Heard: March 8, 2016.
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.
Supreme Judicial Court granted an application for direct
Richard J. Yurko (Douglas W. Salvesen with him) for the
Euripides D. Dalmanieras (Caroline Stoker Donovan with him)
for the plaintiff.
Present: GANTS, C.J., SPINA, CORDY, BOTSFORD, DUFFLY, LENK,
& HINES, JJ.
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
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
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. 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 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. 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
The Waldman action.
October, 2013, Waldman Biomedical Consultancy, Inc., a former
consultant to the company, sued the company for over $300,
000 in alleged unpaid 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.
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.
Dispute over compensation.
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 Bridget's compensation, and that such
compensation was unauthorized by the company.
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. 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.
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. Kim nominated herself and two outside director
candidates, all of whom were elected to the three-member
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. YSR demanded that the company
"promptly address and correct these matters."
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 discussed resigning with anyone from the company at
any other time. On July 31, 2014, YSR withdrew as counsel
from the Waldman action.
The parties countersue.
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. 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, 2 014."
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, ...