Phase II Chin, LLC et al v. Forum Shops, LLC et al

Filing 76

Phase II Chin, LLC et al v. Forum Shops, LLC et al

Doc. 76

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MORRIS PETERSON Steve Morris, No. 1543 Jean-Paul Hendricks, No. 10079 900 Bank of America Plaza 300 South Fourth Street Las Vegas, Nevada 89101 Telephone: [phone] Facsimile: [phone] Caesars Palace Cor

6 Attorneys for Defendants

7 Caesars Palace Rea ty Corp.

P

. and

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UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

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PHASE I1 CHIN, LLC and LOVE & 1 1 MONEY, LLC, (formerly dba O.P.M.L.V., LLC,
12 13 1 4

) CASE NO. 2:08-cv-162-JCM-GWF

1
) ) ) ) ) ) ) ) ) ) ) ) )

Plaintiffs,

vs.

15 FORUM SHOPS, LLC, FORUM

DEVELOPERS LIMITED 16 PARTNERSHIP, SIMON PROPERTY GROUP LIMITED PARTNERSHIP, 17 SIMON PROPERTY GROUP, INC., CAESARS PALACE CORP., and 18 CAESARS PALACE REALTY CORP.,
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OPPOSITION TO PLAINTIFF PHASE I1 CHIN, LLC'S MOTION TO DISQUALIFY ATTORNEY STEVE MORRIS AND THE LAW FIRM OF MORRIS PICKERING & PETERSON (NOW MORRIS PETERSON)

Defendants.

1 1

Defendants Caesars Palace Corp. and Caesars Palace Realty Corp.

22 ("Caesars")hereby oppose plaintiff Phase I1 Chin, LLC's ("Chinois")motion to disqualify Steve Morris and the law firm of Morris, Pickering & Peterson (now 23 24 Morris Peterson). This opposition is based on the following memorandum of 25 points and authorities, the Declaration of Steve Morris, and the papers and 26 pleadings on file, including Chinois's motion and the exhibits thereto. 27
MORRIS PETERSON

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ATTORNEYS AT LAW 9 0 0 BANK OF AMERICA PLAZA 300 SOUTH FOURTH STREET LASVEGAS, NEVADA89101 702/474-9400 FAX [phone]

Dockets.Justia.com

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POINTS AND AUTHORITIES INTRODUCTION This motion to disqualify is based on a single and brief telephone call in October 2007 for which there is neither a record nor an estimate of duration by Chinois counsel. The call did not result in an attorney-client relationship of any

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6 nature or duration between Steve Morris or his law firm and Chinois or any

7 person or entity associated with this plaintiff. No documents or pleadings were
8 sent to or received by Morris to obtain legal advice or an opinion from him with
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respect to litigation then pending in Delaware against Chinois by the Forum Shops

1 or contemplated by Chinois against the Forum Shops and/or Simon Property 0 1 1 Group in Las Vegas.
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During the October telephone call, Morris told Heller that Morris

13 Peterson (then Morris Pickering & Peterson) represented Harrah's, Caesars parent,

1 and could not represent Chinois in a dispute in which Caesar's would be an 4
15 adverse party. Steve Morris Declaration 916, attached hereto ("Morris Decl.").
16 Heller describes this bar to representation of Chinois merely as something that

17 "might present a problem." Heller Declaration ¶5. In doing so, he omits the fact
18 that during their single conversation Morris recommended Stan Hunterton as a 19 "very capable and experienced litigator," whom Heller was also considering and

20 who might be able to advise and represent Chinois in Las Vegas. Exhibit A to 21 Motion to Disqualify at 2. There was no discussion or communication with Morris 22 thereafter, as Heller implies, in which "it was , . . decided that in order not to place 23 Mr. Morris or Chinois in the middle of a potential conflict Chinois would select 24 other attorneys (Hunterton & Associates) as local counsel." Heller Declaration q[5, 25 attached to the Motion to Disqualify as page 24. The decision to consult and 26 "select other attorneys" was made when Heller identified Caesars as a potential

27 defendant in the telephone discussion.
MORRIS PETERSON

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ATTORNEYS AT LAW 900 BANK O F AMERICA PLAZA 300 SOUTH FOURTH STREET LASVEGAS, NEVADA89101

702/474-9400 FAX [phone]

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Against these facts Chinois claims Heller and Morris discussed,

2 among other things, not merely litigation but "potential causes of action" in 3 Nevada and "eight causes of action for damages and injunctive relief, possible 4 defendants, litigation strategy, [and] prospects for settlement

...

