Horaist v. Doctor's Hospital of Opelousas

• Decision Date: 11 July 2001
• Docket Number: Nos. 99-31121,99-31138,s. 99-31121
• Citation: 255 F.3d 261
• Parties: (5th Cir. 2001) Deborah M. Horaist, Plaintiff-Appellant, v. Doctor's Hospital of Opelousas; Columbia/HCA Healthcare Corporation of Central Louisiana, Inc.; Notami Opelousas, Inc.; Notami Hospital of Louisiana, Inc.; Columbia/HCA Healthcare Corporation; James Bienvenue; Greg Gibson; Mel Lagarde; Daryl Doise; Rick Thomason; Seldon Deshotel, Jr., M.D.; Continental Insurance companies; continental casualty company; reliance insurance Company of Illinois; CAN Insurance Company; Clarendon Lloyds; Healthcare Indemnity, Inc.; and Lloyds of London, Defendants-Appellees. Sealed Appellee, Plaintiff-Appellee, v. Sealed Appellant 1; Sealed Appellant 2; Sealed Appellant 3; Sealed Appellant 4; Sealed Appellant 5; Sealed Appellant 6; Sealed Appellant 7; Sealed Appellant 8; Sealed Appellant 9, Defendants-Appellants
• Court: U.S. Court of Appeals — Fifth Circuit

Page 261

255 F.3d 261 (5th Cir. 2001)

Deborah M. Horaist, Plaintiff-Appellant, v. Doctor's Hospital of Opelousas; Columbia/HCA Healthcare Corporation of Central Louisiana, Inc.; Notami Opelousas, Inc.; Notami Hospital of Louisiana, Inc.; Columbia/HCA Healthcare Corporation; James Bienvenue; Greg Gibson; Mel Lagarde; Daryl Doise; Rick Thomason; Seldon Deshotel, Jr., M.D.; Continental Insurance companies; continental casualty company; reliance insurance Company of Illinois; CAN

Insurance Company; Clarendon Lloyds; Healthcare Indemnity, Inc.; and Lloyds of London, Defendants-Appellees.

Sealed Appellee, Plaintiff-Appellee, v. Sealed Appellant 1; Sealed Appellant 2; Sealed Appellant 3; Sealed Appellant 4; Sealed Appellant 5; Sealed Appellant 6; Sealed Appellant 7; Sealed Appellant 8; Sealed Appellant 9, Defendants-Appellants.

Nos. 99-31121, 99-31138

UNITED STATES COURT OF APPEALS, FIFTH CIRCUIT

July 11, 2001

[Copyrighted Material Omitted] Appeals from the United States District Court for the Western District of Louisiana.

Before REYNALDO G. GARZA, HIGGINBOTHAM, and SMITH, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Deborah Horaist was fired by Doctor's Hospital of Opelousas, allegedly in retaliation for reporting unwelcome sexual advances from her supervisors. She sued the alleged harassers, the hospital, and several of its officers (collectively "defendants") under title VII, 42 U.S.C. § 1985(3), and state law. Defendants moved to disqualify Horaist's counsel on the ground that he had an intimate relationship with her.

The district court denied the motion but certified its ruling for interlocutory appeal under 28 U.S.C. § 1292(b). The court also dismissed most of Horiast's claims but certified its dismissal of her conspiracy claims and her state law claims for appeal under Fed. R. Civ. P. 54(b).

Horaist appeals, contending that she properly raised claims under § 1985(3) and that her state law claims are not time-barred. We affirm and remand for further proceedings.

I.

Horaist was Director of Business Health Services for Doctor's Hospital from July 1995 to December 1996, during which time she was dating Andre Toce, her lawyer in this case. In November 1995, Toce sponsored a breast augmentation surgery for her.

Horaist asserts that throughout her employment, she received unwelcome sexual advances and verbal harassment, including comments about her breasts, from Sheldon Deshotels, a physician on staff. Horaist reported Deshotels's behavior to Gibson and to the Chief Operations Officer and Chief Financial Officer. Gibson advised her to file a written complaint with him rather than with Human Resources. Horaist did not tell Toce about the sexual harassment at the time, nor did Toce notice anything while attending social functions at the hospital with her.

Horiast further claims that Gibson made repeated and unwelcome sexual advances toward her, including calling her residence, fondling her in a sexual manner, commenting explicitly about her body and the thoughts he had in connection therewith, and attempting to kiss her. She reported this behavior to the COO and CFO, who advised her to file a formal complaint.

After reporting Gibson, Horaist asserts that he made unrealistic demands on her schedule and that her duties changed from those of an executive manager to those of an errand girl. Further, Gibson purportedly suggested that she should have sexual relations with him if she wanted to keep her job. Horaist was fired in December 1996, allegedly in retaliation for reporting the harassment. After her termination, she earned money through a gift-basket business and interior decorating.

