Clinard v Blackwood, 98-00555

• Citation: 46 S.W.3d 177
• Decision Date: 18 May 2001
• Docket Number: 98-00555
• Parties: JOHN M. CLINARD, ET AL. v. C. ROGER BLACKWOOD, ET AL.IN THE SUPREME COURT OF TENNESSEE AT NASHVILLE
• Court: Supreme Court of Tennessee

JOHN M. CLINARD, ET AL. v C. ROGER BLACKWOOD, ET AL.

No. M1998-00555-SC-R11-CV

IN THE SUPREME COURT OF TENNESSEE AT NASHVILLE

October 4, 2000 Session

Filed May 18, 2001

Appeal by Permission from the Court of Appeals, Middle Section Circuit Court for Robertson County: No. 8674

Walter C. Kurtz, Judge

We granted this appeal to determine whether attorney screening procedures may be used to prevent a law firm's disqualification under Tenn. Sup. Ct. R. 8, Canon 5, DR 5-105(D), the vicarious disqualification rule. We hold that when an attorney has a conflict of interest arising from a former representation that would prohibit representation of a present client, DR 5-105(D) does not require automatic vicarious disqualification of that attorney's law firm. When an attorney has a conflict of interest resulting from former representation, adequate procedures to screen that attorney can rebut the presumption of shared confidences. The screening procedures utilized in this case were sufficient to overcome the presumption of shared confidences. Nevertheless, the serious appearance of impropriety requires the law firm's disqualification. The judgment of the Court of Appeals is affirmed.

Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals Affirmed.

JANICE M. HOLDER, J., delivered the opinion of the court, in which E. RILEY ANDERSON, C.J., and Adolpho A. Birch, Jr., joined. FRANK F. DROWOTA, III, J., filed a concurring and dissenting opinion. WILLIAM M. BARKER, filed a concurring opinion.

Ames Davis, Mark W. Peters, Paula D. Walker, and Thomas Mink, Nashville, Tennessee, for the appellant, American Limestone, Inc.

Ames Davis, Mark W. Peters, and Paula D. Walker, Nashville, Tennessee, for the appellants, Edward Clinard and John M. Clinard.

James Clarence Evans and Winston S. Evans, Nashville, Tennessee, for the appellees, C. Roger Blackwood and Nancy Dods Blackwood.

Thomas Mink, Nashville, Tennessee, for the defendant, Austin Powder Co., Inc.

Allen F. Ramsaur, Gail Vaughn Ashworth, and Kathryn Reed Edge, Nashville, Tennessee, and Brian S. Faughnan and Lucian T. Pera, Memphis, Tennessee, for the amicus curiae, Tennessee Bar Association.

OPINION

BACKGROUND

Maclin P. Davis, Jr., was a partner in the law firm of Waller, Lansden, Dortch & Davis ("the Waller firm"). While at the Waller firm, Mr. Davis represented both Mr. C. Roger Blackwood and Mrs. Nancy Dods Blackwood in separate matters. In 1988, Mr. Davis left the Waller firm and joined the law firm of Baker, Donelson, Bearman & Caldwell ("the Baker firm").¹ Mr. Davis continued to represent the Blackwoods during his employment with the Baker firm.

John and Edward Clinard filed a declaratory judgment action against Mr. Blackwood seeking to establish a disputed property line. Mr. Blackwood retained Mr. Davis to represent him in the lawsuit. Mr. Davis entered an appearance and filed an answer and counterclaim against the Clinards. Mr. Davis and Mr. Blackwood also discussed filing a counterclaim and third-party claim against the Clinards and American Limestone Company, Inc. for blasting damage to the Blackwoods' property. Ultimately, Mr. Davis withdrew as Mr. Blackwood's attorney because American Limestone was a client of the Baker firm in an unrelated matter.

Attorney Winston S. Evans was then hired to represent the Blackwoods. Mr. Evans filed an amended counterclaim and third-party claim on behalf of the Blackwoods against the Clinards and American Limestone and later added Austin Powder Company, Inc. as a counterdefendant.²

Subsequently, the Waller firm undertook representation of the Clinards and American Limestone against the Blackwoods. In June 1997, Mr. Davis left the Baker firm and returned to the Waller firm. Upon Mr. Davis's return, the Waller firm implemented its "Conflict of Interest Screening Procedures." These procedures were intended to prevent Mr. Davis and his secretary from sharing information concerning the Blackwoods' case with the other lawyers and staff of the Waller firm.

In September 1997, the Blackwoods filed a motion to disqualify the Waller firm from continuing to represent the Clinards. The trial court ruled that the Waller firm was not disqualified. The Blackwoods were granted an interlocutory appeal.

The Court of Appeals reversed. In a comprehensive examination of relevant authorities, the court ruled that the screening procedures employed by the Waller firm were insufficient to rebut the presumption of shared confidences between Mr. Davis and the members of the Waller firm with regard to the Blackwood/Clinard litigation. We granted review.