'I!,

Heller

5 Declaration at 24, ¶4, without a scintilla of evidence to confirm these conclusory 6 allegations. Not only is it improbable that such a discussion took place, Chinois

7 has not demonstrated that an attorney-client relationship was established in a ten
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minute telephone call that would confer "former client" status on Chinois under

9 Nevada Model Rule 1.9 sufficient to support disqualification of Morris and his

1 firm.' 0
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More to the point, however, Chinois, as a "prospective client" in

la October 2007, must establish that it disclosed confidential information under
13 Nevada Model Rule 1.18 (Duties to Prospective Client) to qualify it to invoke 14 Model Rule 1.9. Without demonstrating that Phillip Heller disclosed information
15 from Chinois to Morris "that could be significantly harmful to that person in the

16 matter," Model Rule 1.18(c),Rule 1.9 is irrelevant in this lawsuit. No such 17 demonstration of disclosure harmful to Chinois is made in the pending motion, 18 nor is Model Rule 1.18 even acknowledged in the motion. This failure of evidence 19

MORRIS

The motion to disqualify relies largely on the assum tion that in s eaking to Morris for several minutes about a contemplate lawsuit in Las 21 &gas and whether to file it in state or federal court, Heller necessarily disclosed 22 significantly harmful confidential information to Morris about this lawsuit. This assumption distinguishes most of the case authority relied on b Chinois to invoke Model Rule 1.9, which a lies to communications with&rmeu clients and 23 depends on evidence of disqua Ipp 1 ying confidences disclosed by the client and/or le a1 advice iven in response thereto. See, e.g., Trolze v. Smitk, 621 F.2d 994,998 24 ( 9 h Cir. 1986 (involving Mr. Fagelbaum's rior law firm under several rovisions of the Model Code that are not ound in the Model Rules applicable 25 [ere. The confidences in uestion in Trone came from admitted former 26 representation and were s own to be ones that could be used against the firm's former client);Green v. Montgomery Count ,784 F. Supp. 841,845 (M.D. Ala. 1992) 27 (lawyer consulted b former client hearJhis story and advised client not to sue and then appeared or the defendant when client went elsewhere for 28 representation. Evidence established that Green was an actual former client and his belief that he was consulting his former attorney about a new case). PETERSON

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ATTORNEYS AT LAW 900 BANKOF AMERICA PLAZA 300 SOUTH FOURTH STREET LASVEGAS. NEVADA 89101

702/474-9400
FAX [phone]

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1 and authority to support disqualification is not overcome by the conclusory 2 declarations of either Phillip Heller or Jerold Fagelbaum, and for this reason the 3 motion to disqualify should be denied.
4 11.

RELEVANT FACTS At some time in or about October 2007, on a date not recorded by

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6 either party, (Declaration of Steve Morris attached hereto ("Morris Decl.") 32;

7 Declaration of Philip Heller in support of Motion to Disqualify ("Heller Decl.")

8 ¶¶3-4.), Morris received a telephone call from Heller to discuss a lawsuit he was 9 contemplating against the Forum Shops and the Simon parties on behalf of
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Chinois, a lessee at the Forum Shops. Morris Decl. 12. The content of this single

11 conversation is the issue in this case. (Plaintiff Phase I1 Chin LLC is herein
12 referred to as Chinois). 13

Heller said he represented Chinois in some sort of dispute with

1 Simon, Chinois's lessor, or another tenant or subtenant involving a nightclub. 4

15 Morris Decl. 132-3. Morris told Heller that Simon wJanuary 26,2009as the
16 operator/ground lessor of the Forum Shops. Morris Decl. ¶2. Morris did make a

17 record or notes of the call or speak to anyone in his law firm about the call. Morris 18 Decl. qlO(4). He estimates that it was ten to fifteen minutes in duration. Id. 19

During the course of this brief but cordial telephone conversation,

20 Morris was asked about and discussed his experience as a litigator in Las Vegas
21 and of his familiarity with the local and state federal district courts and their

22 calendars, Morris Decl. ¶4, which he freely discussed. Id. Heller told Morris that 23 Chinois had been sued in Delaware by the Forum Shops/Simon and that Chinois 24 had hired Heller to represent this Las Vegas lessee, and he was considering a 25 counter-suit here against Simon for various reasons. Morris Decl. 133-4; Heller
26 Decl. ¶4.

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MORRIS PETERSON

In the course of their discussion about the "pros and cons of state

28 versus federal court" (Heller Decl. 34), Heller mentioned Caesars as a possible

ATTORNEYS AT LAW 9OOBANKOF AMERICA PLAZA 300 SOUTH FOURTH STREET LASVEGAS, N E V A D A 8 9 1 0 1 7021474-9400 FAX [phone]

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1 additional defendant in the action he was considering, and Morris informed him 2 that Caesars/Harrah's were clients of his firm and recommended he speak to
3 another Las Vegas attorney about acting as local counsel, in particular Stan

4 Hunterton and Harold Gewerter. Morris Decl. ¶q16,7; Heller Decl. ¶5. The call
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then concluded. Morris Decl. 98. In January 2008, Chinois sued the defendants in this lawsuit,

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7 including Caesars, with Stan Hunterton as local counsel. Caesars requested
8 Kristina Pickering to represent it in the lawsuit, and she removed the case to this
9 Court. Michael Kostrinsky Declaration ¶3 ("Kostrinsky Decl."), attached hereto;

10 Morris Decl. ¶8. Heller thereafter called Morris to complain of the firm's
11 representation of Caesars. Morris Decl. ¶8; Ex. A to Motion to Disqualify. Morris

