Opinion
No. CV06-4016486
May 1, 2008
MEMORANDUM OF DECISION RE MOTION TO DISQUALIFY
The plaintiffs have moved to disqualify Attorney Ridgely Brown, counsel for the defendants. The plaintiffs argue that Attorney Brown will be called as a fact witness at trial and that his credibility will be an issue. On December 12, 2007, the court conducted an evidentiary hearing on the motion at which time Attorney Brown testified regarding his personal knowledge of and participation in the events that culminated in the present lawsuit. At the conclusion of evidence, the court granted a continuance to allow each party to file a memorandum of law regarding the legal issues surrounding the motion to disqualify. The plaintiffs filed their memorandum of law on January 23, 2008. The defendants have not filed a memorandum of law.
The court notes that in addition to the evidence at the hearing on December 12, 2007, the court also heard evidence in this matter regarding a motion for temporary injunctive relief on June 13, 2006, July 6, 2006, September 6, 2006 and September 7, 2006 at which time the plaintiffs and the defendant Angle testified at length regarding their dispute. On October 13, 2006, the court granted the plaintiff's request for temporary injunctive relief. The court also issued a written memorandum of decision on January 2, 2007, denying a motion to dismiss filed by the defendants. The court, therefore is familiar with the dispute between the parties, as well as, Attorney Brown's role in the events leading to the underlying dispute, as well as, his role in the continuing dispute, while acting as counsel for the defendants.
Jean v. L.A. Limousine of Greenwich, LLC, Superior Court, judicial district of Fairfield at Bridgeport, No. CV06 4016486S (Oct. 13, 2006, Arnold, J.).
Jean v. L.A. Limousine of Greenwich, LLC, Superior Court, judicial district of Fairfield at Bridgeport, No. CV06 4016486S (January 2, 2007, Arnold, J.).
The plaintiffs move to disqualify Attorney Brown as they intend to call him as a witness regarding which parties in the dispute he represented; his actions and knowledge regarding the purchase of the subject limousine company; and payments received by Brown from the company, which may have been in violation of the court's previous orders. The plaintiffs argue that Brown's testimony concerns certain contested facts and that Brown's credibility will be an issue. They move to disqualify him pursuant to Rule 3.7 of the Rules of Professional Conduct, which states in relevant part as follows:
(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless:
(1) The testimony relates to an uncontested issue;
(2) The testimony relates to the nature and value of legal services rendered in the case; or
(3) Disqualification of the lawyer would work substantial hardship on the client.
In ruling on a motion to disqualify a party's legal counsel the court is mindful that "[t]he Superior Court has inherent and statutory authority to regulate the conduct of attorneys who are officers of the court . . ." (Citations omitted; internal quotation marks omitted.) American Heritage Agency, Inc. v. Gelinas, 62 Conn.App. 711, 724-25, 774 A.2d 220 (2001). "Disqualification of counsel is a remedy that serves to enforce the lawyer's duty of absolute fidelity and to guard against the danger of inadvertent use of confidential information." Id. "In disqualification matters, however, we must be solicitous of a client's right freely to choose his counsel; mindful of the fact that 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.' Id. The competing interests at stake in this motion to disqualify are: (1) the defendants' interest in protecting confidential information; (2) the plaintiff's interest in freely selecting counsel of his choice; and (3) the public's interest in the scrupulous administration of justice. Id.; Goldenberg v. Corporate Air, Inc., 189 Conn. 504, 507, 457 A.2d 296 (1983), overruled in part, Burger Burger, Inc. v. Murren, 202 Conn. 660, 522 A.2d 812 (1987). A party moving for disqualification of an opponent's counsel must meet a high standard of proof." (Internal quotation marks omitted.) Penna v. Margolis, Superior Court, judicial district of New Haven at New Haven, Docket No. CV 03 0475408 (February 9, 2004, Zoarski, J.T.R.). "The courts should act very carefully before disqualifying an attorney and negating the right of a client to be represented by counsel of choice." Somers Associates, P.C. v. Kendall, Superior Court, judicial district of Windham at Putnam, Docket No. CV064478 (February 23, 2001, Foley, J.).
