Kapco Mfg. Co., Inc. v. C & O ENTERPRISES, INC.

• Court: U.S. District Court — Northern District of Illinois
• Citation: Kapco Mfg. Co., Inc. v. C & O ENTERPRISES, INC., 637 F. Supp. 1231 (N.D. Ill. 1985)
• Decision Date: 17 October 1985
• Docket Number: No. 84 C 10129.,84 C 10129.
• Parties: KAPCO MANUFACTURING COMPANY, INC., Plaintiff, v. C & O ENTERPRISES, INC., et al., Defendants.

637 F. Supp. 1231

KAPCO MANUFACTURING COMPANY, INC., Plaintiff, v. C & O ENTERPRISES, INC., et al., Defendants.

No. 84 C 10129.

United States District Court, N.D. Illinois, E.D.

October 17, 1985.

Eugene F. Friedman, Eugene F. Friedman, Ltd., Chicago, Ill., for plaintiff.

Robert M. Tarnoff, Daniel E. Beederman, Schoenberg, Fisher & Newman, Ltd., Chicago, Ill., for A.G. Busch Inc., Bruce Creager, Richard Wharton, and Richard Kinzalow.

Marvin A. Tenenbaum, M. Marshall Seeder, Alexander, Unikel, Bloom, Zalewa & Tenenbaum, Ltd., Chicago, Ill., for C & O Ent. and Thomas Carter.

Robert A. Lewanthal, Fred Sudak & Associates, Chicago, Ill., for Roy Thomas, Inc., Roy Jackson, Thomas Fogarty, and Margaret Groves.

Thomas A. Reynolds, III, Winston & Strawn, Chicago, Ill., for Texaco, Inc.

MEMORANDUM OPINION AND ORDER

ROVNER, District Judge.

Presently pending before this Court is the motion of plaintiff Kapco Manufacturing Company, Inc. ("Kapco") to disqualify the attorneys representing defendants C & O Enterprises, Inc. ("C & O"), Tom Carter, and Jack O'Neill. Eugene F. Friedman of the firm of Eugene F. Friedman, Ltd. represents Kapco. The law firm sought to be disqualified is Alexander, Unikel, Bloom, Zalewa & Tenenbaum, Ltd. ("the Alexander firm"), and the attorney whose disqualification is directly at issue is a partner in that firm, Marvin M. Tenenbaum. Kapco has also requested an injunction against all of the employees of the firm, prohibiting them from disclosing or discussing any information they may have in this suit with anyone.

This lawsuit, although less than one year old, has a lengthy and complex procedural history. Kapco filed its eleven count complaint against a multitude of defendants on November 23, 1984 alleging, inter alia, that the defendants infringed Kapco's trademark rights in the name DASH-GO for car starters. Less than one month later, after a lengthy pretrial conference with this Court on December 20, 1984, the case was dismissed as settled between all the parties. The terms of the settlement agreement were read into the record by the attorneys on that date and transcribed by the court reporter. Although the case was dismissed, this Court retained jurisdiction to enforce the settlement agreement.

Subsequent disputes between the parties as to the substance and meaning of the settlement agreement, however, led to a plethora of motions and ultimately to three published opinions, two in the District Court and one in the United States Court of Appeals for the Seventh Circuit: Kapco Manufacturing Co., Inc. v. C & O Enterprises, Inc., et al., 605 F.Supp. 253 (N.D.Ill. 1985) (Bua, J.);¹ Kapco Manufacturing Co., Inc. v. C & O Enterprises, Inc., et al., 773 F.2d 151 (7th Cir.1985); Kapco Manufacturing Co. v. C & O Enterprises, Inc., et al., 108 F.R.D. 55 (N.D.Ill.1985) (Rovner, J.).

The procedural history of this case and the flurry of motions filed by Kapco are adequately set forth in the published opinions and, for the sake of economy, will not be repeated here. Suffice it to state for present purposes that after Judge Bua denied Kapco's motion to reinstate the case on March 29, 1985, Kapco, 605 F.Supp. 253, and after this Court denied Kapco's motion to reconsider Judge Bua's order on April 30, 1985, Kapco filed the instant motion to disqualify Tenenbaum and the Alexander firm and for an injunction on May 15, 1985.²

After full briefing on the motion to disqualify was completed, this Court held an evidentiary hearing on October 3 and 4, 1985. For the reasons stated below, the motion to disqualify and for an injunction is denied.

Facts³

Friedman's firm presently numbers two attorneys, himself and an associate, Bruce W. Craig. Although the Friedman firm shares office space with another small firm, it is separate and distinct from that firm, with separate files and office personnel.

Ms. Patricia C. Wyatt was Friedman's main secretary and office manager from December 3, 1981 to sometime in April, 1985. On May 6, 1985, Ms. Wyatt began working full time as a secretary for partner Richard Alexander of the Alexander firm. Until approximately December, 1980, she had previously worked as a secretary for Mr. Alexander prior to her employment with Friedman in December, 1981.