12 told Heller he had no knowledge of the lawsuit and had very little recollection of 13 their telephone conversation in the preceding October and no record of it. Morris 14 Decl. ¶8; Ex. A, at 2-3, email 2/14/08 Morris to Heller.
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This was the last contact between Morris and Heller. When

16 Ms. Pickering was elected to the Nevada Supreme Court, she began transferring

17 her pending cases to others in December. Caesars requested that this case be 18 transferred to Morris. Kostrinsky Decl. 94. Ms. Pickering so informed 19 Mr. Fagelbaum and Mr. Heller and other counsel in the case on December 19. 0
20 December 23, Heller objected to Morris replacing Pickering. Exs. G and C to
21 Motion to Disqualify. This motion to disqualify was filed on January 5,2009.

Morris Peterson has consistently maintained that no disabling
23 confidential information was received by Morris during his call with Heller in
24 October 2007. Morris Decl. ¶9. The record, such as it is, does not support that in

25 speaking to Heller 15 months ago for 10 to 15 minutes, Morris was acting as
26 Chinois's attorney and delivering legal advice to this litigant through Heller.

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MORRIS PETERSOh'

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ATTORNEYS AT LAW 900 BANK OF AMERICA PLAZA 300 SOUTH FOURTH STREET LAS VEGAS. NEVADA 89101 70?~74-9400 FAX [phone]

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111.

STANDARD OF REVIEW FOR THIS MOTION Federal courts apply state law in determining whether attorney

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3 disqualification is warranted.
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In-N-Out Burger v.In 6' Out Tire & Auto, Inc., 2008

WL 2937294 at "2 (D. Nev. 2008), citing In re County ofLos Angeles, 223 F.3d 990,995
(9th Cir. 2000) ("because we apply state law in determining matters of

6 disqualification, we must follow the reasoned view of the state supreme court

7 when it has spoken on the issue."). Exhibit 1hereto. Therefore Nevada Rules of
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Professional Conduct ("NRPC")are directly applicable to this case. See also Local

9 Rule IA10-7(a) ("Model Rules of Prof. Conduct, as adopted and amended. . . by
10 the Supreme Court of Nevada" govern lawyers practicing in this federal District

1 1 Court).

12

Counsel for Chinois correctly points out that NRPC 1.9(a) says "A

13 lawyer who has formerly represented a client in a matter shall not thereafter
14 represent another person in the same or a substantially related matter in which

15 that person's interests are materially adverse to the interests of the former client
16 unless the former client gives informed consent, confirmed in writing." Rule 1.9,

17 however, is inapplicable in this case unless Chinois was formerly Morris 18 Pickering's client, which it was not. Chinois was merely a "prospective client" 19 when Morris and Heller spoke in October 2007. Thus NRPC 1.18 (Duties to 20 Prospective Clients) governs the application of NRPC 1.9 in respect this 21 proceeding. Rule 1.18(c)requires the party moving for disqualification to 22 demonstrate that the target lawyer (Morris) received "information from the 23 prospective client that could be significantly harmful to that person in the matter." 24

The receipt by Morris of such disqualifying information is not

25 presumed, nor has the receipt of such information been shown or otherwise
26 established by Phillip Heller's conclusory declaration. Motions to disqualify are
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MORRIS PETERSON

not favored: "To overcome the court's disfavor of motions to disqualify, the

28 moving part must proffer compelling evidence that significantly harmful

ATrORNEYS AT LAW 900 BANK OF AMERICA PLAZA 300 SOUTH FOURTH STREET LASVEGAS, N E V A D A 8 9 1 0 1 702/474-9400 FAX [phone]

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information was disclosed. A D P , Inc. v.P M J Enterprises, 207 WL 836658 at "5

2 (D.N.J., Hedges, M.J.) (depositions that elicited testimony that a lawyer disclosed 3 "specificbackground information" in a conversation that the target lawyer "had
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difficulty recalling," including settlement discussions and claims the lawyer did

5 recall, did not establish receipt of "significantly harmful" under Mode Rule 1,18(c), 6 Id. at *1,5). Exhibit 2 hereto.

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"In addressing a motion to disqualify, the threshold question is whether there existed an attorney-client relationship that subjects a lawyer to the

9 ethical obligation of preserving confidential communications." Nelson v.Green
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Builders, 823 F.Supp. 1439,1445 (E.D. Wisc. 1993) (citing Westinghouse Elec. Corp. v.

11 Kerr McGee Corp., 580 F.2d 1311 (7th Cir. 1978)). To determine whether Morris is
12 Chinois's former attorney, it is first necessary to determine if he "formerly 13 represented" Chinois as a consequence of the October call between Morris and 14 Heller. The fact that one lawyer who represents a client speaks to another lawyer 15 about the client's affairs does not make the second lawyer co-counsel with the first.
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"The burden of establishing an attorney-client relationship rests on

17 the claimant of the privilege

...