"The Connecticut Supreme Court has interpreted [r]ule 3.7 to require an attorney to withdraw `if he . . . reasonably foresees that he will be called as a witness to testify on a material matter.'" (Emphasis in original.) Talcott Mountain Science Center for Student Involvement, Inc. v. Abington Ltd. Partnership, Superior Court, complex litigation docket at Waterbury, Docket No. X01 CV 95 0152121 (June 28, 2002, Hodgson, J.) (32 Conn. L. Rptr. 420, 421), quoting State v. Crespo, 246 Conn. 665, 684-85 n. 14, 718 A.2d 925 (1998), cert. denied, 525 U.S. 1125, 119 S.Ct. 911, 142 L.Ed.2d 909 (1999). "An attorney is not absolutely prohibited from testifying on behalf of a client, but should only do so when the testimony concerns a formal matter, or the need for the testimony arises from an exigency not reasonably foreseeable . . . Where, however, an attorney does not withdraw, a court exercising its supervisory power can . . . disqualify the attorney." (Citations omitted; internal quotation marks omitted.) Enquire Printing Publishing Co. v. O'Reilly, 193 Conn. 370, 376, 477 A.2d 648 (1984).
"[W]hether a witness `ought' to testify is not alone determined by the fact that he has relevant knowledge or was involved in the transaction at issue. Disqualification may be required only when it is likely that the testimony to be given by the witness is necessary. Testimony may be relevant and even highly useful but still not strictly necessary. A finding of necessity takes into account such factors as the significance of the matters, weight of the testimony and availability of other evidence." (Internal quotation marks omitted.) Roosevelt Building Product Co. v. Morin Corp., Superior Court, judicial district of Litchfield, Docket No. CV 00 0083595 (September 4, 2001, Cremins, J.) 30 Conn. L. Rptr. 331.
The present action is a dispute between the plaintiffs Jean Claude and L. Alberto Uribe and the defendants Christopher Angle and L.A. Limousine of Greenwich, LLC. The court has had the benefit of two evidentiary hearings to hear the contested facts in the present dispute. First, the court heard the testimony of the parties regarding the plaintiffs' request for temporary injunctive relief. At that time Jean, Uribe and Angle, among others, testified regarding the purchase of a business known as L.A. Limousine and the subsequent operation of that business. More recently, the court heard the testimony of the defendants' counsel, Attorney Ridgely Brown, regarding the motion to disqualify Brown from further representing the defendants. Attorney Brown was present at a transaction regarding the alleged purchase of L.A. Limousine which occurred in November 2005 from Charles Livetri, while none of the parties to this dispute were present. This is a disagreement between the plaintiffs and the defendant Angle, as to the ownership of L.A. Limousine based on what transpired in November 2005.
It is not disputed that prior to October 2005, the plaintiffs Jean and Uribe and the defendant Angle agreed among themselves to form a limited liability corporation to purchase a limousine company that was owned by Livetri. To that effect, Jean, Uribe and Angle completed the paperwork required to form a limited liability company and filed it with the Secretary of State for Connecticut on or about October 24, 2005. The limited liability corporation was L.A. Limousine of Greenwich, LLC. No other documents exist regarding the formation of the limited liability corporation and there are no written corporate documents evidencing any agreement between the parties as to ownership shares or how the corporation would operate. The parties do not dispute that all agreements among themselves were oral agreements.
Uribe, Jean and Angle then proceeded to negotiate with Livetri as to the price and terms of the purchase. Without a written, signed contract Uribe forwarded an initial deposit to Livetri in the amount of $40,000. Uribe and Angle were to sign a promissory note for the balance of the purchase price with Angle's residence being used for collateral by way of a mortgage.
Subsequent testimony reflects that Uribe ultimately paid a total sum of $51,000 to Livetri. The sum of $51,000 was to be allocated as $17,000 each for Jean, Uribe and Angle. Jean and Angle were to repay Uribe the sum of $17,000 plus interest. There is no written documentation reflecting the agreement to repay these sums or any terms of this agreement.
Subsequent to the formation of the limited liability corporation, and prior to the alleged purchase of the limousine company, the parties had a disagreement regarding the prospective purchase price for Livetri's limousine company. Livetri was asking for a purchase price in the amount of $575,000. Jean protested that the price was too high and refused to sign any documents relating to the purchase. Subsequently, Uribe also refused to attend the closing on the sale of the limousine company, feeling, as well, that the price was excessive. Neither Jean or Uribe attended the closing and neither signed any contracts, documents or promissory notes to effectuate the purchase of L.A. Limousine from Livetri.
