Opinion
No. 99-4677C
October 25, 2001
MEMORANDUM OF DECISION AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT AND MOTIONS TO STRIKE
INTRODUCTION
This action arises from the defendant law firm's representation of the plaintiff in the defense of a suit brought against the plaintiff by two union pension funds. Although the underlying action ended with dismissal of the claim against the plaintiff, he now contends that the defendant was negligent and breached its fiduciary duty in its representation of him in that case. As relief, he seeks damages including disgorgement of legal fees he paid to the defendant and reimbursement for fees paid to successor counsel. Presently before the Court are the defendant's motion for summary judgment, the plaintiff's cross-motion for partial summary judgment, and each party's motion to strike the affidavit of the other's expert. For the reasons that will be explained, summary judgment will enter for the defendant.
BACKGROUND
The record presented in connection with the present motions, considered in the light most favorable to the plaintiff, provides the following background. The plaintiff, David L. McElroy, a resident of Massachusetts, was a general partner in the Landmark Park Plaza Limited Partnership ("Landmark"). Landmark owned and operated the Park Plaza Hotel in New Haven, Connecticut. On June 9, 1993, Landmark filed for bankruptcy protection in the Bankruptcy Court in Connecticut. On July 6, 1994, the Bankruptcy Court confirmed a reorganization plan providing for sale of the hotel to "The Cordish Company or its assigns." The approved reorganization plan included a provision, § 5.08, under which, upon confirmation of the plan, "each claimant shall be deemed to have released the Debtor, and the Purchaser and their respective General Partners, . . . from any and all liabilities, claims, demands, causes of action, obligations and the like which may arise from or in connection with the conduct of the Debtor's Business or the obligations giving rise to the claims for which a distribution is being made up and to the Distribution Date."
Three years after the sale, on September 30, 1997, the trustees of the Hotel Employees and Restaurant Employees International Union Pension Fund and the Hotel Employees Restaurant Employees International Union Pension Plan ("the Funds") sued McElroy in the United States District Court for the Eastern District of Illinois. That suit (the "underlying" or "Hanley" case) alleged that McElroy was liable to the Funds for withdrawal payments under ERISA, as a consequence of Landmark's having "ceased to be a participating employer" under the union's pension plan "during the plan year ending December 1994."
McElroy engaged the defendant Robinson Cole to represent him. Robinson Cole is a Connecticut limited liability partnership with its principal office in Hartford and smaller offices in Boston, New York, Stamford and Greenwich. According to an affidavit of its Financial Officer, as of February 28, 2001, it had 167 attorneys, 122 in its Connecticut offices. McElroy's initial contact at Robinson Cole was Hartford partner John Lynch, a friend of McElroy's son, David M. McElroy. McElroy faxed to Lynch a copy of the complaint in the underlying action. In his fax cover sheet, dated November 12, 1997, McElroy informed Lynch that:
The plaintiff points out that Robinson Cole's web site refers to "nearly 200 lawyers." The difference is of no significance to the issues in this case.
Landmark did not cancel or withdraw from the pension plan. It sold the Park Plaza on Aug. 31, 1994. 155 Temple St., L.C., of 300 Water St. Baltimore MD. was the owner employer as of Sept. 1 and through Nov. 6, 1994, the day the pension plan was allegedly terminated.
Robinson Cole opened the matter in its records by means of a "new client"form, dated November 14, 1997, listing the union pension plan and its trustees as the only adverse parties. A conflict check based on that information identified no conflicts. Lynch assigned the case to Michael Enright, also a partner in the Hartford Office, who specialized in bankruptcy matters. Both Lynch and Enright are members of the Connecticut bar and are not members of the Massachusetts bar. Enright recommended that McElroy also engage John Costello of the Chicago firm of Wildman, Harrold, Allen Dixon as local counsel. McElroy did so, setting up financial arrangements directly with that firm.
Lynch memorialized the terms of Robinson Cole's engagement in a letter to McElroy dated November 20, 1997, which McElroy countersigned to indicate his acceptance. According to the letter, Robinson Cole would represent McElroy in the Hanley suit "and in any related litigation. The representation will likely involve a request for an injunction against the Funds based on the confirmed Chapter 11 plan . . . , examination of the question of proper venue and such other issues as may arise." The letter went on:
We anticipate that our representation may include all services typically rendered for a defendant in contested litigation, including consultation regarding background, status and strategy, preparation of pleadings and briefs regarding the dispute, legal research regarding applicable law, court appearances and involvement in pretrial discovery, advice regarding any proposed resolution and other matters which may arise within the attorney/client relationship during such an engagement. Obviously it would be impossible to list such services exhaustively here, and your needs may change during the course of our representation.
Enright obtained the files kept by the attorney who had represented McElroy in the bankruptcy. In reviewing those files on November 26, 1997, Enright became aware of an Assignment of Contracts agreement between Landmark and 155 Temple Street L.C., executed on behalf of 155 Temple Street by its then principal, David Cordish. Under that agreement, Landmark had assigned to 155 Temple Street, and the latter had accepted, all rights and obligations under certain contracts. Among the contracts specifically included were those with "Local 217 Hotel and Restaurant Employees and Bartenders Union." Within a day or two thereafter, according to his deposition testimony, Enright called McElroy and said, according to Enright's deposition testimony, "you got to go after the purchaser of the hotel. At least make a demand on them and maybe they will fund the defense costs."
