The Florida Bar v. Dunagan
1999 WL 68487, 731 So. 2d 1237 (1999)
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Rule of Law:
An attorney may not represent a client against a former client in the same or a substantially related matter where the clients' interests are materially adverse, nor may the attorney use information from the prior representation to the former client's disadvantage, without obtaining the former client's informed consent prior to undertaking the representation.
Facts:
- In July 1992, attorney Walter Benton Dunagan prepared a bill of sale transferring a restaurant, 'Biscuits ‘N’ Gravy ‘N’ More', to the joint ownership of William and Paula Leucht.
- Dunagan subsequently represented both William and Paula Leucht in a commercial lease dispute and an eminent domain suit related to their jointly owned restaurant.
- On February 23, 1996, Dunagan sent a letter to the local police department stating he represented William Leucht and that William was the sole owner of the restaurant, contrary to the bill of sale Dunagan had prepared.
- The letter further stated that William Leucht intended to fire two employees and that they would be ejected from the premises if they returned.
- Several days after sending the letter, Dunagan filed a petition for dissolution of marriage on behalf of William Leucht against Paula Leucht.
- Following the divorce filing, Paula Leucht went to the restaurant, where police, relying on Dunagan's letter, informed her she had to leave because her husband was the sole owner; she was then arrested for disorderly conduct and forcibly removed.
Procedural Posture:
- The Florida Bar filed a complaint against attorney Walter Benton Dunagan alleging ethical breaches.
- A formal hearing was conducted before a referee appointed by the Supreme Court of Florida.
- The referee found Dunagan guilty of violating multiple Rules Regulating The Florida Bar.
- The referee recommended that Dunagan be suspended from the practice of law for ninety-one days and be required to pay costs.
- Dunagan sought review of the referee's findings of fact and recommended discipline in the Supreme Court of Florida.
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Issue:
Does an attorney violate the Rules of Professional Conduct by representing a husband in a dissolution of marriage proceeding after having previously represented both the husband and wife jointly in matters concerning a marital business, and by using information from the prior representation to the wife's disadvantage?
Opinions:
Majority - Per Curiam
Yes, an attorney violates the Rules of Professional Conduct by representing one spouse in a divorce after having represented the couple jointly in a substantially related matter. The prior representation regarding the formation of a business is substantially related to a subsequent divorce because the business, created during the marriage, is a marital asset and inherently an issue in the dissolution. Here, Dunagan's prior representation of the Leuchts in forming their business was substantially related to the divorce, as ownership of the business was a central asset. The divorce petition Dunagan filed on behalf of William Leucht directly contradicted the bill of sale he previously prepared by claiming William was the 'sole owner.' Furthermore, Paula Leucht did not give valid consent; her failure to object after being sued does not constitute 'consent after consultation,' and the burden to obtain such consent rested on Dunagan before he began the adverse representation. Finally, Dunagan improperly used information related to the prior representation to Paula Leucht's disadvantage, as his letter to the police claiming William was the sole owner directly contributed to her arrest.
Analysis:
This decision reinforces the strict application of the 'substantially related' test for successive conflicts of interest, particularly within family law. It establishes a strong precedent that an attorney's prior joint representation of a couple concerning a business that becomes a marital asset is almost per se substantially related to a subsequent divorce proceeding. The ruling clarifies that the duty to obtain informed consent rests solely with the attorney and must be fulfilled before undertaking the conflicting representation; a former client's passive failure to object is insufficient. This case serves as a significant warning to attorneys in transactional or business law to exercise extreme caution before representing one spouse against another in a future dispute, highlighting the enduring nature of the duty of loyalty to former clients.
