Berlinger et al v. Wells Fargo, N.A. as Successor to Wachovia Bank, N.A.
Filing
87
OPINION AND ORDER overruling 80 Bruce D. Berlinger's Objections to Magistrate's Decision on Motion for Disqualification of Amy S. Rubin, Esq. and the Law Firm of Fox Rothschild; denying 76 Wells Fargo Bank, N.A.'s Motion for Sanctions Pursuant to Federal Rule of Civil Procedure 11 and Florida Statute Sec. 57.105. See Opinion and Order for details. Signed by Judge John E. Steele on 7/26/2013. (AAA)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
STACEY SUE BERLINGER, BRIAN BRUCE
BERLINGER,
and
HEATHER
ANNE
BERLINGER, as beneficiaries to the
Rosa B. Schweiker Trust and all of
its related trusts,
Plaintiffs,
vs.
Case No.
2:11-cv-459-FtM-29UAM
WELLS FARGO, N.A. as Successor to
WACHOVIA BANK, N.A., as Corporate
Trustee to the Rosa B. Schweiker
Trust, and all of its related trusts,
Defendant/Third
Party Plaintiff,
vs.
BRUCE
D.
CASSELBERRY
BERLINGER
and
SUE
Third
Party
Defendants.
___________________________________
OPINION AND ORDER
This matter comes before the Court on Bruce D. Berlinger’s
Objections to Magistrate’s Decision on Motion for Disqualification
of Amy S. Rubin, Esq. and the Law Firm of Fox Rothschild (Doc. #80)
filed on June 27, 2012.
No response has been filed and the time to
respond has expired.
I.
In
their
Berlinger,
First
Brian
Amended
Bruce
Complaint,
Berlinger,
and
plaintiffs
Heather
Stacey
Anne
Sue
Berlinger
(plaintiffs), beneficiaries to the Rosa B. Schweiker Trust and all
of its related trusts (Trusts), allege that Wells Fargo, N.A.
(Wells Fargo), corporate co-trustee of the Trusts, wrongfully
distributed trust funds to Sue Casselberry (Casselberry), as a
result of her 2007 divorce settlement with Bruce D. Berlinger
(Berlinger). (Doc. #25, pp. 7, 8.) Plaintiffs moved to disqualify
Wells Fargo's counsel, Amy S. Rubin (Rubin), due to an alleged
conflict of interest based on counsel's involvement in the prior
divorce action between Berlinger and Casselberry.
(Doc. #48.)
On
April 19, 2012, the Magistrate Judge issued an Order denying
plaintiffs’ motion.
which were overruled.
(Doc. #58.)
Plaintiffs filed objections,
(Doc. #85.)
On April 20, 2012, defendant filed a Third Party Complaint
alleging claims of contribution and unjust enrichment against
Berlinger and a claim of unjust enrichment against Casselberry.
(Doc. #60.)
Berlinger similarly moved to disqualify Wells Fargo’s
counsel, Rubin.
(Doc. #71.)
In the divorce proceedings, a Joint Defense Agreement (JDA)
was executed and signed on behalf of Berlinger and Wells Fargo, by
their attorneys, John Asbell (Asbell) and Rubin.
(Id., pp. 3, 4.)
The JDA provided for the signatories to cooperate with each other
and to share privileged information in their joint defense against
Casselberry.
(Id.)
In his motion, Berlinger argued that Rubin's
prior involvement in the divorce proceedings disqualified her from
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representing Wells Fargo in this case.
(Doc. #71.)
He asserted
that: (1) during the divorce action, Rubin filed a motion for
partial summary judgment and an Answer "in accordance with the
understanding produced by the [JDA]. . . ."; (2) Rubin's Answer
admitted that she owed a fiduciary duty to the beneficiaries, which
included Berlinger; and (3) Rubin relied on information obtained
from
her
representation
of
Wells
Fargo
during
the
divorce
proceedings to subpoena documents showing that plaintiffs signed
releases which waived their claims to a portion of the Trusts'
corpus.
(Id.)
On
June 15, 2012, the Magistrate Judge issued an
Order denying Berlinger’s motion.
(Doc. #78.)
II.
Berlinger objects to the Magistrate Judge's Order pursuant to
Fed. R. Civ. P. 72(a).
A district court reviews an objection to a
non-dispositive order of a magistrate judge to determine whether
the order was clearly erroneous or contrary to law.
Fed. R. Civ.
P. 72(a); 28 U.S.C. § 636(b)(1)(A).
In his objections, Berlinger argues that the Magistrate Judge
erred because: (1) under the relevant case law, an attorney-client
relationship forms between counsel for one defendant and a codefendant when they enter into a joint defense agreement, even when
the co-defendant retains separate counsel; (2) Jacob v. Barton, 877
So. 2d 935 (Fla. 2d DCA 2004) holds that an attorney-client
relationship is formed between a co-trustee and/or beneficiary and
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an attorney, when that attorney is hired by a trust to provide
legal services; (3) if an attorney-client relationship was formed
between Rubin and Berlinger, the prior litigation was shown to be
substantially similar; and (4) Berlinger did not make an informed
waiver of future conflicts.
