Keuffer v. O.F. Mossberg & Sons, Inc., 2016 MT 127 (May 31, 2016) (Wheat, J.; Baker, J., dissenting; McKinnon, J., dissenting) (4-3, aff’d)
Issue: Whether the district court abused its discretion in disqualifying Mossberg’s out-of-state and local counsel for violation of Rule 1.20 of the Montana Rules of Professional Conduct.
Short Answer: No.
Facts: Luke and Stephanie Keuffer were hunting in Montana in October 2008. Stephanie was using a .308 Mossberg model 800 rifle. The Keuffers allege that the Mossberg rifle fell and struck Luke’s rifle, which discharged and shot Luke in the face, causing serious and permanent injury.
In August 2010, Luke called Tarlow & Stonecipher, PLLC and spoke to attorney Margaret Weamer regarding a possible claim against a gun manufacturer for injuries sustained in a hunting accident. Weamer’s records indicate she spoke to Luke for 6-12 minutes, after which she advised him her firm would not be interested in taking his case. The Keuffers retained other counsel and filed a personal injury action against Mosberg in June 2011. Tarlow & Stonecipher later agreed to represent Mossberg as local counsel in this litigation. Before agreeing to the representation, the firm ran a conflict check that revealed the phone conversation between Luke and Weamer, but determined the conversation did not create a conflict with the representation of Mossberg. The firm disclosed the conversation to Mossberg’s national counsel, John Renzulli, but did not disclose it to Luke’s counsel, who did not learn of the conversation until Renzulli deposed Stephanie in June 2014.
Following the deposition, Keuffers moved to disqualify both Tarlow & Stonecipher, PLLC, and the Renzulli Law Firm, PLLP. Mossberg opposed the motion, filing two affidavits from Weamer regarding her conversation with Luke, and requesting a hearing. The district court held a hearing, during which it questioned Weamer and Renzulli. The court asked Renzulli why he asked Stephanie about contacting other law firms. Renzulli responded that he typically asks such questions because he likes “to know if [the plaintiffs are] shopping the case.” Renzulli indicated that he intended to introduce that information at trial.
Procedural Posture & Holding: The district court granted Keuffers’ motion to disqualify both Tarlow & Stonecipher, PLLC, and the Renzulli Law Firm, PLLP, finding counsel had violated Rules 1.20(b) and (c) of the Montana Rules of Professional Conduct. The district court disqualified counsel because it found their actions defeat the purpose of the Rules and threaten the public’s trust in the legal system. Mossberg appeals and the Supreme Court affirms.
Reasoning: Although a violation of the Rules of Professional Conduct is not prima facie grounds for disqualification, a trial court may consider such violations if they prejudice the rights of the parties. Schuff. The application of the rules here turns on how Renzulli used the information and whether that use warrants disqualification. The Court holds that for Rule 1.20 “to have any teeth and be an effective tool” in regulating attorneys’ conduct, “it must be broadly construed whereby all the subsections work together as a whole.” ¶ 13.
Luke was a prospective client under Rule 1.20, triggering certain duties on the part of Mossberg’s attorneys. Under subsection (b) of the rule, information gained from the consultation may not be used or revealed by the lawyer with whom the client consults. The district court found that Mossberg’s counsel improperly used the Keuffers’ consultation against them in Stephanie’s deposition. The court further held that use of the fact that the consultation occurred, as opposed to information learned in the consult, was equally a violation of the rule. “When the fact of a consultation is used to attack and intimidate a party, such conduct constitutes a violation of Rule 1.20 and will support a motion for sanctions, including disqualification.” ¶ 16. While inadvertent use of such information would not support disqualification, intentional use will.
The district court imputed Renzulli’s conduct to Tarlow & Stonecipher beause the Tarlow firm communicated the substance of the phone call to Renzulli and thereafter participated in the development and prosecution of the case. Thus, allowing the Tarlow firm to continue in the case would undermine the remedy imposed on Renzulli.
The district court wrongly relied on Rule 1.20(c) instead of 1.20(b), but it correctly concluded that both firms should be disqualified. Holding this was not an abuse of discretion, the Court affirms.
Justice Baker’s Dissent (joined by Cotter, J.): “The Court today upholds the District Court’s disqualification order without reasoned analysis of the applicable Rule.” ¶ 25. Prospective clients do not receive the same protections under the rules as current or former clients. The inquiry under Rule 1.20(c) is not whether information was divulged by the prospective client, but whether the information could be significantly harmful to that person in that or a related matter. Perry, ¶ 21. The district court did not make any finding that the information Weamer received is significantly harmful to the Keuffers; thus, there is no justification for disqualification under Rule 1.20(c).
Renzulli’s use of Luke’s communication with Weamer during his deposition of Stephanie as a litigation tactic to imply that the Keuffers had a weak case was “out of bounds.” ¶ 34. He “demonstrated a lack of professional, courteous, and civil attitude toward not only the Keuffers, but to the legal system.” Id. But it is not sufficient to disqualify under Rule 1.20. Irrespective of how the Keuffers felt after Stephanie’s deposition, to invoke the harsh remedy of disqualification, they must demonstrate prejudice, i.e., how their rights in the litigation would be adversely impacted by Renzulli’s and Tarlow & Stonecipher’s continued representation of Mossberg.
The district court has ample discretion to impose alternate remedies or sanctions, such as an order in limine precluding the offensive line of questioning and any mention of the consultation before a jury. Additionally, Mossberg’s interests should be taken into consideration.
Nothing in the rules requires Tarlow & Stonecipher to have disclosed the consulting phone call to Keuffers’ counsel after discovering it during the conflict check, because no significantly harmful information was received by Weamer.
Justice McKinnon’s Dissent: Justice McKinnon agrees that the attorneys violated Rule 1.20(b), prejudicing Keuffers, but believes the district court abused its discretion in imposing the severe remedy of disqualification. “The public’s trust in the legal system in not undermined when a trial court perceives an abuse by counsel and corrects it by a fair, proportionate, and measured remedy.” ¶ 46.