Title: Liapis v. Dist. Ct.

State: nevada

Issuer: Nevada Supreme Court

Document:

cm

 

428 Nev, Advance Opinion 31
IN THE SUPREME COURT OF THE STATE OF NEVADA

‘THEODORE L. LIAPIS, No. 58649

Petitioner,

vs.

‘THE SECOND JUDICIAL DISTRICT.

COURT OF THE STATE OF NEVADA, FILED

IN AND FOR THE COUNTY OF

WASHOE; AND THE HONORABLE

EGAN K. WALKER, DISTRICT JUDGE, AUG OP 2012

Respondents,
and

MARIE JOSEPHINE LIAPIS,
Real Party in Interest.

Original petition for a writ of mandamus challenging a district
court order disqualifying counsel,
Petition granted,

Mark 'T. Liapis, Reno,
for Petitioner.

Jonathan H. King, Reno,
for Real Party in Interest.

BEFORE CHERRY, C.J., PICKERING and HARDESTY, JJ.

OPINION
By the Court, HARDESTY,

‘This original petition for a writ of mandamus raises two novel

 

issues regarding attorney disqualification: should an attorney who
represents one of his parents in a divorce action between both parents be

/8°36030

 
disqualified either (1) because the attorney's representation will constitute
an appearance of impropriety or (2) because representing the parent will
violate the concurrent-conflict-of-interest rule in Nevada Rule of
Professional Conduct (RPC) 1.7? Because appearance of impropriety is no
longer recognized by the American Bar Association, and we have not
recognized the appearance of impropriety as a basis for disqualifying
counsel except in the limited circumstance of a public lawyer, we reject
that conclusion when the alleged impropriety is based solely on a familial
relationship with the attorney. We also conclude that absent an ethical
breach by the attorney that affects the fairness of the entire litigation or a
proven confidential relationship between the nonclient parent and the
attorney, the nonelient parent lacks standing to seek disqualification
under RPC 1.7.
EACTS AND PROCEDURAL HISTORY

Real party in interest Marie Liapis filed a complaint for
divorce against petitioner Theodore Liapis, in which she also sought
disposition of the couple's property, permanent spousal support, and her
attorney fees and costs. Theodore answered Marie's complaint in proper
person but later retained Mark Liapis, the couple's son, as his attorney.

A settlement conference was scheduled, and each party filed a
statement in preparation for that conference. In her statement, Marie
objected to Mark's representation of Theodore. Because of the issues
raised concerning Mark's representation of Theodore, the district court
vacated the scheduled settlement conference and gave Mark time to
determine whether he would continue as Theodore's counsel,

Mark informed Marie's counsel that he did not intend to
withdraw as counsel for Theodore. Marie subsequently filed a motion to

disqualify Mark, asserting three bases for his disqualification. First, she

 

 
argued that Mark’s representation of Theodore and his pecuniary interest
in their estate created an appearance of impropriety. Second, she argued
that even though Mark had never represented her, there was an “inherent
conflict of interest” because it was unclear “how [Mark] would be able to
zealously represent [Theodore]” when he “professe[d] to still love both his
parents.” Finally, she contended that Mark should be disqualified because
he was a potential witness in the case.

In response, Theodore argued that Marie's “boilerplate
generalities” were insufficient to mandate Mark's disqualification, and
that Mark had no pecuniary interest in the couple's estate. Further,
‘Theodore argued that there was no concurrent conflict of interest under
RPC 1.7 because Mark had never represented Marie and, even if Theodore

could raise a conflict, he waived it through a written informed consent.

 

Finally, he argued that Mark could not be disqualified as a potential
witness because the case was still in the pretrial phase, and under
DiMartino v, District Court, 119 Nev. 119, 121-22, 66 P.3d 945, 946.47
(2003), potential witnesses can serve as pretrial counsel.