(Doc. #80.)
After a de novo review of the law, the Court agrees with the
Magistrate Judge that Berlinger has failed to establish that an
attorney-client relationship existed between Berlinger and Rubin.
Berlinger first argues that under the relevant case law an
attorney-client relationship formed between Rubin and himself as a
result of the JDA.
The Court disagrees.
Co-defendants who enter
into a joint defense agreement are represented by independent
counsel, but
necessitates
agree
the
to
pursue
exchange
a
of
common
defense
confidential
during defense strategy sessions.
strategy that
communications
made
United States v. Almeida, 341
F.3d 1318, 1323-24 (11th Cir. 2003).
To facilitate confidential
exchanges of information between co-defendants, the communications
made during
the
joint
(citations omitted).
defense
strategy
are privileged.
Id.
However, a joint defense agreement does not
necessarily create a duty of loyalty between the co-defendants and
their counsel.
Id. at 1323.
"[I]t is therefore improper to
conclude that all of the attorneys in the joint defense strategy
session represent all of the participating defendants."
Id.
See
also Wilson P. Abraham Constr. Corp. v. Armco Steel Corp., 559 F.2d
-4-
250,
253
(5th
Cir.
1977)(noting
that
in
the
joint-defense
situation, "there is no presumption that confidential information
was
exchanged
relationship.")
as
there
was
no
direct
attorney-client
Therefore, the case law does not suggest that an
attorney-client relationship was formed.1
Berlinger also argues that under Jacob, 877 So. 2d 935,
Rubin's "real client" is Berlinger as either a co-trustee or a
beneficiary to the Trusts because he benefitted from Rubin's
representation.
The Court has previously addressed this argument
with respect to plaintiffs and agreed with the Magistrate Judge
that
Jacob
did
not
require
a
finding
relationship between plaintiffs and Rubin.
of
an
attorney-client
(Doc. #85.)
The Court
similarly finds that Jacob does not require a finding of an
attorney-client relationship between Rubin and Berlinger, either in
his role as co-trustee or beneficiary.2
The Court concludes that Berlinger has not established either
that the Order was clearly erroneous or that it was contrary to law
and, thus, Berlinger’s objections are overruled.
1
While the Court does not find that an attorney-client
relationship was formed between Berlinger and Rubin, Rubin remains
unable to utilize privileged communications shared pursuant to the
JDA.
2
Because the Court does not find that an attorney-client
relationship was formed between Berlinger and Rubin, the Court need
not address Berlinger’s remaining objections regarding whether the
prior litigation was substantially similar or whether Berlinger
made an informed waiver of future conflicts.
-5-
III.
Also before the Court is Wells Fargo Bank, N.A.’s Motion for
Sanctions Pursuant to Federal Rule of Civil Procedure 11 and
Florida
Statute
§57.105
(Doc.
#76)
filed
on
June
8,
Berlinger filed a Response (Doc. #79) on June 22, 2012.
2012.
Wells
Fargo seeks sanctions against Berlinger and his counsel arguing
that Berlinger’s Motion to Disqualify (Doc. #71) is not warranted
by existing law and/or the factual contentions asserted in the
motion are without evidentiary support.
“Under Rule 11, sanctions are properly assessed when: (1) a
party files a pleading that has no reasonable factual basis; (2)
the party files a pleading based on a legal theory that has no
reasonable chance of success and cannot be advanced as a reasonable
argument to change existing law; or (3) the party files a pleading
in bad faith for an improper purpose.”
Thompson v. RelationServe
Media, Inc., 610 F.3d 628, 637 n.12 (11th Cir. 2010)(citation
omitted).
In making the determination, the Court must evaluate
whether “the party’s claims are objectively frivolous” and whether
“the person who signed the pleadings should have been aware that
they were frivolous.” Jones v. Int’l Riding Helmets, Ltd., 49 F.3d
692, 695 (11th Cir. 1995)(citing McGuire Oil Co. v. Mapco, Inc.,
958 F.2d 1552, 1563 (11th Cir. 1992)).
Fargo has not satisfied this standard.
-6-
The Court finds that Wells
Wells Fargo also seeks fees pursuant to Florida Statute
Section 57.105, which allows for attorney’s fees to be awarded if
a claim or defense was unsupported.
Fla. Stat. § 57.105(1).
Monetary sanctions cannot be awarded if the Court finds that the
claim was presented in good faith.
Fla. Stat. § 57.105(3).
As
with the Rule 11 motion, the Court finds that sanctions are not
appropriate because Wells Fargo has failed to satisfy the standard.
Accordingly, it is now
ORDERED:
1.
Bruce D. Berlinger’s Objections to Magistrate’s Decision
on Motion for Disqualification of Amy S. Rubin, Esq. and the Law
Firm of Fox Rothschild (Doc. #80) are OVERRULED.
2.
Wells Fargo Bank, N.A.’s Motion for Sanctions Pursuant to
Federal Rule of Civil Procedure 11 and Florida Statute §57.105
(Doc. #76) is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this 26th day of
July, 2013.
Copies: Counsel of record
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