The defendant's papers refer to McElroy's potential claim against the purchaser as one for indemnification. Although that term appears in Enright's deposition testimony, in the demand letter he drafted, and in the demand letter that was ultimately sent, McElroy asserts that the potential claim was not for indemnification, but rather "was a direct claim based on the assignment of obligations." This distinction does not affect the issues presented by these motions.
McElroy rejected the suggestion at that time, telling Enright, according to Enright's deposition testimony, "that he didn't want to do that because Mr. Cordish had bailed him out of the bankruptcy situation he was in and he couldn't do that to his friend." McElroy's own deposition testimony confirms that he declined to pursue that course at that time because Cordish, whom McElroy then believed to still be the principal of 155 Temple Street, "was a friend of mine."
In fact, Cordish was no longer the principal of 155 Temple Street; he had transferred a ninety-nine percent interest to Omni Hotels, retaining only a one percent interest. According to McElroy's deposition testimony, he had long been aware of Omni's involvement in the hotel, having learned at the time of Landmark's sale to 155 Temple Street that "Omni was interested in the hotel" and "was selected to be the operator of the hotel." According to McElroy, "Omni was all over the pages of the publications in Connecticut." Nonetheless, McElroy testified, he "didn't know that Omni was the owner of the hotel until some time in January [1998] probably." McElroy's son, David M. McElroy, obtained this information from business contacts, and reported it to Enright in a telephone conversation on December 19, 1997. McElroy himself, according to his deposition testimony, confirmed the information directly with Cordish on January 14, 1998, the day after a January 13, 1998, strategy session with his Robinson Cole attorneys.
The record does not establish whether this is the precise name of the entity.
McElroy argues that publicity regarding Omni's involvement in the hotel would support an inference that Enright knew of Omni's ownership at the time of his initial suggestion to assert a claim against the hotel purchaser. The argument ignores McElroy's deposition testimony regarding his own lack of knowledge on the same point at that same time, despite his awareness of news media coverage of involvement by Omni. No other evidence indicates any knowledge on the part of Enright, Lynch, or any other Robinson Cole attorneys involved in the representation of McElroy of Omni's ownership interest in the hotel prior to December 19, 1997.
On December 1, 1997, Enright filed a motion in the Bankruptcy Court in Connecticut to reopen the bankruptcy proceeding so as to consider a motion to enjoin the Funds from proceeding with the Hanley action, based on the release of general partners in the confirmed reorganization plan. Enright requested expedited consideration of the motion to reopen, and the court clerk scheduled it for hearing at a motions session in Bridgeport on Tuesday, December 23, 1997. The Funds, through their Chicago attorney, Mark Spadoro, opposed the motion on the ground that the debtor in the bankruptcy action was not a party to the Hanley case, and that McElroy's contention regarding the effect of the release should be addressed to the Federal District Court in Illinois as an affirmative defense in that case.
Spadoro, according to his deposition testimony, "was unable to attend that [the December 23 hearing] without probably doing a — some change in my schedule," although "certainly . . . if Mr. Enright had insisted that we were going forward on that date and the court . . . would not grant any kind of continuance, someone would have been present on behalf of the Funds if I could not be present." He telephoned Enright on Friday, December 19, 1997, and requested agreement to postpone the hearing. Enright, according to both his own deposition testimony and that of Spadoro, refused to agree to a postponement, but suggested that the judge might be willing to handle the matter by telephone, informing Spadoro that "this was a judge who frequently did things by telephone when it was necessary."
According to Enright's deposition testimony, Enright discussed that possibility with McElroy later the same day. McElroy "had misgivings," and "did not want to delay the relief he was seeking." In a further conversation on Monday, December 22, 1997, according to Enright's testimony, he encouraged McElroy "to acquiesce in this telephone conference . . . because I thought it was a good opportunity to discuss with the judge what this was all about so he could see the equities under the underlying case in a setting where he wouldn't be a room full of forty lawyers waiting to have their matters heard. It was the best chance, I thought to educate him about it in a place where we could do it fully without much interruption or distraction. . . . Even a day earlier was better, in my view, than to do it on Tuesday." McElroy, according to Enright, acquiesced, although still reluctant.
McElroy's deposition testimony confirms much of Enright's account of the discussion between them on this subject, but differs somewhat from Enright's version. McElroy does not recall a conversation on December 19th, but does recall one on the 22nd, in which Enright told him that "there was going to be a telephone conference" and that Enright "might be able to get rid of this on the phone." McElroy did not understand the telephone conference to be in substitution for the hearing scheduled for December 23rd; to the contrary, he told Enright "don't let anything interfere with that hearing tomorrow." Enright "implied," according to McElroy's testimony, that "this is all going to be over with. We're going to get rid of this on the phone, and we won't even have to show up for a hearing."