   

While the district court acknowledged Marie's argument
regarding the appearance of impropriety, it reached no conclusion about
whether Mark's representation created such an appearance. The district
court then referred to RPC 1.7, which governs concurrent conflicts of
interest, and found “that Mark(’s] representation of his father will [not]
provide competent and diligent representation unaffected by the fact that
his mother is the adverse party.” Finally, the district court cited RPC 3.7,
which governs attorneys as witnesses, and concluded that the “exclusion of

Mark ....as a witness in this case will not work substantial hardship on

 

 
[Theodore]. ‘Therefore, Mark .. .can only serve as a witness in this case
when he is disqualified or dismissed as the attorney of record.” ‘The
district court ordered that Mark be disqualified as counsel, and Theodore
filed this writ petition?
DISCUSSION
In resolving this writ petition, we must determine whether

representation by a child of one of the opposing parents in a divorce action

 

creates a disqualifying appearance of impropriety, whether a nonclient ha:

standing to assert the concurrent-conflict-of-interest rule in RPC 1.7, and
whether an attorney can be disqualified during the pretrial phase based
on his status as a potential witness.
Standard for writ relief

“A writ of mandamus is available to compel performance of an
act that the law requires as a duty resulting from an office, trust, or
station, or to control an arbitrary or capricious exercise of discretion.”
Millen v, Dist. Ct., 122 Nev. 1245, 1250, 148 P.3d 694, 698 (2006); see NRS

34.160. The extraordinary remedy of mandamus may issue only where no

‘Presumably, the district court meant that the exclusion of Mark as
an attorney would not work a substantial hardship on ‘Theodore.

"Mark represents Theodore in the writ petition before this court.
Marie requests that “serious consideration be given to striking the Petition
because Mark [is representing Theodore in this petition but] has been
disqualified from further representation.” However, this court has
permitted a disqualified attorney to represent the petitioner before this
court when challenging a disqualification order, see, e.g., Nevada Yellow
Cab Corp. v. Dist. Ct., 123 Nev. 44, 48, 152 P.3d 737, 740 (2007); Millen v.
Dist. Ct, 122 Nev. 1245, 1250, 148 P.3d 694, 698 (2006); Brown v, Dist.
Ct 116 Nev. 1200, 1203-04, 14 P.3d 1266, 1269 (2000), and thus, we
decline to strike the petition.

 

 
plain, speedy, and adequate legal remedy exists, id. at 1250-51, 148 P.3d
at 698; NRS 34.170, and the consideration of a petition for such relief is
solely within our discretion. Millen, 122 Nev. at 1251, 148 P.3d at 698.
We have previously indicated that a petition for mandamus relief
generally is an appropriate means to challenge district court orders
regarding attorney disqualification. 1d.; see also Nevada Yellow Cab Corp,
v, Dist. Ct. 123 Nev. 44, 49, 152 P.3d 737, 740 (2007). ‘Thus, we exercise
our discretion to consider this writ petition.

Mi tion_of Theodor

appearance of impropriety
Although the district court did not base its disqualification

   

order on Mark’s representation of Theodore creating an appearance of
impropriety, Marie opposes writ relief on the ground that “Canon 9 of the
[Model] Code of Professional Responsibility adopted by the American Bar
Association provides that a lawyer should avoid even the appearance of
professional impropriety,” and the “son of opposing litigants in the same
litigation cannot avoid the appearance of impropriety,” particularly
because Mark “has a potential pecuniary interest as a future heir.”

While “Canon 9 required attorneys to ‘avoid even the
appearance of impropriety[,]’ [tJhe ABA Model Code has since been
replaced by the ABA Rules of Professional Conduct, which expressly
eliminated the ‘appearance of impropriety’ standard.” In re 767 East
Berry Ave, Associates, L.P., 419 B.R. 833, 845 (Bankr. D. Colo, 2009); see
also MJK Family v. Corp. Eagle Management Services, 676 F. Supp. 24
584, 593 (E.D. Mich. 2009) (noting that while the “former Code of

Professional Responsibility ... expressly prohibited the ‘appearance of

impropriety[,)'.. . . (tJhat ambiguous standard has long been abandoned”)
In re Wheatfield Business Park LLC, 286 B.R. 412, 421 (Bankr. C.D. Cal

 

