Attorneys - Disqualification - LLC.

Byline: Mass. Lawyers Weekly Staff

Where a defendant in a dispute over a limited liability company has moved to disqualify the plaintiff's counsel, the defendant has not shown that counsel learned any confidences from the defendant during his representation of the LLC, so the disqualification motion should be denied.

"Defendant Richard Pryor has moved to disqualify the law firm Newman & Newman, P.C., and Attorney Richard Joyce from continuing to represent All Tech Networking, LLC, and Steven Wojcik in this civil action.

"Pryor and Wojcik are the sole members and managers of All Tech. They each own half of the LLC. This lawsuit concerns Wojcik's attempt in February 2018 to terminate Pryor's employment with All Tech and his instruction that Pryor may no longer 'take any action on behalf of the Company.' Wojcik retained Attorney Joyce in November 2017 to try to negotiate the buyout of Pryor's interest in the LLC, and subsequently expanded the scope of Joyce's assignment to include representing the company in connection with the purported termination of Pryor's employment.

"The Court concludes that it must deny Pryor's motion to disqualify Attorney Joyce and his law firm because Pryor has not shown that Joyce learned any confidences from Pryor that would be relevant to this litigation.

"Pryor has not shown that he had any attorney-client relationship with Attorney Joyce. '[C]ounsel for a closely held corporation does not by virtue of that relationship have an attorney-client relationship with the individual shareholders[.]' ... A lawyer retained by a corporation represents the corporate entity, not its shareholders, officers, or directors. ... Since no attorney-client relationship ever existed between Pryor and Attorney Joyce or the Newman firm, the ethical rules that Pryor relies upon in seeking to disqualify Plaintiffs' counsel do not apply.

"The Court recognizes that it may turn out that Attorney Joyce owed Pryor a fiduciary duty of loyalty even though Pryor has not shown that they ever had an attorney-client relationship. If a limited liability company is governed by an...