisdiction. Art. V, § 15, Fla. Const.

After a formal hearing in this matter, the referee found the following facts. In July 1992, Dunagan prepared a bill of sale purporting to transfer certain assets of a restaurant business, "Biscuits `N' Gravy `N' More" ("B & G"), to the joint ownership of William and Paula Leucht. Dunagan also prepared the fictitious name filing for this business but, according to a letter sent by him to the Leuchts, inadvertently omitted Paula Leucht's name on the registration form.

Subsequently, a commercial lease dispute arose between B & G and Bay-Walsh Properties (Florida) Inc., d/b/a/ Nova Village Market Partnership ("Bay-Walsh"). The suit filed by Bay-Walsh named B & G, William Leucht, and Paula Leucht as defendants. Dunagan represented B & G and the Leuchts in this action and specifically moved to dismiss Paula Leucht as a improper party to the suit.[1]

Later in 1994, Dunagan was involved in negotiations between the Leuchts and a *1239 third party to open another B & G restaurant in Daytona Beach and, in 1994 and 1995, also represented B & G and the Leuchts in an eminent domain suit against the Florida Department of Transportation.

On or about February 23, 1996, Dunagan sent a letter to the Port Orange Police Department and city attorney in which he stated that he represented William Leucht, that William Leucht was the sole owner of B & G, and that although there was a bill of sale which was "considered to put the business in the name of William and Paula Leucht," this "instrument and the legal consequences thereof were duly considered, and it was determined with deliberation that William Leucht would remain the sole owner." The letters further advised that Mr. Leucht intended to fire two employees, after which they would no longer be welcome on the premises of the restaurant, and that if they entered the premises, they would be ejected. The letters purported to notify the police "in order to prevent a breach of the peace from occurring."

Several days after sending these letters, Dunagan filed a petition for dissolution of marriage on behalf of William Leucht against Paula Leucht. A few days later, Paula Leucht called B & G restaurant and was told by an employee that William Leucht was the sole owner and she could not come to the restaurant. Ms. Leucht went to the restaurant anyway and was arrested for disorderly conduct and forcibly removed from the premises. Prior to, during, and after her arrest, Ms. Leucht informed the police that she co-owned the restaurant.

Finally, on May 2, 1996, the judge in the divorce proceeding ordered that William and Paula Leucht were to share equally in the net proceeds from both B & G restaurants, and on October 31, 1996, Dunagan filed a motion to withdraw from representation of William Leucht in the divorce proceeding after Paula Leucht hired an attorney to file a malpractice lawsuit against him.

After making these factual findings, the referee recommended Dunagan be found guilty of violating rules 4-1.7(a)(prohibiting representation of a client when such representation will be directly adverse to the interests of another client); 4-1.7(b)(prohibiting representation of a client when the lawyer's exercise of independent professional judgment may be materially limited by the lawyer's responsibilities to another client, a third person, or the lawyer's own interest); 4-1.9(a)(prohibiting representation of a client whose interests are materially adverse to a former client in the same or a substantially related matter);[2] 4-1.9(b)(prohibiting use of information relating to the representation of a former client to his or her disadvantage); and 4-1.16(a)(requiring an attorney to decline representation of a client where the representation will result in a violation of the Rules of Professional Conduct or law) of the Rules Regulating The Florida Bar. The referee recommended that Dunagan be suspended for ninety-one days and costs be taxed against him in favor of The Florida Bar. Dunagan seeks review of the referee's findings and recommendation.

I. Conflict of Interest

Dunagan first argues that the referee erred in finding that his representation of William Leucht in the divorce proceeding after having jointly represented William and Paula Leucht in matters relating to their business presented a conflict of interest. Dunagan argues that the business matters in which he represented the Leuchts were completely unrelated to the dissolution of marriage and that ownership of the business was not a central issue in the divorce; therefore, he reasons, there was no conflict of interest. This argument is without merit.

*1240 Rule 4-1.9(a) of the Rules Regulating The Florida Bar prohibits a lawyer who has formerly represented a client from representing another person "in the same or a substantially related matter" where that person's interests are materially adverse to the former client's interests.[3] Whether two legal matters are substantially related depends upon the specific facts of each particular situation or transaction. Further, the comment to rule 4-1.9 states that "[w]hen a lawyer has been directly involved in a specific transaction, subsequent representation of other clients with materially adverse interests clearly is prohibited."

For example, in Florida Bar v. Wilson, 714 So.2d 381 (Fla.1998), attorney Wilson represented Betty Wells and her husband in several matters, including a declaratory judgment suit against the Department of the Lottery. The final judgment in this suit provided that husband and wife were to share the lottery proceeds equally. Id. at 382. Subsequently, Mr. Wells sought to have Wilson represent him in a dissolution action against Mrs. Wells. Wilson refused due to his past representation, but after Mr. Wells obtained other counsel and filed a dissolution action, Wilson filed an answer and counter-petition on behalf of Mrs. Wells and moved to set aside the declaratory judgment award giving Mr. Wells fifty percent interest in the lottery winnings. Id. The referee found a clear conflict of interest in violation of rule 4-1.9, and we upheld this finding. Id. at 383.

Similarly, here Dunagan represented William and Paula Leucht in the formation of their business and, specifically, prepared a bill of sale transferring assets of the business to their joint ownership. Because the business was begun during the marriage, it was a marital asset and as such was inherently an issue in the divorce.

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731 So. 2d 1237, 1999 WL 68487, Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-florida-bar-v-dunagan-fla-1999.