 
2002) (“Except for the states where attorney conduct is still governed by
the ABA Model Code of Professional Responsibility (which the ABA Model
Rules replaced in 1983), United States lawyers are no longer subject to a
rule requiring them to avoid conduct that creates the appearance of
impropriety.”). ‘This is significant because Nevada adopted the Model
Rules of Professional Conduct with only slight variations in 1986 as SCR
150-203.5, since renumbered to track the ABA Model Rules numbering
scheme, In the Matter of Amendments to the Supreme Court Rules of
Professional Conduet, SCR 150-203.5, ADKT 370 (Order Repealing Rules
150-203.5 of the Supreme Court Rules and Adopting the Nevada Rules of
Professional Conduct, February 6, 2006).

In fact, Nevada has expressly declined to adopt Canon 9 of the
Model Code. Brown v, Dist. Ct,, 116 Nev. 1200, 1204 n4, 14 P.3d 1266,
1269 n.4 (2000). Rather, this court has recognized that an appearance of
impropriety may form a basis for attorney disqualification only in the
limited circumstance of a public lawyer, and only if the appearance of
impropriety is so extreme as to undermine public trust and confidence in
the judicial system, See id, (declining to conclude that any alleged
appearance of impropriety in that case met such a standard); Collier v.
Legakes, 98 Nev. 307, 310, 646 P.2d 1219, 1221 (1982) (addressing this
standard in the context of a government attorney). Thus, generally, “fals
distinguished from judicial recusals, which may be required on the basis of

‘a mere appearance of impropriety, such an appearance of impropriety by
itself does not support a lawyer's disqualification.” DCH Health Services
Corp. v. Waite, 115 Cal. Rptr. 2d 847, 850 (Ct. App. 2002) (internal
citation and quotation omitted).

 

 
oe ee

 

Marie lacks standing to seek Mark’s disqualification pursuant to RPC 1,7
RPC 1.7(a) prohibits a lawyer from representing a client “if the

representation involves a concurrent conflict of interest.” Such a conflict
exists if “[tJhere is a significant risk that the representation of one or more
clients will be materially limited by the lawyer's responsibilities to
another client, a former client or a third person or by a personal interest of

the lawyer.” RPC 1.7(a)(2). However, even if a conflict arises, the rule

 

also provides that “a lawyer may represent a client if... {t]he lawyer

 

reasonably believes that the lawyer will be able to provide competent and
diligent representation to each affected client; ... [t]he representation is
not prohibited by law;... [and eJach affected client gives informed
consent, confirmed in writing.” RPC 1.7(b)(1), (2), (4)

Before we can consider the merits of the concurrent-conflict

 

rule, we first address Marie's standing to seek Mark's disqualification.
‘The party socking to disqualify bears the burden of establishing that it
has standing to do so. See, e.g., Great Lakes Const., Inc. v. Burman, 114
Cal. Rptr. 3d 301, 307 (Ct. App. 2010), “The general rule is that only a
former or current client has standing to bring a motion to disqualify
counsel on the basis of a conflict of interest.” Model Rules of Profl
Conduct R. 1.7 annot. (RPC 1.7 is identical to the model rule); see also
Great Lakes Const.. Inc., 114 Cal. Rptr. 3d at 307 “Generally, before the
disqualification of an attorney is proper, the complaining party must have

 

or must have had an attorney-client relationship with that attorney.”)
Marie is neither a former nor current client of Mark.

However, some courts have permitted nonclients to bring a
motion to disqualify an attorney in limited circumstances. First, if the
breach of ethics “so infects the litigation in which disqualification is sought
that it impacts the [nonclient] moving party's interest in a just and lawful

 
cn

 

