In Metropolitan v. Syntek, there was a motion to disqualify counsel filed by Syntek Finance Corporation. The lawyer, Richard Nelson, representing Metropolitan Life Insurance Company was from the law firm Hughes & Luce, the same law firm that represented Gene Phillips (who owns a controlling interest in Syntek Finance Corporation) in a divorce in 1986. Due to the previous representation, Hughes & Luce Law firm was privy to financial information that Phillips believed should disqualify the law firm from representing Metropolitan Life Insurance in a court case that had to do with Phillip’s, and Syntek Finance Corporation’s, financial obligations (the court case was in regards to Syntek Finance Corporation failing to make loan payments on a building purchased from Metropolitan Life Insurance). The trial court dismissed the motion, the appeals court reversed and remanded.
According to Rule 1.09 of the Texas Disciplinary Rules of Professional Conduct a lawyer cannot represent a client that is adverse to a former client if the matter is the same or substantially related. Texas National Bank v. Coker established the basis for the substantially related test. In order to be considered substantially related, the facts of the previous representation must be related to the facts of the pending litigation in a way that threatens confidences revealed to former counsel being divulged to a present adversary.
In Metropolitan v. Syntek, the Coker standard was evaluated by the testimony of nineteen witnesses. The testimonies revealed that the information that Phillips believed to be substantially related was available in the public domain and provided by Syntek Finance Corporation during discovery. Information regarding a bankruptcy of a company controlled by Phillips revealed to the former representation was also information that was available in the public domain and reviewed during the testimonies.
After five days of hearing testimonies regarding the disqualification, it was determined that the trial court did not err in determining there was no substantial relationship between the current and former representation per the Coker standard and the decision of the appeals court was reversed and remanded for further consideration.
In my opinion, it is clear that there was not any evidence of substantially related facts. Most court proceedings become public record, including divorce, so unless Phillips had many secret conversations with his legal counsel regarding his business ethics a divorce proceeding and a trial regarding the failure to fulfill a business contract do not seem to be closely related enough to disqualify counsel.