Bryan Corp. v. Abrano

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SJC-12003

BRYAN CORPORATION vs. BRYAN ABRANO.

Suffolk. March 8, 2016. - June 14, 2016.

Present: Gants, C.J., Spina, Cordy, Botsford, Duffly, Lenk, &

Hines, JJ.

Attorney at Law, Disqualification, Conflict of interest.

Civil actions commenced in the Superior Court Department on

November 7, 2014, and March 13, 2015.

After transfer to the business litigation session and

consolidation, a motion to disqualify counsel was heard by Janet

L. Sanders, J.

The Supreme Judicial Court granted an application for

direct appellate review.

Richard J. Yurko (Douglas W. Salvesen with him) for the

defendant.

Euripides D. Dalmanieras (Caroline Stoker Donovan with him)

for the plaintiff.

CORDY, J. The defendant, Bryan Abrano (Bryan), appeals

from a Superior Court judge's order disqualifying his attorneys,

members of the firm of Yurko, Salvesen & Remz, P.C. (YSR), from

2

representing him in a dispute against the plaintiff, Bryan

Corporation (company), of which Bryan is a shareholder. The

Superior Court judge granted the plaintiff's motion to

disqualify on the ground that YSR's representation of Bryan

violated Mass. R. Prof. C. 1.7, as appearing in 471 Mass. 1335

(2015), or in the alternative, Mass. R. Prof. C. 1.9, as

appearing in 471 Mass. 1359 (2015), governing the concurrent and

successive representation of clients, respectively. Because we

conclude that YSR's conduct violated rule 1.7's prohibition

against the simultaneous representation of adverse parties, we

affirm the order of disqualification.1

1. Background. We summarize the facts relevant to the

posture of this controversy, which arises from a dispute between

family members who are shareholders in a close corporation.2 The

company, which is headquartered in Woburn, was incorporated in

1985 as a close corporation and supplies pharmaceuticals and

medical devices. Since October, 2008, the company has had three

1

Also before us is a motion filed by Bryan Corporation

(company) to supplement the appellate record with materials that

were not before the motion judge and the defendant's opposition

thereto. We deny the motion, and do not rely on the appended

materials in reaching our conclusion.

2

"A close corporation is typified by a small number of

shareholders, no ready market for the corporate stock, and

substantial majority shareholder participation in the

management, direction, and operations of the corporation."

Merriam v. Demoulas Super Mkts., Inc., 464 Mass. 721, 726 n.12

(2013), citing Donahue v. Rodd Electrotype Co. of New England,

367 Mass. 578, 586 (1975).

3

shareholders: Bryan; his sister, Bridget Rodrigue (Bridget);

and their mother, Kim Abrano (Kim). Kim holds fifty-one per

cent of the company, Bryan holds thirty-three per cent, and

Bridget holds sixteen per cent. Bryan, Bridget, and Kim all

obtained their shares from Frank Abrano (Frank), who founded the

company, and who is Kim's estranged husband and Bryan and

Bridget's father. Bryan and Bridget were directors of the

company until July, 2014.3 Bryan was the company's president and

chief executive officer until 2013, when he was replaced by

Libor Krupica. Bridget was the company's secretary and her

husband, Dennon Rodrigue (Dennon), was the treasurer. Kim has

been a director since 2008, and in July, 2014, she became the

secretary and treasurer, replacing Bridget and Dennon. Frank is

not a stockholder, director, or officer.4

a. The Waldman action. In October, 2013, Waldman

Biomedical Consultancy, Inc., a former consultant to the

company, sued the company for over $300,000 in alleged unpaid

3

Prior to becoming shareholders and directors, Bryan Abrano

(Bryan) and Bridget Rodrigue (Bridget) were employees of the

company.

4

In 2008, Frank Abrano (Frank) was convicted in Federal

court of intentionally causing the company to sell misbranded

and adulterated drugs. He was sentenced to one year and one day

in prison and required to pay a $1 million fine. As part of a

related plea agreement and civil settlement with the company,

Frank was required to cut all ties with the company and divest

himself of his entire interest in the company. He transferred a

controlling interest to his wife, Kim Abrano (Kim), and sold the

remaining shares to Bryan and Bridget.