Horaist sued the corporate defendants and certain of their officers, Deshotels, and Gibson for retaliatory discharge, breach of contract, conspiracy to permit the sexual harassment or to force Horaist out of her position, and state law claims of battery and intentional infliction of emotional distress. The defendants moved to disqualify Toce and his law firm on the ground that his intimate relationship with Horaist caused a conflict of interest and interfered with his ability to render independent professional judgment. Moreover, they claimed Toce was a necessary witness on the issues of liability and damages for emotional distress, because Horaist had discussed problems in her relationship with Toce with her therapist. Further, they argued that these conflicts should be imputed to Toce's firm.

The court dismissed the § 1985(3) conspiracy claims against all defendants, the state law claims against the corporate defendants, state law claims against Deshotels, and state law claims against Gibson for failure to state a claim on which relief could be granted. See Fed. R. Civ. P. 12(b)(6). Only the breach of contract claim against Gibson and the contract and title VII claims against the corporate defendants remained. The court certified these claims for immediate appeal¹ and later dismissed all title VII claims against the individual defendants. Horaist now presents the issues certified for appeal by the district court, and the parties do not contest the propriety of that certification.²

II.

The district court refused to disqualify Toce and his firm from representing Horaist and it certified the ruling for an interlocutory appeal under 28 U.S.C. § 1292(b). On appeal, we consider whether (1) Toce was a necessary witness; (2) he had an impermissible conflict of interest; and (3) any disqualification should be imputed to his firm. We review the findings of fact for clear error and the application of the rules of ethical conduct de novo. FDIC v. United States Fire Ins. Co., 50 F.3d 1304, 1311 (5th Cir. 1995).

"[D]isqualification cases are governed by state and national ethical standards adopted by the court." Id. at 1312 (quoting In re Am. Airlines, Inc., 972 F.2d 605, 605 (5th Cir. 1992)). Ethical canons relevant to the district court's order include (1) the local rules for the Western District of Louisiana; (2) the American Bar Association's ("ABA's") Model Rules of Professional Conduct; (3) the ABA's Model Code of Professional Responsibility; and (4) the state rules of conduct. See id. The Rules of the Western District of Louisiana specifically adopt the Rules of Professional Conduct of the Supreme Court of Louisiana. See La. Uniform R. U.S. Dist. Ct. LR83.2.4W. These rules are identical to the ABA's Model Rules of Professional Conduct in all relevant aspects. See La. Rev. Stat. tit. 37, ch. 4, art. XVI.

We interpret these rules as we would any other source of law. In re Dresser Indus., 972 F.2d 540, 543 (5th Cir. 1992). In considering a disqualification motion, we view the rules in light of the litigant's rights and the public interest, considering "whether a conflict has (1) the appearance of impropriety in general, or (2) a possibility that a specific impropriety will occur, and (3) the likelihood of public suspicion from the impropriety outweighs any social interests which will be served by the lawyer's continued participation in the case." Id. at 544.

A.

Defendants contend that Toce is a necessary witness and thus should be disqualified. Model Rules of Prof'l Conduct 3.7(a); La. Rules of Prof'l Conduct 3.7(a) (2000).³ They believe he must testify that Horaist did not tell him about the harassment at the time it occurred and that this fact is adverse to her. They also want Toce to testify to Horaist's emotional state and to her earnings in her gift-basket business and interior decorating.

If a lawyer must testify adversely to a client's interest, the client cannot waive the conflict. See United States Fire Ins. Co., 50 F.3d at 1317. But, if a lawyer discovers during litigation that he "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 would prejudice his client." Model Rules of Prof'l Conduct 3.7(c); La. Rules of Prof'l Conduct 3.7(c). "Testimony is considered prejudicial under this Rule if it is so adverse to the client's side that the bar or the client might have an interest in discrediting the testimony," and the movant has the burden of establishing prejudice with specificity. Smith v. New Orleans Fed. Sav. & Loan Ass'n, 474 F. Supp. 742, 749-50 (E.D. La. 1979) (internal quotation marks omitted).

Each item of information that Toce could provide is already available from another source, and defendants have failed to articulate how Toce's corroboration would prejudice Horaist. Horaist may testify to the nature of her relationship with Toce and to the fact that she did not reveal her harassment to him at the time. Other co-workers may shed light on Horaist's behavior with her alleged harassers. She may produce business records or testify to her earnings. Her psychologist, family, friends, and former co-workers can testify to her emotional state.⁴

Because his testimony is cumulative, Toce is not a necessary witness. His testimony corroborates Horaist's, so she has no interest in discrediting it. The defendants have not met their burden of demonstrating prejudice. See id. at 750.⁵ In addition, when the attorney's participation as both lawyer and witness stands to prejudice only his own client, the opposing attorney should have no say in the matter. United States Fire Ins. Co., 50 F.3d at 1315.

B.

Defendants argue that Toce's representation of Horaist creates a conflict of interest. "A lawyer shall not represent a client if the representation of that client may be materially limited by . . . the lawyer's own interests, unless: (1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation." Model Rules of Prof'l Conduct 1.7(b); La. Rules of Prof'l Conduct 1.7(b).

Defendants also claim that Toce cannot exercise independent professional judgment because of his past relationship. "In representing a client, a lawyer shall exercise independent professional...