During the time the parties were contemplating the purchase of the limousine company from Livetri, the defendant Angle was represented by Attorney Ridgely Brown. Brown testified that he had represented Angle in various legal matters for several years prior to this time. Attorney Brown testified that he was not representing Uribe or Jean and that he instructed them to seek separate legal counsel. Only Attorney Brown attended the closing and effectuated the purchase of L.A. Limousine. Uribe and Jean refused to attend the closing and Angle was out of state. In effectuating a purchase of Livetri's limousine company, Brown utilized a power of attorney from Angle which designated Brown as Angle's attorney-in-fact. Brown had no such authorizations from Uribe and Jean, the other two members of the limited liability company. Brown affixed his signature as the attorney-in-fact on separate lines designated for Angle's signature and as a "duly authorized agent" for L.A. Limousine, LLC. To date, there is no evidence that Brown was authorized to act by Uribe or Jean in behalf of L.A. Limousine, LLC. to consummate this purchase, either by oral agreement of the parties or by way of a written corporate authorization. The documents signed by Brown also contained signature lines for Uribe, but these lines were left blank. Brown charged L.A. Limousine the sum of $12,000 for his services for the purchase of the limousine company from Livetri and payments for these fees have been paid from L.A. Limousine funds.
Subsequent to the alleged purchase of L.A. Limousine in November 2005, the plaintiffs and the defendant began to jointly operate the L.A. Limousine, LLC, assuming various roles to varying degrees. The evidence shows that Angle assumed the role of day-to-day management of the business. However, a dispute soon developed regarding Angle's management of the company's finances and his refusal to allow Uribe and Jean access to the financial records of the company, including certain expenditures, which the plaintiffs claim benefitted only Angle. The plaintiffs allege that Angle has run the limousine business as a sole proprietorship. These allegations by the plaintiffs against Angle prompted the plaintiffs to file the subject legal action, which included their request for temporary injunctive relief. The court granted temporary injunctive relief to the plaintiffs and ordered the following:
See Jean v. L.A. Limousine of Greenwich, LLC, Superior Court, judicial district of Fairfield at Bridgeport, No. CV06 4016486S (Oct. 13, 2006, Arnold, J.)
A. The defendant Christopher Angle shall advise the plaintiffs of the computer password, the credit card company passwords and all bank account passwords regarding the assets of the L.A. Limousine of Greenwich, L.L.C. within one week of the receipt of notice of these amended orders.
CT Page 7460
B. Additionally, the defendant Christopher Angle shall within one week of receipt of notice of this decision, turn over all assets and business records of the L.A. Limousine of Greenwich, L.L.C. to the plaintiffs. The term "records" shall include, but is not limited to, all computer records and software programs to access said records. The defendant Angle is further enjoined from destroying or electronically erasing any records of the corporation.
C. The defendant Christopher Angle is also enjoined from disposing of any assets and from transferring any assets of the L.A. Limousine of Greenwich, L.L.C., other than expenditures made only for the customary and usual day-to-day operating expenses. All other expenditures shall be made only with the express authority of the majority vote of the members of the L.A. Limousine of Greenwich, L.L.C.
D. The corporation shall be run on a daily basis by a majority vote of the members of the corporation or by a duly appointed designee. A majority of the voting members of the L.A. Limousine of Greenwich, L.L.C., shall, if necessary appoint a designee, until further orders of the court.
E. The voting membership of the L.A. Limousine of Greenwich, L.L.C. for the purposes of these orders, shall consist of Christopher Angle, Jean Claude Jean and L. Alberto Uribe.
F. All monetary assets and income of the corporation shall be deposited in an account at a recognized financial institution authorized to do business in the State of Connecticut. Said institution shall be designated by a vote of the majority membership of the corporation. No withdrawal of funds or expenditure of said funds shall be made from said account by any member or members of the corporation except for those withdrawals and expenditures necessary for the customary and usual day-to-day operating expenses of the corporation which may include, but are not limited to, payments to employees, vendors, independent contractors, and creditors whose services are necessary to the financial well-being of the corporation, as well as taxes payable to any state, municipal or federal authority. Should any dispute arise as to the propriety or necessity of any such expenditure, the parties shall immediately petition the court for a hearing on said matter, prior to making any such payment or expenditure.
