perhaps the most interesting case on the docket this morning that's interested as we are in hospital reimbursement this is an equity case it arises because my client spent some seventeen million dollars restoring the second tallest building in sioux city iowa historic art deco building known as the bedrock jackson building investing more than ten million dollars of their own money it was a tax credit investment and it was supposed to yield approximately eight million dollars in federal and state tax credits to defer the cost of the restoration what is the present status of the bedroom building the value of building has been completely restored it is ready to be rented the bank will and the trustee and the receiver rather will not let us read it although we have produced tenants still there can't be any tax credit money received or if it is what has been received where it stands now is that the building was completed the restoration was completed over the summer the federal tax credits were applied for and august and were started five by the national park service in september and some three and a half million dollars in federal tax credits have now been credited against the bank's debt and we maintain there's another half a million that's available as soon as we can get the records together i'm sorry to interrupt you but no no that's that's fine you need you need to know that because what that leaves then is a balance owed to the bank of approximately two million dollars significance of this is that the bank has scheduled a foreclosure sale of that property eight days from now on the twenty second of november and as part of this i wish to renew my request that this court granted a stay to allow this court time to decide the issues in th dollars i mean we spent seventeen now eighteen million dollars restoring it and the bank over the past year has spent another two million so there is substantial equity in that property and from the ranch that we have received we have some tenants in their short time and the tenant we offered the building a fully ran it would yield some two million dollars a year and in free cash there is there is no danger here that the bank is not going to be paid that's not why we're here we're here because the bank wants the building they want the building for free and that's why we're here and why we're really here is that instead of hearing ire motion to disqualify with the law firm that represents the bank judge strand denied our motion to hear that first and in fact the bank of the bank against us and his partner mr norman jones was the principal witness against my client so once we have the hearing my client is forced to face his own lawyer across the court room not only as an adversary stationary absolutely yeah if you look at the language of that letter it comes down to what does the word or me what do you have to do is or are and what will you feel look at the at the at the most generous or is ambiguous what does that mean it could mean either one it could mean both but if you look at the language of the letter then they usually mean one of the other so that would be this first that would be the first standard meeting but it can also mean both but if you look at the letter as a whole what the letter says saying i'm going out to dinner with you or him i think it means you go to one of the other room tell me why i'm wrong i don't want to go with the the him or her means i'm not going to go with  one it could mean it could be either way but if you look at if you look at the letter as a whole what the letter says to my client is if went through ups reps starts to represent the bank in litigation against you you can ask that they withdraw you can object that there is a conflict and then the letter says they shall withdraw because my client when he before he signed that letter wrote them and said you have to change may withdraw to shall withdraw because that will give me the comfort that i need what comfort could he possibly half in mind except the comfort that he wouldn't be sued by his own lawyer so when you look at the letter as a whole you look at the parole evidence it's clear initiate this foreclosure the first thing that my client did was write to norman jones the partner who had written the letter and who did but he'd been dealing with candidly all along he never he never was told that went that did not represent him the first indication he had that went through didn't represent him was when they filed this lawsuit because he was working cooperatively with them i thought there was a break in time that the attorney didn't deal with the client is that true or false well their position is that they didn't actually not build my client after the loan closed they billed my client for all the work they did for the bank on the closing he paid for all of that after that they can went to continue to be involved in the transaction because the loan had to he said in november of two thousand and seventeen norm jones came to him and said hey look let's get together and let's kick chevron out of this deal and put the bank and i will we'll go down the road together on this and get this taken care of my client waited for them to make an offer they never made an offer the loan went in default in december and in april they filed for receivership we submit that a lawyer can't sue his own client there's no question but what went through was my client's lawyer now went there because oh no we did represent you for five years so then it's molly holly oncle there's no such rule there's no five year rule once a client always a client when it's on the same transaction well i don't know that there's a lot of lot of truth to that obviously and you know if there's not a waiver that's the absolute truth the question really becomes what if the judge got the disqualification part of it right how does that render the rest of the action in error well i think the bower's case addresses that directly where you had a situation where there was a disqualification of the law firm and the district court went ahead and granted a summary judgment and the six circuit said flat out you can't do that because nobody can predict what would happen once the lawyer violates the sacred bond of attorney client privilege you don't know what's going to happen you can't predict and you have to absolutely prevent that and the fact that judge grand went ahead and went straight to the merits without ruling on the disqualification is there and plus he he he if he applied the wrong standard he says you know you have to my client has to prove that there was a conflict of interest no no that's not the rule under the dane food case here and on the davenport case this circuit clearly says once you establish the attorney client relationship there is an air refutable presumption that confidential information is used and that it has to be disqualified the law firm has to be disqualified the burden is on the law firm not on the client let me address a procedural question here too that i want to i don't think is emphasized sufficiently in the in the pleadings once the receiver was appointed all