Court Opinion

ID: 1041813
Source: CourtListenerOpinion
Date Created: 2013-09-24 10:25:13.188511+00
Date Added: 2024-06-11T12:05:42.618710
License: Public Domain

ORDER GRANTING PETITION FOR WRIT OF MANDAMUS

                             This original petition for a writ of mandamus challenges a
                district court order disqualifying petitioners' counsel and a district court
                order denying reconsideration of that decision.
                             Real parties in interest filed a motion to disqualify James
                Pengilly and Pengilly's law firm, Pengilly Robbins Slater (PRS), from
                representing petitioners in the underlying lawsuit. As grounds for
                disqualification, real parties in interest contended that PRS's ability to
                represent petitioners would be materially limited by Pengilly's personal
                interest in the matter and that this was a violation of RPC 1.7.
                             The district court granted the motion, after which this court
                issued its opinion in Liapis v. Second Judicial District Court, 128 Nev.
                282 P.3d 733 (2012). PRS then filed a motion for reconsideration,
                contending that real parties in interest, none of whom had been clients of
                PRS, lacked standing to seek disqualification for an ostensible violation of
                RPC 1.7. The district court denied this motion, stating that Liapis
                confirmed the propriety of its disqualification order. Petitioners then filed
                this writ petition.
                             "A writ of mandamus is available to compel performance of an
                act that the law requires as a duty resulting from an office, trust, or
                station, or to control. an arbitrary or capricious exercise of discretion."
                Liapis, 128 Nev. at , 282 P.3d at 736 (quotation omitted). A petition for
                mandamus relief is generally the appropriate means of challenging a
                district court order regarding attorney disqualification. Id.
                             Having considered the district court's reasoning for
                disqualification under RPC 1.7, we conclude that the district court

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                manifestly abused its discretion and that writ relief is appropriate.        Id.
                Although the district court recognized that nonclients generally lack
                standing to bring a motion to disqualify based on an ostensible violation of
                RPC 1.7, it nevertheless concluded that real parties in interest had
                standing to bring their disqualification motion based on the following
                exception set forth in Liapis: "if the breach of ethics so infects the
                litigation . . . that it impacts the nonclient moving party's interest in a just
                and lawful determination of [its] claims, [the nonclient] may have the
                standing needed to bring a motion to disqualify." Liapis, 128 Nev. at ,
                282 P.3d at 737 (emphases added) (quotation and alterations omitted).
                Thus, for real parties in interest to have standing to seek PRS's
                disqualification, they would have needed to show that there was a "breach
                of ethics" on Pengilly's or PRS's part and that this breach impacted the
                ability of real parties in interest to obtain a "just and lawful
                determination" of the claims asserted against them. Id.
                            Here, the district court's disqualification order alluded to three
                ostensible ethical breaches: (1) a violation of RPC 1.7 based upon PRS's
                failure to obtain conflict waivers from petitioners demonstrating that
                petitioners understood the potential for a lack of objectivity due to
                Pengilly's personal interest in the matter, (2) a violation of RPC 1.8 based
                upon Pengilly's alleged desire to use the underlying litigation as a means
                of replacing real parties in interest with a new board of directors, and (3) a
                violation of RPC 3.7 based upon the likelihood that Pengilly would be
                called as a witness at trial. While we question the district court's

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                conclusion that these three matters constituted ethical breaches,' there is
                no evidence to suggest that real parties in interest will be unable to obtain
                a "just and lawful determination" of the claims asserted against them.
                Liapis, 128 Nev. at ,282 P.3d at 737. Pengilly and PRS are bound by
                the same court rules and rules of civil procedure as any other law firm.
                Similarly, if petitioners' claims turn out to be frivolous or brought in bad
                faith, or if PRS improvidently rejects a settlement offer, real parties in
                interest have remedies at their disposal. See, e.g., NRS 18.010(2)(b); NRS
                17.115(4).
                             Because real parties in interest cannot establish that they
                have standing to seek PRS's disqualification based simply on their concern
                that PRS will pursue petitioners' claims more zealously than another law
                firm would, we conclude that the district court manifestly abused its
                discretion by granting real parties in interest's motion to disqualify PRS

                       'Specifically, after the district court issued its disqualification order,
                Pengilly and PRS obtained conflict waivers from each of the petitioners.
                See RPC 1.7(b) (permitting representation under these circumstances).
                Similarly, the possibility that Pengilly would use the underlying lawsuit
                as a means of replacing the current directors in order to have PRS take
                over as counsel in an ongoing construction defect lawsuit does not appear
                to fall within the conduct prohibited by RPC 1.8.            See RPC 1.8(i) ("A
                lawyer shall not acquire a proprietary interest in the cause of action or
                subject matter of litigation the lawyer is conducting for a client . . . ."
                (emphases added)). Finally, while RPC 3.7 prohibits a lawyer from acting
                as an advocate at trial if the lawyer is a necessary witness, Pengilly and
                PRS did not violate this rule by representing petitioners at the pretrial
                stage. See Liapis, 128 Nev. at , 282 P.3d at 739 ("[A] lawyer who is
                likely to be a necessary witness may still represent a client in the pretrial
                stage." (quoting DiMartino v. Eighth Judicial Dist. Court, 119 Nev. 119,
                121, 66 P.3d 945, 946 (2003))).

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                based on a perceived violation of RPC 1.7.      Liapis, 128 Nev. at   , 282
                F'.3d at 736. We therefore conclude that writ relief is appropriate, and we
                direct the clerk of this court to issue a writ of mandamus instructing the
                district court to vacate its disqualification order and its order denying
                reconsideration.
                            It is so ORDERED.

                                                                                         J.
                                                              Douglas

                                                                                        , J.
                                                              Saitta

                cc:   Hon. Elissa F. Cadish, District Judge
                      Pengilly Robbins Slater
                      Parker, Nelson & Associates
                      Alan Mikal
                      Leach Johnson Song & Gruchow
                      The Hayes Law Firm
                      David Strickler
                      Deanna Watterson
                      Rachelle Cooper-Martinez
                      Eighth District Court Clerk

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