G. No party or parties to this action shall engage in personal dealing in any way or realize any income from the corporation without further order of the court unless a voting member, as listed in paragraph E, has been designated to run the corporation on a day-to-day basis in accordance with paragraph D. In that event the corporation is authorized to pay said voting member regular wages in an amount to be agreed upon by a majority vote of the voting members of the corporation. In making this order, the court exempts any monthly installment payments by the corporation in behalf of L. Alberto Uribe in payment of a loan from Uribe to the corporation in the original amount of $51,000.
H. The orders of the court shall not be stayed pending the outcome of the defendant Angle's appeal.
The appeal has since been withdrawn.
I. The plaintiffs, Jean Claude Jean of 339 Saunders Avenue, Bridgeport, Connecticut and L. Alberto Uribe of 328 West Cedar Street, Norwalk, Connecticut, as principals shall post a bond in the sum of $20,000, cash or surety, to indemnify the defendant from damages should they not prosecute the action to effect.
Subsequent to the issuance of the court's orders regarding temporary injunctive relief, disputes arose regarding compliance by Angle. Among those disputes were claims that:
1. Angle continued to run the limousine service as a sole proprietorship;
2. Angle continued to deny the plaintiffs access to the financial records of the limousine company;
3. Angle was making unauthorized payments to himself and Attorney Brown.
The court heard various arguments of the parties and despite not making any findings regarding the truth of these allegations, the court admonished Angle to comply with its orders or face findings of contempt. Subsequently, the plaintiffs filed their Motion to Disqualify, and on December 12, 2007, the court conducted an evidentiary hearing.
At the hearing on December 12, 2007, Attorney Brown testified that he only represented Angle at the purchase closing, not L.A. Limousine of Greenwich, LLC. However, he later testified that he "effectively" represented L.A. Limousine. In this dispute, the plaintiffs argue that Brown did, in fact, represent L.A. Limousine at the purchase closing. The plaintiffs argue that who Brown represented is relevant and that Brown was paid by funds from L.A. Limousine for representation relating to the purchase transaction. Angle and Brown claim that Angle was the "sole" purchaser of the limousine company from Livetri, and the plaintiffs have no ownership interest in the limousine company. However, as the plaintiffs argue, the facts become further clouded and confused, Angle instructed Brown to bill L.A. Limousine for representation for the purchase transaction, but to bill Angle, himself for representation in this action. Brown received payments both before and after the court's orders of temporary injunctive relief on October 13, 2007, despite the fact barring such payments by L.A. Limousine. There was evidence that any such payments by Angle were cash payments, but Brown testified that he did not distinguish from whom the payments were made, Angle personally or L.A. Limousine. Once again, however, Brown contradicted his former testimony and later said that he interpreted the cash payments as coming from Angle's personal funds. The evidence reveals that approximately $3,000 was paid to Brown from L.A. Limousine funds subsequent to the court's orders of October 13, 2007. The checks were made payable to "cash" and bear a notation in the memo box designating the funds to "R. Brown." The plaintiffs argue that Brown was hired by Angle to represent L.A. Limousine at the purchase closing without authorization from Jean and Uribe, the other members of the limited liability corporation. Nonetheless, Brown signed the closing papers as the authorized agent of L.A. Limousine.
The defendant Angle has taken a position that once Uribe and Jean indicated an unwillingness to proceed with the closing in November 2005, they were no longer members of the limited liability corporation and that purchase transaction was "dead." Angle then allegedly instructed Brown to proceed in behalf of Angle and L.A. Limousine without the participation of Uribe and Jean. Whether or not the initial agreement to purchase the limousine company from Livetri was, in fact, a "dead deal" is contested by the plaintiffs. Brown claims that L.A. Limousine LLC., in fact, was not the purchaser of Livetri's limousine company, and Angle was the purchaser. Yet, Brown clearly knew that Uribe had made a substantial deposit toward the purchase price in behalf of L.A. Limousine.