4

fees (Waldman action). In March, 2014, the company retained YSR

to defend it in the Waldman action. YSR and the company

executed an engagement letter that provided that YSR would

handle discovery and other pretrial matters, and in the event of

a trial, a YSR partner (Richard Yurko or Douglas Salvesen) and

associate (Anthony Fioravanti) would try the case. The letter

did not address conflicts of interest or provide that YSR could

withdraw from the representation were a conflict to arise.

YSR filed an answer on the company's behalf in April, 2014.

According to YSR's bills for work in the Waldman action, from

April 1 through July, 31, 2014, YSR drafted and responded to

discovery requests, reviewed documents, consulted with Dennon

and Bryan, and discussed various discovery matters with

Waldman's counsel.

b. Dispute over compensation. In late June, 2014, a

dispute arose over the payment of the company's fiscal-year-end

profits, with Bryan and Bridget calling for their shares of the

profits to be disbursed in deductible W-2 compensation to avoid

double taxation given the company's C Corporation status. Bryan

has alleged that Kim, the majority shareholder and "an agent

having the management of [the company]," stopped payment on the

2014 year-end profit distribution checks in violation of the

Massachusetts Wage Act, G. L. c. 149, § 148 (Wage Act). Kim has

alleged that she was unaware of the extent of Bryan and

5

Bridget's compensation, and that such compensation was

unauthorized by the company.

On June 30, 2014, Bridget's husband, Dennon, contacted YSR

to "discuss a different matter" from the Waldman action. The

following day, Dennon had a conference telephone call with YSR

attorneys Yurko and Fioravanti, as well as Bruce Garr, another

lawyer for the company who is not associated with YSR. Bryan

and Bridget were not on the call, but YSR has acknowledged that

an attorney-client relationship was formed with Bryan, Bridget,

and Dennon on July 1, 2014.5 July 1, 2014, was also the day that

Bryan and Bridget began requesting that the company issue their

"year-end wage checks" to them. During the call, Yurko advised

Dennon that should YSR undertake representation of one or more

of Bryan, Bridget, and Dennon, a conflict of interest might

arise between the company and Bryan or Bridget should they be

removed from the board of directors. Yurko indicated to Dennon

that, should such a conflict arise, he would withdraw from the

Waldman action.

On July, 15, 2014, Kim, Bryan, and Bridget attended a

shareholders meeting to elect directors. Bryan and Bridget, who

at this point were represented by YSR, did not renominate

themselves to the board, instead nominating three other people.

5

Bridget and Dennon Rodrigue (Dennon) are currently

represented by counsel from another law firm.

6

Kim nominated herself and two outside director candidates, all

of whom were elected to the three-member board.

On July 21, 2014, YSR sent a demand letter to the company's

president and Kim. In the letter, Yurko indicated that he was

sending the letter on behalf of Bryan and Bridget in connection

with the alleged Wage Act violations and other claims. The

letter also stated that Bryan and Bridget each had claims

against the company and against Kim and Frank and others.6 YSR

demanded that the company "promptly address and correct these

matters."

On July 23, 2014, Yurko sent a letter to Dennon in which

YSR resigned as the company's counsel in the Waldman action.

The letter stated, "As I mentioned to you late last week, a

conflict has developed in our continued representation of [the

company] in this matter and therefore, reluctantly, we must

resign from the representation." The letter further stated that

there was one discovery matter that needed to be finished up,

which YSR would do "with your permission." An entry from July

23, 2014, on one of YSR's bills for work on the Waldman action

states: "Draft and send letter resigning from case." YSR's

bills do not contain any other entries indicating that it

6

The claims related to Frank's alleged participation in

company activities in violation of his plea agreement with the

Federal government and Kim's alleged enabling of such

participation.

