Homehealth, Inc. v. Heritage Mutual Insurance Co.

SHARPNACK, Chief Judge,

dissenting.

I respectfully dissent. I disagree with the majority's conclusion that since the Appellants were unaware that a conflict "conclusively" existed until two weeks before trial, they were free from fault.

The majority relies on Koors v. Great Southwest Fire Ins. Co., 530 N.E.2d 780 (Ind.Ct.App.1988), reh'g denied, 588 N.E.2d 259. In Koors, we decided that the client was not at fault when his counsel withdrew due to a conflict two weeks before trial because there was "nothing in the record to show the [the client] was aware or could foresee the potential conflict of interest." Id. at 788. Accordingly, to be free from fault, the client need not be unaware of a conflict which "conclusively" existed. Rather, the client is only free from fault when he was unaware or could not foresee the potential conflict of interest.

I find that the Appellants "were aware or could foresee the potential for conflict of interest" three years, not two weeks, prior to *200trial. See Id. The record reveals that the Appellants first learned that their counsel, Grimm, had a potential conflict of interest on September 5, 1991. At this time, Heritage and Farm Bureau filed their answer which included a non-party defense against Grimm.

In addition, on December 3, 1991, Van Horne filed a motion to disqualify Grimm on the basis that Grimm was a material witness to the lawsuit. During the hearing, Van Horne's counsel representedihis intention to call Grimm as a witness at the trial, and the following exchange ensued:

"THE COURT: You've basically suggested it, but I'm not sure if you said directly so I'll ask you, do you intend to call John Grimm as a witness in the trial?
[Van Horne's Counsell: Yes, Your Honor."

Record, p. 611.

Although the court denied Van Horne's motion to disqualify, the court expressly stated that a potential conflict existed. In its order, the court stated:

"That if indeed this case does come to a point where there exists some valid basis (beyond mere bald general allegations) tending to prove (or from which a reasonable inference can be drawn) that not only the Plaintiffs Gandhi Lingamneni and Homehealth, Inc. but also their attorney John C. Grimm may have been at fault then the interests of the Plaintiffs and their attorney would be incompatible and conflicting and for attorney John C. Grimm to then continue to represent the plaintiffs in this matter would constitute a violation of Indiana Rule of Professional Conduct 1.7 unless the exception is that rule's subparagraph (b)(@2) would be invoked."

Record, pp. 124-125.

The majority emphasizes the fact that the court denied Van Horne's motion. However, this ruling in no way negated the Appellants' notice that there was a potential conflict of interest. Accordingly, the Appellants had over three years to find substitute counsel in the event that Grimm would be called as a material witness and could no longer represent them.

It was not until December 5, 1994, that Grimm "discovered" he would be called as a material witness and, consequently, filed a motion to withdraw his appearance.4 On December 20, 1994, the trial court granted Grimm's motion to withdraw, but denied his motion for continuance. The trial court reasoned that the Appellants had sufficient notice that Grimm would be called as a material witness and had adequate time to secure substitute counsel. -It was not until this time that the Appellants showed any attempt to obtain substitute counsel.

In sum, three years prior to trial, the Appellants were aware or could have foreseen the potential for a conflict of interest. The fact that the Appellant's counsel withdrew due to this conflict just two weeks prior to trial in no way negates the Appellant's notice. I find that under these conditions, the Appellants failed to demonstrate diligence in obtaining counsel.

In Fetner v. Maury Boyd & Associates, Inc., we addressed a similar issue. Fetner v. Maury Boyd & Associates, Inc., 563 N.E.2d 1334 (Ind.Ct.App.1990), reh'g denied, trans. denied. Although the case was filed on April 3, 1989, Fetner, the defendant, made no attempt to secure counsel until June 26, 1989, when he called a law firm. Id. at 1888. He waited until the second week of July to contact another attorney who eventually agreed to represent him. Id. Fetner's counsel moved for a continuance because the trial was set for July 18, 1989; the trial court denied this motion. Id. at 1336. We held:

"Given the deference necessarily due a trial court's decision on this matter, and Fet-ner's lack of diligence during the time immediately approaching trial, we cannot say the denial of Fetner's motion for a continuance constituted a violation of due process."

Id. at 1388.

Likewise, in the present case, I find the Appellants' efforts to obtain counsel demonstrated a lack of diligence. The Appellants were aware for over three years prior to trial that their counsel may be called as a material *201witness. Yet, they waited until just two weeks before trial to obtain substitute counsel. As such, the Appellants were not free from fault.

I respectfully dissent and would affirm the trial court's judgment.

. The trial court found it was "apparent" on November 1, 1994, that Gritum would be called as a material witness at the trial. Record, pp. 499-500.