The Georgia Court of Appeals this week published an opinion addressing two key issues in disqualification procedure: the timing of appeals and the necessity of procedural protections (such as evidentiary hearings).  The case involved a lawyer who had formed an LLC in 2006 at the request of one of its members, Mr. Befekadu, but the lawyer had since performed no work for the LLC.  After Mr. Befekadu later wrote allegedly unauthorized checks to himself, the other members of the LLC brought suit against him for conversion and misappropriation of the LLC’s assets.  The lawyer agreed to represent Mr. Befekadu in that suit.  The lawyer quickly informed the opposing lawyers that, if they had an issue with his prior work potentially causing his disqualification, they should file a motion with the court.  They never did, and the case eventually proceeded to trial.

At trial, the following spontaneous colloquy occurred while the lawyer was cross-examining a witness:

THE COURT: You’re disqualified. You incorporated this corporation and now you’re up here fussing about what was done and when it was done and how it was done. And your name appears on all these documents. That’s a disqualification. You can’t do it on both sides. You’re trying to do it on both sides. . . . What do the Plaintiffs want to do?

[OPPOSING COUNSEL]: We’re happy to let him be disqualified.

THE COURT: Then you’re disqualified and we’ll have to—I will discharge the jury.

[COUNSEL]: Your honor, I would like to say that we did discuss this back early on. All that I did, on behalf of this company, was to—

THE COURT: The minute you say, all that I did, is enough to disqualify you.

[COUNSEL]: Okay. I filed the articles of incorporation.

THE COURT: That’s the rules. Let me say this. I’ve just been disqualified from a criminal case because I represented the victim’s mother in 1995. Once you touch it, you’re in trouble. So I’m going to have to declare a mistrial.

On a later appeal after the retrial (without the lawyer), the appellate court reversed.  The court first addressed the opposing counsel’s “argument that Befekadu’s appeal of the disqualification order should be dismissed because he did not obtain a certificate of immediate review at the time the order was entered.”  That is an interesting argument, because usually the argument runs in the opposite direction: that an interlocutory appeal is premature.  The Supreme Court of the United States, and several state courts, have agreed that interlocutory appeals of disqualification orders are generally inappropriate.[1] The Georgia scheme is different in materials ways, but the court nevertheless rejected the opposing counsel’s argument: “Although disqualification orders are interlocutory and subject to the interlocutory appeal procedure, ‘relief from an erroneous disqualification order is [also] available on appeal from a final judgment.’” (quoting Settendown Public Utility v. Waterscape Utility, 324 Ga. App. 652, 654, 657, 751 S.E.2d 463 (2014)).  In other words, both interlocutory appeal (if the procedural rules are followed) and direct appeal are permissible vehicles in which to challenge the disqualification order.

After establishing that the order was properly before the court, Mr. Befekadu argued that the opposing side had waived any right to seek disqualification of his counsel by failing to raise the issue promptly. The court agreed in principle, noting that “even if a conflict of interest exists, such conflict can be waived by failing to raise the issue with reasonable promptness after a party discovers the facts that would support a motion to disqualify.” Given the sudden colloquy at trial, “however, the disqualification issue was raised and ruled on by the trial court before any potential waiver could be considered.”  The court therefore concluded that, “[o]n remand, Befekadu will have the opportunity to argue that [the opposing side] waived any conflict of interest and have that issue considered by the trial court.”

Finally, the appellate court was concerned with the trial court’s disqualification process (or the lack of it).  Although the appellate court did not hold that a right to an evidentiary hearing always exists on the issue of disqualification, as some courts have held, the court did conclude a hearing was “necessary in this case to allow the parties to submit evidence in support of their positions before the trial court determines whether disqualification is appropriate.”  The court also wisely stated that the trial court’s order on remand (whether that order ultimately grants or denies the disqualification) must be supported by “necessary findings of fact.”

The full opinion is available here: Befekadu v. Addis Int’l Money Transfer, LLC, No. A14A1643, __ S.E.2d __, 2015 WL 1215142 (Ga. Ct. App. Mar. 18, 2015).

[1]           See, e.g., Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 370 (1981) (holding that “orders denying motions to disqualify counsel are not appealable final decisions under § 1291”); Flanagan v. United States, 465 U.S. 259, 260 (1984) (holding that “a District Court’s pretrial disqualification of defense counsel in a criminal prosecution is not immediately appealable”); Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 440 (1985) (holding “that orders disqualifying counsel in civil cases, like orders disqualifying counsel in criminal cases and orders denying a motion to disqualify in civil cases, are not collateral orders subject to appeal as ‘final judgments’ within the meaning of 28 U.S.C. § 1291”); see also generally Ronald D. Rotunda, Conflicts Problems When Representing Members of Corporate Families, 72 Notre Dame L. Rev. 655, 665–66 (1997) (“Many state courts have followed the federal lead by rejecting the notion of a right to appeal on this issue,” and “[t]he parties are left with the cumbersome and procedurally difficult remedy of filing an extraordinary writ of mandamus.”).  Indeed, just this week, the Ohio Supreme Court addressed this timing issue when a judge accused of violently assaulting his wife moved to disqualify the prosecutor’s office, the trial court denied the motion, and the judge attempted to take an interlocutory appeal of the trial court’s denial.  While recognizing that the Ohio Supreme Court had held that a criminal defendant may take an interlocutory appeal of a decision granting the disqualification of chosen counsel, relying on State v. Chambliss, 947 N.E.2d 651 (Ohio 2011) and United States v. Gonzalez-Lopez, 548 U.S. 140 (2006), the same rule did not apply to a criminal defendant’s motion to disqualify the opposing side:

The erroneous deprivation of a defendant’s attorney results in structural error that renders a postconviction appeal meaningless because the defendant has been irretrievably deprived of his chosen attorney’s advice and representation during trial: “A postconviction reversal of the trial court’s judgment would not be automatically effective. A criminal defendant might exhaust his or her resources during the first trial, thereby denying that defendant the counsel of his or her choice. Further, if counsel of choice were later deemed to have been erroneously removed, the subject matter of the first trial, including the strategy employed, witnesses cross-examined, etc., would be stale and likely weakened.” Chambliss, ¶ 22.  On the other hand, the denial of a party’s motion to disqualify his or her opponent’s attorney does not implicate the same concerns and does not render a postconviction appeal meaningless. . . . An incorrect ruling on a criminal defendant’s motion to disqualify the prosecutor’s office may be remedied by a new trial if he or she is convicted and successfully appeals from the ruling.

The full opinion is available here: State ex rel. McGinty v. Eighth Dist. Ct. App., No. 2014–1739, __ N.E.3d __, 2015-Ohio-937, 2015 WL 1244736 (March 17, 2015).