The telephone conference proceeded that same day. Participants were Enright, Spadoro, and the Bankruptcy Court judge. Spadoro and Enright give consistent accounts, in substance as follows. Enright informed the judge that the motion was scheduled for the following morning, that he wanted to go forward, and that Spadoro wanted to postpone it. In response to the judge's inquiries, Enright explained the grounds for the motion, and Spadoro explained the grounds for his opposition, with each presenting his arguments regarding the appropriate forum for determination of whether the release barred the Fund's claim against McElroy. The judge gave the attorneys "the benefit of his thoughts," indicating his view that the District Court in Illinois was the proper forum. He noted that he would not be able to schedule an injunction hearing for "quite sometime," and indicated that he would "mark this matter off and if you have better arguments, you can come back with them." According to Enright's deposition testimony, the judge's use of the term "mark off" meant "he has neither granted it nor denied it and he can reclaim it, which would mean to get a new hearing on it and argue it."
The process of arranging the telephone conference began with a letter from Enright faxed to the judge, indicating that "I am advised by counsel for the respondent . . . that he will be unable to attend that hearing [scheduled for the next morning]. My client does not want to delay the hearing. I write to request a telephonic conference with counsel for the respondent, me and the Court on the phone today, if possible." Enright sent a copy of the letter to Spadoro, but did not send a copy to McElroy.
McElroy asserts a hearsay objection to both participants' testimony regarding the content of the conversation. The testimony is not hearsay, since it is offered to prove what occurred in the conversation, not the truth of any statement made in that conversation. Both witnesses have personal knowledge of the conversation, and are fully available for cross-examination.
Enright reported to McElroy that the motion had been "marked off." According to McElroy's deposition testimony, Enright reported that "no issues were discussed" in the telephone conference, and that "he wasn't going to do anything further in the case as far as presenting it to the Bankruptcy Court." McElroy, according to his testimony, told Enright "that I'm going to find other counsel that will." Enright responded to the effect that McElroy was free to do so.
On January 13, 1998, McElroy, his son, Enright, Lynch, and another Robinson Cole attorney met at Robinson Cole's Hartford office to discuss next steps in the defense of the Hanley case. Among the approaches discussed were the preparation of an affidavit of McElroy's assets, so as to demonstrate to the Funds that any judgment against McElroy would be uncollectible, and the preparation of a demand letter to Omni, as ninety-nine percent owner of the hotel. Enright prepared a draft demand letter the next day, January 14, 1998, and provided the draft to McElroy. Enright's draft was directed to 155 Temple Street, as assignee under the Assignment of Contracts, to the attention of David Cordish. The draft demanded "that assignee indemnify Mr. McElroy," and asserted an intention, absent satisfactory response, to "take appropriate legal action, including but not limited to initiating a third party claim against Assignee in the pending suit or initiating other legal proceedings against Assignee."
On January 20, 1998, according to Enright's deposition testimony, Enright learned from an internal e-mail that Jeffrey Hirsch, a partner in Robinson Cole's Boston office, represented Omni. Enright reported this discovery to Lynch, who undertook to perform another conflicts check, while Enright telephoned Hirsch. Both sources confirmed that Hirsch represented Omni in connection with labor matters related to the hotel in New Haven.
Records of Robinson Cole indicate that the labor matter with respect to the New Haven hotel arose in February of 1997, and that Hirsch had provided "general labor advice" to Omni Hotels beginning in July of 1994.
Enright then spoke by telephone with McElroy. According to Enright, he told McElroy that Robinson Cole could neither represent McElroy in bringing a claim against Omni, nor represent Omni in defending such a claim. Enright testified that he told McElroy "you may want to terminate us as your counsel if you feel that we can't represent you at all anymore based on the fact that we do work for Omni. You may want to hire somebody else to engage with Omni." McElroy, according to Enright's deposition, responded by demanding that Robinson Cole "fire" Omni; Enright refused that demand, explaining that it would not solve the problem, in that the firm would still be barred from representing McElroy in a claim against Omni.
McElroy's deposition testimony confirms the occurrence and the substance of this conversation, but not its timing. McElroy's son testified at his deposition that Enright told him "that issue wasn't a problem because his firm's representation of Omni was out of the Boston office and not his office, which is Hartford," and that Lynch, "was just sort of generally reassuring that it wasn't a problem."
Plaintiff asserts that Enright and Lynch had known earlier of the firm's representation of Omni. To support this assertion, he relies on three items of evidence, as follows: (1) McElroy initially testified at his deposition that the matter was discussed in the same January 13, 1997, meeting in which the preparation of a demand letter to Omni had been discussed. Asked why he though Enright would have undertaken to draft the demand in light of the conflict, McElroy testified that he was "baffled." Later in the deposition, however, McElroy testified that he did not recall whether the conversation about the conflict had occurred at that meeting or at another time. (2) McElroy's son, David M. McElroy, testified at his deposition that he learned of Robinson Cole's representation of Omni "some time around" "mid-December," either from his father or from Enright, and that he discussed the matter by telephone with John Lynch in "early January," before the January 13 meeting. (2) In October of 1998, apparently in the context of a dispute with McElroy regarding Wildman, Harrold's outstanding fees, John Costello wrote to McElroy that "You have known of Mr. Enright's representation of Omni since December 1997." The record does not indicate how Costello would have had any personal knowledge on this point.
After this discussion of the conflict, Attorney Costello at Wildman, Harrold, assumed responsibility for McElroy's potential claim against Omni, while both Robinson Cole and Wildman, Harrold continued to work together on defense of the Hanley case. Robinson Cole did not ask either McElroy or Omni to execute a waiver of any conflict of interest that might exist in the firm's continued representation of both clients. McElroy, according to his deposition testimony, understood that he could have chosen other counsel, but elected at that time to proceed with respect to Omni through Wildman, Harrold.
