Global Lab Partners, LLC, James W. Dillard, Sr., Alexander Cover, Christie Cover, Mark L'Hommedieu and John D. Levitan, Sr. v. Patroni Enterprises, LLC, a Florida limited liability company, and Kathleen Van Alstine ( 2021 )

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D20-2887
_____________________________
GLOBAL LAB PARTNERS, LLC,
JAMES W. DILLARD, SR.,
ALEXANDER COVER, CHRISTIE
COVER, MARK L'HOMMEDIEU,
and JOHN D. LEVITAN, SR.,
Appellants,
v.
PATRONI ENTERPRISES, LLC, a
Florida limited liability
company, and KATHLEEN VAN
ALSTINE,
Appellees.
_____________________________
On appeal from the Circuit Court for Escambia County.
Gary L. Bergosh, Judge.
September 22, 2021
ROBERTS, J.
Appellants seek review of a non-final order disqualifying
Richard Beckish and Arthur Fletcher (“Counsel”) from
representing them in a commercial dispute involving Appellees.
Appellants argue there was no competent, substantial evidence of
a prior attorney-client relationship between Counsel and any
Appellee to support disqualification under Rule 4-1.9 of the Rules
Regulating the Florida Bar. Appellants also argue Appellees
waived disqualification by waiting too long to file their motion.1
We disagree and affirm the order on appeal for the following
reasons.
Facts
In December 2016, Appellants James Dillard, Alexander
Cover, Mark L'Hommedieu, and John Levitan met with Clyde
Patroni to discuss the operations of a business called Global Lab
Partners, LLC (“GLP”). Also present were general counsel for
GLP, Richard Beckish, and assistant general counsel, Arthur
Fletcher.
Patroni Enterprises, LLC, 2 later purchased five units of GLP
from Mr. Dillard. Mr. Patroni went on to maintain an office at the
GLP facility with access to the company’s books and records. In
the following months, Mr. Patroni approached Kathleen Van
Alstine with the hopes of convincing her to invest in GLP. Ms. Van
Alstine purchased ten units of GLP from Mr. Dillard. As
consideration, Ms. Van Alstine and Mr. Patroni asked that Mr.
Patroni be placed in a role that would allow him to manage the
day-to-day operations of GLP’s subsidiary. By July 2017, the GLP
subsidiary under Mr. Patroni’s leadership had yet to generate any
profits and was forced to incur debt. It later defaulted on its debt.
In October 2018, Appellees filed the lawsuit that formed the
basis of this action. They alleged nine counts against Appellants,
which included actions for breach of contract, fraudulent
misrepresentation, and fraudulent inducement. Appellants filed
affirmative defenses and counterclaims as well as a third-party
complaint and cross-claims against Mr. Patroni.
1 Appellants raise an additional Issue that there were no legal
grounds to disqualify Counsel under Rule 4-3.7 of the Rules
Regulating the Florida Bar. This Issue does not merit discussion
as the trial court did not disqualify Counsel under Rule 4-3.7.
2 Clyde Patroni is the sole managing member of Patroni
Enterprises.
2
In August 2019, eight months after Counsel filed a notice of
appearance for Appellants in the case, Appellees filed a motion to
disqualify Counsel under Rule 4-1.9. Appellees argued Counsel
could not represent Appellants in the instant litigation because
Counsel had a prior attorney-client relationship with Appellees
involving the same or substantially related matters.
Appellants opposed disqualification, denying the existence of
a prior attorney-client relationship. Appellants filed affidavits
from Counsel that admitted Counsel had prepared and reviewed
various documents referenced in Appellees’ motion to disqualify;
however, Counsel stated they only acted as general counsel for
GLP and denied an attorney-client relationship with any Appellee.
The trial court held an evidentiary hearing on the motion to
disqualify. At the hearing, Mr. Patroni testified as to several
documents admitted into evidence, asserting that Counsel, acting
on his behalf, had prepared the documents or had substantially
participated in their creation. Mr. Patroni testified Counsel had
substantially counseled him in areas relevant to Patroni
Enterprises’ acquisition of GLP, Ms. Van Alstine’s acquisition of
membership interest in GLP, and Mr. Patroni’s position as
representative/manager, among other things.
After considering the testimony and evidence presented at the
hearing, the trial court orally granted the motion as the
representation was “blurred.” The court later rendered an order
disqualifying Counsel from representing any of the Appellants,
stating that “[Counsel’s] relationship with the entities involved
was interconnected, as evidenced by the transcript of the
hearing.” 3 This appeal followed.
3 To the extent Appellants argue the trial court failed to make
adequate factual findings in the order on appeal, they did not move
for rehearing to preserve the issue for appeal. See Owens v. Owens,
973 So. 2d 1169 (Fla. 1st DCA 2007); Pensacola Beach Pier, Inc. v.
King, 66 So. 3d 321 (Fla. 1st DCA 2011).
