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MAY'S FAMILY CENTERS, INC. v. GOODMAN'S

United States District Court, Northern District of Illinois, E.D


August 16, 1984

MAY'S FAMILY CENTERS, INC., PLAINTIFF,
v.
GOODMAN'S, INC., DEFENDANT.

The opinion of the court was delivered by: Shadur, District Judge.

MEMORANDUM OPINION AND ORDER

May's Family Centers, Inc. ("May's") sues Goodman's, Inc. ("Goodman's")*fn1 for breach of contract and tortious interference with the business relationship between May's and Zayre Corporation ("Zayre"). In brief,*fn2 May's (as lessee) sought the consent of Goodman's (as lessor) to an assignment of May's lease to Zayre. Allegedly Goodman's (in breach of its lease obligation) refused to grant its consent in the time frame May's needed, causing May's to lose Zayre as a potential assignee.

May's attorney, Bernard Wiczer ("Wiczer") of the firm of Wiczer and Associates, Ltd., conducted negotiations with Goodman's former counsel, Larry Goodman and Earl Slavitt of the firm of Katten, Muchin, Zavis, Pearl and Galler.*fn3 Wiczer also had some discussions with Goodman's lessor Belscot Retailers, Inc.

Goodman's has now moved to disqualify Wiczer and his firm from representing May's because Wiczer ought to be called as a witness.*fn4 May's resists disqualification, contending:

1. Wiczer would testify only to uncontroverted matters.

    2. Goodman's has not shown its own case would be prejudiced
  if Wiczer remains as May's counsel.*fn5

    3. Disqualifying Wiczer at this point will prejudice May's
  prosecution of this action.*fn6

Those assertions seek to bring this case within exceptions (1) and (4) of ABA Code of Professional Responsibility ("Code") DR 5-101(B), incorporated by DR 5-102:

  DR 5-101 Refusing Employment When the Interests of the Lawyer
  May Impair His Independent Professional Judgment.

  (B) A lawyer shall not accept employment in contemplated or
      pending litigation if he knows or it is obvious that he or
      a lawyer in his firm ought to be called as a witness,
      except that he may undertake the employment and he or a
      lawyer in his firm may testify:

      (1) If the testimony will relate solely to an uncontested
    matter.

      (2) If the testimony will relate solely to a matter of
    formality and there is no reason to believe that
    substantial evidence will be offered in opposition to the
    testimony.

      (3) If the testimony will relate solely to the nature and
    value of legal services rendered in the case by the lawyer
    or his firm to the client.

      (4) As to any matter, if refusal would work a substantial
    hardship on the client because of the distinctive value of
    the lawyer or his firm as counsel in the particular case.

  DR 5-102 Withdrawal as Counsel When the Lawyer Becomes a
  Witness.

  (A) If, after undertaking employment in contemplated or
      pending litigation, a lawyer learns or it is obvious that
      he or a lawyer in his firm ought to be called as a witness
      on behalf of his client, he shall withdraw from the conduct
      of the trial and his firm, if any, shall not continue
      representation in the trial, except that he may continue
      the representation and he or a lawyer in his firm may
      testify in the circumstances enumerated in DR 5-101(B)(1)
      through (4).

What of the first of those exceptions, DR 5-101(B)(1)? It has already been said that Wiczer conducted negotiations with Goodman's former counsel. If the facts to which Wiczer would testify in that respect were truly "uncontroverted," Goodman's former counsel could presumably testify and there would be no need for Wiczer to testify at all. But May's is unwilling to leave it at that (May's June 15, 1984 Mem. 3-4). Under those circumstances there is at least a substantial doubt that Wiczer will in fact be testifying to "uncontroverted" matters.*fn7

If not, Wiczer must bring himself within the second exception, DR 5-101(B)(4). On that score he advances several hardships to May's if Wiczer's firm were forced to withdraw:

1. delay in the proceedings;

2. payment for duplicate effort;

    3. new counsel's not having viewed deponents during
  discovery; and

    4. May's possible inability to find substitute counsel, for
  its current cash flow does not allow prompt payment of bills
  (May's is in bankruptcy).*fn8

If "substantial hardship on the client because of the distinctive value of the lawyer or his firm as counsel in the particular case" equated with delay and expense incurred in bringing new counsel into the case, the exception would swallow up the rule. Teleprompter of Erie, Inc. v. City of Erie, 573 F. Supp. 963, 966 (W.D.Pa. 1983) quoting MacArthur v. Bank of New York, 524 F. Supp. 1205, 1210 (S.D.N.Y. 1981). Courts that have considered the question have not found "distinctive value" in a long standing relationship with the client, involvement with the litigation from its inception or financial hardship to the client. General Mill Supply Co. v. SCA Services, Inc., 505 F. Supp. 1093, 1098-1100 (E.D. Mich. 1981), aff'd, 697 F.2d 704, 713 (6th Cir. 1982); United States ex rel. Sheldon Electric Co. v. Blackhawk Heating & Plumbing Co., 423 F. Supp. 486, 490 (S.D.N.Y. 1976).

Plainly May's reasons do not meet the "substantial hardship" or "distinctive value" tests. This is not a complicated case. May's counsel should have known from the outset that what happened in the negotiations between Goodman's and May's would be the core of May's claim. And of course Wiczer can assist in bringing new counsel up to speed on the current posture of the case, minimizing the hardship to May's. In sum, if Wiczer is in fact going to testify to controverted matters, he and his firm should be disqualified.

Conclusion

Disqualification is not mandated now (see n. 7). If it is hereafter determined Wiczer ought to testify at trial to any controverted matter, he and his firm are disqualified from representing May's in this action. If however Wiczer will be testifying to truly uncontroverted matters, or if it later becomes clear he need not testify at all, then he and his firm are not disqualified. In the interim there is no reason they cannot continue in the case to deal with the summary judgment motion now in the briefing stage.


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