US, Lord Elec. Co. v. Titan Pacific Const., C80-1109C.

Citation637 F. Supp. 1556
Decision Date30 June 1986
Docket NumberNo. C80-1109C.,C80-1109C.
PartiesThe UNITED STATES of America for the Use and Benefit of LORD ELECTRIC COMPANY, INC., Plaintiff, v. TITAN PACIFIC CONSTRUCTION CORPORATION and Safeco Insurance Company, Defendants.
CourtUnited States District Courts. 9th Circuit. United States District Court (Western District of Washington)

COPYRIGHT MATERIAL OMITTED

Madeline A. Renkens, Barokas & Martin, Seattle, Wash., for plaintiff.

Richard L. Abramson, Peckar & Abramson, Hackensack, N.J., Douglas C. Ross, Davis Wright & Jones, Joni H. Ostergaard, Lizbeth A. Englund, Roberts & Shefelman, Seattle, Wash., for defendants.

MEMORANDUM OPINION AND ORDER ON MOTION FOR DISQUALIFICATION OF COUNSEL

COUGHENOUR, District Judge.

THIS MATTER is before the Court on defendants' motion to disqualify counsel. The Court heard oral argument on the motion May 29, 1986, and issued a minute order denying the motion June 3, 1986. This memorandum opinion is submitted in conjunction with that minute order.

The motion arises out of the recent association of Rex Walker with counsel for plaintiffs. Walker was an associate and partner at Davis, Wright, Todd, Riese and Jones ("Davis Wright"), and its predecessor firms, for 23 years. While he was a partner at Davis Wright, Walker was contacted by Edwin Albom, Vice President of defendant Titan Pacific Corporation ("Titan"), with respect to the Indian Island Ordnance Facilities Relocation Project, which is the subject of this lawsuit. Titan was the general contractor at Indian Island in 1979 under a contract awarded by the Navy. Titan subcontracted the earthwork, utilities, electrical, and mechanical work to four firms — Spike Voudouris General Engineering Company ("Voudouris"), Tonneson Construction Company ("Tonneson"), Lord Electric Company ("Lord"), and Pease and Sons, Inc. ("Pease"), respectively. In 1977, problems between Voudouris and Titan developed, and in 1978, Voudouris left the construction site. The earthwork was completed by another subcontractor. In 1979, Voudouris filed a Miller Act claim against Titan. United States for the Use and Benefit of Spike Voudouris v. Titan Pacific Construction Co., et al. (W.D.Wash.) (Complaint filed Nov. 13, 1979). To defend that claim, Titan retained Davis Wright. It also appears from the affidavits of Edwin Albom and David C. Tarshes, an attorney at Davis Wright, that Rex Walker and Davis Wright were consulted at this time regarding potential claims by the remaining subcontractors. During this period Walker signed and filed pleadings in the Voudouris matter, met and conferred with officials at Titan, and engaged in discussions and negotiations with Dale Martin of Barokas and Martin. Barokas and Martin had been retained as counsel by Tonneson, Lord and Pease. Tonneson, Lord and Pease each filed separate complaints against Titan on October 15, 1980.1

Walker left Davis Wright December 31, 1981, subject to an agreement not to compete in the practice of law in the area of Western Washington for a period of four years. In 1985, having been out of the practice of law for four years, Walker engaged in discussions with Marvin L. Gray and Allen D. Clark of Davis Wright about the possibility of returning to work at that firm. Walker also engaged in discussions with principals at Barokas and Martin regarding a non-participating association with that firm. Walker concluded an agreement with Barokas and Martin on December 18, 1985, and promptly notified Davis Wright. Walker became "of counsel" to Barokas and Martin January 1, 1986. By the terms of their agreement, Walker is assigned to work less than full time on discrete matters, and is compensated according to the hours he works and the earnings of the cases upon which he works directly. Walker does not participate in the general earnings of the firm.

In April, 1986, Dale Martin asked Walker whether he would consider working on the Miller Act suits that had been filed against Titan by Tonneson, Lord, and Pease in 1980. Walker reminded Martin that he had been Titan's counsel at Davis Wright in 1979-80. Barokas and Martin then sought Titan's consent to Walker's representation of plaintiffs in these three suits. Titan refused to consent and demanded that Barokas and Martin voluntarily withdraw as counsel. When Barokas and Martin refused to withdraw as plaintiffs' counsel, the instant motion to disqualify counsel was filed.2

Defendants' motion raises two distinct issues: first, whether Rex Walker must be disqualified from representing plaintiff; and if Walker is disqualified, whether Barokas and Martin must then be disqualified as a consequence of their recent association with Walker.

