Blackhawk Land and Resources, LLC et al v. WWMV, LLC et al

Filing 73

MEMORANDUM OPINION AND ORDER denying without prejudice the 55 MOTION to disqualify Shawn George from representing the defendants in this case, as is the request for a protective order; the court further lifts its stay of discovery proceedings. Signed by Judge John T. Copenhaver, Jr. on 2/27/2018. (cc: counsel of record; Magistrate Judge Dwane L. Tinsley) (taq)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON

BLACKHAWK LAND AND RESOURCES, LLC and
PANTHER CREEK MINING, LLC,
Plaintiffs/Counterdefendants,

v.

Civil Action No. 2:16-cv-10711

WWMV, LLC and RWMV, LLC,
Defendants/Counterclaimants.

MEMORANDUM OPINION AND ORDER

Pending before the court is the plaintiffs’ motion to
disqualify defendants’ counsel Shawn George, including a request
for a protective order to that end, filed on December 12, 2017.
Defendants have responded in opposition, and the court held a
hearing on the matter on December 22, 2017.
Plaintiffs move to disqualify Shawn George as counsel
for the defendants because he took part in the settlement
negotiations between the parties leading to, and including, the
settlement of claims between them that the defendants allege
took place.

According to plaintiffs, such role makes Mr. George

a necessary witness, because the alleged settlement is asserted
as a defense by the defendants to the breach of contract claims

at issue, and this settlement is in dispute.

Plaintiffs believe

that Mr. George’s connection to the defendants as one who has an
ownership interest is also material.

Along with the

disqualification, plaintiffs seek a protective order to prevent
Mr. George from taking depositions.
In his capacity as counsel for the defendants, Mr.
George participated in a meeting with representatives of
Blackhawk Mining on August 22, 2016, along with Ralph Ballard,
the manager of RWMV, which manages WWMV, and E. Forrest Jones,
Jr. whose affiliation is not entirely clear to the court at this
juncture.

In their discovery response, sent on November 6,

2017, defendants discussed this meeting, the alleged settlement,
and subsequent communications between Mr. George and Blackhawk
representatives.

Defendants also identified every person

present at the meeting, including Mr. George, as individuals
with knowledge concerning the allegations in the plaintiffs’
complaint and the defenses thereto.
Defendants object to the timing of the motion as
“retaliatory” to their deposition attempts and argue that the
plaintiffs seek to smooth their path to summary judgment in
their favor.

Furthermore, they contend that plaintiffs cannot

satisfy the legal standard for disqualification under Smithson

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v. United States Fidelity & Guaranty Co., 411 S.E.2d 850 (W. Va.
1991).
At the hearing, the defendants maintained that Mr.
Ballard, present at the meeting in question, would be made
available for deposition, and all parties appeared to agree that
the e-mail communications to and from Mr. George, pertaining to
the alleged settlement, would likely be admissible in court.

A. Standard for Disqualification
Local Rule of Civil Procedure 83.7 provides that
“attorneys shall conduct themselves in accordance with the Rules
of Professional Conduct and the Standards of Professional
Conduct promulgated and adopted by the Supreme Court of Appeals
of West Virginia, and the Model Rules of Professional Conduct
published by the American Bar Association.”

L.R. Civ. P. 83.7.

West Virginia Rules of Professional Conduct, Rule 3.7
provides that:
(a) A lawyer shall not act as advocate at a trial
in which the lawyer is likely to be
a necessary witness except where:
(1) the testimony relates to an uncontested
issue;
(2) the testimony relates to the nature and value
of legal services rendered in the case; or
(3) disqualification of the lawyer would work
substantial hardship on the client...
W.Va. R.P.C., Rule 3.7.
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The American Bar Association’s Model Rule 3.7 is essentially the
same as W.Va. R.P.C., Rule 3.7.
According to West Virginia law, “[w]hen counsel for a
party to a cause finds that he is required to be a material
witness for his client he should immediately so advise his
client and retire as counsel in the case.”

Edmiston v. Wilson,

146 W.Va. 511, 531 (W.Va. 1961) (internal citation omitted);
Garlow v. Z, 186 W.Va. 457, 464 (W.Va. 1991) (“Of course, the
lawyer should disqualify himself or herself upon finding that he
or she will be a material witness.”).

If counsel does not

voluntarily withdraw from the case, the court has the inherent
power to disqualify the attorney.

Garlow, 186 W.Va. at 465.

The test for the propriety of disqualification is laid
out in Smithson.
First, it must be shown that the attorney will
give evidence material to the determination of
the issues being litigated; second, the evidence
cannot be obtained elsewhere; and, third, the
testimony is prejudicial or may be potentially
prejudicial to the testifying attorney's client.
Syl. pt. 3, Smithson, 411 S.E.2d 850.

B. Analysis
The first prong of the Smithson test is established
insofar as it is undisputed that Mr. George has material

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information about the parties’ negotiations and, therefore, the
settlement defense.
The second prong is disputed insofar as the defendants
suggest that the plaintiffs can obtain the information from
other individuals such as Mr. Ballard and Mr. Jones.

Moreover,

the e-mail communications are admissible, and it is not clear at
this stage that Mr. George is a necessary witness with respect
to their contents or any other aspect related thereto.

In this

light, this prong weighs against disqualification.
Finally, with respect to the third factor, while the
parties have a dispute whether the settlement was reached or
whether they were instead engaged in preliminary discussions,
Mr. George has taken a consistent and clear position on the
matter, which is that of the defendants, obviating the concern
that his testimony may be adverse to his side.