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United States ZI. Gartner, 474 F.2d 297,298 (9th

18 Cir. 1973). Here, there is no agreement to establish that Morris was Chinois's

19 attorney for any reason at any time, nor do the declarations of Heller and 20 Fagelbaum say that there was. They do not say, either, that they or Chinois 21 believed Morris was acting as counsel to Chinois when Heller spoke to him. 22

Courts also consider that "opposing one party's interest in preserving

23 confidential communications is another party's interest in being represented by the 24 counsel of his choice." Nelson v. Green Builders, 823 F.Supp. 1439,1445 (E.D. Wisc. 25 1993)citing Schiessle v. Stephens, 717 F.2d 417,420 (7th Cir. 1993). Kostrinsky Decl. 26 9[5. Moreover, "motions to disqualify counsel . . . should be resolved with extreme
27 caution because they may be used abusively as a litigation tactic, when, for
MORRIS PETERSON
ATTORNEYS AT LAW
900 BANK OF AMERICA PLAZA

28 example, a movant is facing a formidable opponent."

Nelson v.Green Builders, 823

300 SOUTH FOURTH STREET LASVEGAS, NEVADA89101 702/474-9400 FAX [phone]

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1 F.Supp. 1439,1444 (E.D. Wisc. 1993) (citing Freeman v. Chicago Musical Instvtlment

2 Co., 689 F.2d 715,721 (7th Cir. 1982)). "Because of the potential for abuse,
3 disqualification motions should be subjected to "particularly strict scrutiny."

Optyl

4 Eyewear Fashion Int'l Coup. v. Style Co., LTD., 760 F.2d 1045,1050 (9th Cir. 1985); see
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ADP, Inc. v. PMJ Enterprises, 2007 WL836658 (D.N.J.). This means a party's right to

6 counsel of its choice must be balanced against another party's right to disqualify

7 that counsel because of contact with the moving party. Polyargo Plastics, Inc., v.
8 Cincinnnati Milacron, Inc., 903 F. Supp. 253,258 (D. P.R. 1995)(citingKevlik v.
9

Goldstein, 724 F.2d 844,850 (1st Cir. 1984)). Disqualification is not accomplished
NO ATTORNEY-CLIENT RELATIONSHIP WAS CREATED BETWEEN MORRIS PETERSON AND CHINIOS
A.

10 merely by requesting it. 11 IV. 12 13 14

Morris Did Not Receive Confidential Information from Chinois that Chinois Did Not Publish by Filing This Lawsuit. The unspecified information alleged in the Motion to Disqualify does

15 not rise to the level of confidential client information that warrants denying 16 Caesars its counsel of choice. From the description of the information Chinios
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alleges as confidential, most if not all of it has been disclosed in the complaint that

18 was filed on January 8,2008. Information that is public cannot be, by definition, 19 confidential, much less can public information - such as facts alleged, claims made

20 in a complaint - be "significantly harmful" to Chinois if also "disclosed" by Morris

or any member of Morris Peterson.
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No Confidential Client Information Was Disclosed
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In addition to Model Rule 1.18, courts say that 'confidential

24 information' for the purposes of a disqualification motion is information that if
25 revealed could put the plaintiff at a disadvantage or the other party at an

26 advantage.

"

Polyargo Plastics, Inc., v. Cincinnati Milacron, Inc., 903 F. Supp. 253,258

27 (D. P.R. 1995). What could that be here? Chinois has not established that Morris
MORRIS PETERSON

28 Peterson obtained any confidential fact from Chinois that could put Caesars at an

ATTORNEYS AT LAW 9 0 0 BANKOF AMERICA PLAZA 300 SOUTH FOURTH STREET LA5 VEGAS. NEVADA 89101 702/474-9400 FAX [phone]

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1 advantage in this lawsuit or disadvantage Chinois. To confirm this conclusion,
2 "the court should. . . undertake a realistic appraisal of whether confidences might 3 have been disclosed in the prior matter that will be harmful to the client in the

4 later matter." Robbins v. Gillock, 109 Nev. at 1018,862 P.2d at 1197 (1993).
5

When undertaking this appraisal, the Court should consider that

6 "unless there is evidence to the contrary

. . . [it] must assume that an attorney will

7 observe his responsibilities to the legal system, as well as to his client." United
8 States v. Walker River Irrigation, Dist. 2006 WL 618823 at "5 (D. Nev. 2006, McQuaid,

9 M.J.) (citing Geders v. United States, 425 U.S. 80,93 (1976)(internalquotations
1 omitted). Exhibit 3 hereto. This Court and others also say, that in assessing 0
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disqualification for conflict of interests that "a party is presumptively entitled to

12 the counsel of his choice, [and] that right may be overridden only if compelling
13 reasons exist." In re BellSouth Corp., 334 F.3d 941,961 (11th Cir. 2003) (internal

1 quotations omitted); accord, United States v, Walker River Irrigation Dist., 2006 WL 4

15 618823 at "3 (D. Nev.) ("disqualification is a 'drastic measure which courts should
16 hesitate to impose except when absolutely necessary' ' I ) .

