Case Name: AMERICAN DREDGING COMPANY, Appellee, v. CITY OF PHILADELPHIA, Appellant, v. The PARTNERSHIP OF MUESER, RUTLEDGE, WENTWORTH & JOHNSTON, and its partners Individually, William H. Mueser, Paul Wentworth, Philip C. Rutledge, Robert C. Johnston and S. V. DeSimone and the Ballinger Company, a partnership, and the Individual partners, Robert S. Ballinger, Jr., John Demoll and Louis Demoll v. EDWARD A. MAGUIRE, INC.
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1978-07-19
Citations: 480 Pa. 177
Docket Number: No. 599
Parties: AMERICAN DREDGING COMPANY, Appellee, v. CITY OF PHILADELPHIA, Appellant, v. The PARTNERSHIP OF MUESER, RUTLEDGE, WENTWORTH & JOHNSTON, and its partners Individually, William H. Mueser, Paul Wentworth, Philip C. Rutledge, Robert C. Johnston and S. V. DeSimone and the Ballinger Company, a partnership, and the Individual partners, Robert S. Ballinger, Jr., John Demoll and Louis Demoll v. EDWARD A. MAGUIRE, INC.
Judges: Before EAGEN, C. J., and O’BRIEN, ROBERTS, POMEROY, NIX, MANDERINO and PACKEL, JJ.
Reporter: Pennsylvania State Reports
Volume: 480
Pages: 177–194

Head Matter:
389 A.2d 568
AMERICAN DREDGING COMPANY, Appellee, v. CITY OF PHILADELPHIA, Appellant, v. The PARTNERSHIP OF MUESER, RUTLEDGE, WENTWORTH & JOHNSTON, and its partners Individually, William H. Mueser, Paul Wentworth, Philip C. Rutledge, Robert C. Johnston and S. V. DeSimone and the Ballinger Company, a partnership, and the Individual partners, Robert S. Ballinger, Jr., John Demoll and Louis Demoll v. EDWARD A. MAGUIRE, INC.
Supreme Court of Pennsylvania.
Argued Oct. 21, 1977.
Decided July 19, 1978.
Truscott & Erisman, William L. Gaunt, Otis W. Erisman, Philadelphia, for appellant.
Mark D. Alspach, Richard P. Brown, Jr., Philadelphia, for appellee, American Dredging.
Glenn C. Equi, Philadelphia, for appellee, Ballinger Co.
Daniel Mungall, Jr., Philadelphia, for appellee, Edw. A. Maguire, Inc.
James D. Wilder, Philadelphia, for appellees, Mueser, Rutledge, Wentworth & Johnston.
M. Carton Dittmann, Jr., Philadelphia, for appellee, Phila. Port Corp.
Before EAGEN, C. J., and O’BRIEN, ROBERTS, POMEROY, NIX, MANDERINO and PACKEL, JJ.

Opinion:
OPINION
MANDERINO, Justice.
In February 1972, American Dredging Company (American), the general contractor for the Tioga Marine Terminal Site Construction contract, brought suit on its behalf and on behalf of its subcontractor, Arundel Corporation (Arundel), against the City of Philadelphia (City). The suit claimed damages in excess of five million dollars for delays and other problems allegedly caused by the Philadelphia Port Corporation (Port Corporation), an agency of the City to which management and supervision of the construction of the Tioga Marine Terminal had been delegated. The procedural complexities of the litigation are not relevant here and need not be discussed. Suffice it to say that the matter was eventually scheduled for trial. On November 22, 1976, at a pretrial conference held the day before the scheduled commencement of trial, City orally moved to disqualify plaintiff's. co-counsel from participation in the case. City's motion was based on alleged violations of Canons 4, 5, and 9, of the Code of Professional Responsibility.
The Code of Professional Responsibility, adopted by us as the standard of conduct for attorneys of all courts of the Commonwealth, 455 Pa. lvii, is comprised of three distinct but related parts: (1) Canons, which provide general "axiomatic norms" for the legal profession to follow: (2) Ethical Considerations, which are applicable principles, "aspirational in character:" and (3) Disciplinary Rules, which are mandatory and "state the minimum level of conduct below which no lawyer can fall without being subject to disciplinary action." Code of Professional Responsibility, Preliminary Statement.
The trial court denied City's motion to disqualify. Pursuant to City's petition to the Superior Court for allowance of an interlocutory appeal, the trial court certified that its interlocutory order involved a controlling question of law as to which there was substantial ground for disagreement, and that an immediate appeal from that order could materially advance the ultimate termination of the case. In a memorandum opinion filed subsequent to this order, the trial court stated that it had denied City's motion to disqualify because it was untimely. The trial court did not discuss the merits of City's position. On appeal, the Superior Court affirmed in a per curiam opinion, stating simply that "[t]he motion to disqualify was untimely filed." American Dredging Co. v. City of Philadelphia, 246 Pa.Super. 654, 372 A.2d 848 (1977). We granted City's petition for allowance of appeal and this appeal followed.
