Detter v. Schreiber, S-98-1362.
| Decision Date | 05 May 2000 |
| Docket Number | No. S-98-1362.,S-98-1362. |
| Citation | 610 N.W.2d 13,259 Neb. 381 |
| Parties | Jere D. DETTER, appellee, v. Jeffrey A. SCHREIBER, appellant. |
| Court | Nebraska Supreme Court |
Thomas J. Young and Kevin R. Hopp, of Young & LaPuzza, Omaha, for appellant.
Duane M. Katz, of Frazier, Wieland, Bataillon & Katz, Omaha, for appellee.
Jere D. Detter sued Jeffrey A. Schreiber concerning two promissory notes which were allegedly unpaid by Schreiber. Schreiber's answer and counterclaim alleged payment in full and sought payment for management services rendered by Schreiber. Prior to trial, Detter made a motion to disqualify Schreiber's attorney, which was sustained by the trial court. Schreiber appeals from the order which disqualified his counsel in the action on the promissory notes.
In an appeal from an order disqualifying counsel, an appellate court reviews the trial court's factual findings for clear error and ultimately makes its disqualification decision independent of the trial court's ruling. Hawkes v. Lewis, 255 Neb. 447, 586 N.W.2d 430 (1998).
In 1991, Schreiber and Detter commenced a business known as Miracle Hills Animal Hospital, P.C. (the corporation). In connection with the formation of the corporation, on February 27, 1992, Schreiber executed two promissory notes in the total principal sum of $19,000 which was payable to Detter. The articles of incorporation provided that Schreiber and Detter would each own 50 percent of the shares of the corporation and would be the only members of the board of directors. In 1996, Schreiber retained the services of Thomas J. Young to draft a shareholder agreement. These services were paid for by the corporation.
On May 12, 1998, Detter commenced an action against Schreiber on the two promissory notes. Detter's second amended petition asserted that Schreiber had made only those payments set forth in exhibit 4 attached to the petition. Detter alleged that following notice of default, Schreiber had paid $11,000 on June 3, 1998, and that there was then due and owing the sum of $10,430.45 plus interest.
Schreiber's answer and counterclaim denied that there was any balance due on the notes. Schreiber alleged that Detter was equitably estopped from recovering any and all amounts above those which had already been paid by Schreiber and that Schreiber had performed management duties on behalf of the corporation which were of value to the corporation in the amount of $70,000. Schreiber further alleged that he was entitled to set off this amount against any sum owed to Detter together with ongoing management fees in the approximate sum of $773.33 per month. Schreiber's counterclaim alleged that since the inception and commencement of the business, he had performed all the management duties of the corporation and that pursuant to an oral contract made in March 1998, Schreiber was entitled to ongoing management fees in the amount of $773.33 per month commencing April 1998.
Prior to trial, Detter moved the trial court for an order directing that Young remove himself as attorney of record for Schreiber. The motion alleged that the law firm of Young & LaPuzza had acted as attorneys for the corporation and that Young had acted as the attorney for the corporation with respect to the negotiation of the corporation's lease with Dial Enterprises and a shareholder agreement between Detter and Schreiber.
Detter alleged that during said representation, Young discussed with Detter his personal situation, needs, and goals regarding the corporation and was acting as the attorney for the corporation, Detter, and Schreiber. He further alleged that Young would in all probability be a witness at trial. In support of said allegations, Detter attached an affidavit to his motion.
Detter's affidavit alleged that he was a 50-percent owner of the corporation and was currently serving as its president. Detter claimed that he and Schreiber were the only shareholders of the corporation and that beginning in 1995, the corporation used the services of the law firm of Young & LaPuzza. Detter stated that in 1996, the corporation used the services of Young & LaPuzza to draft a shareholder agreement. Detter claimed that during his discussions with Schreiber and Young, it was his understanding that Young represented the corporation, Detter, and Schreiber with respect to the proposed shareholder agreement. Detter also stated that during his discussions with Young regarding the shareholder agreement, he discussed his thoughts and feelings with respect to the shareholder agreement and that as a result, Young had a great deal of information regarding facts and circumstances surrounding the present litigation and had information regarding Detter's financial plans and needs. The affidavit further claimed that Schreiber had specifically advised Detter that Young was representing Detter's interests, that Detter could ask Young any questions he might have, and that Young & LaPuzza's bill would be paid from the corporate account. Detter also claimed that Young never advised him that Young was not representing his interests.
Schreiber and Young also submitted affidavits which denied that Young was Detter's attorney or that Young had received any confidential information from Detter. Schreiber's affidavit specifically alleged that James T. Blazek was the registered agent of the corporation and its corporate attorney and that Blazek, who had always acted as the attorney for the corporation, continued to do so to date. Schreiber claimed that Detter had specifically refused to allow Young or the Young & LaPuzza law firm to act as the corporate attorneys for the corporation. Schreiber further stated that he had initiated efforts to have a proposed shareholder agreement, which was never executed, signed by Detter and himself and that he had contacted Young to prepare the initial draft of the agreement. Schreiber claimed that Young met with both Detter and Schreiber regarding the proposed shareholder agreement but that at no time during the conversations or discussions was any information relative to Detter's personal financial situation discussed or revealed. Schreiber asserted that he was not privy to Detter's personal financial situation except with regard to the operation, income, and expenses of the corporation.
In addition, Schreiber acknowledged that Detter was free to contact Young or any other attorney regarding the shareholder agreement. Schreiber stated that Young had been his personal attorney since 1990 but that he did not consult Young with regard to the corporation or the various agreements or promissory notes which were executed at the time the corporation was formed.
On November 23, 1998, the trial court found that Young had a conflict of interest and sustained Detter's motion to remove him. Schreiber appeals from the order which sustained Detter's motion to remove Young.
Schreiber assigns as error that the trial court erred when it admitted Detter's affidavit over objection as to conclusory statements contained therein and when it sustained Detter's motion to remove Young.
In Richardson v. Griffiths, 251 Neb. 825, 560 N.W.2d 430 (1997), we concluded that if an appeal from an order of disqualification of counsel involves issues collateral to the basic controversy and if the appeal from the judgment dispositive of the entire case would not be likely to protect the client's interest, an interlocutory appeal from the order removing counsel was appropriate. We conclude that an interlocutory appeal from the trial court's order of disqualification here is appropriate and that we have jurisdiction to adjudicate the instant matter as an exception to the final order requirement for an appeal.
We next address the issue of disqualification. In an appeal from an order disqualifying counsel, an appellate court reviews the trial court's factual findings for clear error and ultimately makes its disqualification decision independent of the trial court's ruling. Hawkes v. Lewis, 255 Neb. 447, 586 N.W.2d 430 (1998). An attorney-client relationship is created when a person seeks advice or assistance from an attorney, the advice or assistance sought pertains to...
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