Sent from my iPad"Disqualify Emeka Ugwuonye", Embassy Petitions the U.S District Court
<image003.png>Case 1:10-cv-01929-BJR-DAR Document 110 Filed 01/09/13 Page 1 of 9
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
EMBASSY OF THE FEDERAL
REPUBLIC OF NIGERIA
Plaintiff,
v.
EPHRAIM EMEKA UGWUONYE, et al. (defendants)
Civil Action No. 1:10-cv-01929 (BJR)
PLAINTIFF'S MOTION TO DISQUALIFY DEFENDANT UGWUONYE AS COUNSEL FOR DEFENDANT ECU ASSOCIATES, P.C.
Plaintiff Embassy of the Federal Republic of Nigeria ("Embassy"), through counsel, respectfully moves this Court to disqualify Defendant Ephraim Emeka Ugwuonye ("Ugwuonye") from acting as counsel for Defendant ECU Associates, P.C. ("ECU Associates").
Local Rule 7(m) Certification
On January 8 and 9, 2013, the Embassy's counsel conferred with Mr. Ugwuonye, who does not consent to the relief requested in this motion.
I. PROCEDURAL BACKGROUND
The Embassy moved for a default judgment against ECU Associates on August 13, 2012. See Dkt. #77. On November 2, 2012, the Court deferred ruling on the Embassy's motion. See Dkt. #96 at 13. The Court afforded ECU Associates an opportunity to obtain counsel and ordered that "[f]ailure to obtain counsel will result in the Court entering a default against this Defendant." Id. at 14 (emphasis in original). On December 10, 2012, Ugwuonye entered his appearance as counsel for ECU Associates. See Dkt. #108.
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II. ARGUMENT
Ugwuonye cannot represent ECU Associates in this action for numerous reasons, including the fact that the Court has already said as much when it advised Ugwuonye that he could not defend ECU Associates as its director-trustee. Ugwuonye currently is suspended from practicing law in the District of Columbia. He cannot represent ECU Associates in an adversarial proceeding against his former client, the Embassy. Ugwuonye is a necessary witness in this case and cannot act in the dual capacities of witness and advocate. Ugwuonye and ECU Associates have a conflict of interest. Finally, Ugwuonye has an established record of missing court deadlines and failing to comply with procedural and discovery rules. Each of these reasons is sufficient to disqualify Ugwuonye from representing ECU Associates. Collectively, they mandate disqualification.
A. Ugwuonye Cannot Defend ECU Associates as Its Director-Trustee
The Court has already made it clear that Ugwuonye cannot represent ECU Associates. When it issued its order deferring ruling on the Embassy's motion for a default judgment, the Court advised Ugwuonye that "while [he] can appear pro se in his personal capacity, he cannot do so as the director-trustee of ECU Associates." Dkt. #96 at 7. The Court further advised that "Ugwuonye must obtain counsel in order to defend this case as director-trustee of ECU Associates, P.C." Id.; see also id. at 12 n.14 ("As noted above, Ugwuonye cannot appear pro se as director-trustee for the corporation; ECU Associates, P.C. must be represented by counsel."). Ugwuonye disregarded the Court's advisement when he entered his appearance as counsel for ECU Associates.
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B. Ugwuonye is Suspended from Practicing Law in the District of Columbia
Ugwuonye cannot represent ECU Associates because he is suspended from practicing law in the District of Columbia as a result of reciprocal disciplinary action based on his prior ethical violations.
On July 24, 2008 the Maryland Court of Appeals suspended Mr. Ugwuonye from the practice of law for 90 days, from August 23 through November 21, 2008. See Attorney Grievance Comm'n v. Ugwuonye, 405 Md. 351, 373-375 (2008). The Commission described its disciplinary action against Mr. Ugwuonye as follows:
UGWUONYE, Ephraim, Jr. - 90-day Suspension by the Court of Appeals on July 24, 2008 for failure to act with diligence and competence in representing a client by failing to respond to a notice of contemplated dismissal for lack of service. With regard to another client, he took a fee for a frivolous case and failed to return an unearned fee [of $3,500.00] (which he had deposited in his operating account).
See Exhibit A at 2.
On October 30, 2008, the D.C. Court of Appeals imposed reciprocal discipline upon Mr. Ugwuonye as a result of his suspension in Maryland. See Exhibit B. The court suspended Mr. Ugwuonye from practicing law for 90 days. Id. The court further ordered that "for purposes of reinstatement respondent's suspension will not begin to run until such time as he files an affidavit that fully complies with the requirements of D.C. Bar. R. XI, § 14(g)." Id. The court has not yet issued an order reinstating Mr. Ugwuonye to practice law. See Exhibit C, a true and correct copy of the D.C. Bar website accessed on January 8, 2013 ("Membership Status: Suspended. Reason for suspension: Disciplinary suspension."). Therefore, Ugwuonye cannot represent ECU Associates in the District of Columbia without engaging in the unauthorized practice of law.
