The opinion of the court was delivered by: Chesler, United States Magistrate Judge.
This matter comes before the Court on the motion of Defendant
Carolyn Kohn to disqualify Plaintiff's counsel, Diane K. Weeks,
Esq. Oral argument was heard on January 11, 1999 and an
evidentiary hearing was conducted on March 15, 1999.
For the reasons stated below, Defendant's motion to disqualify
Plaintiff's counsel, Diane K. Weeks, Esq., is granted.
The following facts are gleaned from the certifications
submitted by the parties in support of or opposition to the
Defendant's motion to disqualify Plaintiff's counsel and from the
transcript of the March 15, 1999 evidentiary hearing held on the
matter (hereinafter "Tr.").
Montgomery Academy (the "Academy") is a state-approved private
school for emotionally handicapped or disabled children located
in the State of New Jersey. See Certification of Defendant
Carolyn Kohn (hereinafter "Kohn Cert.") ¶ 2. Defendant Carolyn
Kohn ("Ms.Kohn") was the founder of the Academy and served as its
Director until February 1997. See Kohn Cert. ¶ 3; Tr. at 7.
Ms. Kohn met Plaintiff's counsel, Diane K. Weeks, Esq.
("Weeks"), sometime in early 1996. See Tr. at 8. They were
introduced by Dr. Virginia Murray ("Dr.Murray"), their mutual
periodontist, who was also a personal friend of Ms. Kohn and a
fairly new Academy Board Member. See Tr. at 8, 160-61;
Certification of Diane K. Weeks, Esq. in Opposition to Defendant
Carolyn Kohn's Disqualification Motion (hereinafter "Weeks
Cert.") ¶¶ 16-17.
In June of 1996, Ms. Kohn needed to hire a lawyer to negotiate
the Academy's lease renewal. See Tr. at 7-8. She called Diane
K. Weeks, Esq. See Tr. at 8-10. Ms. Weeks and Ms. Kohn met at
the Academy on June 17, 1996 and discussed the Academy's lease
renewal. See Tr. at 9-12, 84-85. They agreed that Ms. Weeks
would negotiate the lease on the Academy's behalf; however, no
letter of retention or other written agreement was made to that
effect. See Tr. at 11-12, 85-86, 89. According to Ms. Weeks,
she informed Ms. Kohn that the Academy's Board of Directors ("the
Board") would have to vote to retain her on their behalf before
she would be officially retained. See Tr. at 87-88, 154-55.
Shortly after this meeting at the Academy, on June 27, 1996,
Ms. Kohn and Dr. Murray attended a meeting of the "Hemlock
Investors" at which they discovered that the "Hemlock
Investments" were part of a "Ponzi Scheme" and that all the
investment monies were probably lost. See Tr. at 13. The
Academy Pension Plan had significant investments in Hemlock, as
did Ms. Kohn herself. See Tr. at 13-14. Ms. Kohn was also a
trustee of the Academy's Plan. See Tr. at 14. After the
meeting, Ms. Kohn expressed her concern to Dr. Murray about the
investments in Hemlock that both she and the Academy had and they
agreed that she should call Ms. Weeks as soon as possible. See
Tr. at 13, 59-61, 170-71.
Ms. Kohn called Ms. Weeks when she got home from the meeting
that night, anxious to discuss what she had learned with an
attorney. See Tr. at 14, 91. Ms. Kohn and Ms. Weeks spoke the
following day, June 28, 1996, and Ms. Kohn briefly told Ms. Weeks
what had transpired at the Hemlock meeting. See Tr. at 92-93.
They met two days later, on June 30, 1996, at Ms. Weeks's house.
See Tr. at 16-17, 93. Ms. Kohn apparently shared with Ms. Weeks
what she had learned about the Hemlock Investments and they
listened to an audio tape which Ms. Kohn had made of the Hemlock
Investors meeting on June 27, 1996. See Weeks Cert. ¶ 24.
During the meeting, Ms. Kohn claims that she "shared with [Ms.
Weeks] everything that [she] could think of, everything that had
gone on and also [her] feelings and [her] concerns and [her]
worries . . ." about the Hemlock Investments. See Tr. at 17.
According to Ms. Kohn, at this time and in the days to follow she
considered Ms. Weeks to be her personal lawyer and thought that
Ms. Weeks would protect her. See id. In her certification, Ms.
Kohn stated that she "met with Ms. Weeks several times. During
those sessions, I told her everything I knew and remembered
concerning my role as Trustee and other relevant facts. We
examined all documents and audiotapes of meetings together." Kohn
Cert. ¶ 11. Ms. Kohn went on to say that she "was always under
the impression that Ms. Weeks was representing [her] and had
[her] interests in mind when discussing these matters with
[her]." See Kohn Cert. ¶ 12. Ms. Kohn testified that she had
sought Ms. Weeks's help both for herself and for the school
because she was "fearful for the school, [she] was fearful for
[her]self, [and she] was fearful for the employees." Tr. at
59-61. Furthermore, Ms. Kohn claims that she discussed with Ms.
Weeks the possibility of Ms. Weeks representing both Ms. Kohn and
the Academy and that Ms. Weeks said to her, "I could probably do
that. I could bill you separately." See Kohn Cert. ¶ 15; Tr. at
Ms. Weeks's version of the June 30, 1996 meeting is quite
different. According to Ms. Weeks, she made clear to Ms. Kohn
during the meeting that she represented the Academy, that a
separate retention letter would have to be issued for Ms. Weeks
to handle the Academy's investment problems, and that Ms. Kohn
would have to get separate counsel if she had individual
liability. See Tr. at 120, 129-30. Ms. Weeks claims that she
deflected any attempts by Ms. Kohn to discuss Ms. Kohn's personal
investments or involvement. See Tr. at 119-20; Weeks Cert. ¶¶
At the time of the June 30, 1996 meeting between Ms. Weeks and
Ms. Kohn, the Academy's Board of Directors had neither voted on
nor knew about Ms. Weeks's anticipated representation of the
Academy for either the lease renewal or the pension plan. See
Tr. at 18. Although Ms. Kohn had told Ms. Weeks that she would be
retained to represent the school, the only other person
affiliated with the school who was aware of this agreement was
Dr. Murray, a fairly new Board member.*fn1 See Tr.
at 18, 148-50. On the basis of Ms. Kohn's representation that the
Board would vote to retain her for the lease negotiation at their
next meeting, Ms. Weeks claims that she considered herself to be
the Board's attorney at that time. See Tr. at 120, 148-50,
155-56. Ms. Kohn, however, seemed to believe that Ms. Weeks ...