Enright and Lynch also did not discuss the matter with the firm's ethics partner, although, according to Enright's deposition testimony, they had unsuccessfully attempted to reach him on January 20, immediately after discovering the conflict, but before Enright's conversation with McElroy on the subject.
Enright sent his draft demand letter to Costello, who made minor revisions, reviewed it with McElroy, and then sent it out, with McElroy's approval, dated January 23, 1998, to 155 Temple Street, LLC, to the attention Michael Smith, "Vice President, Legal," at Omni's address in Texas. A series of correspondence between Smith and Costello followed, culminating in a letter from Smith, dated March 2, 1998, rejecting McElroy's demand on the ground that the Funds' claim did not arise from any breach of the collective bargaining agreement that 155 Temple Street had assumed under the Assignment of Contracts.
The parties in the Hanley case filed a joint status report on March 6, 1998. The document, which Enright participated in drafting, indicated that McElroy had been granted an extension of time to answer until March 11, and that "plaintiffs have no objection to a further extension of time while settlement is being considered." The document noted further that McElroy "will assert" both that any claim by the plaintiffs against him is "barred by the operation of a release contained in Landmark Park Plaza's confirmed Chapter 11 plan," and "that the purchasers of the assets in the Chapter 11 proceeding assumed any liability to the Plan and must pay any obligations owed to the Plan." The status report also indicated that "plaintiffs' attorneys are evaluating the financial affairs of defendant McElroy, and based on information submitted by defendant's attorney, plaintiffs' attorneys anticipate that this claim may be considered uncollectible as to defendant McElroy." On that basis, the parties jointly requested "that a discovery schedule not be set at this time."
On the same date as the status report, Enright sent McElroy a letter reporting that Spadoro had requested a copy of the Assignment of Contract. Enright proposed to send him copies of both that document and Omni's letter rejecting McElroy's demand. Enright commented that "I think Spadoro is tying up loose ends here, and I am becoming more optimistic that he will not pursue the suit. Although they have not suggested it yet, they may ask that you assign any rights you may have under the Assignment of Contracts to them as a condition of dismissal." McElroy objected to sending Spadoro a copy of Omni's letter, and Enright then sent Spadoro the Assignment of Contracts only.
After reviewing the financial information provided by McElroy, Spadoro did recommend to the Funds that they abandon their claim against McElroy as uncollectible. The Funds attempted to negotiate a settlement for "nuisance value"; McElroy's response, according to Spadoro's deposition testimony, was to the effect that "he'd rather pay attorneys' fees than pay the Fund." The Funds undertook an independent asset search to verify the financial information provided; that effort delayed until October their action on their attorney's recommendation.
In May of 1998, Enright sent a memorandum to McElroy enclosing a draft answer to the complaint in the Hanley case. Enright's memorandum stated:
As you know, due to conflicts of interest, this firm cannot represent you in any action against the purchaser of the hotel. If you have questions about any claim against the purchaser of the hotel, you should talk to Jack Costello at Wildman, Harrold about it, or engage other counsel of your choosing.
According to Costello's deposition testimony, he and McElroy did discuss whether to assert a third party claim against 155 Temple Street in McElroy's answer in the Hanley case, and decided "that we would defer action . . . until we figured out what if any liability we had to the union and whether or not settlement negotiations would eventually come through and be fruitful." Considerations discussed included prematurity of the potential claim, litigation expense, and the prospect that if McElroy were held liable, he could then pursue his claim against Omni in a more convenient forum, such as Massachusetts or Connecticut.
While the Hanley case proceeded, McElroy pursued his effort to engage another bankruptcy attorney in Connecticut to seek to reopen the bankruptcy case. He eventually engaged Attorney Douglas Skalka, who filed a motion to reopen the case in the Bankruptcy Court, dated September 2, 1998. Spadoro filed an opposition, and a hearing was scheduled, but no hearing or ruling on the motion had occurred by the time the Hanley case reached resolution.
In a post-argument letter, McElroy suggests that a factfinder could infer that this motion, and the scheduling of a hearing on it, had a causal relationship with the Funds' decision to dismiss the action. The Court has reviewed the evidence cited, and concludes that it would not support that inference.
In mid-September, 1998, McElroy engaged his present counsel, Bell, Boyd Lloyd, and dismissed both Robinson Cole and Wildman, Harrold. On September 25, 1998, Bell, Boyd Lloyd filed in the Hanley case a "Motion to Hold Case in Abeyance or in the Alternative to Reopen and Extend Discovery." The motion sought, in substance, to stay the action pending the Bankruptcy Court's ruling on the motion to reopen, and if the bankruptcy were reopened, pending litigation of an adversary proceeding in the Bankruptcy Court to enforce the release in the confirmation plan. The Court in Hanley denied the motion on September 29, 1998.
Soon thereafter, the Funds adopted their counsel's recommendation to abandon their claim, based on McElroy's lack of collectible assets, considered in relation to the anticipated cost of the litigation. The Hanley action concluded with the filing of a stipulation of dismissal, dated October 30, 1998, without prejudice and without costs. McElroy made no payment to the Funds and gave no assignment of any claim or other consideration for the dismissal.
