Court Opinion

ID: 9785930
Source: CourtListenerOpinion
Date Created: 2023-08-30 22:48:34.286855+00
Date Added: 2024-06-11T07:36:36.203129
License: Public Domain

Justice Pro Tem McKEE
dissenting.
I respectfully dissent. The remand in this case accomplishes little more than grading the trial judge’s papers on an issue that was properly within his discretion. Although the district judge did comment upon the insufficiency of the evidence in testing plaintiffs motion to amend — a technical prohibition under the guidelines established by this court— the plain fact is that the proposed amendment fails to constitute a claim for relief under the pleadings as framed or under any construction of the facts or the law offered to support the pleadings, making the amendment an act of futility. Since the majority sidestepped all of the summary judgment issues raised in this appeal, the remand becomes a needless loop back through the district court.
Nothing alleged in the proposed amendment constitutes a breach of duty on the part of any lawyer from Stoel Rives or demonstrates any damage on account thereof. There is no general duty of confidentiality to keep information from being exchanged among lawyers in the same firm, nor any general duty that requires one to seek the client’s permission before exchanging information with others from the same firm. There is no allegation in the proposed amendment of any special duty on the part of anyone, no facts offered to give rise to any special duty, and no reason to infer or imply such. There is no allegation that any lawyer revealed any information outside the firm, which is all that any duty of confidentiality addresses in any case. In any event, there is no sufficient allegation of causation or resultant damage to the plaintiffs.
All that is alleged in the proposed amendment is that one lawyer (Jarvis) from the Stoel law firm disclosed information pertaining to the plaintiffs case to another lawyer (Giauque) in the same firm. There is no allegation or even suggestion in the proposed amended ■ complaint, in any of the briefing submitted to the district judge or to this court, or in any of the supporting affidavits or other discovery materials submitted to the district court or to this court, that anyone from the ■ defendant law firm disclosed anything pertaining to plaintiffs ease to anyone outside the firm. In my opinion, it is not a breach of duty for one lawyer in a firm to disclose confidential information to another lawyer in the same firm.
The majority infers that because Giauque, the lawyer to whom Jarvis addressed the offending memorandum, at one time represented a subsidiary of the plaintiff’s adversary, this created some sort of special duty on the part of the Stoel firm generally, requiring the firm to seek plaintiffs consent before allowing any lawyer in the firm to reveal any sensitive information to Giauque. As a matter of general law, and on every construction of the proposed pleadings, briefing and affidavits submitted in this case, this is plainly not so.
It is a frequent occurrence that lawyers in a firm will have some past connection with the present adversary of a current client. As long as the past connection is disclosed to the current client — as was done in this case — and so long as there is no present or ongoing conflict in the representation of dual interests — and none such was indicated in this case — there is no ethical prohibition to such circumstance, nor need there be. With respect to the current client, no ongoing protection is needed. All lawyers of the firm are under an absolute ethical duty to keep any information pertaining to the current client confidential. Any breach of this duty can certainly be the basis of a malpractice claim. But the gravamen of the breach of confidentially is the unwarranted disclosure of confidential information to someone outside the firm. There is no breach of duty where information about a current client’s case is shared with other lawyers in the firm — or, for that matter, with secretaries, paralegal assistants, or administrative personnel within the firm — so long as the information remains in the firm.
*47The ethical and practical concern that exists in this circumstance involves the prior client, not the current client, because the lawyer who had the involvement with the prior client may well have obtained privileged information during the time of the prior connection. No lawyer can ethically use any previously obtained confidential information of a prior client in connection with the representation of a current client. If this circumstance faces the trial lawyer actually representing the current client, there is usually no alternative but for the lawyer to withdraw. One cannot be expected to disregard information actually possessed in memory, and the lawyer would be unable to continue under such circumstances. If the previous representation involves another lawyer in the same firm, it may be possible to wall-off the other lawyer from the lawyers handling the new client’s matter, and prevent any information that lawyer may have about the prior client from tainting the present lawyers’ efforts to represent the current client. This effort is sometimes referred to as a “Chinese Wall” agreement, wherein the prior lawyer agrees that he or she will have no involvement with the case. It is essential to recognize that these ‘Wall” arrangements are intended to protect the prior client — who may need protection from inadvertent disclosure. The “Wall” agreements are usually one-way streets, in that they are intended to protect the old client, not the new, for the very good reason that the new client needs no additional protection.
Giauque provided a “Chinese Wall” affidavit to IKON to the effect that he would take no part in the litigation efforts by Spur and its related companies against IKON. The purpose of this affidavit was to assure the prior client — IKON in this case — that information Giauque might have obtained while acting as counsel for the subsidiary of IKON would not be used or inadvertently disclosed to the trial team now representing Spur in the current litigation. Giauque’s affidavit is a one-way street. He promised not to stick his nose into the new case, but there is no promise, nor any necessity of a promise, to shield Giauque from information flowing the other way. As noted above, there does not need to be any promise or shield because Giauque is absolutely bound by the firm’s obligations of confidentiality to the new client.
The bald allegation that sending information to Giauque breached some sort of duty to keep Giauque in the dark is insufficient in view of the fact that, as a matter of law, no such duty exists. There is no allegation in the proposed amended complaint of any special duty, by agreement or otherwise, and, as the trial court correctly observed, there is nothing in the record to indicate any circumstance where some special duty could be inferred or construed to arise in this case.