3
Analysis
We have jurisdiction. See Fla. R. App. P. 9.130(3)(a)(E). The
trial court’s order is reviewed for an abuse of discretion. See ASI
Holding Co., Inc. v. Royal Beach & Golf Resorts, LLC, 163 So. 3d
668, 669 (Fla. 1st DCA 2015) (citing Young v. Achenbauch, 136 So.
3d 575, 580 (Fla. 2014)). “Such discretion is ‘limited by the
applicable legal principles, [but] the appellate court will not
substitute its judgment for the trial court’s express or implied
findings of fact which are supported by competent, substantial
evidence.’” ASI Holding Co., Inc., 163 So. 3d at 669 (quoting
Young, 136 So. 3d at 581 (quoting Applied Digital Sols., Inc. v.
Vasa, 941 So. 2d 404, 408 (Fla. 4th DCA 2006))). Under an abuse
of discretion standard of review, a ruling will be upheld unless it
is found to be “arbitrary, fanciful, or unreasonable,” such that
discretion is abused “only where no reasonable man would take the
view adopted by the trial court.” Canakaris v. Canakaris, 382 So.
2d 1197, 1203 (Fla. 1980).
I.
The Rules Regulating the Florida Bar provide the standard
for determining whether an attorney should be disqualified in a
given case. Young, 136 So. 3d at 580. In the instant case, the
pertinent rule raised on appeal is Rule 4-1.9, which establishes
that a lawyer who has formerly represented a client in a matter
must not afterwards represent another person in the same or a
substantially related matter in which that person’s interests are
adverse to the interests of the former client.
In cases seeking disqualification under Rule 4-1.9, a two-
prong test applies. The moving party must show “that (1) an
attorney-client relationship existed, thereby giving rise to an
irrefutable presumption that confidences were disclosed during
the relationship, and (2) the matter in which the law firm
subsequently represented the interest adverse to the former client
was the same or substantially related to the matter in which it
represented the former client.” State Farm. Mut. Auto. Ins. Co. v.
K.A.W., 575 So. 2d 630, 633 (Fla. 1991). Appellants only dispute
the first prong of the test.
4
To satisfy the first prong of the test, the moving party must
demonstrate that their perception that an attorney-client
relationship existed is “objectively reasonable.” See Yang Enters.,
Inc. v. Georgalis, 988 So. 2d 1180, 1184 (Fla 1st DCA 2008). There
is no legal requirement for a single formalized document to
demonstrate an attorney-client relationship exists; instead, the
test for determining that the relationship exists “is a subjective one
and hinges upon the client’s belief that he is consulting a lawyer
in that capacity and his manifested intention is to seek
professional legal advice.” JBJ Inv. of S. Fla., Inc. v. S. Title Grp.,
Inc., 251 So. 3d 173, 177 (Fla. 4th DCA 2018) (quoting
Bartholomew v. Bartholomew, 611 So. 2d 85, 86 (Fla. 2d DCA
1992)). Therefore, whether the trial court abused its discretion
turns on the singular issue of whether Mr. Patroni’s subjective
belief was an objectively reasonable one.
Mr. Patroni testified to his subjective belief that he had an
attorney-client relationship with Counsel. Appellees produced
competent, substantial evidence to substantiate this perception.
Based on the totality of the circumstances presented at the
hearing, the trial court had a basis to deem the perceived attorney-
client relationship “objectively reasonable.” Upon proof of a prior
attorney-client relationship that was interconnected with the
current litigation, the trial court appropriately granted Appellees’
motion to disqualify Counsel. The trial court did not abuse its
discretion in disqualifying Counsel under Rule 4-1.9.
II.
Appellants argue that even if Counsel could have been
disqualified, Appellees waived the issue by waiting too long to file
their motion. “A motion to disqualify should be made with
reasonable promptness after the party discovers the facts which
lead to the motion.” Transmark, U.S.A., Inc. v. State, Dep’t of Ins.,
631 So. 2d 1112, 1116 (Fla. 1st DCA 1994). Florida courts have
made a point of enforcing this rule to bar a plaintiff or defendant
from using disqualification as an “ambush tactic” to undermine
opposing counsel once litigation is seriously underway. Appellees
waited roughly eight months after the appearance of Counsel to
file their motion. The question of waiver in the instant case turns
on the issue of “reasonable promptness.”
5
There is no bright-line rule governing the amount of time
within which a party can be found to be reasonably prompt.
Notably, most relevant case law in Florida has found waiver after
delays of greater than eight months. See, e.g., Zayas-Bazan v.
Marcelin, 40 So. 3d 870 (Fla. 3d DCA 2010) (holding that officers
waived their right to disqualify opposing counsel by failing to file
a motion until more than two-and-one-half years after the suit
began); Case v. City of Miami, 756 So. 2d 259 (Fla. 3d DCA 2000)
(holding that the city waived its right to seek disqualification as a
result of waiting seven years to file the motion); Balda v. Sorchych,
616 So. 2d 1114 (Fla. 5th DCA 1993) (holding that a trial court did
not depart from the essential requirements of the law by denying
a disqualification motion made more than three years after the
commencement of the lawsuit); L.E.B. v. D.D.C., 304 So. 3d 54 (Fla.