7

discussed resigning with anyone from the company at any other

time. On July 31, 2014, YSR withdrew as counsel from the

Waldman action.

c. The parties countersue. In November, 2014, Bryan,

represented by YSR, and Bridget, represented by a different law

firm, commenced an action against Frank and Kim, alleging claims

under the Wage Act and for breach of contract and breach of

fiduciary duty against Kim, and a claim for breach of the

covenant of good faith and fair dealing against Frank.7 Bryan

and Bridget sought treble the amount of their "end of year

compensation payments dated June 30," which they said were based

on the company's "operating profit for the fiscal year ending

June 20, 2014."

The company was not named as a party in the action, but the

complaint referred to the company as "[d]efendant Bryan

Corporation" four times in the complaint. Bryan and Bridget

also alleged that the company was obligated to pay the wages

that formed the basis of their claims: "Bryan Abrano and

Bridget Rodrigue earned substantial wages from their employment

by the [c]ompany, which wages were definitely determined and had

become due and payable not later than June 30, 2014," and "[t]he

7

The Superior Court dismissed the breach of contract claim

against Kim in March, 2015.

8

[c]ompany had a legal obligation to pay these wages no later

than July 7, 2014."8

In March, 2015, the company commenced an action against

Bryan, Bridget, and Dennon for breach of fiduciary duty (company

action). In its complaint, the company disputed that the year-

end profit distributions that Bryan and Bridget had previously

received during the years 2008 to 2013 were wages, and sought to

recover what it alleged were excess distributions paid to them

during that period.

In April, 2015, Bryan moved to consolidate the two

lawsuits, arguing that the claims asserted by the company

against him and Bridget were "the mirror image" of the claims

asserted by Bryan and Bridget against Kim and Frank. Both

parties appear to agree that the lawsuits turn on whether the

payments Bryan and Bridget received from 2008 through 2013 and

the 2014 payouts they are seeking represent wages or dividends.

The motion was allowed, over the company's objection, in May,

2015.

At the same time, the company moved to disqualify YSR as

Bryan's counsel because YSR had represented the company in the

Waldman action eight months earlier, between March and July,

8

Because the company was not named as a party to Bryan and

Bridget's suit, the company did not have standing to challenge

the representation of Bryan by Yurko, Salvesen & Remz, P.C.

(YSR).

9

2014. The company argued that YSR's simultaneous representation

of both the company and Bryan constituted an impermissible

conflict of interest, and that disqualification was required by

rule 1.7, which governs concurrent conflicts of interest, or, in

the alternative, rule 1.9, which governs a lawyer's duties to

former clients. A hearing was held in August, 2015, and the

motion judge allowed the motion "[f]or the reasons set forth . .

. in the motion itself." Bryan timely appealed, and we granted

his application for direct appellate review.

2. Standard of review. We review an order disqualifying

counsel for abuse of discretion. Smaland Beach Ass'n v. Genova,

461 Mass. 214, 220 (2012). Our consideration of the motion is

informed by the principle that courts "should not lightly

interrupt the relationship between a lawyer and her client."

Adoption of Erica, 426 Mass. 55, 58 (1997). "[A]s a

prophylactic device for protecting the attorney-client

relationship, . . . courts should hesitate to impose

[disqualification] except when absolutely necessary" (citation

omitted). Id., quoting Freeman v. Chicago Musical Instrument

Co., 689 F.2d 715, 721 (7th Cir. 1982). Nonetheless, the right

to representation by an attorney of one's choosing is not

absolute, and must, in some circumstances, yield to other

considerations. McCourt Co. v. FPC Props., Inc., 386 Mass. 145,

151 (1982).

10

Because the motion judge did not make oral or written

findings, our task on appeal is made more difficult, as the

factual underpinnings of the judge's decision are unclear, and

both parties refer in their briefs to facts that cannot be

independently verified. Because the parties do not contest the

authenticity of the documents included in the record appendix,

our analysis depends largely on the facts as drawn from these

documents.

To the extent that the judge adopted wholesale the

company's reasons for disqualification, we are free to affirm

her ruling on any grounds supported by the record. See

Commonwealth v. Va Meng Joe, 425 Mass. 99, 102 (1997).

