First Key Homes of Ga., LLC v. Robinson

• Decision Date: 31 October 2022
• Docket Number: A22A0885
• Parties: FIRST KEY HOMES OF GEORGIA, LLC et al. v. ROBINSON.
• Court: Georgia Court of Appeals

365 Ga.App. 882

880 S.E.2d 371

FIRST KEY HOMES OF GEORGIA, LLC et al.

v.ROBINSON.

A22A0885

Court of Appeals of Georgia.

October 31, 2022

Charles B. Marsh, Swift Currie McGhee & Hiers, for Appellant.

Harold Lionel Johnson, for Appellee.

Miller, Presiding Judge.

In this interlocutory appeal, defendants First Key Homes of Georgia, LLC, and Cerberus SFR Holdings II, L.P., seek review of the trial court's order denying their motion to disqualify plaintiff Kobree Robinson's counsel. On appeal, the defendants argue that the trial court erred by denying their motion to disqualify because an unwaived conflict of interest existed, and that the trial court erred by imposing a screening arrangement that is contrary to Georgia law and the Georgia Rules of Professional Conduct.¹ For the reasons that follow, we conclude that Robinson's counsel has a conflict of interest that is imputed to the entire firm, and we therefore reverse the trial court's order denying the defendants’ motion to disqualify Robinson's counsel.

The ultimate determination of whether an attorney should be disqualified from representing a client in a judicial proceeding rests in the sound discretion of the trial judge.

This Court will not interfere with a trial court's ruling absent abuse of that discretion. In ruling on a motion to disqualify counsel, the trial court sits as the trier of fact, resolving conflicts in the evidence and assessing witness credibility.

(Citation and punctuation omitted.) Samnick v. Goodman , 354 Ga. App. 805, 806, 841 S.E.2d 468 (2020). Additionally, "[a]s the party seeking disqualification, the appellants had the burden to demonstrate to the superior court that disqualification was warranted." (Citation and punctuation omitted.) Ga. Trails and Rentals, Inc. v. Rogers , 359 Ga. App. 207, 213 (1), 855 S.E.2d 103 (2021).

So viewed, the record shows that the defendants rent single-family residences to tenants in various states, including Georgia. In January 2019, Robinson entered into a lease agreement with the defendants for a residential property located in Decatur, Georgia. Robinson later discovered the presence of mold throughout his home after moving into the residence, and he made multiple complaints to the defendants which were allegedly ignored. Robinson and his wife allegedly suffered various physical side effects from being exposed to the mold.

Robinson retained attorney June James from the law firm of Wakhisi-Douglas, LLC, to represent him, and James sent First Key Homes a letter on January 13, 2021, notifying the company that she was representing Robinson. First Key Homes replied to the letter on January 26, and requested that the firm withdraw its representation because James had previously worked for First Key Homes, and her representation of Robinson created a conflict of interest that required the entire firm's disqualification. Harold Johnson, another attorney for Wakhisi-Douglas, subsequently filed suit on Robinson's behalf against the defendants. The defendants answered the complaint and collectively filed a motion to disqualify Robinson's counsel from representing him, arguing that his counsel had an "obvious and incurable conflict of interest." Specifically, Thomas DeRue, Jr., First Key Homes’ general counsel and corporate secretary, averred that James had previously worked as in-house counsel for First Key Homes. DeRue averred that James handled tenant complaints, "participated in considerable legal analysis," completed discovery requests and document production, and that she was privy to First Key Homes’ legal strategies, operating procedures, and its confidential policies and affairs.

At the hearing on the motion, James acknowledged that she previously worked as senior counsel for First Key Homes and that her responsibilities included working with the compliance department to develop standard operating procedures, researching statutes to determine the company's compliance, and conducting compliance training with property managers. James testified that she was assigned to claims concerning tenants’ complaints about maintenance and that she handled the claims that did not involve litigation. She also testified that if a tenant retained an attorney, she would work with opposing counsel to settle the matter, and that she also advised the company's staff on how to address a tenant's complaints. Although she did not engage in any litigation or appear in court on behalf of First Key Homes, James worked with outside counsel to gather information regarding any communications with residents that filed lawsuits against the company. She would also review the resident's legal complaint and would speak to the property manager and outside counsel to prepare for litigation. She described her role as "the middleman between the company and outside counsel." As to Robinson, James testified that she did not handle his claims or perform any work in his case against the defendants.²

Following the hearing, the trial court denied the defendants’ motion to disqualify counsel, but it ordered Robinson's counsel to "screen" James from all matters concerning the underlying litigation in accordance with Rule 1.10 of the American Bar Association Model Rules of Professional Conduct. The defendants filed an application for an interlocutory appeal, which this Court granted. This appeal followed.

In their sole enumeration of error, the defendants argue that the trial court erred in denying their motion to disqualify Wakhisi-Douglas from representing Robinson in the underlying litigation. Specifically, they argue that James had a conflict of interest, the conflict was not waived, the conflict was imputed to the entire firm, and that Georgia law does not permit the screening procedures implemented by the trial court. We agree that Robinson's counsel has a conflict of interest and that the trial court erred by denying the motion to disqualify Robinson's counsel.

We approach motions to disqualify with caution due to the consequences that could result if the motion is granted, such as the inevitable delay of the proceedings and the unique hardship on the client including the loss of time, money, choice of counsel, and specialized knowledge of the disqualified attorney. Additionally, we are mindful of counsel using motions to disqualify as a dilatory tactic. Accordingly, we view disqualification as an extraordinary remedy that should be granted sparingly.

(Citations omitted.) Hodge v. URFA-Sexton, LP , 295 Ga. 136, 138-139 (1), 758 S.E.2d 314 (2014). With these principles in mind, we turn to the defendants’ claim of error.

"A lawyer must avoid even the appearance of impropriety, ... to the end that the image of disinterested justice is not impoverished or tainted. Thus, it is that sometimes an attorney, guiltless in any actual sense, nevertheless is required to stand aside for the sake of public confidence in the probity of the administration of justice." (Citation and punctuation omitted.) Love v. State , 202 Ga. App. 889, 891, 416 S.E.2d 99 (1992). Thus, an attorney is "disqualified from representing a client against a former client in an action that is of the same general subject matter, and grows out of an event that occurred during the time of such representation." (Citation and punctuation omitted.) Befekadu v. Addis Intl. Money Transfer, LLC , 332 Ga. App. 103, 107 (1) (c), 772 S.E.2d 785 (2015).³ Disqualification in this situation "is limited to cases where the lawyer was actively representing the party when the events giving rise to the case in question occurred." (Citation and punctuation omitted.) Id. Additionally, "if one attorney in a firm has an actual conflict of interest, we impute that conflict to all the attorneys in the firm, subjecting the entire firm to disqualification." (Citation and punctuation omitted.) Hodge , supra, 295 Ga. at 139 (1), 758 S.E.2d 314. The rationale behind this rule is "that a firm of lawyers is essentially one lawyer for purposes of the rules governing loyalty to the client, or from the premise that each lawyer is vicariously bound by the obligation of loyalty owed by each lawyer with...