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Florida 2nd DCA disqualifies bank’s law firm in foreclosure related action since it also represented the defendant’s former lawyer in related malpractice claim

Hello everyone and welcome to this JACPA Ethics Alert.  This Ethics Alert will discuss the recent (September 21, 2011) Second District Court of Appeal opinion which held that a law firm which represents a defendant’s former lawyer in a related legal malpractice litigation must be disqualified.  The case is: Frye v. Ironstone Bank, f/k/a Atlantic States Bank, 69 So.3d 1046 (Fla. 2d DCA 2011).

In Frye, the bank filed a foreclosure action against an LLC which later filed bankruptcy.  After the property was sold, there was a deficiency and the bank proceeded against Mr. Frye for payment of the deficiency pursuant to his personal guarantees.  Frye was initially represented by a lawyer in a south Florida law firm.

While the litigation was pending, Frye terminated the law firm’s services and obtained new counsel.  He also initiated a legal malpractice action against the lawyer and the firm related to the representation in the foreclosure/deficiency proceedings and other matters involving loans and personal guaranties.  The malpractice action alleged that the lawyer and the firm obtained “confidences of (Frye) during their representation, including, without limitation, information gleaned from performing estate and asset planning (for Frye) giving (the lawyer and law firm) intimate knowledge of (Frye’s) financial circumstances.”

Another law firm (Henderson Franklin) was retained by the bank for representation in the deficiency proceedings.  The law firm was also retained to represent Frye’s previous lawyer and law firm for representation in the legal malpractice action.  Frye filed a motion to disqualify the Henderson Franklin law firm.

After a hearing, the trial court judge observed on the record that “the basic problem with (Mr. Frye’s) position is there is no attorney/client relationship between Mr. Frye and Henderson Franklin. Therefore, there is no irrefutable presumption because you’ve not established an attorney/client relationship.”

The judge also stated that Frye failed to meet his burden of establishing “the procedural and substantive requirements for disqualification because, number one, Frye and Henderson Franklin never shared an attorney/client relationship, and, number two, there has been no evidentiary showing that the matter in which Henderson Franklin is representing … (the former lawyer and firm) … are the same or substantially related matters.” The written order denying the motion to disqualify made similar findings and conclusions and cited to Kaplan v. Divosta Homes, L.P., 20 So.3d 459 (Fla. 2d DCA 2009).  After the judge issued a written order, Frye filed a Petition for Writ of Certiorari requesting that the order be reversed and that the firm be disqualified.

The 2nd DCA opinion reviewed and discussed the case law, including State Farm Mut. Auto. Ins. Co. v. K.A.W., 575 So.2d 630 (Fla.1991), and noted that the existence of the attorney/client relationship between Frye and the lawyer/firm created an irrefutable presumption that confidential information was disclosed during the representation of Frye in the bank’s action on the guaranty and in estate and asset planning matters.

Further, under Florida Bar Rule 4-1.6(a), a lawyer is prohibited from revealing information relating to the representation without the former client’s informed consent; however, because Frye sued the lawyer/firm in connection with that representation, under Bar Rule 4-1.6(c)(4) and (e), the lawyer would be permitted to reveal confidential information and communications to the extent necessary to defend the malpractice action.

As a consequence, by representing the former lawyer/firm in the legal malpractice litigation, Henderson Franklin gained an informational advantage. The opinion cited the case of Adelman v. Adelman, 561 So.2d 671 (Fla. 3d DCA 1990).  In that case, the lawyer was disqualified from representing a party in a marriage dissolution action when the lawyer also represented the opposing party’s ex-lawyer in a legal malpractice action brought by the opposing party arising out of the same dissolution action.

The opinion also cited to Castellano v. Winthrop, 27 So.3d 134 (Fla. 5th DCA 2010) (disqualification is appropriate where a party obtains an unfair informational or tactical advantage through the disclosure of privileged information to that party’s counsel); and Greig v. Macy’s Ne., Inc., 1 F.Supp.2d 397 (D.N.J.1998) (requiring disqualification of counsel under facts similar to those in Adelman and in this case).

Based on the above analysis and case law, the court found that the lawyer and law firm should have been disqualified, granted certiorari, and remanded the case to the trial court to render an order of disqualification.

Bottom line:  This appellate opinion (and underlying case) illustrates the somewhat complicated and nuanced analysis and application of conflict of interest issues related to former clients.

…be careful out there!

As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding these or any other ethics, risk management, or other issues, please do not hesitate to contact me.





My law firm focuses on review, analysis, and interpretation of the Rules Regulating The Florida Bar, advice and representation of lawyers in Bar disciplinary matters, defense of applicants for admission to The Florida Bar before the Board of Bar Examiners, defense of all Florida licensed professionals in discipline and admission matters before all state agencies and boards, expert ethics opinions, and practice management for lawyers and law firms.  If there is a lawyer or other Florida professional license involved, I can defend the complaint or help you get your license.

If you have any questions or comments, please call me at (727) 799-1688 or e-mail me at [email protected].  You can find my law firm on the web at In addition to handling individual cases, matters, problems and issues for my clients, I also am on retainer to provide ethics advice to numerous lawyers and law firms throughout the state of Florida.  I also provide legal assistance and advice to numerous individuals and non-legal entities to help insure compliance with the law and rules related to UPL and other issues.

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