Opinion ID: 3052575
Heading Depth: 3
Heading Rank: 6

Heading: The October 23, 2001 Waiver

Text: On October 22, 2001, Harris sent another letter to Dr. and Mrs. Bertelsen. In the letter, Harris stated: “We are agreed, following extended discussion and full disclosure, that there is no conflict of interest and that all parties will proceed in an effort to fully defend against the allegations and the claims made by ARCO and will assert all affirmative defenses, offsets, discounts and counterclaims that might be available to any and all parties in that litigation.”6 The Harris letter also noted Dr. and Mrs. Bertelsen agreed to assume the obligation of paying for the litigation, because Jeffrey and Amy Bertelsen and BFG lacked the resources to do so. The Harris letter then discussed the Tesoro transaction and a potential conflict of interest created by requirements Tesoro was imposing. Tesoro required Dr. and Mrs. Bertelsen to reconvey the deeds of trust they had against the six gas station properties to reduce the amount of debt of record. Tesoro also required Dr. and Mrs. Bertelsen, along with all secured lenders, to execute a Non-Disturbance and Attornment Agreement. The Harris letter explained: These requirements, imposed by Tesoro, . . . create a potential conflict of interest between our representation of Jeff and Amy Bertelsen and [BFG] and you [i.e., Dr. and Mrs. Bertelsen] in connection with the proposed transaction. Jeff and Amy Bertelsen and [BFG] desire that you execute the deeds of recon- 6 The letter also stated: “We have agreed that we will vigorously contest this matter working initially to extricate you from the lawsuit and ensure that if any liability is incurred, it will be primarily, if not exclusively, borne by Jeff and Amy Bertelsen and [BFG]. Jeff and Amy Bertelsen have agreed to this approach and litigation strategy.” 10262 BERTELSEN v. HARRIS veyance and Non-Disturbance Agreement, pursuant to Tesoro’s Agreement to Lease.[7] Therefore, we recommend that you seek new and separate legal counsel with respect to this matter in order to determine your rights, remedies and obligations under the proposed transaction with Tesoro. In consideration for Dr. and Mrs. Bertelsen’s compliance with Tesoro’s requirements, Jeffrey and Amy Bertelsen agreed, among other things, to assume all defense costs in connection with the ongoing ARCO litigation against all Bertelsens, indemnify Dr. and Mrs. Bertelsen against any judgment against them by ARCO, and assume payments on a loan secured by Dr. Bertelsen. Finally, in the letter, Harris stated that, if Dr. and Mrs. Bertelsen chose to proceed to discuss the matter with him without the benefit of new legal counsel, he required them to sign an attached waiver. The waiver stated: “We, separately and as husband and wife, hereby waive any and all conflict of interest as to the representation of Harris Berne Christensen LLP for and in connection with the proposed transaction under the Agreement to Lease, by and between Tesoro West Coast Petroleum Company and Jeff and Amy Bertelsen and [BFG].” Dr. and Mrs. Bertelsen signed the waiver on October 23, 2001, and did not seek independent counsel. Jeffrey and Amy Bertelsen were not asked to sign this conflict waiver. 7 In other words, Dr. and Mrs. Bertelsen had to give up their secured status by reconveying their title (held as security), as well as agree to keep in place the lease agreement between BFG and Tesoro, should ownership of the gas stations eventually fall into Dr. and Mrs. Bertelsen’s hands. The letter noted this would create a potential conflict of interest for Harris, representing Jeffrey and Amy Bertelsen on the one hand, who want the deal to go forward, and Dr. and Mrs. Bertelsen on the other hand, who would have to give up their security interests in the real property. BERTELSEN v. HARRIS 10263