determination of her claims, she may have the... standing needed to
bring a motion to disqualify based on a third-party conflict of interest or
other ethical violation.” Colyer v, Smith, 50 F. Supp. 2d 966, 971-72 (C.D.
Cal. 1999) (discussing prudential, as well as constitutional, standing).
Here, Marie alleges simply that Mark’s love for his parents impacts his
ability to represent Theodore, not Marie, In this, Marie does not argue
that Mark’s representation of Theodore constitutes an ethical breach as to
her or impacts any of her legal interests. ‘Thus, Marie has failed to
establish that some “specifically identifiable impropriety” occurred,
Brown, 116 Nev. at 1205, 14 P.3d at 1270 (quoting Cronin v, District
Court, 105 Nev. 635, 641, 781 P.2d 1150, 1153 (1989), disavowed on other
grounds by Nevada Yellow Cab, 123 Nev. at 54 n.26, 152 P.3d at 743 n.26),
and “[slpeculative contentions of conflict of interest cannot justify
disqualification of counsel.” DCH Health Services, 115 Cal. Rptr, 2d at
850 (quoting Smith, Smith & Kring v. Superior Court, 70 Cal. Rptr. 2d
507, 612 (Ct. App. 1997)). Further, to the extent that a conflict of interest
existed, Theodore, Mark's only client in this matter, provided written
informed consent that waived the conflict in accordance RPC
1.7(bX4). Because several of the Nevada Rules of Professional Conduct
permit an attorney to represent a family member? and no rule prohibits
Mark’s conduct in this case, no ethical breach “infects the litigation,”

 

 

*For example, RPC 1.8(c) prohibits a lawyer from soliciting a
substantial gift from the client, unless the lawyer “is related to the client.”
RPC 7.3(a) prohibits an attorney from “solicitling for pecuniary gain)
professional employment: from a prospective client with whom the lawyer
hhas no family . .. relationship.”

 
orm

 

Colver, 50 F. Supp. 2d at 971-72, which would provide a basis for Marie to
bring a motion to disqualify Mark.

Next, “(s]tanding (can] arise{] from a breach of the duty of
confidentiality owed to the complaining party, regardless of whether a
lawyer-client relationship existed.” DCH Health Services, 115 Cal. Rptr.
2d at 849, However, “a lawyer owes no general duty of confidentiality to
nonelients.” Id. “Thus, some sort of confidential or fiduciary relationship
must exist or have existed before a party may disqualify an attorney
predicated on the actual or potential disclosure of confidential
information.” Great Lakes, 114 Cal. Rptr. 3d at 308; see also Oaks
Management Corp. v. Superior Court, 51 Cal. Rptr. 3d 561, 571 (Ct. App.
2006) (“[Wihen no attorney-client relationship exists ‘{mlere exposure to
the confidences of an adversary does not, standing alone, warrant
disqualification.” (second alteration in original) (quoting In_re Complex
Asbestos Litigation, 283 Cal. Rptr. 732, 742 (Ct. App. 1991))).

Mark and Marie's mother-son relationship, standing alone,
does not establish a confidential relationship. See U.S. v. Chestman, 947
F.2d 561, 568 (2d Cir. 1991) (“[Mlore than the gratuitous reposal of a
secret to another who happens to be a family member is required to
establish a fiduciary or similar relationship of trust and confidence.”);
Latty_v. St. Joseph's Society, 17 A.9d 155, 161 (Md. Ct. Spee. App. 2011)
(While some confidential relationships arise if there is a familial
relationship, ‘the mere existence of a familial relationship is not indicative
of a confidential relationship.” (quoting Orwick v. Moldawer, 822 A.2d
506, 512 (Md. Ct. Spec. App. 2003))); Economopoulos_v, Kolaitis, 528
S.E.2d 714, 718 (Va. 2000) (“A parent-child relationship, standing alone, is
insufficient to create a confidential or fiduciary relationship). And

 
although a fiduciary relationship “is particularly likely to exist when there
is a family relationship,” Perry v. Jordan, 111 Nev. 943, 947, 900 P.24 335,
388 (1995), “{a} family relationship, of itself, does not create a fiduciary
relationship” unless it is established by additional facts, Simpson v.
Dailey, 496 A.2d 126, 128 (R.I. 1985); Texas Bank and Trust Co, v, Moore,
595 S.W.2d 502, 508 (Tex. 1980), Rather, “[wJhether a confidential
relationship exists for a parent-child... is an issue of fact and is not
presumed as a matter of law.” Latty, 17 A.8d at 161 (internal quotations
omitted); see also Dino v, Pelayo, 51 Cal. Rptr. 3d 620, 624 (Ct. App. 2006)
(Whether a confidential relationship exists [for purposes of nonclient
standing] is a question of fact.”)