From the time McElroy engaged Bell, Boyd Lloyd until the conclusion of the Hanley case, that firm charged McElroy, and McElroy paid, some thirty-six thousand dollars in fees and expenses. Robinson Cole charged McElroy a total of some sixteen thousand dollars for services in 1998. McElroy paid Wildman, Harrold some eight thousand dollars for services in 1998, leaving an additional unpaid balance in an amount that does not appear in the record.
The billing records submitted leave some uncertainty as to whether this total includes some charges carried over from 1997, and whether it has been paid.
On September 29, 1999, McElroy filed this action against Robinson Cole. His complaint asserts four counts: legal malpractice (count I); violation of G.L.c. 93A (count II); intentional misrepresentation (count III); and breach of fiduciary duty (count IV). In support of these claims, plaintiff offers, in addition to the evidence summarized supra, an affidavit of Arnold R. Rosenfeld setting forth his opinions regarding the conduct of the defendant, based on his extensive expertise in the ethical responsibilities of members of the Massachusetts bar. In substance, Attorney Rosenfeld opines that Robinson Cole's concurrent representation of McElroy and Omni "was a conflict of interest pursuant to the Massachusetts Rules of Professional Conduct," and that "as a result of this conflict of interest, Robinson Cole breached its ethical duties to its client, McElroy, resulting in a loss to him of at least the additional legal fees he incurred as a result of the conflict of interest." Rosenfeld explains in detail the basis for his conclusion regarding the conflict of interest, but does not identify any basis for his conclusion that the conflict resulted in any additional legal fees or any other loss.
This count hedges the distinction between tort and contract, asserting that the defendant acted "negligently, recklessly, unethically and in willful disregard of its duty," and that "[i]n the alternative, defendant breached its contract to represent plaintiff in legal matters."
Defendant has moved to strike the Rosenfeld affidavit. For the reasons that will appear, no ruling on that motion is necessary.
DISCUSSION
This Court grants summary judgment where there are no genuine issues of material fact and where the record entitles the moving party to judgment as a matter of law. See Mass.R.Civ.P. 56 (c); Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983); Community National Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bears the burden of establishing that there is no issue of material fact on every relevant issue. See Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). A party moving for summary judgment who does not bear the burden of proof at trial may demonstrate the absence of a genuine dispute of material fact for trial either by submitting affirmative evidence negating an essential element of the non-moving party's case, or by showing that the non-moving party has no reasonable expectation of proving an essential element of its case at trial. Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991).
Once the moving party establishes the absence of a triable issue by either of these methods, the party opposing the motion must respond with evidence of specific facts establishing the existence of a genuine dispute. Pederson v. Time, 404 Mass. 14, 17 (1989). The opposing party may not rest on the allegations of his pleadings, nor may he rely on "bare assertions and conclusions regarding [his own] understandings, beliefs, and assumptions." Key Capital Corp. v. M S Liquidating Corp., 27 Mass. App. Ct. 721, 728 (1989). Mere contradictions of factual allegations, without evidentiary support, are insufficient to raise questions of material fact sufficient to defeat a summary judgment motion. Madsen v. Erwin, 395 Mass. 715, 721 (1985), quoting Olympic Junior, Inc. v. David Crystal, Inc., 463 F.2d 1141, 1146 (3rd Cir. 1972) (noting that conclusory statements, denials, and allegations are insufficient to raise material issues of fact). His obligation, rather, is to demonstrate the existence of admissible evidence sufficient to meet his burden of proof on the issues raised by the motion.
1. The Choice of Law Issue.
Before addressing the particular claims raised, it is necessary to determine which state's law will govern the substantive issues in this case. The choice of law issue requires a functional analysis, focusing on the question of which state has the most significant relationship to the transactions and the parties involved. See Bushkin Associates, Inc. v. Raytheon Co., 393 Mass. 622, 628-636 (1985); see also Harrison v. NetCentric Corporation, 433 Mass. 465, 470 (2001), and cases cited. Here, although the plaintiff resides in Massachusetts and conducted some communications with the defendant from here, and the defendant has an office here, the functional significance of these facts pales upon consideration of the matter that is at the heart of the dispute: that is, the performance of members of the Connecticut bar in representing a client in litigation arising from the operation of a Connecticut business, including appearance in a court in Connecticut. It is apparent that Connecticut has the greater interest in this matter. Accordingly, the Court will apply Connecticut law.
2. The Legal Malpractice Claim.
To meet his burden of proof on the legal malpractice claim under Connecticut law, the plaintiff must present evidence from which a jury could find "the failure of one rendering professional services to exercise that degree of skill and learning commonly applied under all the circumstances in the community by the average prudent reputable member of the profession with the result of injury, loss, or damage to the recipient of those services. . . . Generally, a plaintiff in a legal malpractice action must establish the standard of professional skill or care through expert testimony." Vanacore v. Kennedy, 86 F. Supp.2d 42, 48 (D.Conn. 1998) (internal citations omitted). Evidence of a violation of the Rules of Professional Conduct does not meet this burden, and is insufficient to withstand a motion for summary judgment. See Standish v. Sotavento Corporation, 58 Conn. App. 789, 796, (2000). See also Fishman v. Brooks, 396 Mass. 643, 646 (1986). Causation of harm is also a matter generally requiring expert testimony. See Solomon v. Levett, 30 Conn. App. 125, 129 (1993) ; Atlas Tack Corp. v. Donabed, 47 Mass. App. Ct. 221, 226 (1999). See also McCann v. Davis, Malm D'Agostine, 423 Mass. 558, 559-560 (1996) (no recovery where no evidence that negligence caused harm).
