Opinion ID: 1088850
Heading Depth: 3
Heading Rank: 1

Heading: Based on a Conflict of Interest

Text: In their petition for the writ of mandamus, Wheeler and Phillips argue that the defendants lacked standing to bring their motion to disqualify Spain & Gillon. Wheeler and Phillips cite our holding in Ex parte Tiffin, 879 So.2d 1160, 1165 (Ala.2003), in which we stated that 'a stranger to the attorney-client relationship lacks standing to assert a conflict of interest in that relationship.' (Quoting Jones v. American Employers Ins. Co., 106 Ohio App.3d 636, 641, 666 N.E.2d 1152, 1155 (1995).) They argue that neither of Miller's former clients, the Department of Finance and the State Board of Adjustment, are parties to this litigation. Because the defendants were not Miller's clients, Wheeler and Phillips argue, the defendants lack standing to move the trial court to disqualify Spain & Gillon from representing Wheeler and Phillips. In Tiffin, we held that minority shareholders could not move to disqualify a corporation's counsel on the basis of a conflict of interest under Rules 1.7 and 1.9, Ala. R. Prof. Cond. Because the case was not a shareholder-derivative suit, the shareholders were not representing the interests of the corporation. Because the corporation, and not the shareholders, was counsel's client, the shareholders lacked standing to challenge the representation based on a conflict of interest. Similarly, in Lowe v. Graves, 404 So.2d 652, 653 (Ala.1981), we held that '[t]he principle seems to be fully established that only a party who sustains the relation of a client to an attorney, who undertakes to represent conflicting interests, may be entitled to object to such representation for that reason alone.' (Quoting Riley v. Bradley, 252 Ala. 282, 287, 41 So.2d 641, 644 (1948).) Furthermore, we have stated: To allow an unauthorized surrogate to champion the rights of the former client would allow that surrogate to use the conflict rules for his own purposes where a genuine conflict might not really exist. It would place in the hands of the unauthorized surrogate powerful presumptions which are inappropriate in his hands. 404 So.2d at 653. Therefore, we must first determine whether any of the defendants were Lee Miller's clients during his employment as legal counsel for the Department of Finance. Other courts have held that a lawyer employed by a state agency represents that agency only and does not have a conflict of interest in cases against the state or another state agency. See Gray v. Rhode Island Dep't of Children, Youth & Families, 937 F.Supp. 153, 158 (D.R.I. 1996) (The client clearly includes the attorney's own agency. On the other hand, it would not include some other agency under all circumstances, because any two agencies can have compatible or conflicting positions depending on the matter involved.). The defendants assert standing on various grounds. The AIFA and former Governor Siegelman and former Finance Director Mabry, its president and secretary, respectively, at all times pertinent to this litigation, assert that they were Miller's clients during his employment with the Department of Finance. Therefore, they argue, they have standing to challenge his representation in this case and to impute his alleged conflict to Spain & Gillon. They argue that Miller represented the AIFA and thereby represented then Governor Siegelman in his role as president of the AIFA and then Finance Director Mabry in his role as secretary of AIFA. In his deposition, Miller agreed that the AIFA utilized the staff of the Department of Finance, including Miller as general counsel, on some issues. Furthermore, Mabry testified that Miller ran the AIFA. They also argue that Miller was Mabry's statutorily designated lawyer. Presumably, they are referring to § 41-4-203, Ala.Code 1975, which provides: The chief of the legal division [of the Department of Finance] shall confer with and advise the Director of Finance . . . on all legal matters pertaining to said department. Wheeler and Phillips acknowledge that by statute Miller reported to Mabry as the Director of Finance. However, they argue, Mabry was not sued in his capacity as Director of Finance. Instead, he was sued individually and as secretary of the AIFA. Moreover, they argue, Mabry did not consult Miller regarding the Hyundai transaction, but instead sought counsel from attorneys with the law firm of Maynard, Cooper & Gale, P.C. They state: There is certainly no evidence whatsoever that Mabry or the AIFA ever consulted Miller in any way as to the `ploy' used by the defendants to purchase the Shelton property. Although we agree with Wheeler and Phillips that Miller did not act as then Finance Director Mabry or then Governor Siegelman's personal attorney during his employment with the Department of Finance, Miller's testimony shows that through his position with the Department of Finance he worked for the AIFA. Miller's statutory duties extended only to the Department of Finance and the State Board of Adjustment, but the AIFA apparently operated largely through the staff of the Department of Finance and through Miller particularly. By using Miller as its general counsel on some issues, the AIFA established an attorney-client relationship with Miller. Therefore, the AIFA had standing to move to disqualify Miller from representing Southdale, LLC, in its action against the AIFA. In the same way, Miller reported to then Governor Siegelman and then Finance Director Mabry, as president and secretary, respectively, of the AIFA. Because we hold that Miller represented the AIFA and both former Governor Siegelman and former Finance Director Mabry in their capacities with the AIFA, these defendants had standing to move for Spain & Gillon's disqualification from this case on the basis of a conflict of interest.