3. Discussion. The company asks us to affirm the

disqualification order on the ground that YSR violated rule 1.7

when it undertook concurrent representation of both the company

and Bryan where the parties had a conflict of interest that

existed or was foreseeable at the inception of the dual

representation. It also asks the court to adopt the so-called

"hot potato" doctrine, which "limit[s] the ability of a law firm

to terminate its relationship with an existing client 'like a

hot potato' so that it may accept a representation of another

client in an adverse, but more lucrative, matter." National

Med. Care, Inc. vs. Home Med. of Am., Inc., Mass. Super. Ct. No.

0081CV01225, slip op. at note 5 (Middlesex County Sept. 12,

11

2002). In the alternative, the company argues that rule 1.9's

prohibition on using a former client's confidences in subsequent

litigation involving that client warrants disqualification.

Bryan counters that rule 1.7 does not govern the issues

before us because his interests were not adverse to those of the

company at the time the dual representation commenced. He also

asks the court to eschew the "hot potato" doctrine as an

unnecessary addition to the existing rules of professional

conduct and that adopting the doctrine would amount to

impermissible ad hoc rulemaking. He also argues that rule 1.9

does not apply in this matter because the record does not

support a conclusion that YSR used confidential information

relating to its representation of the company to the company's

disadvantage in the suit against the company. See Mass. R.

Prof. C. 1.9 (c). Lastly, he asserts that even if YSR committed

ethical violations, disqualification is not the appropriate

remedy in this matter.

Based on our review of the record, we conclude that YSR,

acting as a reasonable lawyer, should have known at the time it

agreed to represent Bryan, Bridget, and Dennon that their

interests were adverse to, or were likely soon to become adverse

to, those of the company, and, in these circumstances, both the

duty of loyalty and rule 1.7 required it to decline

representation, or at least seek the informed consent of the

12

company. See Mass. R. Prof. C. 1.7 comment 6. It was therefore

also improper for YSR to send a demand letter to the company

while it was still representing the company in the Waldman

action and had not obtained its informed consent to do so.

Accordingly, the issues in this case are properly analyzed under

rule 1.7, and based on the particular facts in this case, we

conclude that disqualification is an appropriate remedy.

Because the rules and our prior case law provide an adequate

framework for resolving the issues in this case, we need not

reach the parties' arguments concerning the "hot potato"

doctrine, nor do we consider the parties' arguments related to

rule 1.9. Accordingly, we affirm the ruling of the Superior

Court judge.

a. The lawyer's duty of loyalty. We begin our discussion

by reviewing the contours of the duty of loyalty and rule 1.7,

particularly as they apply to organizational clients.9 With

limited exceptions, rule 1.7 prohibits a lawyer from

representing a client if the representation is "directly adverse

to another client," Mass. R. Prof. C. 1.7 (a) (1), or where

9

The company moved to disqualify YSR under the prior

version of rule 1.7. Rule 1.7 was amended effective July 1,

2015. "Because the substance of rule 1.7 remains unchanged, we

analyze [the issues] against the most recent version of the

rules, published in 2015. See Mass. R. Prof. C. 1.7, as

appearing in 471 Mass. 1335 (2015)." Maling v. Finnegan,

Henderson, Farabow, Garrett & Dunner, LLP, 473 Mass. 336, 339

n.6 (2015).

13

"there is a significant risk that the representation of one or

more clients will be materially limited by the lawyer's

responsibilities to another client, a former client or a third

person or by a personal interest of the lawyer." Mass. R. Prof.

C. 1.7 (a) (2).

We have previously explained the rule's dual purpose as "a

prophylactic [measure] to protect confidences that a client may

have shared with his or her attorney . . . [and] safeguard[s]

loyalty as a feature of the lawyer-client relationship"

(citation omitted). Maling v. Finnegan, Henderson, Farabow,

Garrett & Dunner, LLP, 473 Mass. 336, 340 (2015), quoting SWS

Fin. Fund A v. Salomon Bros. Inc., 790 F. Supp. 1392, 1401 (N.D.

Ill. 1992). In this case, we are particularly concerned with

rule 1.7's function in furthering the lawyer's duty of loyalty,

which forms the bedrock of the attorney-client relationship.