Here, the only expert testimony the plaintiff offers is that of Mr. Rosenfeld, to the effect that the defendants' conduct was in violation of the Massachusetts Rules of Professional Responsibility, and that that violation caused, in some unexplained way, "additional legal fees." If such testimony were admissible to prove the asserted violation, it would not suffice to meet the plaintiff's burden of proof. Having offered no evidence to show the applicable standard of professional skill and care under the circumstances, any breach of that standard, or any injury resulting from any such breach, the plaintiff has failed to demonstrate any reasonable expectation that he would be able to meet his burden of proof at trial on the elements of the claim of legal malpractice. Accordingly, the defendant's motion for summary judgment must be allowed as to Count I.
Massachusetts law bars such opinion testimony. See Fishman v. Brooks, 396 Mass. 643, 650 (1986). The parties have not called the Court's attention to any authority on this point under Connecticut law. If Connecticut permits such testimony, its relevance would depend on whether the Connecticut Rules of Professional Responsibility are sufficiently similar to those of Massachusetts that a fact-finder could infer violation of the former from evidence of violation of the latter. The parties appear to agree that the rules are at least substantially similar, both being based on the Model Rules of Professional Responsibility of the American Bar Association.
3. The Intentional Misrepresentation Claim.
To prevail on his claim for intentional misrepresentation, the plaintiff would have to present evidence to prove each of the following: "(1) a false representation was made as a statement of fact; (2) the statement was untrue and known to be so by its maker; (3) the statement was made with the intent of inducing reliance thereon; and (4) the other party relied on the statement to his detriment." Billington v. Billington, 220 Conn. 212, 217 (1991). See Danca v. Taunton Savings Bank, 385 Mass. 1, 8 (1982) (stating plaintiff must show defendant "made a false representation of material fact with knowledge of its falsity for the purpose of inducing the plaintiff to act thereon, and that the plaintiff relied upon the representation as true and acted upon it to his damage"); see also McEvoy Travel Bureau, Inc. v. Norton Co., 408 Mass. 704, 709 (1990); Macoviak v. Chase Home Mortgage Corp. 40 Mass. App. Ct. 755, 760 (1996). The plaintiff's arguments leave considerable uncertainty as to the identity of the false statements of fact he contends the defendant made, on which he claims to have relied. Even if those elements were proven, however, this claim, like the legal malpractice claim, would fail for lack of any evidence that such reliance was detrimental to him.
As discussed supra with respect to the causation element of the malpractice claim, the record is devoid of any evidence from which a fact-finder could find that the plaintiff suffered any harm as a result of his reliance on any falsehood made by the defendant. Mr. Rosenfeld's reference to "additional legal fees . . . incurred as a result of the conflict of interest" does not fill this gap, in the absence of any evidence to indicate that the plaintiff incurred more legal fees to defend the Hanley case than he would have incurred in the absence of any claimed misrepresentation. Mr. Rosenfeld does not even suggest any such harm resulted from any misrepresentation. Nor could his conclusion on this point support a finding of causation even as to the asserted conflict of interest, since it lacks any identified basis in the underlying facts.
The closest the plaintiff comes to identifying the claimed harm is his argument that false statements on the part of the defendant regarding whether it had a conflict of interest or not caused the plaintiff to incur "increased legal fees paid to substitute counsel who did not have a conflict of interest." His theory seems to be that claimed misrepresentations regarding the conflict somehow account for the charges he incurred for fees and expenses of some or all of his various counsel. The theory is unsupported by any evidence, and defies logic. To establish causation with respect to legal fees, the plaintiff would have to show that, absent the claimed misconduct, he would have been able to defend the underlying litigation at lower cost, with an equally or more favorable result. Nothing in the record so indicates. Certainly, if the defendant had withdrawn from all representation of the plaintiff in early 1998, or had declined to represent him at all when he first presented himself in 1997, he would not have paid the fees he did pay for its services. But he inevitably would have paid other counsel to defend him, and nothing in the record in any way suggests that other counsel would have cost less. Nor does the record support the plaintiff's apparent contention that misconduct of the defendant necessitated his incurring the fees charged him by his present counsel. Indeed, the record offers no indication that the services for which he paid those fees were necessary at all, or contributed in any way to the result ultimately obtained in the underlying action. The defendant is entitled to judgment as a matter of law on Count III.