The facts pertinent to City's claim of ethical violations are these. At the time of the motion to disqualify, as well as for a period of approximately 11 months prior to that time, Richard P. Brown, Jr., a partner in the Philadelphia office of the law firm of Morgan, Lewis and Bockius, was counsel of record for Arundel, subcontractor to plaintiff American, and a party in interest in American's suit against City although not a named plaintiff. Underlying City's petition were the following allegations: (1) that John P. Bracken, a partner in the Morgan, Lewis and Bockius firm, was an officer, an Executive Committee member, and a Board member of Port Corporation, the instrumentality and agent of the defendant City; (2) that Port Corporation supervised and managed the Tioga Marine Site Terminal project for City, and that it was Port Corporation's actions in that capacity that formed the subject of the litigation commenced by American; (3) that by virtue of Bracken's relationship with Port Corporation, he had received certain confidential information regarding the facts of the litigation commenced by American; (4) that City would be relying on the records and testimony of present or former Port Corporation employees in its defense against American's claims; and (5) that, at the very least, an appearance of impropriety resulted from the simultaneous existence of Bracken's relationship with an agency of defendant City, and representation of American and Arundel, by Bracken's law partner.
Stripped of their procedural trappings, and reduced to simplest terms, the questions before us are: (1) whether under the facts of this case, City's motion to disqualify was timely filed, and if so, (2) whether the Canons of the Code of Professional Responsibility bar an attorney from representing the plaintiff in a lawsuit when a partner in that attorney's law firm holds a position of substantial responsibility as an officer and board member of the defendant. We believe both questions should be answered in the affirmative. We therefore reverse the Superior Court's order affirming the trial court's dismissal of City's motion to disqualify. We also order that Richard P. Brown, Jr., and the law firm of Morgan, Lewis and Bockius be disqualified from representing Arundel and American in this matter.
Initially, Brown and Morgan, Lewis and Bockius argue that City's motion to disqualify was properly dismissed because untimely filed. In support of this position it is argued that Brown entered his appearance as co-counsel for American on December 2, 1975, at which time City was represented by the City Solicitor's office; that the City Solicitor was both a Port Corporation Director and member of its executive committee while American's suit against City was pending, and that, therefore, City knew of the relative positions of Brown, and Bracken, his partner at Morgan, Lewis and Bockius. Because City raised no objection to Brown's representation of Arundel or his appearance as co-counsel for American until November 22, 1976, Brown and his law firm now contend that such a motion to disqualify is too late.
City counters that special counsel now representing City is not a member of the City Solicitor's office; that special counsel entered the case only two and one-half months prior to November 22, 1976, and realized the significance of the relationship between Brown and Bracken on the eve of the pretrial conference when a memorandum was discovered indicating that Bracken had received certain information vital to plaintiff's case against City. Alternately, City argues that even if its motion to disqualify was untimely filed, such lack of promptness should not bar City's motion because a motion for disqualification is in the public interest and courts may not act contrary to that interest by permit ting one party's delay in moving for disqualification to justify a breach of the Code of Professional Responsibility.
In Pennsylvania, the Canons of the Code of Professional Responsibility have the force of statutory rules of conduct for attorneys. Slater v. Rimar, Inc., 462 Pa. 138, 338 A.2d 584 (1975); Schofield Discipline Case, 362 Pa. 201, 66 A.2d 675 (1949). The trial court in the first instance has the power to regulate the conduct of attorneys practicing before it, and has the duty to insure that those attorneys act in accordance with the Code of Professional Responsibility. No specific rule of court governs the timeliness of a motion to disqualify based on alleged ethical violations of the challenged attorney. The court's responsibility cannot be defeated by the laches of the party seeking disqualification, at least where the motion to disqualify is made prior to the commencement of trial. Ernie Industries Inc., v. Patentex, Inc., 478 F.2d 562 (2d Cir. 1973). We will therefore address the merits of City's motion.
In support of their position Brown and his firm argue that Canon 4 of the Code of Professional Responsibility — "A Lawyer Should Preserve the Confidences and Secrets of a Client." (Emphasis added) — applies only where there is an attorney-client relationship, and is, therefore, inapplicable here because Bracken's relationship to Port Corporation is not one of attorney-client. Similarly, Brown and his firm argue that Canon 5 of the Code of Professional Responsibility — "A Lawyer Should Exercise Independent Professional Judgment on Behalf of a Client " (emphasis added) — applies only in an attorney-client relationship and has not been breached here because neither Port Corporation nor City have ever been Bracken's client. Lastly, Brown and his firm contend that an alleged breach of Canon 9 — "A Lawyer Should Avoid Even the Appearance of Professional Impropriety" — must be judged within the context of specific ethical or disciplinary rules, none of which, it is argued, have been violated by Brown, Bracken, or their firm.