Neither party argues that Mark and Marie share some type of
logally recognizable confidential relationship, and Marie offered no
evidence to the district court that Mark acquired any privileged,
confidential information from Marie, In Brown, this court concluded that
“disqualification is not warranted absent proof of a reasonable probability
that counsel actually acquired privileged, confidential information.” 116
Nev. at 1202, 14 P.3d at 1267 (emphasis added). Similarly, in the context
of familial relationships, other courts have declined to disqualify counsel
absent proof that counsel actually acquired confidential information from
a family member. See, e.g., Addam v. Superior Court, 10 Cal. Rptr. 3d 39,
42 (Ct. App. 2004) (holding in a marital dissolution action that a sibling
relationship between a husband's attorney and a wife's former physician
was insufficient to disqualify the attorney and explaining that “{the
attorney's] brother presumably possesses confidential information relating

to [the] wife; but there is no evidence that he disclosed any such
information to his sister”); DCH Health Services, 115 Cal. Rptr. 2d at 850-

 

 
 

51 @eclining to disqualify an attorney whose wife obtained confidential
information about the adverse party and noting that “[sJociety has
entrusted lawyers with confidences, and we should not assume that
lawyers will violate these confidences when involved in particular
relationships”). ‘Thus, Marie has not established that she shared a
confidential or fiduciary relationship with Mark sufficient to give her
standing to seek his disqualification,

Nor has Marie demonstrated that Mark hi
“pecuniary interest” in the couple's estate. While all children may have an

a disabling

 

expectancy in their parents’ estate, no child hi
her parents’ estate. See, e.g, In_re Estate of Melton, 128 Nev. _, __,
272 P.Sd 668, 677 (2012) (explaining that under certain circumstance:
disinheritance clauses can be enforced); NRS 133.170 (omission of a child

pecuniary right to his or

 

 

from a will is deemed intentional). And even if Marie had demonstrated
such an interest, a pecuniary interest, without more, does not create a
confidential or fiduciary relationship requiring disqualification. Thus,

while a child's decision to represent one of his or her parents in a divorce

 

proceeding may appear unusual, we conclude that Marie's argument lacks
merit.

warrant disqualification

While RPC 3.7(a) prohibits, with exceptions, a lawyer from
acting “as advocate at a trial in which the lawyer is likely to be a
necessary witness,” we have previously determined that RPC 3.7 does not
disqualify an attorney from the case entirely. In DiMartino v. District
Court, 119 Nev. 119, 66 P.3d 945 (2003), this court held that RPC 3.7
“does not mandate complete disqualification of an attorney who may be

called as a witness; by its plain terms, [it] simply prohibits the attorney

rT

 
one

 

from appearing as trial counsel.” Id. at 121, 66 P.8d at 946. Thus, this
court held that “a lawyer who is likely to be a necessary witness may still
represent a client in the pretrial stage.” Id, at 121-22, 66 P.3d at 946-47,
Because of this court's holding in DiMartino, we conclude that the district
court manifestly abused its discretion when it disqualified Mark based on
his status as a potential witness when the case had not yet reached the

trial phase.

 

Accordingly, we conclude that the district court manifestly
abused its discretion when it disqualified Mark, Nevada Yellow Cab Corp.
v. Dist, Ct., 123 Nev. 44, 54, 152 P.3d 737, 743 (2007) (“IAl district court's
discretion in [disqualification] matters is broad and... its decision will
not be set aside absent a manifest abuse of that discretion.”), We grant
‘Theodore’s petition for extraordinary relief and direct the clerk of this
court to issue a writ of mandamus instructing the district court to vacate

its order granting Marie's motion to disqualify Mark as Theodore's

counsel.
hae 4
Hardesty
We concur:
| . Cd,
Cherry
I Ld
Pickering

‘We deny Marie's request to strike portions of the writ petition and
the corresponding appendix.

12