3. The Breach of Fiduciary Duty Claim.
To recover on a claim of breach of fiduciary duty, the plaintiff must prove, in addition to the existence and breach of a fiduciary relationship, harm caused by the breach. See Lux v. Environmental Warranty, 59 Conn. App. 26, 41-43 (2000) (stating defendant must provide evidence of harm arising from alleged breach of fiduciary duty); 2 Mallen Smith, Legal Malpractice, § 14.2, at 536-540 (5th ed. 2000). The relationship between attorney and client is one of trust and confidence, and gives rise to fiduciary duties of the attorney toward the client. See Vanacore v. Kennedy, 86 F. Supp.2d at 50 and cases cited; Andrews v. Gorby, 237 Conn. 12, 20 (1996). Conduct by an attorney in derogation of the client's interest breaches the attorney's fiduciary duty. See Biller Associates v. Peterkin, 58 Conn. App. 8, 18 (2000). But not every violation of an ethical rule is a breach of fiduciary duty. See Standish v. Sotavento Corporation, 58 Conn. App. at 797; Flexo Converters USA, Inc. v. Adelman, 2000 WL 1868232, § 3-5 (Conn.Sup.er.), and cases cited. Nor does a breach of fiduciary duty give rise to a cause of action for damages in the absence of proof of resulting harm. See id. at § 5; See also Meehan v. Shaughnessy, 404 Mass. 419, 439 (1989) (recovery for breach of fiduciary duty depends on "causal connection between [plaintiff's] claimed losses and the breach of duty"); Van Brode Group, Inc. v. Bowditch Dewey, 36 Mass. App. Ct.509, 517 (1994) ("It is fundamental that a tort action cannot be sustained without proof of damages, whether the action is framed as legal malpractice . . . or breach of fiduciary duty").
The plaintiff argues that the defendant breached its fiduciary duty to the plaintiff by representing him while simultaneously representing Omni, whose interests were adverse to his. The resulting harm, he asserts, was "damage to the essence of the attorney-client relationship," and "the need to extricate himself from a situation in which he was represented by counsel with divided loyalties." This argument collapses the elements of breach and causation, essentially eliminating the latter. The case law provides no support for the theory, but rather affirms the necessity of proving that the breach caused actual harm.
The plaintiff argues also that as a result of the claimed conflict he "was precluded from making a claim against Omni to shift liability for the ERISA withdrawal liability and avoid months of litigation." The suggestion seems to be that different counsel would have brought suit against Omni, or asserted a third party claim against it in the Hanley case, and that such action would have brought about an earlier end to the Hanley case, or to McElroy's role in it. The evidence does not support any aspect of this theory. No expert testimony indicates that such action would have been advisable as a strategic matter, nor does any evidence indicate that McElroy did or would have decided to undertake it, with its attendant litigation costs, or that doing so would have caused the Funds to drop their claim against him sooner than they did.
McElroy argues also that he was harmed in that he "was required to obtain and pay for the services of substitute counsel who did not have a conflict of interest." This argument fails here for the same reason already discussed with respect to the other claims; McElroy offers no evidence that his defense in the Hanley cause would have cost him less in the absence of any conflict of interest that Robinson Cole may have had.
McElroy also suggests that he was harmed by certain actions taken by Robinson Cole that he contends were not in his interest, and were motivated by its conflicting loyalty to Omni. Chief among these claimed actions is Enright's December 22, 1997, telephone conference with the Bankruptcy Court judge. Even if the record could fairly be construed to support McElroy's theory of Enright's motivation for the call, his conclusion would not follow. Although the outcome of the conference call was certainly unfavorable, nothing in the evidence provides any basis for a finding that Enright's participation in it was contrary to McElroy's interest, as compared with the alternatives available at the time, or that any of those alternatives would have produced a result more favorable to McElroy.
McElroy places heavy emphasis on his contention that Enright's conduct with respect to the telephone conference was contrary to his instructions. His implicit premise appears to be that a client is entitled to dictate an attorney's decision whether to accommodate opposing counsel on a matter of scheduling, even in the absence of an emergency. He cites no authority for that premise, and the Court does not accept it. See, e.g., Boston Bar Association Civil Litigation Standards, Part B(1) (1995) ("First requests for reasonable extensions of time to respond to litigation deadlines . . . should ordinarily be granted as a matter of courtesy unless time is of the essence").
McElroy points also to Robinson Cole's advice that Wildman, Harrold could represent him with respect to Omni, even though Robinson Cole could not. He asserts, relying on Mr. Rosenfeld's opinion, that that advice was incorrect as a matter of law, because Robinson Cole's conflict was imputed to Wildman, Harrold. Mr. Rosenfeld's opinion in this regard is at least in considerable tension with pertinent federal authority. See American Can Company v. Citrus Feed Co., 436 F.2d 1125, 1129-1130 (5th Cir. 1971) ; Baybrook Homes, Inc. v. Banyan Construction Development, Inc., 991 F. Supp. 1440, 144 (M.D. Fl. 1997). In any event, even if Robinson Cole's advice on this point was erroneous, that conclusion would not supply the missing element of harm, absent evidence that different representation would likely have led to a better outcome, or to the same outcome achieved sooner or at less cost. No such evidence appears.
Some of McElroy's arguments seem to suggest a contention that Robinson Cole would have vicarious liability for conduct of Wildman, Harrold. He offers no authority for any such theory, and the Court is aware of none.
In the same vein, McElroy characterizes as an act of disloyalty Enright's proposal to send to the Funds' counsel a copy of Omni's letter denying McElroy's claim. The evidence, however, indicates that Enright did not send the letter, upon McElroy's objection. Whatever inferences might be suggested as to motivation for the proposal, it cannot have caused harm, since it was never acted upon.