Stoel Rives is a very large, multi-state firm with offices in many cities. Jarvis heads the firm’s professional responsibility group and is an expert on legal ethics. He is based in Portland. Giauque is based in Salt Lake City. The litigation team was centered in the firm’s Boise office. Jarvis had no connection with the ongoing litigation. There is no evidenced or allegation that Jarvis knew or had any reason to know of Giauque’s “Chinese Wall” agreement. There is no evidence or allegation that Jarvis sent the memo to Giauque in an effort to help IKON. There is no evidence or allegation that anyone from the litigation team knew or had any reason to know that Jarvis was going to send the material to Giauque. There is no evidence or allegation that Giauque actually received the memo, or if he received it that he read it. Finally, there is no evidence or allegation that he, or anyone else, communicated any of the information contained in the memo to anyone outside the firm, let alone to anyone within IKON.
The majority has been led astray by loose pleading. The charging allegation of the proposed amendment alleges first that Giauque “was a partner/attorney with Stoel” and that he “rendered legal services to IKON.” In affidavits and briefing, it appears that Giauque rendered service to a subsidiary of IKON, a different entity not involved in the current litigation. In the next allegation, plaintiffs charge that the offending memo had been inadvertently revealed to “IKON’s attorney.” It is clear from the *48affidavits and briefing that Giauque was, at one time, an attorney for the subsidiary of IKON, but not for IKON itself. There is no indication that this subsidiary had any connection with Spur or its related companies or with the activities giving rise to the current litigation. There is no allegation or indication that Giauque had any connection whatsoever with the litigation representation of IKON. Clearly, from all the evidence in the record, he was not “IKON’s attorney.” Finally, the proposed amended complaint alleges that the plaintiffs proceeded into mediation “oblivious to the aforementioned disclosure to IKON.” There is no indication anywhere in the record, and no allegation or suggestion in any of the materials submitted to the trial court or this court that anyone from the Stoel firm disclosed anything to IKON.
The problem is that the proposed amendment, in three short, conclusory paragraphs jumps from Giauque having represented IKON at one time, to Giauque being IKON’s current attorney in the litigation, to Giauque being IKON. The jumps are not supported elsewhere in the complaint, in the briefs, in any of the affidavits submitted in connection with the motion, or in any of the discovery material submitted either to the trial court or this court.
Finally, and in any event, there is no sufficient allegation of damage. The only allegation of damage is a paragraph to the effect that because Spur was not informed that Giauque had received the offending information from Jarvis, Spur and its affiliates proceeded with the mediation and were deprived of their right to arbitration. This statement of causation is logically flawed if examined in isolation, and factually unsupported if examined in light of the record. When examined in isolation, it is an example of the logical fallacy post hoc ergo propter hoc (after this and therefore because of it), and is insufficient unless the necessary linkage is alleged or is obvious.
The only indication in the record to support the allegation of damage and causation is a statement in an affidavit by the CEO of Spur, wherein he contends that had he known of the disclosure to Giauque, he would not have accepted the letter agreement but would have insisted on arbitration. But this recital merely restates the logical fallacy. His simple statement that one event followed another, without more, does not supply the necessary linkage and is not sufficient to support the conclusion that the latter was “caused” by the former and therefore resulted in damage. Even in notice pleading, the allegations and inference from Hicks’ affidavit are insufficient to provide the necessary linkage as a matter of law.
The missing link in the logical premise, of course, is a connection between the disclosure of information and a detrimental result at mediation. There must be some allegation that Spur received less at the mediation than it would have received at arbitration because of the disclosure of information to Giauque. There is no allegation or showing in this case, either in the faulty pleadings offered to the court or in any of the materials submitted in support of the motion, either to the trial court or to this court on appeal. There is no linkage in the proposed pleading, and the omission is fatal.
There is no suggestion anywhere in the record that anyone at Stoel did anything in connection with any of the events surrounding the letter agreement to deprive Spur of its right to arbitration. To the contrary, the letter agreement expressly refers to the circumstances whereby Spur could continue to arbitration after the mediation. Stoel merely stated that if it was not paid its fees by the conclusion of the mediation, the law firm would not continue to represent Spur through the arbitration. The fact is that Stoel did represent Spur at the mediation, and Spur did settle. There is no indication that Spur objected to the settlement amount, or that it was forced upon it by Stoel. All of the materials submitted to the trial court and to this court in the briefing and affidavits indicated that Spur voluntarily accepted the settlement, voluntarily executed all of the required releases, and voluntarily dismissed its claims against IKON. The majority’s conclusion that the allegation of causation and damage in the complaint is sufficient is logically flawed, legally insufficient, and contrary to the demonstrated facts of the case.
I understand the majority’s concern that the trial court should not weigh the evidence when considering a motion to amend. How*49ever, the clear law is that the decision to allow an amendment to the complaint, especially late in the proceedings, rests in the sound discretion of the trial court. Although the trial court should liberally grant amendments, the trial court need not do so when such would be a futile act.1 So here. Where the proposed pleadings are as vague and indirect as in the instant case, and where even a cursory examination of the briefing and other materials submitted to the trial court reveals that there is nothing to support the inferences or implications suggested by the proposed amendment, either in the claimed cause of action or in the allegation of damages sustained, and where the facts recited make clear that there is no cause of action to state, the trial judge was correct in his ruling and his decision should be affirmed.
The majority’s insistence on a needless and expensive loop back through the trial court merely to require the trial judge to consider these issues upon a separate motion brought under different rules in order to articulate a technically correct basis for the ruling is to exalt form over substance to an unreasonable degree.

. Duffin v. Idaho Crop Imp. Ass’n, 895 P.2d 1195, 126 Idaho 1002, (1995); Black Canyon Racquetball Club, Inc. v. Idaho First Nat. Bank, 804 P.2d 900, 119 Idaho 171, (1991).