of the right title and interest of my clients was given to the receiver i had no standing at that point to participate in that litigation i had no money it was all the receiver had all the money did you try to intervene because you if we in any way interfere with what the receiver is doing we might well be held in contempt you know already ruled on and we had to stay out of the wagon and he also we had no money so basically we were on the situation where we had no standing no money no records and our own lawyer was suing us we bring this appeal we had to wait until after there was a final appealable order and that's why we're here and i will reserve the balance of thank you thank you  failed to respond to the motion for summary judgment parents had a full and fair opportunity to participate and respond on the merits of this case but they chose not to instead they chose to default and ignore a motion for summary judgment on that basis alone c r b t was entitled to the entry of judgment in its favor and this court can affirm on that basis second even though the district court would have been well within its rights and the case law to grant default judgement it chose not to instead it chose to delve into the record and evaluate whether c r b t had met its obligations to present admissible evidence on all of the elements necessary to establish its claims of determining that c or bt had done so the district court entered summary judgment third this court can affirm because winter when weinstein does not have a disqualifying conflict the waiver letter the passage of time both preclude this court's from coming to a conclusion that the district court erred in ruling that there was no disqualifying conflict with mr patterson did not raise the conflict of interest in response to the motion for summary judgment is presented all right in response to the join the necessary parties chevron had been denied in the court had pointed are a receiver those orders were issued in early november late december late october early november and so the defendants time to answer the complaint was november sixteenth the defendant opted not to answer the complaint and so in early december c r b t moved for summary judgment no responsive pleading was filed in connection with that motion and in early january january eleventh the district court denied the motion for default and instead opted to determine in its words whether c or bt is the moving party has met its burden of showing that summary judgment is appropriate it found that that was the case and entered summary judgment it's after that that appellant's have filed their rule sixty motion criticizing the district court and its determinations of the amounts that were under the no see so you do acknowledge that the disqualification was not resolved until after the receiver hearing was held and the receiver was appointed right that's correct i as a matter of fact ok judgment the court granted the motion to dismiss the gender discrimination claim and then declined to adjudicate the state law claims it therefore dismissed the complaint on summary judgment and then turned to this qualification issue and said me to deny that motion is moot but that's very very different from what happened in this case first the motion to disqualify was evaluated on the merits it wasn't tonight is moot but it was considered and the district court found that there was not a disqualifying conflict second the motion for summary judgment was considered after the motion to disqualify was denied your your honor points to the fact that the motion for appointment of a receiver was determined first but that's interim relief it's not a dispositive motion it's interim relief in the receiver was a point well it's dispositive as to who the receiver is you agree with me on that right i would agree with you on that but i think that that's that's that's using the word dispositive different context ok where do you get to decide i know you dispositive motion versus the timing of the motion i believe that that that that's what bauer says is that ballmer is looks at the fact that the motion for summary judgment rendered which was a determining of motion on the merits rendered the motion to disqualify moot and you get that from several of the circuits d c to has it right for saying does the word dispositive motion i'm not aware of the case that you're referring to of standing at the podium grimes but doesn't matter have just case you did that ring the bell with you but the point is is the record of the receiver here and in the in the appellate record where we can get it or the district court or somewhere  sought only to obtain a portion of the hearing where mr jones was testifying on direct examination they chose not to obtain any other portions of the hearing it's well this jones is testimony enough to show that there's a conflict well i think it's is mr jones's testimony enough to show that there was a conflict no pay why well mr jones this testimony demonstrates that approximately a year later we were asked to represent c r v t and we at obtain the conflict waiver letter at that time and so it's not true that there was no conflict the claim is that the conflict was waived i know why is that wrong i mean you've got exactly the same product project you have a good salary the same party that you represented that you're about to sue and you are dealing with facts that you have awareness of both from following your representation and before your representation and in any world where i've lived worked in and i'll just tell you i've spent over thirty years of my life on attorneys standards committees and judiciary conduct committees and i've drafted rules on conflict and i'm interpreter you know dozens and dozens of rules and conflicts and i'm having a hard time with the idea that there is no conflict now i get the idea that th conflict was way but that's a totally different animal now you tell me why if you've got knowledge and a party that you used to represent and then you sue him that that's not a conflict because i'm very curious in all  what you're doing i'm not only in place the man takes with you but the reality of it is that is there a conflict when zero client oh arising out of a project that you represented them on relating a fact that you became aware of in part at least in your prior representation is that a conflict yes yes and that's exactly the case here is it not know why not so the two engagements the engagement that winthrop had for maaco and the engagement that winthro that to determine if that the parties determined that they were unrelated subjects but let's dig a little deeper and talk about what the topics were in connection with the work that winthrop and weinstein did for c r bt that was first and foremost the subject about what letter the work that it did was it reviewed analyzed and assisted in drafting bond financing documents that permitted a six million dollar financing facility to be provided to make go in the other repellents that work is distinct and different then providing work related to the tax credits that was done a year prior from a co now