As Friedman's secretary, her duties were wide ranging. She testified that she did everything for Friedman, from secretarial and clerical duties to filing papers in court and acting as a messenger. There is no testimony, however, that she ever performed services such as legal or fact investigation, research, or analysis. In any event, she had complete and free access to Kapco's files, which were numerous because Kapco is or had been involved in approximately 10 to 15 cases as a plaintiff or defendant since its inception several years ago. Friedman acts as Kapco's counsel on all litigated matters and on most general matters. Kenneth Rubel, Kapco's president and sole shareholder, engaged Friedman's services approximately three years ago.

According to Friedman, Craig, and Rubel, Ms. Wyatt received substantial amounts of confidential information concerning Kapco and this litigation while she worked for Friedman. Ms. Wyatt did not contest this assertion. In particular, Friedman, Rubel, and Craig testified that she attended a luncheon with them on March 25, 1985 at the Italian Village Restaurant in Chicago at which they discussed Kapco's possible courses of action on several motions pending before Judge Bua. At that time, they discussed the possibility of taking an appeal, and they discussed strategy in other cases in which Kapco was involved.⁴

At least until early 1985, Friedman and Ms. Wyatt apparently enjoyed a cordial professional relationship and a personal friendship as well. Although Friedman had occasion to reprimand her for using his word processing equipment to do typing for one of his clients after hours without informing him that she was doing so,⁵ and also without informing Friedman that she had dated this client, he gave her regular raises. Friedman and Ms. Wyatt also met on occasion after work for drinks, he lent her $3,000 when she needed money during her custody battle, she called him and his wife to discuss personal matters at home, and she borrowed books from him occasionally. In mid-February, 1985, Friedman and Ms. Wyatt had a dispute over her salary raise and vacation time. During the course of their discussions, Ms. Wyatt told Friedman that she had a job offer from another firm, the name of which she did not divulge to him. Bruce Craig, Friedman's associate, subsequently engaged in a discussion with Ms. Wyatt in an effort to convince her not to leave the Friedman firm. During that conversation, she told Craig that she had a job offer from the Alexander firm, but that Tenenbaum "threw a fit" when he learned that the Alexander firm might hire her because of the potential conflicts regarding this on-going litigation.⁶

Sometime in late February or early March, 1985, Ms. Wyatt told Friedman that she would remain in his employment. She continued to work on Kapco matters — including attending the March 25 luncheon described above—until April 11, 1985, when she informed Friedman that she would leave his employment effective April 30, 1985. She refused to tell Friedman or Craig where she would be working despite Friedman's specific inquiries, explaining only that she did not want Friedman to call her during business hours to find out where various items and files were located in the office. She also refused to answer his direct questions as to whether she would be working for anyone having any connection with any matters handled by his office. Indeed, she even refused to answer when Friedman asked her directly whether she would be working with the Alexander firm because he knew that she was personally friendly with one of the partners of that firm, James Zalewa. She gave instructions to her family and friends not to tell Friedman where she would be employed. No one at the Alexander firm informed him of Ms. Wyatt's impending employment with that firm.

Tenenbaum testified that he was indeed concerned when he first learned in early 1985 from his partners that the Alexander firm was considering hiring Ms. Wyatt as the secretary to Mr. Alexander. He told his partners that he had settled the Kapco case with Friedman but that because Friedman's motion to reinstate was pending, it was "inadvisable" to offer her employment. They agreed. On March 26, 1985, Judge Bua denied the motion to reinstate, and Tenenbaum told his partners that, although he continued to have concerns, they could extend an offer of employment to Ms. Wyatt because Mr. Alexander needed a secretary. His concerns now centered not around any potential conflict of interest but around what Friedman might do to Ms. Wyatt or to his firm if he found out she was employed by the Alexander firm.⁷

Ms. Wyatt stated that she too was concerned because Mr. Friedman specifically told her when she left his office that from now on, she would be "fair game."⁸ She also stated that, aside from disputes over a salary raise and vacation time, she decided in early 1985 to seek employment elsewhere because Friedman frequently used foul language in the office, made crude remarks about women, told off-color jokes, and referred to opposing counsel, including Tenenbaum, in profane terms.⁹ She telephoned the Alexander firm in early 1985 to ask if they had a position available, and the firm responded negatively. She subsequently obtained a tentative offer from them that, she testified, wasn't confirmed until April, whereupon she accepted the offer and gave Friedman notice that she was leaving.

On May 6, 1985, she began to work full time as a secretary to Richard Alexander of the Alexander firm. Tenenbaum helped organize that firm in August, 1983, and it now consists of approximately 15 lawyers, only three of whom work in its litigation section. Ms. Wyatt continued to work full time...