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It is not "absolutely necessary'' to disqualify Morris Peterson and/or

18 Morris for Morris speaking to Heller in October 2007 for a few minutes about

19 litigation for Chinois in Las Vegas until Morris elicited a potential conflict from

20 Heller. See 1Restatement of the Law Governing Lawyers (Third) 9 15, comment c,
21 at 140 (personal disqualification for dealing with a prospective client ''occurs only 22 when the subsequent matter presents the opportunity to use information obtained 23 from the former prospective client that would be 'significantly harmful' 24 declaration does not support the "drastic measure" of disqualification. 25 26
'I).

Heller's

2.

The Case Law Relied on by Chinois

Chinois cites In Re Rossana, 359 B.R. 697,706 (D. Nev. 2008) for the

27 proposition that it may be implied under Nevada law that a lawyer received
MORRIS PETERSON

28 confidential information during a previous representation. However, in Rossana,

AnORNEYS AT LAW 900 BANK OF AMERICA PLAZA 300 SOUTH FOURTH STREET LASVEGAS, NEVADA89101 702/474-9400 FAX [phone]

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1 the prior representation was actual motion practice and obtaining a judgment in

2 Rossana's favor by the targeted lawyer. These facts of real representation by the 3 lawyer in Rossana distinguish it from the phone conversation in this case,
4 Moreover, this Court has observed that the burden of proof falls on the movant for
5 disqualification, which means
"

'that party must have evidence to buttress the

6 claim that a conflict exists'

'I).

In-N-Out-Burger v. In & Out Tire & Auto, Inc., 2008

7 WL 2937294 at *4 (D. Nev. Leavitt, M.J.) (citing Robbins

v. Gillock, 109 Nev. 1015,

8 1017). This means here and in California, where Chinois counsel originated the 9 call to Morris, that "a motion to disqualify should be accompanied by declarations
1 and admissible evidence sufficient to establish the factual predicate on which the 0
11 motion depends."

Walker v. River Irrigation District, supra, at "3. This evidence is

12 missing in the pending motion.
13

Similarly, in Laryngeal Mask v.A m b u , 2008 WL 558541 (S.D. Cal. 2008),

14 Exhibit 4 hereto, and

The people ex rel Dept. Of Corps. v. Speedy Ol Change Systems, i

15 20 Cal.4th 1135 (1999), cited by plaintiffs for the proposition that even the briefest

16 of client meetings can result in an attorney-client relationship, are inapposite here.

17 First, these cases do not reflect application or consideration of Model Rule 1.18 that
18 is an integral part of the Nevada Rules that address attorney-client relationships in
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this Nevada federal Court. More importantly, however, these two California cases

20 involved an extended face-to-face meeting and a series of telephone calls
21 concerning the subject lawsuits, which are absent here.

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The matters alleged to have been disclosed in Speedy Oil included "the

23 background of the case, Mobil's theories in the case, Mobil's discovery strategy 24 and an analysis of the procedural and substantive issues which had arisen to date,
25 and [were] likely to arise in the future the state of the case, experts, and 26 consultants, and specific factual issues.'' This is significantly more information

27 than Chinois alleges was disclosed to Morris in one telephone call of short
MORRIS PETERSON
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300 SOUTH FOURTH STREET LASVEGAS, NEVADA 89101 702/474-9400 FAX [phone]

28 duration. Furthermore, Chinois has not met its burden to show that confidential

900 BANK OF AMERICA PLAZA

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1 information was in fact passed between Heller and Morris. Absent evidence to

2 support the conclusory and self-serving affidavits of Heller and Faglebaum, see In
3 re Marriage ofZirnmerrnan, 16 Cal. App. 4th 556,565 (1993), the instant motion to
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disqualify must be denied. See Xobbins v. Gillock, 109 Nev. at 1017 ("party must have evidence to buttress the claim that a conflict exists"); Colyer v. Smith, 50 F. Supp. 2d 966,967 (C.D. Cal. 1999).

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3.

Even I the Court Believes the In ormation Conferred b Heller W a s Confi ential, it Has Now Been ublicly Disclosed and s No Longer Privileged

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Even if Heller discussed the facts of this case and his claims for relief,

1 these facts were made public in the complaint he and Stan Hunterton filed on 0 1 1 January 8,2008. A similar situation was before the court in Leathern v. City of 12 Laprote, Indiana, 2008 WL 1804150 (N.D. Ind. 2008), where plaintiff Leathem
13 alleged that in telephone conversation with attorney Friedman he disclosed

14 numerous facts about his cause of action. Representation did not result.

15 Thereafter, Leathem filed a motion to disqualify attorney Friedman from 16 representing one of the defendants sued by Leathem through another lawyer. In 17 denying Laethem's motion to disqualify attorney Friedman the court said the 18 "facts of this case have been disclosed in Leathem's complaint and various other 19 filings by Leathem. Leathem's recitation of facts cannot reasonably be construed 20 as confidential information." Id. at *2.

