Opinion ID: 2168806
Heading Depth: 2
Heading Rank: 1

Heading: Disqualification of Two Receivers

Text: The contested real estate is presently under the management of four receivers who have also been commissioned to sell the property in order to partition it. Two of them, as we indicated above, were appointed by the court at the time it created the receivership, February 12, 1973, when it granted the interlocutory divorce decree. These receivers were petitioner's attorney and respondent's attorney. The respondent's attorney subsequently withdrew as counsel but remained as a receiver, and respondent's next attorney was evidently also appointed a receiver. There is no record of the order by which he was appointed, but a bond submitted on April 28, 1975 does refer to three commissioners for the sale of the property and everyone involved in the case seems to accept the fact that by that time respondent's new attorney was a third receiver. This attorney, too, has since withdrawn as counsel yet continues to act as a receiver. The petitioner also changed attorneys after the original appointments were made. Her first attorney is still a receiver and her present attorney was appointed on October 17, 1975, pursuant to petitioner's motion, in order to counterbalance respondent's second receiver. The respondent argues that the two receivers who are former attorneys of his should be removed as receivers and any attorney who has represented him in this case should be disqualified from acting as a receiver. He contends that since these receivers are petitioning the court to sell the property, they are taking a position contrary to that which they argued while representing him and by doing so in the same case, they are violating their ethical duty to him as a former client. In Family Court respondent sought generally to have the receivership rescinded, but he did not seek to remove or replace these two receivers. He raises this question of removal for the first time here on appeal. It is generally considered a matter for the discretion of the court imposing the receivership to decide who should be appointed as receiver, Wax v. Monks, 327 Mass. 1, 3-4, 96 N.E.2d 704, 706 (1951); 1 Clark, The Law and Practice of Receivers § 113 at 165 (3d ed. 1959), and to decide, once a receiver has been appointed, whether he should be removed, First Nat'l Bank v. E. T. Barnum Wire & Iron Works, 60 Mich. 487, 499, 27 N.W. 657, 661 (1886); Flinn v. Hanbury, 157 App.Div. 207, 208, 141 N.Y.S. 844 (1913); Lasell v. Yankton Cty., 69 S.D. 66, 67-68, 6 N.W.2d 439, 440 (1942). As we have stated in other contexts, this court will not lightly undertake to review an exercise of judicial discretion on the part of a trial court. Such an issue will be raised only on an objection that is properly taken to a ruling by the trial court on a motion clearly and expressly stated. Manekofsky v. Baker, 92 R.I. 377, 380, 169 A.2d 376, 378 (1961); accord, State v. Ouimette, 110 R.I. 747, 766, 298 A.2d 124, 136 (1972). In the case before us now, there is no reason for us to make an exception to this rule. Although respondent contends that these attorneys are acting unfairly and unethically toward him, there is no evidence of any actual impropriety or conflict of interest on their part. Had respondent made a motion in the court below to remove or replace the receivers, he could have presented to the court any specific factors which would actually warrant removal of these receivers. The trial justice could then have considered the motion and the evidence as part of his supervision of this receivership and he would have made a ruling that could have been the subject of a valid exception. We, in turn, would have had a record to examine and a decision to review to determine if the court exercised its discretion properly in allowing the attorneys to continue as receivers after withdrawing as counsel. As matters stand now, however, we have no such ruling and no exception under which we are required to review the court's discretion. Manekofsky v. Baker, supra . We are aware that in some cases involving objections to attorneys' representing adverse parties against former clients, courts have considered the question even though the objecting party delayed in raising the issue. E. g., Ernie Indus., Inc. v. Patentex, Inc., 478 F.2d 562, 574 (2d Cir. 1973); Fleischer v. A.A.P., Inc., 163 F.Supp. 548, 559 (S.D.N.Y.1958), appeal dismissed sub nom. Fleischer v. Phillips, 264 F.2d 515 (2d Cir.), cert. denied, 359 U.S. 1002, 79 S.Ct. 1139, 3 L.Ed.2d 1030 (1959); Empire Linotype School, Inc. v. United States, 143 F.Supp. 627, 631 (S.D.N.Y.1956). Furthermore, in the oft-cited case of Peirce v. Palmer, 31 R.I. 432, 77 A. 201 (1910), this court defined the rule that once an attorney has acted for a client in a matter, he cannot thereafter take a position in the same matter that is hostile to his former client. Unlike those cases, however, the present situation does not involve an attorney who withdraws as counsel in a case and then, in the same matter, represents an adverse party. Although the receivers have acted contrary to respondent's wishes in seeking permission to sell the property, they have not attempted to promote one party's claims or the other's. They have taken no position on whether Mrs. Cavanagh has any rights in the estate or on how the proceeds of the sale of the property should be divided. As officers of the court, the receivers are obliged to assist the court in protecting the estate during the litigation and in disposing of the property pursuant to the court's decision. By acting as receivers, these attorneys serve the court and do not represent any particular party. They are therefore not taking a hostile position vis-à-vis their former client and are not breaching their professional responsibility toward him. See American Nat'l Bank v. Bradford, 28 Tenn. App. 239, 188 S.W.2d 971, cert. denied (1945); In re Coulter's Estate, 406 Pa. 402, 178 A.2d 742 (1962). We therefore deny the respondent's request that his former attorneys be disqualified from acting as receivers. The respondent's appeal is denied and dismissed, the decree appealed from is affirmed, and the case is remanded to the Family Court for further proceedings.