FSM SUPREME COURT TRIAL DIVISION
Cite as Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615 (Pon. 2024)
CRAIG REFFNER,
Plaintiff,
vs.
WESTERN UNION NETWORK (IRELAND) LIMITED,
CONSOLIDATED TRANSPORTATION SERVICES, INC.
(FSM), and APDIN PETER d/b/a Ray & Dor’s Store,
Defendants.
CIVIL ACTION NO. 2023-007
ORDER DENYING MOTION TO DISQUALIFY DEFENSE COUNSEL
Larry Wentworth
Associate Justice
Hearing: September 19, 2024
Decided: November 27, 2024
APPEARANCES:
For the Plaintiff:
Marstella E. Jack, Esq.
P.O. Box 2210
Kolonia, Pohnpei FM 96941
For the Defendant:
Aaron L. Warren, Esq.
Mooney Wieland Warren PLLC
P.O. Box 3501
Pago Pago, American Samoa AS 96799
For the Defendant:
Debrah Ann Mori Retuyan, Esq.
P.O. Box 1450
Kolonia, Pohnpei FM 96941
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Courts view with caution any motion to disqualify opposing counsel because such motions can be used to harass. Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615, 617 (Pon. 2024).
The test to determine whether a conflict of interest exists when representing more than one client is found in FSM MRPC Rule 1.7. Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615, 617 (Pon. 2024).
A lawyer cannot represent a client if the representation of that client will be directly adverse to
another client, unless the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and each client consents after consultation. Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615, 617 (Pon. 2024).
Resolving questions of conflict of interest is primarily the responsibility of the lawyer undertaking the representation, but, in litigation, a court may raise the question when there is reason to infer that the lawyer has neglected the responsibility. Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615, 617 (Pon. 2024).
The court will not disqualify a lawyer from jointly representing two clients when the court is satisfied with the lawyer's representations that she reasonably believes that she can represent both clients in the matter, or, in the alternative, that her continued representation of one party will not adversely affect her relationship with the other party; that she has consulted with each client and that each has consented to the joint representation; when both she and the clients' predecessor attorney had waivers signed by both clients for the joint representation; when both clients are continuously consulted on the case against them; when there is no current conflict between the two clients that cannot be waived; and when a possible future certification of a class action that may create an actual conflict between the two clients has not yet occurred and may never occur. If it does occur, the disqualification issue may then be revisited. Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615, 617-18 (Pon. 2024).
It is axiomatic that an attorney cannot represent two clients whose interests are actually, as opposed to potentially, conflicting. If a lawyer accepts dual representation and the clients' interests thereafter come into actual conflict, the lawyer must withdraw. Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615, 618 (Pon. 2024).
It is a well established ethical principle that an attorney owes undivided allegiance to a client and usually may not represent parties on both sides of a dispute. Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615, 618 (Pon. 2024).
When a lawyer is engaged in joint representation of two clients and there is no current dispute between the two, no actual conflict between the two is currently apparent. But if the two clients later come into actual conflict, that is, end up on opposite sides of a dispute, the court trusts that the lawyer will then notify her clients and take the appropriate steps. Reffner v. Western Union Network (Ire.) Ltd., 24 FSM R. 615, 618 (Pon. 2024).
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LARRY WENTWORTH, Associate Justice:
On June 17, 2024, the plaintiff, Craig Reffner, filed a motion to disqualify counsel for co-defendants Consolidated Transportation Services, Inc. (FSM) and Apdin Peter d/b/a Ray and Dor's Store. CTSI and Apdin Peter filed a joint opposition on June 20, 2024. Western Union Network (Ireland) Limited also filed an opposition on July 4, 2024. The court heard the motion on September 19, 2024. Reffner appeared with his counsel of record, Marstella Jack. Debrah Retuyan appeared for both CTSI and Apdin Peter, and Aaron L. Warren appeared virtually for Western Union. At the hearing's end, the court took the matter under advisement.
Reffner seeks to disqualify Retuyan, counsel of record for co-defendants CTSI and Apdin Peter, from representing both parties. Courts must view with caution any motion to disqualify opposing counsel because such motions can be used to harass. Marsolo v. Esa, 17 FSM R. 480, 484 (Chk. 2011). The test to determine whether a conflict of interest exists when representing more than one client is found in FSM MRPC Rule 1.7. Luen Thai Fishing Venture, Ltd. v. Pohnpei, 20 FSM R. 169, 170 (Pon. 2015).