A. Walker's Disqualification.

Defendants assert that the Court must disqualify Rex Walker because his representation of plaintiff presents a risk that defendants' previously revealed confidences might be disclosed. According to defendants, Walker's representation would also present an appearance of impropriety.

When faced with an allegation that an attorney's representation presents a conflict of interest, it is "the duty of the district court to examine the charge, since it is that court which is authorized to supervise the conduct of the members of its bar." Gas-A-Tron of Arizona v. Union Oil Co. of California, 534 F.2d 1322, 1324 (9th Cir.1976) (per curiam) (citing Richardson v. Hamilton Int'l Corp., 469 F.2d 1382 (3d Cir.1972)), cert. denied, 429 U.S. 861, 97 S.Ct. 164, 50 L.Ed.2d 139 (1976). In determining whether an attorney's representation of a particular client violates the attorney's ethical responsibilities, the Court first refers to the local rules regulating the conduct of members of its bar. See Paul E. Iacono Structural Engineer, Inc. v. Humphrey, 772 F.2d 435, 439 (9th Cir.), cert. denied, 464 U.S. 851, 104 S.Ct. 162, 78 L.Ed.2d 148 (1983). Local General Rule 2(e) of the Western District of Washington provides:

"The members of the bar of this Court shall be governed by and shall observe the Canons of Professional Ethics, as promulgated by the Washington State Supreme Court and in effect at the time these rules are adopted, together with any amendments or additions to such Canons of Professional Ethics, unless such amendments or additions are specifically disapproved by the Court."

Walker's representation of plaintiff should be forbidden, defendants argue, because it violates Rule 1.9 of the Washington Rules of Professional Conduct ("RPC"). Rule 1.9 would prevent Walker from representing plaintiff if the present matter is the "same or a substantially related matter in which plaintiff's interests are materially adverse to the interests of the former client unless the former client consents to the representation."3 Titan has refused to consent to Walker's representation in this matter.

Under RPC 1.9, Walker should be disqualified if the pending suit is "substantially related" to the matters in which he formerly represented Titan at Davis Wright, and if he had access to material confidences. Kurbitz v. Kurbitz, 77 Wash.2d 943, 947, 468 P.2d 673 (1970); Intercapital Corp. of Oregon v. Intercapital Corp. of Washington, 41 Wash.App. 9, 11, 700 P.2d 1213 (1985). The Ninth Circuit Court of Appeals uses a similar test: an attorney will be disqualified from representing a client where that representation is adverse to a former client, and the present representation bears a substantial relationship to the attorney's former representation. Trone v. Smith, 621 F.2d 994, 998 (9th Cir.1980). Substantiality is present if the factual contexts of the two representations are similar or related. Id.

Walker seeks to avoid disqualification by averring that he was not in receipt of any confidential information regarding the claims of Tonneson, Lord, and Pease. He states in his affidavit that he received copies of the claims in October, 1980, that he did not review or analyze the claims then, and that he was not in receipt of the analyses of others regarding these same claims. Walker claims to have had no discussion with anyone from Titan regarding the substance or merits of those particular claims, that he merely forwarded the claims to the Department of the Navy, and that he did not at the time understand the interests of these three subcontractors and Titan to be adverse. It is uncontested that all of these cases arise out of the same construction project. The record reveals that the claims of the three plaintiffs represented by Barokas and Martin involve many of the same legal and factual issues that are raised in the Miller Act suit filed against Titan by Voudouris in 1979, and in which Walker had substantial responsibility. Even if Walker had had no involvement with the claims of Tonneson, Lord, and Pease, the identity of the issues between Voudouris' claims and the claims of the other Miller Act plaintiffs would be deemed to provide a "substantial relationship." Compare, e.g., Government of India v. Cook Industries, Inc., 569 F.2d 737 (2d Cir.1978); Emle Industries, Inc. v. Pantentex, Inc., 478 F.2d 562 (2d Cir.1973).

Walker contends that he should not be disqualified because he actually received no confidences from Titan or its officers or employees during the course of his representation in 1979-80. This Court is not required, however, to inquire whether confidences were actually disclosed to Walker.

"The underlying concern is the possibility, or the appearance of the possibility, that the attorney may have received confidential information during the prior representation that would be relevant to the subsequent matter in which disqualification is sought. The test does not require the former client to show that actual confidences were disclosed. That inquiry would be improper as requiring the very disclosure the rule is intended to protect. citation omitted. The inquiry is for this reason restricted to the scope of the representation engaged in by the attorney."

Trone v. Smith, 621 F.2d at 999. Accord, Intercapital Corp., 41 Wash.App. at 13-14, 700 P.2d 1213. See also ...

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