While the court has admittedly taken a tortuous and somewhat exhaustive path in an attempt to explain the confused and conflicting claims of the parties, it is illustrative of the confusion that surrounds this dispute in which little documentation exists regarding the original intent of the parties. The dispute can be summed up simply by stating that the plaintiffs claim L.A. Limousine of Greenwich, LLC. purchased Livetri's limousine company and Angle claims it did not. If L.A. Limousine did not purchase the limousine company from Livetri, then the plaintiffs would not be deemed to have any ownership interest. Accordingly, their allegations as to Angle's misuse of funds in operating the company would have no merit. Thus, the plaintiffs argue that Brown's testimony as to what happened during the purchase transaction in November 2005 is critical. The plaintiffs argue that, to date, Brown's testimony has been contrary to the plaintiffs' interests and has been contradictory, calling into question his credibility. The plaintiffs conclude that Brown is an advocate against the plaintiffs' claims and his allegiance is to Angle not L.A. Limousine of Greenwich, LLC. Therefore, it is not proper for him to represent both L.A. Limousine and Angle without having a conflict of interest.
The court is mindful of the plaintiffs' own conflicting claims wherein they claim that Brown had no authorization to represent L.A. Limousine at the purchase transaction, yet also claim that as members of L.A. Limousine of Greenwich, LLC., they have an ownership interest in the purchased limousine company. This is an example of the muddled claims and continuing confusion the court confronts. The lack of documentary evidence or written agreements between the parties will make the job of the fact-finder at trial even more difficult.
The motion to disqualify has been filed on an allegation of a violation of Rule 3.7 of the Rules of Professional Conduct and not Rule 1.9 of the Rules of Professional Conduct, which governs disqualification of counsel for a conflict of interest relating to a former client. "A lawyer who has formerly represented a client in a matter shall not thereafter: (a) Represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation; or (b) Use information relating to the representation to the disadvantage of the former client except as Rule 1.6 would permit with respect to a client or when the information has become generally known." American Heritage Agency, Inc. v. Gelinas, supra, 62 Conn.App. 725. As the plaintiffs have not alleged a violation of Rule 1.9, or addressed Rule 1.6 in their memorandum of law, the court makes no findings regarding any such violation. The court's decision is based solely on its consideration of the evidence before it and the law that applies to Rule 3.7.
The court finds that Brown's testimony at trial will be necessary to shed light on material matters regarding the purchase transaction of the limousine company and financial payments to Brown by Angle following the issuance of the court's orders regarding temporary injunctive relief. Brown was the only person attending the purchase transaction in behalf of Angle and L.A. Limousine of Greenwich, LLC. The type of evidence that can be provided by Brown is not just relevant, it is also material. The type of information that Brown possesses would be unobtainable elsewhere. It is also apparent that after conducting two separate evidentiary hearings regarding the dispute between the parties and Brown's role in this dispute, Brown's credibility will be in question.
In deciding to grant the motion to disqualify, the court is aware of the decision Nevas v. McDonald, Superior Court, judicial district of Stamford-Norwalk at Stamford, No. CV 04-0200626-S (Feb. 14, 2006, Jennings, J.) 40 Conn. L. Rptr. 781. In Nevas, supra, Judge Jennings concluded that Rule 3.7 does not on its face preclude all representation but rather precludes only acting as an advocate at trial. See Horgan v. Capozzi, No. CV03-00830205, Superior Court, judicial district of Ansonia-Milford (March 24,2004, Robinson, J.), 36 Conn. L. Rptr. 734. Judge Jennings, in denying a motion to disqualify, as having been prematurely filed, concluded that an attorney-witness was not prohibited from representing a client in pretrial and discovery proceedings.
While the court respects the reasoning set forth in Nevas v. McDonald, supra, waiting until the present matter comes to trial would only forestall the inevitable regarding the necessity for Brown to withdraw voluntarily or face disqualification by the court at the time of trial. That would do a disservice to the clients that Attorney Brown represents. While a client has a right to freely choose counsel of his choice, it is only fair, just and equitable for the court to give the defendants sufficient time prior to trial to make their choice as to new counsel. The court does not wish for the defendants to lose time and money in finding new counsel, and the court wants any new counsel to have sufficient time prior to trial to become familiar with the proceedings. Additionally, the court also does not want the quest for new counsel to become a reason for any delay in scheduling a trial date. For these reasons and all of the reasons set forth herein, the court grants the plaintiffs' motion to disqualify Attorney Ridgely Brown.