FSM MRPC Rule 1.7 states:
(a) A lawyer shall not represent a client if the representation of that client will be directly adverse to another client, unless:
(1) the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and
(2) each client consents after consultation.
(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsi¬bilities to another client or to a third person, or by the lawyer's own interests, unless:
(1) the lawyer reasonably believes the representation will not be adversely affected; and
(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved.
Thus, a lawyer cannot represent a client if the representation of that client will be directly adverse to another client, unless the lawyer reasonably believes the representation will not adversely affect the relationship with the other client; and each client consents after consultation. Luen Thai Fishing Venture, Ltd., 20 FSM R. at 172. Additionally, "resolving questions of conflict of interest is primarily the responsibility of the lawyer undertaking the representation. In litigation, a court may raise the question when there is reason to infer that the lawyer has neglected the responsibility." FSM MRPC R. 1.7 cmt.; Marsolo, 17 FSM R. at 484 n.2.
Reffner contends that it is undisputed that a conflict of interest between the parties exist hence the waivers. Reffner argues that the existing conflict of interest is not waiveable because Attorney Retuyan would have to receive competing arguments from each party with respect to "shortage of cash" as the reason for him not receiving his money when he went to the Western Union locations because according to Reffner "shortage of cash" was not an issue at Peter's Western Union location. Furthermore, Reffner claims that he will later ask the court to certify a class action, which would involve individuals who did not receive their funds when they went to obtain them unless they spent a certain percentage of those funds at Ray & Dor's before they obtained their money at Peter's Western Union location. (Reffner himself did not have to spend anything before he obtained his funds.) Reffner maintains that Attorney Retuyan cannot represent both CTSI and Apdin Peter because the inherent conflict that exists between the parties is not waiveable.
Retuyan informs the court that both she and the predecessor counsel of record, Stephen V. Finnen, discussed the joint representation with each client and each client had consented to the joint representation. She provided copies of both clients' waivers. Retuyan maintains that no actual conflict has come to light except for Reffner's speculations; that Reffner does not provide any factual basis to disqualify her from representing both CTSI and Apdin Peter; and that Reffner does not raise any conflict that would affect him. Retuyan argues that Reffner should not be allowed to raise issues of conflicts that do not impact him but instead cause delay and increase the defendants' costs. She asserts that since this case is still at pretrial stage there is yet no finding of liability, and that Reffner's arguments are premature. Retuyan emphasizes that she keeps her clients continuously informed about the case against them.
The court has considered the parties' arguments. It is not persuaded to disqualify Retuyan from jointly representing CTSI and Apdin Peter. The court is satisfied with Retuyan's representations that she
reasonably believes that she can represent both clients in this matter, or, in the alternative, that her continued representation of one party will not adversely affect her relationship with the other party; that she has consulted with each party and that each party has consented to the joint representation. Retuyan represented to the court that both she and Attorney Finnen had waivers signed by both parties for the joint representation and that both are continuously consulted on the case against them. At this stage, there is no reason to believe that any current conflict between Peter and CTSI cannot be waived. Furthermore, even though Reffner has, at different times, mentioned possible future certification of a class action and argued that class certification would create an actual conflict between Retuyan's two clients, that has not yet occurred and may never occur. If it does occur, the disqualification issue may be revisited. That is because
[i]t is axiomatic that an attorney cannot represent two clients whose interests are actually, as opposed to potentially, conflicting. U.S. Fid. & Guar. Co. v. Louis A. Roser Co., Inc., 585 F.2d 932, 939 (8th Cir. 1978). If a lawyer accepts dual representation and the client's [sic] interests thereafter come into actual conflict, the lawyer must withdraw. In re Disciplinary Proceeding Against Carpenter, 160 Wash.2d 16, 28, 155 P.3d 937 (2007).
In re Marriage of Wixom and Wixom, 332 P.3d 1063, 1074 (Wash. Ct. App. 2014). "It is a well established ethical principle that an attorney owes undivided allegiance to a client and usually may not represent parties on both sides of a dispute." CenTra, Inc. v. Estrin, 538 F.3d 402, 413 (6th Cir. 2012). In this case, Retuyan is engaged in joint representation of CTSI and Apdin Peter. There is no current dispute between CTSI and Peter. No actual conflict between the two is currently apparent. If CTSI and Apdin Peter later come into actual conflict, that is, end up on opposite sides of a dispute, the court trusts that Retuyan will then notify her clients and take the appropriate steps.
Accordingly, Reffner's motion to disqualify Debrah Retuyan from representing CTSI and Apdin Peter is denied.
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