Order Form (01/2005)

United States District Court, Northern District of Illinois

Name of Assigned Judge

or Magistrate Judge

Joan H. Lefkow Sitting Judge if Other

than Assigned Judge

CASE NUMBER 12 C 4493 DATE 12/14/2012

CASE

TITLE

Walton et al. vs. Diamond et al.

DOCKET ENTRY TEXT

Plaintiffs’ motion to disqualify counsel for Mark S. Diamond and United Residential Services and Real

Estate, Inc. (#30) is denied without prejudice. Defendant Dennis Both is instructed to file a copy of his

clients’ written informed consent, consistent with ABA Model Rule 1.7(b), by 12/21/2012. Both’s motion to

dismiss Counts IV and VII of the complaint (#25) is taken under advisement. Status hearing set for 1/3/2013

at 8:30 a.m to set a briefing schedule for Diamond and United Residential’s motion to dismiss (#36). 

O[ For further details see text below.] Notices mailed by Judicial staff.

STATEMENT

Plaintiffs Byrdell Walton, Wadie Morehead and Louise Mason filed the present motion seeking to disqualify

attorney and defendant Dennis Both from representing defendants Mark S. Diamond and United Residential

Services and Real Estate, Inc. (“United”), a remodeling company owned by Diamond. Plaintiffs allege that

defendants Matthew Fefferman, Diamond, and Both, acting as mortgage broker, home improvement

contractor and notary/closing agent respectively, conspired to defraud them of substantial equity in their

homes, violating state and/or federal consumer protection laws. Plaintiffs have filed two claims against Both

alleging violation of the Illinois Consumer Fraud Act and Deceptive Business Practices Act, 815 ILL. COMP.

STAT. 505/1 et seq. (Count IV), and civil conspiracy (Count VII). Specifically, plaintiffs allege that Diamond

solicited and arranged for reverse mortgage loans and for home repair and remodeling services through

United, and that Both notarized the mortgage documents. Plaintiffs allege that Diamond, United and/or Both

(collectively “defendants”) did not provide them with certain disclosures required by law, promised

performance which defendants did not intend to perform, obtained plaintiffs’ loan checks through fraud and

deception, and refused to return plaintiffs’ money after failing to perform. 

Plaintiffs filed the present lawsuit on June 8, 2012. On August 7, 2012, Both filed an appearance seeking to

represent himself, Diamond and United. (Dkt. #18.) Plaintiffs now move to disqualify Both from

representing Diamond and United arguing that (1) there is a clear conflict of interest under Rule 1.7; and (2)

Both is a necessary witness at trial and therefore his representation of Diamond and United violates Rule 3.7.1

As the moving party, plaintiffs bear the burden of establishing that disqualification is appropriate. U.S. ex rel.

Cericola v. Ben Franklin Bank, No. 99 C 6311, 2003 WL 21476020, at *2 (N.D. Ill. June 23, 2003). 

“[D]isqualification is ‘a drastic measure which courts should hesitate to impose except when absolutely

necessary.’” Owen v. Wangerin, 985 F.2d 312, 317 (7th Cir. 1993) (quoting Schiessle v. Stephens, 717 F.2d

417, 419–20 (7th Cir. 1983)). This is due, in part, to the fact that “[a] party is entitled to a degree of

12C4493 Walton et al. vs. Diamond et al. Page 1 of 4
STATEMENT

deference in the prerogative to proceed with counsel of its choice.” Ben Franklin Bank, 2003 WL 21476020,

at *2.

This court has generally adopted the American Bar Association’s Model Rules of Professional Conduct

(“ABA Model Rules”) as its rules of professional conduct. See L.R. 83.50; RMB Fasteners, Ltd. v. Heads &

Threads Int’l, LLC, No. 11 C 2071, 2012 WL 245124, at *2 (N.D. Ill. Jan. 25, 2012). ABA Model Rule 1.7

states,

“(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a

concurrent conflict of interest. A concurrent conflict of interest exists if:

(1) the representation of one client will be directly adverse to another client; or

(2) there 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.

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may

represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent

representation to each affected client;

(2) the representation is not prohibited by law;

(3) the representation does not involve the assertion of a claim by one client against another client

represented by the lawyer in the same litigation or other proceeding before a tribunal; and

(4) each affected client gives informed consent, confirmed in writing.”

ABA Model R. of Prof’l Conduct 1.7. Plaintiffs argue that Both should be disqualified under Rule 1.7(a)(2)

because there is a significant risk that his representation of Diamond and United would be materially limited

by his own interests as all three allegedly participated in the same fraudulent scheme. 

The comments to ABA Model Rule 1.7 instruct that under section (a)(2), “[a] conflict may exist by reason of

substantial discrepancy in the parties’ testimony, incompatibility in positions in relation to an opposing party

or the fact that there are substantially different possibilities of settlement of the claims or liabilities in

question.” ABA Model R. of Prof’l Conduct 1.7 cmt. 23. As such, “multiple representation of co-parties in

civil matters is permitted if there is no ‘substantial discrepancy’ among positions, testimony, or settlement

prospects.” ANNOTATED MODEL RULES OF PROFESSIONAL CONDUCT 130 (Ellen J. Bennett et al. eds., 7th ed.

2011). This case is early in the proceedings and defendants’ positions, testimony and settlement prospects

are unclear. Moreover, plaintiffs cite no case law to support the position that Both may not represent himself

as a defendant and his alleged co-conspirators absent a showing of a “substantial discrepancy.” Although the

court recognizes the potential for a conflict under Rule 1.7, it cannot conclude as a matter of law that such a

conflict exists at this time.2

 The court therefore declines to disqualify Both from representing Diamond and

United under Rule 1.7(a)(2). 