21

The same is true here. We are not dealing with "confidential" facts

22 that Morris could disclose that would be harmful to Chinois. These "facts," even if 23 disclosed by Morris, would not be significantly harmful to Chinois because they 24 are not "confidential facts." ADP, Inc. v. PMJ Enterprises, 2007 WL 836658 at *5 25 (D.N.J.)(discussion of plaintiff's business, the history of its dispute with the
26 defendant, and the factual basis of anticipated counterclaim is not significantly

27 harmful information under Mode Rule 1.18).
MORRIS PETERSON

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ATTORNEYS ATLAW 9 0 0 BANK OF AMERICA PLAZA 300 SOUTH FOURTH STREET LAS VEGAS, NEVADA 891 01 702/474-9400 FAX [phone]

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The opinion in Polyagro Plastics, Inc. v.Cincinnati Milacron, Inc., 903 F.Supp 253 (D. P.R. 1995), is also instructive here: at the hearing on plaintiffs' motion to disqualify counsel based on a single 10-minute phone conversation, the would actually prejudice them in the present case. The plaintiff testified, "that the

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4 court asked the plaintiffs what information disclosed to the targeted attorney
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E confidential information that would prejudice plaintiffs entailed the disclosure
' that there was an engineer who had been monitoring the problem, the identity of i

e the father and son who own Polyargo, the reasons for the defects in the machinery,
8 the theories for damages and the financial situation of Polyargo". Id. at 255. In
1c denying Polyagro's motion to disqualify, the court relied on the fact that "most of 11 the information was revealed in the complaint prior to [the attorney's]
1 2 representation of defendants in this case." Id. at 258. The same is true here. It

13 would be unfair and contrary to sound judicial policy to grant the pending motion 14 to disqualify Morris and his firm for allegations made in Chinois complaint,
15

B.

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I t W a s And Is Not Reasonable for Chinois t o Believe Morris Was Its Attorney for Ten Minutes in October 2007.
An attorney-client relationship cannot be established absent facts to

support a reasonable belief that the targeted lawyer was acting as the moving party's attorney: "Before a duty arises on the party [sic] of an attorney based upon implied or inferred attorney-client relationship or upon foreseeable reliance by one other than the actual client, more is required than an individual's subjective unspoken belief that the attorney is his attorney." 2001 WL 1699685 (Bkrtcy.

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M.D.N.C. May 30,2001) (quoting Sheinkopf v.Stone, 927 F.2d 1259,1265 (1st Cir.
199l))(internalquotations omitted). "The test for determining the existence of [an attorney-client] relationship is a subjective one and "hinges on the client's belief that he is consulting a lawyer in that capacity and his manifested intention is to seek professional legal advice." Green v.Montgomery County Alabama, 784 F.Supp. 841,845-46 (M.D. Ala. 1992)(citingWestinghouse Electric Coup., 580 F.2d at 1319).

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MORRIS PETERSON
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ATrORNEYS AT LAW PLAZA 300 SOUTH FOURTH STREET LAS VEGAS, NEVADA 89101 702/474-9400 FAX [phone]

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1 This subjective belief must, however, be reasonable. If the evidence reflects the
2 prospective client should have known that the relationship with the attorney had
3 not developed to a point at which it could be deemed representation, there is no
4
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attorney-client relationship, notwithstanding the prospective client's subjective belief. The evidence here of an attorney-client relationship between Morris and
1.

6 Chinois is not equivocal - it is non-existent.

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It W a s N o t Reasonable for Heller, a Seasoned Attorne ,to Believe That a n Attorney-Client Relationshi Had Been Crea ed, and He Does N o t Say Otherwise in His Dec aration.

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Nearly all the cases cited by Chinios to support the allegation that an

1 attorney-client relationship was established with Morris are based on the fact that 0
11 a lay person, without experience with the law or knowledge of the Rules of

12 Professional Conduct to which lawyers are subject, provided information to an
13 attorney with the expectation the attorney would become the lay person's
14 attorney. Love11 v. Winchester, 941 S.W.2d 466 (Ky. 1997) (lay land purchasers
15 sought to disqualify opposing counsel based on prior consultation); Bays v. Theron,

16 418 Mass. 685 (1994)(prose condominium owners motion to disqualify counsel 17 previously consulted about the case); Burton v. Burton, 139 A.D.2d 554 (1988) 18 (divorce action appealing grant of motion to disqualify wife's attorney); Kearns v. 19 Fred Lavery Porsche A u d i Co., 745 F.2d 600 (1985) (upholding disqualification of a

20 lay patent holder's attorney based on a prior consultation). These cases are simply 21 inapposite here. Heller was an experienced counsel for Chinois, and he knew

22 when he spoke to Morris that a conflict with an existing client of Morris would
23 prevent establishing an attorney-client relationship with him. Heller does not say

24 otherwise in his declaration.
25
26

Guerrero v. Bluebeard's Castle Inc., 982 F.Supp. 343 (D. V.I. 1997),is in
point for this discussion. There, the plaintiff sought to disqualify defendant's

27 counsel based on a telephone conversation between plaintiff's counsel and
MORRIS PETERSON
ATTORNEYS AT LAW
300 SOUTH FOURTH STREET LASVEGAS, N E V A D A 8 9 1 0 1