See, e.g., Strickland v. Washington, 466 U.S. 668, 692 (1984)

(duty of loyalty is "perhaps the most basic of counsel's

duties"); Mass. R. Prof. C. 1.7 comment 1 ("Loyalty and

independent judgment are essential elements in the lawyer's

relationship to a client"). By prohibiting the simultaneous

representation of clients with adverse interests absent informed

consent, rule 1.7 fosters a sense of trust between the lawyer

and client that promotes the lawyer's ability to competently

represent the client's interests. See Mass. R. Prof. C. 1.7

14

comment 6 ("client as to whom the representation is directly

adverse is likely to feel betrayed, and the resulting damage to

the client-lawyer relationship is likely to impair the lawyer's

ability to represent the client effectively").

Representation is "directly adverse" within the meaning of

rule 1.7 (a) (1) when a lawyer "act[s] as an advocate in one

matter against a person the lawyer represents in some other

matter, even when the matters are wholly unrelated." Mass. R.

Prof. C. 1.7 comment 6. Thus, "[t]he undivided loyalty that a

lawyer owes to his clients forbids him, without the clients'

consent, from acting for client A in one action and at the same

time against client A in another." McCourt Co., 386 Mass. at

146. See Mass. R. Prof. C. 1.7 comment 6 ("Loyalty to a current

client prohibits undertaking representation directly adverse to

that client without that client's informed consent").

This principle operates with equal force where client A is

a corporation, and it is "irrelevant [to our analysis] that the

lawsuits are unrelated in subject matter and that it appears

probable that client A will not in fact be prejudiced by the

concurrent participation of the law firm in both actions."

McCourt Co., supra. Indeed, the rules are clear that where a

lawyer represents an organizational client his or her loyalty is

owed to the organization, and not the constituents through whom

the organization acts. Mass R. Prof. C. 1.13 (f), as appearing

15

in 450 Mass. 1301 (2008) ("In dealing with an organization's

directors, . . . shareholders, or other constituents, a lawyer

shall explain the identity of the client when the lawyer knows

or reasonably should know that the organization's interests are

adverse to those of the constituents with whom the lawyer is

dealing"); Mass. R. Prof. C. 1.13 comment 1 ("An organizational

client is a legal entity, but it cannot act except through its

officers, directors, employees, shareholders and other

constituents").

b. Applicability of rule 1.7. Bryan contends that rule

1.7 does not govern our analysis in this case because there was

no conflict of interest prior to July 15, 2014. Bryan maintains

that the matter in which he and the others sought advice from

YSR in early July, 2014, was related to Frank's alleged

impermissible involvement in company affairs, such as Frank's

interference with the normal payroll process, including the

withholding of the checks. Thus, he argues, when YSR agreed to

represent Bryan, Bridget, and Dennon on July 1, 2014, there was

no adversity between them and the company, and the rules

therefore permitted the firm to represent both the company and

its constituents. See Mass. R. Prof. C. 1.13 (g) ("A lawyer

representing an organization may also represent any of its

directors, officers, employees, members, shareholders, or other

constituents, subject to the provisions of Rule 1.7"). From

16

Bryan's perspective, the conflict did not emerge until after

July 15, 2015, when he and Bridget were not reelected to the

board of directors, at which point rule 1.7 was triggered and

YSR was required to resolve the conflict by terminating its

relationship with one of the clients.

We disagree with this view, as Bryan's arguments depend on

an overly narrow reading of rule 1.7. In Maling, we explained

that rule 1.7 encompasses a lawyer's duty to anticipate

potential conflicts and, where appropriate, decline

representation. Maling, 473 Mass. at 347 ("Before engaging a

client, a lawyer must determine whether the potential for

conflict counsels against undertaking representation.") Rule

1.13 incorporates a similar duty with respect to an organization

and its constituents, stating:

"There are times when the organization's interest

may be or become adverse to those of one or more of

its constituents. In such circumstances the lawyer

should advise any constituent, whose interest the

lawyer finds adverse to that of the organization of

the conflict or potential conflict of interest, that

the lawyer cannot represent such constituent, and that

such person may wish to obtain independent

representation" (emphasis added).