We begin our consideration of these arguments with a recognition of several important competing interests at stake in a situation such as that presented by this appeal: (1) a party's interest in freely selecting counsel of its choice; Slater v. Rimar, supra, 462 Pa. 138, 338 A.2d 584 (1975); (2) a party's interest in a trial free from the risk of even inadvertent disclosures of confidential information (Code of Professional Responsibility, Canon 4); (3) the rights of all clients to have their attorneys act in their respective best interests and to exercise independent professional judgment on their behalf (Code of Professional Responsibility, Canon 5); and (4) the public's interest in the scrupulously ethical administration of justice (Code of Professional Responsibility, Canon 9). Woods v. Covington County Bank, 537 F.2d 804 (5th Cir. 1976); See also, Hull v. Celanese Corporation et al., 513 F.2d 568 (2d Cir. 1975).
Furthermore "[wjhere a breach of ethics is made to appear, the relief is usually the granting of a motion to disqualify and remove the offending attorney." Slater v. Rimar, Inc., supra, 462 Pa. at 149, 338 A.2d at 589; See also Kramer v. Scientific Control Corp., 534 F.2d 1085 (3d Cir. 1976) (" 'A court may disqualify an attorney for not only acting improperly but also for failing to avoid the appearance of impropriety.' Richardson v. Hamilton International Corp., 469 F.2d 1382, 1385-86 & n. 12 (3d Cir. 1972), cert. denied, 411 U.S. 986, 93 S.Ct. 2271, 36 L.Ed.2d 964 (1973)").
We also note our agreement with the conclusion of the Third Circuit Court of Appeals in Kramer v. Scientific Control, Corp., 534 F.2d 1085 (3d Cir. 1976), that when one attorney is prohibited by ethical considerations from undertaking to represent a certain client, all members of the firm to which that attorney belongs are also prohibited from serving as counsel to that client.
Brown and his firm overlook several important considerations when contending that the actions of Brown and Bracken did not constitute a violation of Canons 4 or 5 of the Code. Initially, we note that the record indicates that Bracken was one of the original incorporators of Port Corporation, and that Morgan, Lewis and Bockius acted as counsel in the incorporation. Furthermore, from Port Corporation's creation to the present, Bracken has been a member of Port Corporation's Board of Directors, its twelve member Executive Committee, and, until June 30, 1976, was Port Corporation's Senior Vice President. We also note that Port Corporation is a non-profit corporation, and that the Non-Profit Corporation Law of 1972, 15 Pa.C.S. § 7734 (Supp.1978) provides that officers and directors of non-profit corporations shall be deemed to stand in a fiduciary relationship to the corporation. Bracken's position as Board member, executive committee member, and senior vice-president certainly imposed upon him a position of trust similar to that contemplated in an attorney-client relationship by Canon 4. Because of this fiduciary relationship with Port Corporation, Bracken himself could not ethically have represented American or Arundel. Canon 4's admonition that a lawyer should preserve the confidences and secrets of a client is founded in part at least on the fiduciary duty existing between a lawyer and a client. See, Code of Professional Responsibility, Ethical Consideration 4-1.
Even if we conclude that the attorney-client relationship that once existed between Morgan, Lewis and Bockius and Port Corporation had terminated, the lack of a technical attorney-client relationship between Bracken and Port Corporation is not fatal to City's motion to disqualify. In Hull v. Celanese Corporation et al., supra, 513 F.2d 568 (2d Cir. 1975), the court upheld the disqualification of plaintiff's counsel even though counsel had never represented the defendant. Similarly, the court in Kramer v. Scientific Control Corp., supra, 534 F.2d 1085 (3d Cir. 1976), reversed the trial court's dismissal of defendant's motion to disqualify plaintiff's counsel where plaintiff was a class represented by the law partner of one of the individual class plaintiffs, even though no attorney-client relationship had ever existed between the challenged attorney and defendant. Most recently, in Fund of Funds Limited, et al. v. Arthur Andersen & Co., et al., 567 F.2d 225 (2d Cir. 1977), the court granted a motion to disqualify, holding that the challenged law firm was in a position to receive the confidences of the parties seeking disqualification despite the lack of any present, or past, attorney-client relationship between the moving parties and the law firm sought to be disqualified. See also, Rule 203 of our Rules of Disciplinary Enforcement, which provides that
"[a]cts or omissions by a person subject to these rules, individually or in concert with any other person or persons which violate the Disciplinary Rules, shall constitute misconduct and shall be grounds for discipline, whether or not the act or omission occurred in the course of an attorney-client relationship." (emphasis added).
