Kesselhaut v. United States

Decision Date18 May 1977
Docket NumberNo. 166-74.,166-74.
Citation555 F.2d 791
PartiesGeorge and Martin KESSELHAUT v. The UNITED STATES.
CourtU.S. Claims Court

Victor A. Altman, Washington, D.C., attorney of record for plaintiff. J. H. Krug and Krooth & Altman, Washington, D.C., of counsel.

Marc J. Fink, Washington, D.C., with whom was Asst. Atty. Gen. Barbara A. Babcock, Washington, D.C., for defendant.

Before COWEN, Senior Judge, DAVIS, Judge, SKELTON, Senior Judge, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges, en banc.

ON PLAINTIFFS' REQUEST FOR REVIEW

PER CURIAM:

This case is before the court on plaintiffs' request for review of an order by Trial Judge Schwartz, stating that counsel for plaintiffs in the above action, the firm of Krooth and Altman, their partners and associates, are disqualified to represent plaintiffs in connection with the claims grounded upon a contract implied in fact, or express, and therefore directing them promptly to withdraw as counsel. The court heard the case en banc, and on October 22, 1976, entered an order remanding the case to Trial Judge Roald Hogenson, Chief of the Trial Division for further fact finding. Trial Judge Schwartz had himself suggested that further proceedings be before another trial judge. Trial Judge Hogenson has made his report and the parties have elected to stand on their previous briefs and oral arguments.

The facts are as follows: A. M. Prothro, Esquire, had been for many years a lawyer employed in the Federal Housing Administration (FHA) and, since its creation, in the Department of Housing and Urban Development (HUD), rising to be General Counsel of FHA. During the later years of this period the Kesselhaut firm, New Jersey lawyers, represented FHA before New Jersey tribunals with respect to local taxes on property that FHA had acquired by foreclosure. In 1970 they were successful in obtaining tax abatements in the amount of $2,400,000 approximately, but a controversy developed between them and FHA as to the amount of the fees. They filed the above-entitled action in this court to recover the fees, on May 7, 1974.

Mr. Prothro meanwhile retired in March 1969. Up to that date he had had sporadic personal contacts with the matter Kesselhaut and Kesselhaut was handling for FHA, had conferred with George Kesselhaut about it by telephone on one occasion, and had also conferred with him once about another matter. Most of the liaison between the FHA and the Kesselhaut firm, concerning the New Jersey tax case, was conducted by other FHA lawyers who were subordinate to Mr. Prothro. After his retirement he had no further contact with the FHA side of the case.

Mr. Prothro became connected with Krooth and Altman after his retirement. They are a Washington firm and Mr. Kesselhaut had heard of them as outstanding specialists in FHA and HUD related matters. He had learned that Mr. Prothro had become associated with them, and Mr. Prothro was the only attorney associated with them whom he knew. He phoned Mr. Prothro at Krooth and Altman on July 11, 1972, from his Newark, New Jersey, office, and asked for an appointment, not stating the purpose. The meeting took place at Krooth and Altman's offices on July 14. Mr. Kesselhaut stated he wished to retain the firm to prosecute his FHA claim. Mr. Prothro promptly said he could not personally participate. They both met with two other attorneys with the firm, but could not then decide whether Mr. Prothro's disqualification would disqualify the firm. Ultimately Mr. Prothro, after research, decided they were not disqualified. He was next called into a meeting (date not found) in the Krooth and Altman conference room attended by Mr. Kesselhaut, with Mr. Pickrel and Mr. Zwerner of the firm. Mr. Pickrel, not Mr. Prothro, had arranged this meeting. Mr. Prothro said he did not think the firm was disqualified, but he did not further participate in the discussion of that question. The firm eventually decided to take the case after having shown Mr. Prothro certain documents in the case and tested his recollection of them, which was lacking.

Mr. Prothro has never communicated with plaintiffs concerning the merits of their claim, nor provided them with information, advice, or guidance thereon. Similarly, he has never given advice, information, or guidance to the attorneys in Krooth and Altman, nor has he looked at documents in their files concerning the merits of the claim.

Despite Mr. Prothro being ostensibly a partner, actually Krooth and Altman paid him a straight salary with no participation in firm earnings. Shortly before trial, this was changed to hourly compensation for part-time work. At the time of the trial before Judge Hogenson he expected to retire entirely from Krooth and Altman by December 31,...

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  • Chadwick v. Superior Court
    • United States
    • California Court of Appeals Court of Appeals
    • 23 Mayo 1980
    ...Liebman, The Changing Law of Disqualification: The Role of Presumption and Policy, 73 N.W. 996, 1019, 1020 (1979); Kesselhaut v. United States (Ct.Cl.1977) 555 F.2d 791, 793.12 See also Pisa v. Commonwealth (Mass. 1979) 79 A.S. 2114, --- Mass. ---, 393 N.E.2d 386, 388; United States v. Stan......
  • Armstrong v. McAlpin
    • United States
    • U.S. Court of Appeals — Second Circuit
    • 20 Junio 1980
    ...Counsels of fifteen executive branch agencies and chaired by the Attorney General of the United States. 19 Kesselhaut v. United States, 555 F.2d 791, 793 (Ct.Cl.1977) (per curiam). 20 See Administrative Conference of the United States, Recommendation 79-7 (Dec. 14, 1979), reprinted in Legal......
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    • United States
    • California Court of Appeals Court of Appeals
    • 25 Enero 1988
    ...an automatic rule existed (making them virtual Typhoid Marys, reduced to isolated solo practice, as noted in Kesselhaut v. United States (1977) 555 F.2d 791, 214 Ct.Cl. 124), the court said disqualifying the individual lawyer and screening him from the firm can suffice, in a proper case. Th......
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    ...Oil Co., 566 F.2d 602, 605 (8th Cir.1977), cert. denied, 436 U.S. 905, 98 S.Ct. 2235, 56 L.Ed.2d 403 (1978); Kesselhaut v. United States, 214 Ct.Cl. 124, 555 F.2d 791 (1977); In re Gopman, 531 F.2d 262, 266 (5th Cir.1976); Hull v. Celanese Corp., 513 F.2d 568, 571 (2d Cir.1975); Richardson ......
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