28 defendant's counsel before defense counsel was retained by defendants. During

900 BANK OF AMERICA PLAZA

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this call plaintiff's counsel sought assistance from defendant's counsel with

2 plaintiff's case. Plaintiff argued that an attorney-client relationship was formed
3 during that call, as Chinois contends here. In finding that no confidential

4 information had passed between the participants in the call, the court said "the
5

participants to this conversation were both sophisticated counsel well trained in

6 the law. ...[This was not] an untrained layperson approaching a member of the bar

7 for help in time of need." Id. at 347. Clearly in the instant case, both parties were
8 aware of their obligations under the Nevada Model Rules. Chinois, through
9 Heller, was informed that there was a disabling conflict once he disclosed Caesars

10 as a potential party to the contemplated lawsuit. When the conversation

1 1 concluded between Heller and Morris, both Heller and Fagelbaum treated the 12 conflict as a bar to further discussions with Morris. It is disingenuous and 13 unprofessional for them to now suggest that they turned to other Las Vegas

14 lawyers for assistance "in an effort not to place Mr. Morris or Chinois in the middle
15 of a potential conflict. . . 16
.I'

Fagelbaum Decl. ¶4, Motion to Disqualify at 27.

The only case that Chinois tenders to the court that involves attorney-

17 to-attorney contact, The People ex rel. Dept. of Corps. v. Speedee Oil Change Sys., Inc., 18 20 Cal. 4th 1135 (1999) is altogether dissimilar to this case because the attorneys in 19 Speedee Oil engaged in several telephone conversations to discuss the 20 representation and then met in person for an extended two hour face-to-face
21 discussion of the case. At that meeting, the attorneys discussed "the background

22 of the case, Mobile's theories in the case, Mobile's discovery strategy and an

23 analysis of the procedural and substantive issues which had arisen to date and
24 [were] likely to arise in the future, the state of the case, experts, and consultants, 25 and specific factual issues." Id. at 1141. 26

The telephone call of several minutes between Heller and Morris does

27 not invoke Speedee Oil. The discussion here between two experienced attorneys
MORRIS PETERSON

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ATrORNEYS ATLAW 900 BANK OF AMERICA PLAZA 300 SOUTH FOURTH STREET LASVEGAS, NEVADA89101 702/474-9400 FAX [phone]

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1 did not go into "discovery strategy" the ''state of the case," "experts, consultants,

a and specific factual issues.''
3

2.

4
5

Chinois Was Put on Notice That No Attorney-Client Relationship Could Be Established with Morris.

Chinois acknowledges that Morris immediately indicated a potential conflict in response to Heller mentioning Caesars. Heller Aff. 15. NRPC 1.18(f) allows an attorney "to condition conversations with a prospective client on the person's informed consent that no information disclosed during the consultation will prohibit the lawyer form representing a different client in the matter." Under to NRPC l.O(e),informed consent is defined as "the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to a proposed course of conduct." Once Morris advised Heller that a conflict would be presented by including Caesars as a party, any information divulged thereafter by Heller makes it unreasonable for Heller or Chinois to believe that Morris Peterson was speaking as Chinois's lawyer. V. CHINOIS'S MOTION TO DISQUALIFY IS TACTICALLY MOTIVATED This Court has previously observed that "Tactical considerations often motivate such motions," In-n-Out Burger v.In 3 Out Tire 3 Auto, 2008 WL 2937294 at *3 (D. Nev. July 24,2008), and went on to say, "courts must prevent parties from misusing motions for disqualification as instruments of harassment or delay. Courts therefore approach the issue of whether to disqualify opposing counsel as a drastic measure which courts should hesitate to impose except when absolutely necessary." Id. (Internal quotations and cites omitted.) When the spare facts of this case are evaluated, they simply do not support Chinois's allegations that Morris was its former attorney and received "significantlyharmful information during [his] . . . one telephone conversation with [Heller]." ADP v.PMJ Enterprises,

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MORRIS PETERSON
300 SOUTH FOURTH STREET
LA5 VEGAS. NEVADA 89101 702/474-9400 FAX [phone]

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supra. The facts suggest that this motion is tactically motivated.

ATFORNEYS AT LAW 900 BANK OF AMERICA PLAZA

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1

Chinois alleges that Heller called Morris and disclosed to him "the

2 strategy behind the litigation, venue, possible defendants (including Caesars) and
3 the selection and assessment of co-counsel to represent Chinois," without first

4 telling him that Caesars, which is not a lessor to the plaintiff or the developer and 5 operator of the Forum Shops, would be a defendant in the lawsuit Heller was

6 considering in retaliation for Simon's suit against Chinois in Delaware. An 7 experienced lawyer, like Heller, could be expected to say who he was
8 contemplating suing in addition to Simon in Las Vegas before discussing the

9 proposed lawsuit with Las Vegas counsel. But he did not disclose that fact at the 1 same time he disclosed Simon as his proposed defendant. Motion at 10. 0
11