2d DCA 2020) (holding that a delay of greater than one year
waived a motion for disqualification). Moreover, the
circumstances here do not support a finding of waiver. Appellees
filed their motion to disqualify between pleadings and discovery, a
natural demarcation in the proceedings, and the motion was not
preceded by a great deal of work done by either side’s counsel.
Appellees did not waive disqualification.
We recognize the disqualification of opposing party’s counsel
is an extreme maneuver that cuts to the very heart of the litigation
at hand. See Gutierrez v. Rubio, 126 So. 3d 320, 321 (Fla. 3d DCA
2013). It should be met with a degree of skepticism even if filed in
a more timely manner than the motion here. We do not endorse
an eight-month delay in filing a motion to disqualify or assert that
an eight-month delay in and of itself is “reasonably prompt.”
However, given the particular facts of this case and the standard
of review on appeal, the trial court’s order is AFFIRMED.
BILBREY, J., concurs; MAKAR, J., dissents with opinion.
6
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
MAKAR, J., dissenting.
Disqualification of an attorney is a big deal: it severs the client
from the legal counsel he’s chosen and trusts; imposes burdensome
economic costs on the client, who must shoulder the added expense
of hiring and prepping new legal counsel; and injects disorder
directly into the central nervous system of the client’s litigation
affairs. Lee v. Gadasa Corp., 714 So. 2d 610, 612–13 (Fla. 1st DCA
1998) (refusing to sanction “the use by a corporate adversary of a
disciplinary rule for the improper purpose of securing an
advantage over its opponent by depriving the opponent of its
counsel of choice, who is intimately familiar with the litigation,
and forcing it either to spend additional funds for new counsel or
to concede defeat because of financial inability to retain new
counsel[]”). Because they “impinge[] on a party’s right to employ a
lawyer of choice,” disqualification motions “are often interposed for
tactical purposes,” Alexander v. Tandem Staffing Sols., Inc., 881
So. 2d 607, 609 (Fla. 4th DCA 2004), which is another reason why
they “are generally viewed with skepticism[,]” id. at 608. See also
Yang Enters., Inc. v. Georgalis, 988 So. 2d 1180, 1183 (Fla. 1st DCA
2008). Beyond their disruptive nature and strategic misuse, the
“disqualification of a party’s chosen counsel is a harsh sanction and
‘an extraordinary remedy’ which should be resorted to sparingly.”
Lee, 714 So. 2d at 612 (quotation omitted).
Even if a basis for disqualification exists in this case (which
appears dubious given the exceptionally thin basis for the
disqualification order, which made no findings of fact), the motion
to disqualify Global Lab Partners’ in-house counsel was dilatory
and not reasonably prompt. Because disqualification is an
extraordinary remedy, it must be sought with “‘reasonable
promptness . . . to prevent . . . using the motion as a tool to deprive
[the movant’s] opponent of counsel of his choice after completing
substantial preparation of the case.’” Id. (quoting Transmark,
7
U.S.A. v. State, Dep’t of Ins., 631 So. 2d 1112, 1116 (Fla. 1st DCA
1994)). The apparent strategic use of the motion to disqualify, and
its dilatory filing eight months after the movants knew or should
have known of the purported basis for disqualification, is enough
to establish a waiver. See Transmark, 631 So. 2d at 1116
(‘Transmark did not raise the question of conflict until more than
ten months had elapsed and until after the Receiver had already
paid approximately two million dollars in legal fees to its two
outside lawyers. Transmark effectively waived its right to seek
disqualification in failing to timely file its motion.”). Although
discovery of the magnitude in Transmark (a huge case) has not
been done in this case, the principle remains the same: waiver is
justified when the motion for disqualification is dilatory and an
apparent attempt to secure “an advantage over [an] opponent by
depriving the opponent of its counsel of choice.” Lee, 714 So. 2d at
612.
Buttressing that disqualification is unjustified in this case is
that no relief, other than disqualification of in-house counsel as
litigation counsel, has been sought. It is undisputed that
disqualified counsel can testify at trial and collaborate with the
company’s new defense counsel without restrictions; no order has
been entered to prevent disqualified counsel from sharing any
purported confidences. Indeed, no objection has been raised to
disqualified counsel acting as appellate counsel for Global Lab
Partners in this case, i.e., the same one in which he was
disqualified! Disqualified counsel prepared the appellate briefs
and argued the case without restrictions on his sharing or use of
confidential information. In short, the disqualification order is a
paper tiger, one that fails to serve any legitimate interest of the
movants but is extremely prejudicial to Global Lab Partners.
Whatever presumed prejudice to the movants that exists is
marginal at best under the circumstances and merely serves to
show that the dilatory motion to disqualify served one purpose: to
secure a litigation advantage. Disqualifying counsel under these
circumstances is reversible error.
_____________________________
8
Richard M. Beckish and Arthur Fletcher, Pensacola, for
Appellants.
Trevor A. Thompson of Clark Partington, Tallahassee; Jeremy C.
Branning of Clark Partington, Pensacola, for Appellees.
9