Wright v. Kincheloe

81 Va. Cir. 277
CourtFairfax County Circuit Court
DecidedOctober 20, 2010
DocketCase No. CL-2010-3617; Case No. CL-2010-7469
StatusPublished

This text of 81 Va. Cir. 277 (Wright v. Kincheloe) is published on Counsel Stack Legal Research, covering Fairfax County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wright v. Kincheloe, 81 Va. Cir. 277 (Va. Super. Ct. 2010).

Opinion

By Judge Randy I. Bellows

On October 8, 2010, this Court heard oral argument on the Motions to Disqualify filed by Defendant, James G. Kincheloe, Jr. At the conclusion of the hearing, the Court informed the parties that it would take the matter under advisement. After reviewing the parties’ briefs and in light of the oral arguments made, the Court is now prepared to rule.

[278]*278I. Background

On or about December 2, 2003, Plaintiff Kathleen P. Whyard initially retained James Kincheloe to represent her during her separation and divorce.

On January 12, 2009, Whyard’s brother-in-law, Jeffrey C. Wright, wired $150,000 into Kincheloe’s Trust Account which was intended to be used for Whyard’s legal expenses. On March 20, 2009, Whyard and her former husband entered into a Property Settlement Agreement which obviated the need for trial.

David Duff and his firm represent Wright and Whyard in separate lawsuits against Kincheloe. Wright retained Duff to represent him in his fraud claim against Kincheloe on February 22, 2010. Wright filed his Complaint'on March 15, 2010, alleging that Kincheloe intentionally lied to him for the purpose of obtaining $150,000 through false pretenses. An Amended Complaint making identical allegations was filed on May 10, 2010. Whyard retained Duff on May 5, 2010, to represent her in a legal malpractice claim against Kincheloe for substandard representation during her divorce case. Whyard filed her Complaint against Kincheloe on May 21,2010.

On May 5,2010, Wright and Whyard executed a Waiver of Personal Conflict (“Waiver”) whereby they both agreed to “waive, release, and forego any conflict of interest that could conceivably be created by [Duff] in simultaneously representing each of them in their respective claims against attorney Kincheloe.” ¶ 6.

On June 11, 2010, Judge McWeeny granted Kincheloe’s motion for leave to file a Third-Party Complaint against Whyard in Wright’s case. In his Third-Party Complaint, Kincheloe alleged that the $150,000 was a loan from Wright to Whyard. In the alternative, Kincheloe alleged that Whyard is liable to Wright for the legal fees he incurred on her behalf. Kincheloe denies that he is liable to Wright, but, if he is found liable, Kincheloe claims that Whyard is liable for any damages awarded against him.

Duff mistakenly believed that his firm would be representing Whyard in the defense of the Third-Party Complaint and notified Kincheloe’s counsel of his willingness to accept service of the Third-Party Complaint on Whyard’s behalf. On or about June 16, 2010, Kincheloe’s counsel notified Duff via e-mail that he believed there was an incurable conflict of interest in his representation of both Wright and Whyard pursuant to Rule 1.7(b) of the Rules of the Supreme Court of Virginia. Doug Milman, Esq., of the law firm of Wexell Milman represents Whyard in defending against Kincheloe’s Third-Party Complaint.

Judge Roush sustained Whyard’s Demurrer to the Third-Party Complaint on September 24, 2010, with leave to amend. Kincheloe filed [279]*279an Amended Third-Party Complaint with nearly identical allegations as the initial Third-Party Complaint.

Also on September 24, 2010, Kincheloe filed Motions to Disqualify Duff from representing both Wright and Whyard in their suits against Kincheloe. Kincheloe’s contention is that Wright’s payment of $150,000 into Kincheloe’s Trust Account for Whyard’s legal services was a loan from Wright to Whyard which remains unpaid. In his Motions, Kincheloe argues that Wright and Whyard have directly adverse interests in the outcome of Wright’s suit because of this loan agreement. If Wright is successful in his suit against Kincheloe, Kincheloe alleges he has the right to recover at least $150,000 from Whyard for Kincheloe’s legal services. If Wright is unsuccessful in his suit, Kincheloe alleges that Whyard is liable to Wright for the outstanding loan.

II. Analysis

A. Legal Standard

Rule 1.7 of the Virginia Rules of Professional Conduct prohibits the representation of a client if it involves a “concurrent conflict of interest.” Va. Sup. Ct. R., pt. 6, sec. II, 1.7 (2010). A concurrent conflict of interest exists if:

(1) the representation of one client will be directly adverse to another client; or
(2) there is significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client, or a third person or by a personal interest of the lawyer.

Id. If a concurrent conflict exists, a lawyer may continue the representation if: (1) each client gives written consent after consultation; (2) the lawyer reasonably believes he can provide competent and diligent representation to the clients; (3) the representation is lawful; and (4) “the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal.” Id.

B. Findings

The issues in this case are (a) whether a conflict of interest is inherent in Duff’s concurrent representation of Wright and Whyard and (b), if a conflict exists, whether it is cured either by the Waiver executed by Wright [280]*280and Whyard or the fact that Whyard has separate legal representation to defend against Kincheloe’s Third-Party Complaint.

In deciding these Motions, the Court must balance a client’s right to free choice of counsel with maintenance of the highest ethical and professional legal standards. In re Asbestos Cases, 514 F. Supp. 914 (E.D. Va. 1981), rev’d on other grounds sub nom. Greitzer & Locks v. Johns-Manville Corp., 1982 U.S. App. Lexis 21211 (4th Cir. Va. Mar. 5, 1982). Client loyalty and independent judgment are strong ethical concerns inherent in Rule 1.7. See Va. Sup. Ct. R.,pt. 6, sec. II, 1.7,Notes [1], [6], [8] (2010). With that in mind and “with a view of preventing the appearance of impropriety, [the Court] is to resolve all doubts in favor of disqualification.” United States v. Clarkson, 567 F.2d 270, 273, n. 3 (4th Cir. 1977). A firm may not represent a plaintiff and a third-party defendant with adverse interests unless it is “obvious” that adequate multiple representation is possible. See Dacotah Marketing v. Versatility, Inc., 21 F. Supp. 2d 570, 582 (E.D. Va. 1998).

However, in making its findings, the Court is also mindful “that the disqualification of a party’s chosen counsel is a serious matter which cannot be based on imagined scenarios of conflict.” Tessier v. Plastic Surgery Specialists, Inc., 731 F. Supp. 724 (E.D. Va. 1990) (citing Richard Hilton Associates v. City of Richmond, 690 F.2d 1086 (4th Cir. 1982)). The moving party on any disqualification motion bears a “high standard of proof to show that disqualification is warranted. Id. (citing Government of India v. Cook Industries, Inc., 569 F.2d 737 (2d Cir. 1978)).

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Related

United States v. Robert Barnwell Clarkson
567 F.2d 270 (Fourth Circuit, 1977)
Tessier v. Plastic Surgery Specialists, Inc.
731 F. Supp. 724 (E.D. Virginia, 1990)
In Re Asbestos Cases
514 F. Supp. 914 (E.D. Virginia, 1981)
Dacotah Marketing & Research, L.L.C. v. Versatility, Inc.
21 F. Supp. 2d 570 (E.D. Virginia, 1998)

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Bluebook (online)
81 Va. Cir. 277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wright-v-kincheloe-vaccfairfax-2010.