Plaintiffs next argue that Both should be disqualified from representing Diamond and United under Rule 3.7

12C4493 Walton et al. vs. Diamond et al. Page 2 of 4
STATEMENT

because Both is a necessary witness at trial. ABA Model Rule 3.7 states, 

“(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness

unless:

(1) the testimony relates to an uncontested issue;

(2) the testimony relates to the nature and value of legal services rendered in the case; or

(3) disqualification of the lawyer would work substantial hardship on the client.”

ABA Model R. of Prof’l Conduct 3.7(a). “For a lawyer to be disqualified under Rule 3.7, it must be ‘likely’

that the lawyer will be called upon to provide testimony that is relevant and material.” ANNOTATED MODEL

RULES OF PROFESSIONAL CONDUCT 375 (Ellen J. Bennett et al. eds., 7th ed. 2011). “A ‘necessary’ witness

under Rule 3.7 is one whose testimony is unobtainable elsewhere.” Id. at 376. “A necessary witness is not

the same thing as the ‘best’ witness,” however. Harter v. University of Indianapolis, 5 F. Supp. 2d 657, 665

(S.D. Ind. 1998) (interpreting Indiana Rule of Professional Conduct 3.7, which is the same as ABA Model

Rule 3.7). Rather, “[i]f the evidence that would be offered by having an opposing attorney testify can be

elicited through other means, then the attorney is not a necessary witness.” Id.

From the complaint, it appears that Both is the only witness who can testify to certain events alleged therein. 

Plaintiffs assert that Both is the only witness who can explain, for example, (1) why he wrote the name

“United” on the form directing disbursement of Walton’s loan proceeds, and (2) why he notarized Mason’s

loan documents without meeting her. (See Compl. ¶¶ 61, 153–155.) These facts are particularly relevant and

material given that plaintiffs allege that defendants conspired to deprive them of the proceeds of their loans. 

Both is the only witness who can testify as to why he did or did not act in this manner. Moreover, read as a

whole, the complaint alleges that Both participated in a scheme to defraud plaintiffs by directing the

deliverance of loan proceeds to Diamond knowing that the funds would be misappropriated. Clearly, Both is

the only witness who can testify as to his knowledge (or lack thereof) of the alleged fraud scheme. Cf.

United States v. Dfazio, 899 F.2d 626, 632 (7th Cir. 1990) (affirming disqualification of defense counsel

prior to trial finding that “the parties could hardly have stipulated to what [the attorney] knew about [his

client’s] state of mind . . . since that knowledge was only in the ken of [the attorney] . . . .”). At the same

time, however, the Illinois Supreme Court has held that an attorney need not withdraw at the early stages of a

proceeding “based on the possibility that he might have to become a witness” at trial. In re Heilgeist, 469

N.E.2d 1109, 1113, 103 Ill. 2d 453, 83 Ill. Dec. 175 (Ill. 1984) (interpreting Rule 5-101(b) of the Illinois

Code of Professional Responsibility, which at the time prohibited a lawyer from acting as an advocate in a

case where “he knows or it is obvious that he or a lawyer in his firm ought to be called as a witness” at trial). 

The fact that this case is in its early stages is a double edged sword for plaintiffs. On one hand, it is likely,

based on the allegations in the complaint, that Both will become a necessary witness should the case proceed

to trial. On the other hand, defendants have filed motions to dismiss (dkt. #25, #36) and it is unclear whether

the case will in fact proceed to trial. Disqualifying Both early on would avoid unnecessary delay closer to

trial, doing so, however, would also deprive Diamond and United of their chosen representative, which is

disfavored. See Owen, 985 F.2d at 317. 

Weighing these factors, the court concludes that disqualifying Both from representing Diamond and United is

premature, although the court continues to harbor concern that a conflict of interest may arise later in the

proceedings. As such, the court expects full candor from defendants if and when such a conflict materializes. 

12C4493 Walton et al. vs. Diamond et al. Page 3 of 4
STATEMENT

1. Plaintiffs cite to the Illinois Rules of Professional Conduct, but under Northern District of Illinois

Local Rule 83.50 the court applies the ABA Model Rules of Professional Conduct. The two ABA Model

rules at issue are largely the same as their Illinois counterparts, however. 

2. Moreover, Both states that Diamond and United are aware of the allegations in the complaint and have

waived any potential conflicts of interest pursuant to Rule 1.7(b). See ABA Model R. of Prof’l Conduct

1.7 cmt. 23 (“[C]ommon representation of persons having similar interests in civil litigation is proper if

the requirements of paragraph (b) are met.”); see also id. at Rule 1.0(e) (defining “informed consent”). 

Moreover, Both should prepare for the possibility of disqualification under Rule 3.7 prior to trial and make

arrangements for alternative counsel if need be. The court will not delay the proceedings because defendants

have opted to proceed with Both in light of the possibility that he will be a necessary witness at trial. For

these reasons, plaintiffs’ motion to disqualify counsel (dkt. #30) is denied without prejudice. Both is

instructed to file a copy of his clients’ written informed consent, consistent with Rule 1.7(b), by 12/21/2012. 

Both’s motion to dismiss Counts IV and VII of the complaint (dkt. #25) is taken under advisement. Status

hearing is set for [date] to set a briefing schedule for Diamond and United’s motion to dismiss (dkt. #36). 

12C4493 Walton et al. vs. Diamond et al. Page 4 of 4