As an alternative theory, the plaintiff argues that Robinson Cole should be required to disgorge the legal fees he paid to it as a remedy for its having conducted simultaneous representation of clients with adverse interests. He relies on federal court decisions that, applying the law of jurisdictions other than Connecticut, have imposed such a remedy for conflicts of interest not shown to have caused actual harm. See Hendry v. Pelland, 73 F.3d 397, 402 (D.C. Cir. 1996), and cases cited; Silbinger v. Prudence Bonds Corporation, 180 F.2d 917, 920-921 (2d Cir. 1950); Condren v. Grace, 783 F. Supp. 178, 185-187 (S.D.N.Y. 1992). Each of these cases involved a single attorney representing multiple clients with differing interests in the same matter, rather than, as here, an imputed conflict arising from representation of adverse parties in separate matters by different lawyers in a large firm. The decisions in these cases speak of the remedy as a forfeiture, or penalty, for the attorney's violation of the duty of loyalty to the client. A related doctrine, recognized in Massachusetts law, imposes partial forfeiture of compensation as a remedy for an employee's breach of loyalty to an employer, in the absence of evidence of actual harm, but only to the extent of the reduction in the value of the services rendered. See Meehan v. Shaughnessy, 404 Mass. 419, 440 (1989) ("a fiduciary may be required "to repay only that portion of his compensation, if any, that was in excess of the worth of his services to his employer"), quoting Chelsea Industries v. Gaffney, 389 Mass. 1, 326-327 (1983).
The Court in Hendry observed that "[b]ecause a breach of the duty of loyalty diminishes the value of the attorney's representation as a matter of law, some degree of forfeiture is thus appropriate without further proof of injury." 73 F.3d 397, 402 (D.C. Cir. 1996). The implication appears to be that the disgorgement ordered might be some or all of the fees paid, depending on an evaluation of the seriousness of the breach. In Silberger, the Court ordered partial forfeiture of fees. 180 F.2d 917, 923 (2d Cir. 1950).
McElroy identifies no Connecticut decision imposing such a remedy for an attorney's conflict of interest. The Connecticut decisions, cited supra, regarding legal malpractice claims indicate that Connecticut would not recognize such a claim based solely on an attorney's or law firm's violation of the Rules of Professional Conduct. Under Connecticut law, "[v]iolation of a Rule [of the Rules of Professional Conduct] should not give rise to a cause of action nor should it create any presumption that a legal duty has been breached. The Rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability." Standish v. Sotavento Corporation, 58 Conn. App. at 797, quoting Mazzochi v. Beck, 204 Conn. 490, 501 n. 8 (1987). For that reason, the Appellate Court of Connecticut held in Standish v. Sotavento that the lower court had "properly determined that the issue of whether [the attorney] had violated the Rules of Professional Conduct is a matter properly addressed to the statewide grievance committee." Standish v. Sotavento, 58 Conn. App. at 796. See also McCann v. Davis, Malm D'Agostine, 423 Mass. at 559-560 (no cause of action for dual representation, in violation of disciplinary rule, where no harm caused).
The evidence offered in the present record indicates, at most, a breach of the rule prohibiting attorneys in the same law firm from representing conflicting interests. Despite McElroy's arguments, the evidence offered does not support his various contentions that the defendant acted in actual derogation of his interests. Thus, on the facts as presented in this record, an order of disgorgement of fees, as McElroy urges, would effectively grant McElroy a civil remedy for the defendant's claimed breach of the rule regarding representation of conflicting interests. That is exactly what Connecticut law does not permit. To the contrary, Connecticut reserves such matters to the administrative body responsible for attorney discipline. Accordingly, the disgorgement theory must be rejected, and the defendant is entitled to judgment as a matter of law on Count IV.
4. The c. 93A Claim.
Count II of the plaintiff's complaint, alleging violation of G.L.c. 93A, depends on the substantive claims alleged in the other counts of the complaint, particularly on the allegations of misrepresentation and breach of fiduciary duty. As the evidence fails to support those claims, it fails also to support the claim of breach of c. 93A, and the defendant is entitled to judgment as a matter of law on Count II. See McCann v. Davis, Malm D'Agostine, 423 Mass. at 560-561.
5. The Motions to Strike.
In evaluating the sufficiency of the evidence offered by the plaintiff to meet his burden of proof, the Court has considered the opinions set forth in the affidavit of Attorney Rosenfeld, assuming, without deciding, that such evidence would be admissible at trial. As indicated supra, the Court has concluded that the evidence offered, including Mr. Rosenfeld's opinion, is not sufficient to meet the plaintiff's burden of proof on any of the claims asserted, so that the defendant is entitled to judgment as a matter of law on all counts of the complaint. Accordingly, no ruling is necessary on the defendant's motion to strike the affidavit of Attorney Rosenfeld. The Court has had no occasion to consider the affidavit of John Yavis, offered by the defendant, and accordingly does not address the plaintiff's motion to exclude his opinions.
CONCLUSION AND ORDER
For the reasons stated herein, the Plaintiff's Motion for Partial Summary Judgment is DENIED , and the Defendant Robinson Cole LLP's Motion for Summary Judgment is ALLOWED . The Court takes no action on the Plaintiff's Motion to Exclude Expert Testimony of John C. Yavis, Jr., and on the Defendant's Motion to Strike Affidavit of Arnold R. Rosenfeld and to Exclude Him from Offering Expert Testimony in This Matter.
_______________________ Judith Fabricant Justice of the Superior Court
October, 2001