Chinois also claims that Morris was given an overview of the existing

12 Delaware litigation and the anticipated Las Vegas litigation including, "the
13 addition of new parties and potential claims, litigation strategy and prospects for 14 settlement, and Morris provided legal advice on these subjects as well as on other 15 topics including current and possible counsel and judges." Motion at 13. What

16 Heller does not say is that in disclosing "possible defendants" he disclosed 17 Caesars. He does say that after he disclosed Caesars, "Morris revealed that his firm 18 had represented Caesars." It is preposterous and altogether disingenuous for
19 Heller to suggest that Morris continued to provide "legal and other advice,"

20 against his own client, once Caesars had been disclosed, Heller Decl. 9[4, Motion at 21 24. It is also contradicted by Heller's response to Morris's 2/14/08 email in which 22 Heller does not contest Morris's statement that "we would not represent tenants at
23 the Forum Shops because of the relationship between the Forum and Caesars." Ex.

24 A to Motion at 2 (page 56 of Motion papers). And Heller agreed with Morris's 25 statement of referral to Stan Hunterton: "you recall correctly making some very 26 favorable comments to me about Stan (all of which have proven to be true)." Id.

27
hlORRIS PETERSON

These facts suggest that Chinois's assertion that Morris should have

28 invoked "conflicts avoidance procedures" is misleading at best and a deliberate

ATTORNEYS AT LAW 9 0 0 BANK OF AMERICA PLAZA 300 SOUTH FOURTH STREET LA5 VEGAS. NEVADA 891 01 702/474-9400 FAX [phone]

16

1 distortion at worst. Mr. Heller, an experienced attorney, knew Morris Peterson 2 could not be involved in his lawsuit with Caesars as a party. If he continued his
3 conversation with Morris after that disclosure and received legal advice, which
4 5

Morris denies, it could only have been for the purpose of providing support for this motion. This is an inappropriate basis on which to seek Morris's disqualification.

6

7 V.
8
9

CONCLUSION
Chinois has not met its burden to establish that confidential

information was disclosed to Morris in the brief telephone conversation initiated considered confidential, Chinois has not established that the information was not

10 by Heller in October 2007. Even if the information -whatever it was - could be
11

12 made public in the complaint if filed herein in January 2008. Nor has Chinois 13 established that Nevada Model Rule of Professional Conduct 1.18(c) should not
14 apply to and bar this motion because the alleged information in question, which
15 Morris does not have or know, has not been shown to be information "that could

16 be significantly harmful" to Chinois if disclosed in this lawsuit.

17

For these reasons the motion to disqualify Steve Morris and his law MORRISPET By: Jean-Paul Hendricks, No. 10079 900 Bank of America Plaza 300 South Fourth Street Las Vegas, Nevada 89101 Attorneys for Defendants Caesars Palace Cor . and Caesars Palace Rea ty Corp.

18 firm should be denied. 1 9 20 21 22
23

7 SON 7

24 25
26

r

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MORRIS PETERSON

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A n O R N E Y S AT LAW 900 BANK OF AMERICA PLAZA 300 SOUTH FOURTH STREET LASVEGAS, NEVADA 8 9 1 0 1 702/474-9400 FAX [phone]

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1 2

CERTIFICATE OF SERVICE Pursuant to Fed. R. Civ. P. 5(b) and Section IV of District of Nevada

3 Electronic Filing Procedures, I certify that I am an employee of Morris Peterson,

4 2nd that the following documents were served via electronic service:

5 OPPOSITION TO PLAINTIFF PHASE I1 CHIN, LLC'S MOTION TO
6

DISQUALIFY ATTORNEY STEVE MORRIS AND THE LAW FIRM OF

7 MORRIS PICKERING & PETERSON (NOW MORRIS PETERSON)
8

ro:
Pamela R. Lawson Samuel S. Lionel LIONEL SAWYER & COLLINS 300 S. Fourth St., #1700 Las Vegas, Nevada 89101 Attorne s for Defendants Forum hops, LLC, Forum Developers Limited Partnership, Simon Pro erty Group Limited Partnership, an Simon Property Group, Inc.

9 C. Stanley Hunterton

1 HUNTERTON & ASSOCIATES 0 1 1 333 South Sixth Street

Las Vegas, Nevada 89101

Philip Heller 1 2 PAGELBAUM & HELLER, LLP 2049 Century Park East, Suite 4250 14 Los Angeles, CA 90067 Attorneys for Plaintiff Phase I1 Chin, LLC 16
17
1E

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Harold Gewerter GEWERTER LAW OFFICES 5440 W. Sahara Ave. Third Floor Las Vegas, Nevada 89146 Attorneys for Plaintiff Love & Money, LLC

1E
1E

2c

DATED this 26th day of January, 2009.

2 1 2 2 2 2 2 4 2 E 2 c 27
2t
MORRIS PETERSOh
ATTORNEYS AT LAW

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900 BANK OF AMERICA PLAZi
300 SOUTH FOURTH STREET LASVEGAS. NEVADA89101 702/474-9400 FAX [phone]

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