We also reject the argument put forth by Brown and his firm that Brown's representation of Arundel and American is not barred by Canon 5 of the Code. Ethical Consideration 5-14 provides, among other things, that maintenance of the independence of professional judgment required of a lawyer precludes the acceptance or continuation of employment that will adversely affect the lawyer's judgment on behalf of a client or dilute the lawyer's loyalty to a client. Ethical Consideration 5-15 states, that all doubts should be resolved against the propriety of such representation.
Clearly, the interests of both City and its agent Port Corporation are adverse to those of Arundel and American. Had Bracken accepted employment as counsel to Arundel and co-counsel to American while still in the employ of Port Corporation, his violation of the spirit, if not the letter, of Canon 5 would be apparent. Bracken is a long-time official of Port Corporation, an agency of defendant City, and a powerful influence on that Corporation. As an officer and member of the board of Port Corporation during the period of time in which the incidents forming the basis of American's suit occurred, it is likely that he had substantial influence on Port Corporation's action during that period. As such, Bracken's interest in the outcome of the litigation is adverse to American's. Nevertheless, American is represented by Bracken's law partner. We believe that under the facts of this case, Canon 5 bars Brown, as well as Bracken, from representing Arundel and American.
Even if disqualification was not required by Canons 4 and 5, Canon 9's admonition that "[a] Lawyer Should Avoid Even the Appearance of Professional Impropriety", and D.R. 9-101(B)'s prohibition of acceptance of private employment in any matter in which an attorney had substantial responsibility while a public employee, require disqualification here.
As instructed by Ethical Consideration 9-2, "[w]hen explicit ethical guidance does not exist, a lawyer should determine his conduct by acting in a manner that promotes public confidence in the integrity and efficiency of the legal system and the legal profession." Public confidence in the integrity of the legal profession can hardly be promoted when a partner in a well-known law firm in Philadelphia represents a party seeking to sue the City of Philadelphia for damages claimed to exceed five million dollars and claimed to be owed plaintiff because of the actions taken by the City's agency at a time when another partner in the same law firm sat on the Board of Directors and Executive Committee of the City's agency and served as Senior Vice President of that agency.
The record is silent as to whether Bracken would profit financially from legal fees paid by plaintiff. Even if we assume that he would not, the appearance of impropriety remains. As noted in Kramer v. Scientific Control Corp., 534 F.2d 1085 (3d Cir. 1976), lay persons generally understand a legal partnership to include a sharing of profits and losses.
"Esoteric internal protections in writing or under oath, insulating the plaintiff-attorney partner from participating in a fee, can hardly dissipate the lay notion that action by one partner is action for the partnership."
Id. at 1092.
In addition, Ethical Consideration 9-3 admonishes that a lawyer who leaves public employment ". . . should not accept employment in connection with any matter in which he had substantial responsibility prior to his leaving, since to accept employment would give the appearance of impropriety even if none exists." More specifically, Disciplinary Rule 9-101(B) prohibits an attorney from accepting private em ployment in a matter over which he or she exercised substantial responsibility while publicly employed, regardless of whether or not the lawyer's public employment was in the capacity of an attorney. Bracken was clearly publicly employed by virtue of his various positions with Port Corporation. Despite that employment, and despite the prohibition of D.R. 9-101(B), Bracken's firm accepted private employment as plaintiff's co-counsel in a suit filed against the very public agency which employed Bracken. The fact that D.R. 9-101(B) contemplates situations in which the attorney was formerly a public employee makes its prohibition doubly applicable to attorneys who are currently also public employees.
The fact of Bracken's current employment also implicates D.R. 5-101(B). D.R. 5-101(B) provides, with certain exceptions not relevant here, that
"A lawyer shall not accept employment in contemplated or pending litigation if he knows or it is obvious that he or a lawyer in his firm ought to be called as a witness, . . ."
Certainly, the trial in this case will deal primarily with an examination of the propriety of the actions taken by Port Corporation during the period involved — actions authorized at least in part by Bracken. Thus, it is possible that because of his knowledge of Port Corporation's operations during the period of time when American allegedly suffered the losses for which damages against the City are now claimed, Bracken could be called as a witness in American's suit against City.
For these reasons we are compelled to conclude that Brown, and his law firm Morgan, Lewis and Bockius are barred by Canons 4, 5, and 9 of the Code of Professional Responsibility from further representation of Arundel or American in these matters.
The order of the Superior Court, affirming the trial court's dismissal of City's motion to disqualify Richard P. Brown, Jr., and the law firm of Morgan, Lewis and Bockius, is reversed, and Richard P. Brown, Jr., and Morgan, Lewis and Bockius are ordered disqualified.
ROBERTS, J., filed a dissenting opinion.
POMEROY, J., did not participate in the consideration or decision of this case.
PACKEL, former J., did not participate in the decision of this case.