STANDARD OF REVIEW

A trial court's ruling on attorney disqualification, or the vicarious disqualification of that attorney's firm, will be reversed only upon a showing of an abuse of discretion. State v. Culbreath, 30 S.W.3d 309, 312-13 (Tenn. 2000); accord State v. Tate, 925 S.W.2d 548, 550 (Tenn. Crim. App.1995); Whalley Dev. Corp. v. First Citizens Bancshares, Inc., 834 S.W.2d 328, 331-32 (Tenn. Ct. App. 1992). A trial court abuses its discretion whenever it "applie[s] an incorrect legal standard, or reache[s] a decision which is against logic or reasoning that cause[s] an injustice to the party complaining." State v. Shirley, 6 S.W.3d 243, 247 (Tenn. 1999).

This Court, however, occupies a unique position to administer the ethical conduct of Tennessee attorneys. "It is well settled that the licensing and regulation of attorneys practicing law in courts of Tennessee is squarely within the inherent authority of the judicial branch of government." Smith County Educ. Ass'n v. Anderson, 676 S.W.2d 328, 333 (Tenn. 1984). Pursuant to our inherent authority, we govern the discipline of attorneys in this state, Swafford v. Harris, 967 S.W.2d 319, 321 (Tenn. 1998), and are responsible for "prescribing and seeking to enforce and uphold the standards of professional responsibility." Petition of Tenn. Bar Ass'n, 539 S.W.2d 805, 810 (Tenn. 1976) (Harbison, J., concurring). Furthermore, this Court has "original and exclusive jurisdiction to promulgate [our] own Rules. [Our] rule making authority embraces the admission and supervision of members of the Bar of the State of Tennessee." Id. at 807.

As the above authorities suggest, this Court owes a special obligation to ensure proper application of our rules and administration of the legal profession. Our review of a lower court's interpretation of the ethical rules promulgated by this Court is plenary. See In re Burson, 909 S.W.2d 768, 774 (Tenn. 1995); Belmont v. Bd. of Law Examiners, 511 S.W.2d 461, 462 (Tenn. 1974); Anderson, 676 S.W.2d at 333-34. Accordingly, we will closely scrutinize a trial court's disqualification of an attorney or that attorney's firm for an abuse of discretion arising from improper interpretation or application of our rules. Accord Cheves v. Williams, 993 P.2d 191, 205 (Utah 1999) ("The proper standard of review for decisions relating to disqualification is abuse of discretion. However, to the extent this Court has a special interest in administering the law governing attorney ethical rules, a trial court's discretion is limited.").

ANALYSIS

This case involves the "delicate and sometimes difficult task of balancing competing interests: the individual right to be represented by counsel of one's choice, each party's right to be free from the risk of even inadvertent disclosure of confidential information, and the public's interest in the scrupulous administration of justice." Brown v. Eighth Judicial Dist. Court, 14 P.3d 1266, 1269-70 (Nev. 2000). Attorney professional mobility is also implicated in this case and is of special concern to us in our capacity as the ultimate regulator of the Tennessee bar. See In re Burson, 909 S.W.2d 768 (Tenn. 1995).

This Court has promulgated disciplinary rules regulating the ethical conduct of Tennessee attorneys as part of the Tennessee Code of Professional Responsibility. Tenn. Sup. Ct. R. 8. "The Disciplinary Rules . . . are mandatory in character. The Disciplinary Rules state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action." Code of Prof'l Resp., Preliminary Statement. Disciplinary Rule 5-105(D), part of Canon 5 of the Tennessee Code of Professional Responsibility, states as follows:

If a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule no partner, or associate, or any other lawyer affiliated with that lawyer or that lawyer's firm, may accept or continue such employment.

This rule provides for the vicarious disqualification of an attorney's firm when that attorney would be prohibited by the Disciplinary Rules from undertaking the representation. It is undisputed that Mr. Davis would himself be prohibited from representing the Clinards in this matter because of a conflict of interest. Accordingly, under strict application of DR 5-105(D), the Waller firm would be disqualified from representing the Clinards because of Mr. Davis's prior representation of the Blackwoods. Disqualification is necessary because Mr. Davis is presumed to have shared the Blackwoods' confidences with the Waller firm. See Lazy Seven Coal Sales, Inc. v. Stone & Hinds, P.C., 813 S.W.2d 400, 409 (Tenn. 1991). The Waller firm contends, however, that DR 5-105(D) does not prohibit its representation of the Clinards because the firm took adequate measures to screen³ Mr. Davis and his secretary from any involvement with the Clinard/American Limestone matter.

There is no express "screening" exception to be found anywhere in this Court's rules governing attorney conduct. Nevertheless, the Board of Professional Responsibility of the Tennessee Supreme Court ("Board")⁴ has endorsed the use of screening procedures. Over ten years ago, in Formal Opinion 89-F-118, 1989 WL 534365 (March 10, 1989), the Board "approve[d] the use of screening procedures as a viable method to avoid the imputed or...