The plaintiffs’

argument that Mr. George would testify that the alleged
agreement between plaintiffs and defendants was not reduced to
writing or that its realization was contingent on the release of
mechanics’ liens and other anticipated actions by third parties
does not suggest that his testimony is necessarily prejudicial
to the defendants’ position.
Accordingly, the analysis of the Smithson factors does
not support disqualification of Mr. George.

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Plaintiffs argue that separately from the Smithson
factors, Mr. George should be disqualified because he has made
himself a necessary witness but the cases they cite to support
this contention are inapposite.

In Finn v. Harbor Metal

Treating, Inc., Cause No. 3:09-cv-130 CAN, 2009 U.S. Dist. LEXIS
101278, at *7 (N.D. Ind. Oct. 29, 2009), the attorney was the
sole witness on his client’s side to the alleged settlement
agreement, whereas in this case Mr. Ballard is an apparent
witness to the very same matter and Mr. Jones was also present.
In United Plastics Corp. v. United Techs. Auto., No.
6:96CV00829, 1996 U.S. Dist. LEXIS 20177 (M.D.N.C. Dec. 17,
1996) a greater importance attached to the letters there in
issue than in the instant case.

In that case, the plaintiff

company alleged that the defendant company, the previous owner
of a plastic manufacturing plant, failed to perform certain
environmental remediation work that it was supposed to fulfill
pursuant to the sales agreement.

Id. at *1-2.

Plaintiff

alleged that defendant agreed to remedy certain problems and
“memorialized these points of agreements in letters” sent to
plaintiff’s counsel Greg Blount.

Id. at *2-3.

The court noted

that “[t]he only evidence Plaintiff has offered to support the
existence of an agreement is the letters themselves” and deemed
Blount’s testimony to be “essential” to determine whether to
interpret them as acceptance of an offer.
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Id. at *7.

In

LaForest v. Ameriquest Mortg. Co., Civil Action No. 04-30195MAP, 2006 U.S. Dist. LEXIS 39293 (D. Mass. June 2, 2006), a
mortgage loan refinancing matter, the plaintiff’s attorney,
Jason D. Fregeau, was regarded by the court to be an
indispensable source of information when he engaged in
negotiations with the defendant financing company by various
means of communication and described an agreement, which was
ostensibly reached between the parties, in a letter.

Id. at *2.

The plaintiff then asserted that Ameriquest “failed to follow
through on its obligations.”

Id. at *3.

In allowing the motion

to disqualify Fregeau, the court noted that the letter appeared
to contain a counter-offer rather than an agreement, and that he
was the only witness to certain material phone conversations
with defendant’s counsel “regarding the negotiation of the loan
workout.”

Id. at *6-7.

In contrast to both of those cases, in

the case at bar, there was a physical meeting attended by
multiple people, followed by e-mail communications.

The alleged

agreement took place at the meeting, to which, as noted, Mr.
George has not been shown to be a necessary witness.
Consequently, the plaintiffs’ references do not change
the outcome of the Smithson analysis.

In particular, any

ownership interest Mr. George may have does not render him a
“necessary witness,” contrary to the plaintiffs’ contention.
This being so, the request for a protective order, which stems
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from a concern for the jury’s confusion of the various roles of
Mr. George as witness and counsel, is also not compelling.
Mr. George notes that Rule 3.7 refers to trial
advocacy and is motivated by a concern about confusing the jury
with a dual advocate-party role.

Therefore, he argues that he

should still be allowed to proceed with depositions and other
pretrial representation even if he is disqualified at trial,
since the exclusion should be limited to such activities that
present the risk of jury confusion.
argument persuasive.

The court finds this

As the foregoing discussion shows, it is

far from established that Mr. George should be disqualified at
all.

At any rate, the concern over a dual role is the highest

at trial and is attenuated in the discovery process.

Therefore,

the court does not see fit to prevent Mr. George from continuing
to represent the defendants in the case in the pretrial period
and will revisit the appropriateness of his trial representation
should the issue again be presented as the trial date nears.
During the course of depositions in which Mr. George is counsel,
the parties should take reasonable measures to frame questions
so that, insofar as feasible, Mr. George is not referred to as
counsel.
For the foregoing reasons, the court orders that the
plaintiffs’ motion to disqualify Shawn George from representing

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02/08/2016

Last day for Rule 26(f) meeting.

02/15/2016

Last day to file Report of Parties= Planning
Meeting. See L.R. Civ. P. 16.1.

the defendants in this case be,conference at 4:30 p.m. at without
02/22/2016
Scheduling and it hereby is, denied the Robert C.
Byrd United States Courthouse in Charleston, before
prejudice, as is thethe undersigned, unless canceled. The court
request for a protective order.
Lead counsel
directed to appear.
further lifts its stay of discovery proceedings.
02/29/2016
Entry of scheduling order.
The Clerk Last day to serve F.R. Civ. P 26(a)(1) disclosures.
is requested to transmit this written
03/08/2016
opinion and order to all counsel of record and to Magistrate
The Clerk is requested to transmit this Order and
Judge Notice L. Tinsley.
Dwane to all counsel of record and to any unrepresented
parties.
DATED: January 5, 2018
ENTER: February 27, 2016
John T. Copenhaver, Jr.
United States District Judge

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