Chicago Legal Malpractice Lawyer Blog
ARDC claims conflict of interest.
This case illustrates one of the problems with the ARDC process. The underlying conduct took place in 2004. The ARDC filed a complaint against the respondent in December 2008! She answered in February 2009, but the case did not come to hearing until January 2012. The decision was issued on August 24, 2012.
The ARDC claimed that the lawyer, Marine Polynice-Jackson represented one computer company and then improperly engaged in a conflict of interest by assisting one of the computer company’s employees in setting up a new and competing enterprise.
James Throgmorton was the owner of Computer Warehouse and other companies. James Mayer was his “key” employee. Mayer was the employee who dealt with Polynice-Jackson.
The Computer Warehouse company rendered services to Polynice-Jackson’s firm. In turn, the firm formed an attorney-client relationship with Throgmorton.
The ARDC alleged that Mayer and Polynice-Jackson began plotting together to allow Mayer to form a competing company. The attorney denied the charges and claimed that she properly terminated her attorney-client relationship with Throgmorton before working with Mayer and his new company.
In 2004, Mayer left Computer Warehouse and formed his own company. The new company took clients from Computer Warehouse and hired employees away from it. Computer Warehouse’s lawyer, the respondent, then represented the new company formed by James Mayer.
The panel quotes Throgmorton as follows: “Throgmorton testified that the Respondent and Mayer were in collusion against him, and kept it a secret from him. Throgmorton said the “most heinous thing was having an attorney that had access to every bit of information about my business and then using it basicallyagainst me with one my employees [Mayer],” as to the creation of a competing business. (Tr. 50, 52-53).” Pages 6 and 7.
The panel did not agree with this testimony and rejected all of the charges of conflict of interest and recommended that the case be dismissed.
Comment: my view is that an appeal by the administrator is likely. This case goes to the heart of what is expected of attorneys during and after the attorney-client relationship comes to an end. The corporate attorney is supposed to protect the company from these situations – an employee leaves and starts a competing operation and takes customers and other employees with him. Even if the respondent met her technical obligations to Computer Warehouse and Throgmorton, she took a risk in representing a spinoff company. It is hard to believe that the confidences of Computer Warehouse and Throgmorton were not used in forming the attorney-client relationship with Mayer and in doing legal work for Mayer’s company.
A corporation that learns that its former lawyer represents breakaway employees will undoubtedly feel that it has been treated poorly. Whether the administrator proved an ethical violations is another question. In my view, an appeal is likely.
Edward X. Clinton, Jr.