Mass R. Prof. C. 1.13 comment 10. We accordingly focus our

inquiry on whether, in light of the facts, YSR, acting as a

reasonable lawyer, was obliged to identify the adverse interests

between Bryan, Bridget, and Dennon, on the one hand, and YSR's

client, the company, on the other, and decline representation.

17

Bryan argues that nothing in the record supports the

company's assertion that he and Bridget consulted with YSR about

filing an action against the company with respect to the

withheld checks as of July 1, 2014. Ultimately, however,

whether it was on July 1 or July 15, 2014, that YSR agreed to

represent Bryan and the others regarding claims against the

company related to Wage Act violations is not essential to our

decision.

Direct adversity involves a conflict between the legal

rights and duties of clients. Maling, 473 Mass. at 341-342,

quoting American Bar Association Standing Committee on Ethics

and Professional Responsibility, Formal Op. 05–434, at 140 (Dec.

8, 2004). In Maling, we explained that where a lawyer

represents two clients, and where circumstances arise such that

a reasonable lawyer would believe that the actions required to

provide competent representation of one client would render the

client's interests adverse to those of another client of the

lawyer, the proper course of action is to disclose the conflict

and obtain the informed consent of both clients, or withdraw

from representation. Id. at 343; Mass. R. Prof. C. 1.7 comments

3, 4.10 See Coke v. Equity Residential Props. Trust, 440 Mass.

10

Rule 1.13 (g) of the Massachusetts Rules of Professional

Conduct, as appearing in 450 Mass. 1301 (2008), adds that, "[i]f

the organization's consent to the dual representation is

required by Rule 1.7, the consent shall be given by an

18

511, 517 (2003) ("[P]utting it as mildly as we can, we think it

would be questionable conduct for an attorney to participate in

any lawsuit against his own client without the knowledge and

consent of all concerned" [citation omitted]). Similarly, we

conclude that where such circumstances exist prior to the

inception of the lawyer-client relationship, best practice

requires the lawyer to decline representation or disclose the

conflict to both clients. See Mass. R. Prof. C. 1.16 (a) (1),

as appearing in 471 Mass. 1305 (2015) ("a lawyer shall not

represent a client . . . if . . . the representation will result

in violation of the rules of professional conduct or other

law").

According to Bryan and Bridget's own allegations, they had

begun requesting the checks allegedly withheld by Kim as of July

1, 2015, and they claimed that the company had a legal

obligation to pay these wages. Such claims fit squarely into

our definition of direct adversity. Thus, even accepting

Bryan's contention that Dennon did not specifically mention the

withheld checks as of July 1, 2014, YSR should have taken

reasonable measures to ascertain the potential conflict. See

Maling, 473 Mass. at 348; Mass. R. Prof. C. 1.7 comment 3 ("A

appropriate official of the organization other than the

individual who is to be represented, or by the shareholders."

Thus, Bryan, Bridget, and Dennon were not in a position to

consent.

19

conflict of interest may exist before representation is

undertaken, in which event the representation must be declined,

unless the lawyer obtains the informed consent of each client .

. . . To determine whether a conflict of interest exists, a

lawyer should adopt reasonable procedures, appropriate for the

size and type of firm and practice, to determine in both

litigation and non-litigation matters the persons and issues

involved").

Additionally, it is apparent from the record that YSR was

well aware of the potential for a conflict, as it advised Dennon

on July 1, 2014, that changes in the board's structure could

result in an actual conflict of interest that would require it

to withdraw from representing both them and the company. Again,

it was reasonably foreseeable that Bryan and Bridget would be

replaced as directors, and the minutes of that board meeting

reflect that neither renominated themselves to remain on the

board, creating a strong probability that they knew the board's

structure would change. Thus, the circumstances in this case

were not the type of "[u]nforeseeable development[] . . . [that]

might create conflicts in the midst of a representation." Mass.

