Bernocchi v. Forcucci

• Citation: 614 S.E.2d 775,279 Ga. 460
• Decision Date: 16 June 2005
• Docket Number: No. S05A0483.,S05A0483.
• Parties: BERNOCCHI et al. v. FORCUCCI.
• Court: Supreme Court of Georgia

279 Ga. 460

614 S.E.2d 775

BERNOCCHI et al. v. FORCUCCI.

No. S05A0483.

Supreme Court of Georgia.

June 16, 2005.

Michael W. Higgins, Higgins & Dubner, Atlanta, for Appellant.

Charlotte Kathleen Perrell, Perrell & Wright, LLC, Atlanta, for Appellee.

BENHAM, Justice.

In this appeal, we are called upon to review the propriety of the trial court's issuance of injunctive relief and the trial court's disqualification of counsel from simultaneously representing the corporate appellants and the individual appellant. We reverse the entry of injunctive relief, vacate the order granting the motion to disqualify counsel, and remand the case to the trial court for further proceedings.

Appellant Ricardo Bernocchi is an Italian clothing designer. He and appellee Anthony Forcucci and the late Irene Volpi formed appellant Berik Design USA ("BDUI"), with Forcucci as president, in 1995. Six years later, Bernocchi and Forcucci formed a limited liability corporation, appellant The Berik Group, LLC ("TBGL"). In 2004, after Volpi died, a third party purchased her interest in BDUI and Forcucci was removed as a director and voted out of BDUI's management. Bernocchi was elected the sole officer and director of BDUI and approved an offering of shares of BDUI stock. In June 2004, Forcucci, still the owner of one-third of the BDUI stock, filed a petition for a temporary restraining order to stop the stock offering. The parties entered into a consent TRO which restrained Bernocchi and BDUI from issuing more stock and from disposing of the trademarks or assets of TBGL. The parties extended the life of the consent TRO twice, with an attorney from the firm of Higgins and Dubner signing one of the consent orders as the attorney for Bernocchi, BDUI, and TBGL. Contending Bernocchi's interests were adverse to those of BDUI, and TBGL, Forcucci filed a motion to disqualify Higgins and Dubner from simultaneously representing the three defendants. At a hearing on September 10, 2004, the expiration date for the last consent TRO, the trial court found the corporate defendants and Bernocchi to have conflicting interests and granted the motion to disqualify counsel. The trial court issued a certificate of immediate review of its ruling and, in response to Forcucci's inquiry about the status of the TRO, issued an order continuing the restraints set forth in the consent TROs until further order of the court. Bernocchi filed a direct appeal to this Court on the basis that the trial court's latter order was, in fact, an interlocutory injunction. See OCGA 5-6-34(a)(4).

1. "An interlocutory injunction is a device to keep the parties in order to prevent one from hurting the other whilst their respective rights are under adjudication. There must be some vital necessity for the injunction so that one of the parties will not be damaged and left without adequate remedy." Chambers v. Peach County, 268 Ga. 672(1), 492 S.E.2d 191 (1997). Trial courts enjoy broad discretion in deciding whether an interlocutory injunction should be imposed, though the power to do so "shall be prudently and cautiously exercised...." OCGA § 9-5-8. In determining whether to issue an interlocutory injunction, the trial court must balance the conveniences of the parties pending final adjudication. Univ. Health Services v. Long, 274 Ga. 829, 561 S.E.2d 77 (2002). An interlocutory injunction may be issued to maintain the status quo if, after balancing the relative equities of the parties, it appears the equities favor the party seeking the injunction. Lee v. Environmental Pest Control, 271 Ga. 371(2), 516 S.E.2d 76 (1999). The trial court's exercise of its discretion will not be disturbed by an appellate court "unless a manifest abuse of that discretion is shown or unless there was no evidence on which to base the ruling." Kennedy v. W.M. Sheppard Lumber Co., 261 Ga. 145(1), 401 S.E.2d 515 (1991).

In the case at bar, the order granting the interlocutory injunction does not reflect that the trial court balanced the relative equities of the parties. The hearing transcript reflects the trial court recognized the need for an evidentiary hearing, but scheduling conflicts prevented the hearing from taking place on the day the consent TRO expired. As a result, the trial court entered the interlocutory injunction in the absence of an evidentiary hearing at which the party seeking the relief would have to demonstrate entitlement thereto (see Treadwell v. Investment Franchises, 273 Ga. 517, 519, 543 S.E.2d 729 (2001) (burden is on the party seeking injunctive relief to demonstrate entitlement to the relief)), and the parties against whom relief was sought could present evidence showing the inequity in imposing interlocutory injunctive relief. Since the grant of injunctive relief occurred without a balancing of the equities and without evidentiary support, the entry of injunctive relief must be reversed for lack of evidentiary support. Kennedy v. Sheppard Lumber Co., supra, 261 Ga. 145(1), 401 S.E.2d 515.

2. Appellants next take issue with the trial court's order granting Forcucci's motion to disqualify Higgins & Dubner from simultaneous representation of appellant Bernocchi and the two corporate defendants. The trial court's written order contained no findings, but the hearing transcript reflects the trial court believed the corporations to have "a divergence of interests" from both Forcucci and Bernocchi, and granted the motion to disqualify because "there is a conflict on behalf of Mr. Bernocchi with whether or not the corporations' ownerships interest in ... designs and royalties would be protected."

"[T]he right to counsel is an important interest which requires that any curtailment of the client's right to counsel of choice be approached with great caution." Blumenfeld v. Borenstein, 247 Ga. 406, 408, 276 S.E.2d 607 (1981). "[D]isqualification has an immediate adverse effect on the client by separating him from counsel of his choice ... and inevitably cause[s] delay." Reese v. Ga. Power Co., 191 Ga.App. 125(2), 381 S.E.2d 110 (1989). "[A] client whose attorney is disqualified may suffer the loss of time and money in finding new counsel and may lose the benefit of its longtime counsel's specialized knowledge of its operations." Bergeron v. Mackler, 225 Conn. 391, 398, 623 A.2d 489 (Conn.1993). Because of the right involved and the hardships brought about, disqualification of chosen counsel should be seen as an extraordinary remedy and should be granted sparingly. Anderson Trucking Service v. Gibson, 884 So.2d 1046, 1049 (Fla.App.2004). See also Meehan v. Antonino, 2002 WL 31559712 (Conn.Super.2002) (unpub. op.).

The simultaneous representation of parties whose interests in litigation may conflict, such as co-plaintiffs or co-defendants, is governed by Rule 1.7(b) of the Georgia Rules of Professional Conduct. Comment 7 to Rule 1.7(b). Rule 1.7 permits a lawyer to represent a client "notwithstanding a significant risk of material and adverse effect if each affected or former client consents,...