what happened is that given the fact that there is what i would say is not a substantial relationship between the two matters but there is at least some real certainly a factual nexus there is a and said we would like to obtain a conflict waiver letter so that we can do this prospect of work and that's that's how judge grant analyzed this and he looked at and he said well what is that conflict waiver letter say exactly and what is wrong what happens that what if he's wrong well we think that if yes wrong that the court should never the last affirm the entry of the order for judgment because the defendants defaulted and failed to respond to the motion for summary judgment and and so that's how all a matter of practice claim against the firm at that point right because any lawyer would have raised the same theories the same  legal claims and defenses and therefore the results would have been the same that there's nothing magical about your representation and the result would have been the same and so whatever else may exist that's a claim as between your former client your firm right correct and we think that th was wrong on the disqualification we're going to allow the motion for summary judgment to stand there is a question then as to what the court does with winthrop and weinstein's continued involvement in the case because there is a foreclosure that still scheduled there are post judgment things that need to take place and and we certainly would suggest to a would would argue that the requested relief that of dismissal of the case with prejudiced is issue we think that the appropriate the ruling from this court or ultimate ruling would be to disqualify winthrop from continued forward representation that's not what  on the a b a code and the canons of professional conduct in this concept of a presumption of imputation of the conflict that those rules were replaced in iowa in two thousand  analysis that really timing still is everything in this case right as long as the judge makes a conclusion that you are not disqualified and then they move forward with the k s it's a very different case then from finding  that here's my summary judgment i don't need to get to the disqualification because what the judge effectively found is you were not disqualified and then reached the merits of the case and in the analysis of what do you do in that situation you're arguing that that's a very different result  i think that's correct your honor and that of that that bridges into the kind of standing comments that opposing counsel made at the end of his remarks the the and we get this issue frequently in connection with foreclosure issues the receivership order is very specifically constructed in connection with the den affine the type of receiver that's appointed in the type of receiver that's appointed in this case is a receiver over specific assets it is not a receiver over the entity and so it is possible to craft a receiver over an entity and that's typically done in your you know corporate divorce type proceedings that wasn't done here and so mr to bowl to the president of these entities or manager of these entities still had authority to act on behalf of the entities and their choice their deliberate choice not to act in response to the motion for summary judgment but to file a rule sixty motion to file a motion for a stay pending appeal to do the other things that they've done demonstrates that they had the ability to respond to the motion for summary judgment made a deliberate choice not to we asked the court let me say first that it is the same transaction i asked norman jones on the stand would you agree that went through ups representation in this foreclosure proceeding affects maaco one answer of course and that would be the transaction capital t not separate matters capital t that's capital t in the letter it's the same transaction we don't have two separate transactions it's not the bonds and then the bank kno it's the same transaction the bonds were pledged to the bank it's the same transaction you can't separate these two transactions because the confidential information flows through they can't on know what they know and it harms my client i guess one of the things that they seem to be arguing is that they are entitled to have this a farm because we didn't defend we didn't defend because all of our right title and interest in everything having to do with this foreclosure was conveyed to the receiver i'm going to stand up in front of the judge and say mike i represent what i represent i have nobody to represent all of these interests are in the receiver but i have petition to intervene on why because plus there's a practical matter there's no money there's no record i did what i could do i came here on an  probably correctly this court dismissed and then i had to wait till a final judgment which then became appealable and i appealed there's no there's nothing on toward about that third they come down to the firestone case which says well you know if you go forward and then you can decide the disqualification later that was not a receivership this is a receivership where my client was divested of the legal authority to participate i mean what he to do what was i to do who would who did i represent at that point i followed the rules i waited til there was a final decision and then i came here on appeal defenses i allude to some of them in there we think we've got a force maybe your defense because it was the state of ohio was failure to pay what they legally owed us that caused the no no to go into default but if i have no standing i can't plead that i have no money i can't prosecute the case i can only have postage and i don't have any records because the receiver has all the records the court has divest of me of the ability to defend my client and then i come in here and say well we were entitled to judgment because you didn't defend him well that's circular reasoning that's the same circular reasoning that judge strand used when he looked at the letter he said oh well the letter says that my client can object that there's a conflict but they've already waived if there's a conflict went through a will withdraw and that was norm jones testimony i think actually is e mail where he was first asked about it in april or in april of two thousand and seventeen he came back to the first thing he said was when the letter if there's a conflict the letter requires us to withdraw from representing both clients yes that's right that's what it says and that then now after the fact they have constructed all of these other arguments about always a different  corpus oh we didn't mean this or oh it meant that you know there's a real problem here the problem is that they are not only the lawyer they are the client and they are standing here telling you what this letter means when their own partner the drafter rapid admitted what it means and you say you've given that to us right it's in here it's quoted a thank you for your times yes i think your honor that they were very close to bad faith i ask you to reverse the submitted for decision by this court that does conclude