R. Prof. C. 1.7 comment 5.

In light of these considerations, we find that a reasonable

attorney would have or should have known that a conflict of

interest existed or was so likely to materialize such that a

20

prudent attorney would have declined representation or disclosed

the conflict to an appropriate company representative who could

consent to the dual representation.11 Accordingly, YSR's

decision as of July 1, 2014, to represent Bryan, Bridget, and

Dennon constituted a violation of both its duty of loyalty to

the company and rule 1.7's prohibition against the simultaneous

representation of clients whose interests are adverse.

c. Other considerations. A few final observations are in

order. The manner in which YSR terminated its relationship with

the company was largely improper. The record indicates that YSR

only communicated with Dennon regarding its plans to withdraw

from the Waldman action; however, the rules make plain that

Dennon could not consent either to the withdrawal or to YSR's

wrapping up of certain tasks in the Waldman action after YSR

sent the letter. Mass. R. Prof. C. 1.13 comment 10. It also

follows that YSR acted in contravention of rule 1.7 by

simultaneously representing Bryan and the others after July 15,

2014, without obtaining the company's informed consent.

Further, it was improper for YSR to withdraw prior to the

completion of the Waldman action, and the development of the

conflict does not justify the firm's actions. In Maling, 473

11

Again, because Dennon's interests were adverse to those

of the company, he was not in a position to consent to the dual

representation. See Mass. R. Prof. C. 1.13 (g). YSR might

have, for example, contacted Libor Krupica, the company's then

president, to disclose the conflict and seek consent.

21

Mass. at 344-345, we recognized that a lawyer's duty to detect

and prevent potential conflicts may be circumscribed by the

scope of engagement undertaken by a lawyer. See Mass. R. Prof.

C. 1.2 (c), as appearing in 471 Mass. 1313 (2015). Here,

however, it appears from the engagement letter with the company

that YSR did nothing to limit its representation in a manner

that might have permitted YSR to represent adverse clients on

matters unrelated to its work in the Waldman action, or that

might have permitted YSR to withdraw from representation prior

to the completion of the action if a conflict arose. See Mass.

R. Prof. C. 1.16 comment 1 ("A lawyer should not accept

representation in a matter unless it can be performed

competently, promptly, without improper conflict of interest and

to completion"); Mass. R. Prof. C. 1.3 comment 4, as appearing

in 471 Mass. 1318 (2015) ("Unless the relationship is terminated

as provided in Rule 1.16, a lawyer should carry through to

conclusion all matters undertaken for a client").

Thus, by undertaking representation of the company in the

manner contemplated by the engagement letter, YSR owed it the

full panoply of duties that attend the lawyer-client

relationship, chief among which is a duty of undivided loyalty.

We therefore conclude that a firm may not undertake

representation of a new client where the firm can reasonably

anticipate that a conflict will develop with an existing client,

22

and then choose between the two clients when the conflict

materializes. Both the duty of loyalty and the rules clearly

forbid such conduct.

d. Remedy of disqualification. Bryan argues that the

Superior Court judge did not have the authority to disqualify

YSR as a means of remedying its ethical violations. He contends

that disqualification is only necessary to protect the

confidences of a former client or the integrity of a pending

action. We disagree. We have previously explained that

disqualification is appropriate in concurrent representation

scenarios even where the client seeking disqualification "will

not in fact be prejudiced by the concurrent participation of the

law firm in both actions." McCourt Co., 386 Mass. at 146.

Additionally, although we have held that the appearance of

impropriety alone is not sufficient grounds for disqualifying an

attorney, we left open the possibility that, where ethical

violations occurred, disqualification may be appropriate. See

Adoption of Erica, 426 Mass. at 64.

Here, where YSR's conduct constituted a violation of both

its duty of loyalty to the company as well as rule 1.7, we

conclude that it was not an abuse of discretion for the judge to

order disqualification as an appropriate remedy. In this case,

disqualification furthers the policy rationale underlying the

rules of professional conduct by upholding the principle that a

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client is entitled to the undivided loyalty of his or her

lawyer.

4. Conclusion. For these reasons, we affirm the ruling by

the Superior Court judge granting the motion for

disqualification.

So ordered.