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C. Ugwuonye Cannot Represent Another Party Against the Embassy, His Former Client
Ugwuonye continues to disregard his ethical obligations to the Embassy, this time by undertaking to represent ECU Associates against the Embassy concerning the same events and transactions in which Ugwuonye was the Embassy's counsel. Ugwuonye's adverse representation against the Embassy violates Rule 1.9 of the District of Columbia Rules of Professional Conduct, which provides:
A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed consent.
(Emphasis added.) "When a lawyer has been directly involved in a specific transaction, subsequent representation of other clients with materially adverse interests clearly is prohibited." Comment [2] to Rule 1.9.
The Court has identified three questions that must be answered affirmatively to find a violation of Rule 1.9:
The first is whether the attorney accused of the violation is a "former attorney" with respect to a party presently before the court. If so, the second question is whether the subject matter of the former representation is the same as, or substantially related to, the present matter on which the alleged violation of Rule 1.9 is based. If so, the third question is whether the interests of the former client are adverse to the interests of the party represented by the attorney who is accused of violating Rule 1.9.
Paul v. Judicial Watch, Inc., 571 F. Supp. 2d 17, 21 (D.D.C. 2008). For Ugwuonye, the answer to each of these questions is "yes," constituting an ethical violation.
First, there is no dispute that Ugwuonye is the Embassy's former attorney. Ugwuonye alleged in his First Amended Counterclaim that "from 2001 through the end of 2008, Ugwuonye
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acted as counsel to Government of Nigeria (GON) and the Embassy." See Dkt. #106 at 11, ¶ 16.
Second, the matters in which Ugwuonye formerly represented the Embassy are the same as, or substantially related to, the matters at issue in this litigation. The Embassy is suing Ugwuonye and ECU Associates for events that occurred while Ugwuonye and ECU Associates were providing legal representation to the Embassy in connection with several real estate transactions and a refund of $1.55 million from the Internal Revenue Service ("IRS"). See First Amended Complaint, Dkt. #33, ¶ 1. Ugwuonye admitted in his answer to the Embassy's First Amended Complaint that "Ugwuonye, both individually and on behalf [of] ECU ASSOCIATES, PC, represented the Embassy in several real estate transactions and that in one of the transactions, the Internal Revenue Service ('IRS') withheld $1.55 million in property taxes." See Dkt. #106 at 1, ¶ 1. Ugwuonye and ECU Associates breached their engagement agreement to obtain the $1.55 million tax refund for the Embassy, breached their fiduciary duties to the Embassy by withholding the $1.55 million refund from it, and converted the Embassy's $1.55 million refund. See Dkt. #33, Counts I, III, and IV. Therefore, Ugwuonye seeks to represent ECU Associates concerning very same transactions in which he represented the Embassy.
Third, the Embassy's interests are adverse to the interests of ECU Associates. The two parties are now in litigation against each other concerning, among other things, the same $1.55 million refund that Ugwuonye admits he took.
Once a violation of Rule 1.9 is established, the Court need look no further to enforce the mandate of the Rule and disqualify the violating attorney. The Court has held that "disqualification is appropriate when an attorney is in violation of Rule 1.9 of the District of Columbia Rules of Professional Conduct." Paul, 571 F. Supp. 2d at 27. Therefore, the Court should disqualify Ugwuonye as ECU Associates' counsel.
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D. Ugwuonye Cannot Act as Counsel in the Case Because He Is a Necessary Witness
Ugwuonye cannot represent ECU Associates because he is both a Defendant in this action and a necessary witness. Rule 3.7(a) of the Rules of Professional Conduct provides that "[a] lawyer shall not act as an advocate at a trial in which the lawyer is likely to be a necessary witness …." (emphasis added).
Ugwuonye is a necessary witness because he was personally involved in practically every aspect of the events that are at issue in this action. Ugwuonye was the person who obtained the Embassy's tax refund from the IRS. See First Amended Complaint at ¶¶ 18-19. Ugwuonye was the person who informed the Embassy that he would deliver the refund to the Embassy. See id. at ¶ 20. Ugwuonye was the person who deposited the $1.55 million into an ECU Associates bank account. See id. at ¶19. Ugwuonye was the person who then withdrew the money and refused to return it to the Embassy. See id. at ¶¶ 19, 22-23, 28. In fact, Ugwuonye has interjected himself as a witness by alleging that he had conversations with Nigerian officials "regarding the option of paying some part of the fees from funds due to GON by way of the expected tax refund." First Amended Counterclaim, Dkt. #106 at 13, ¶ 28. And he has interjected himself as a witness by bringing a counterclaim against the Embassy for alleged breach of contract. See id. at Count I.
Permitting Ugwuonye to be both a witness and counsel to ECU Associates would have two deleterious effects: prejudicing the Embassy and creating a conflict of interest between Ugwuonye and ECU Associates. See Comment [1] to Rule 3.7. Comment [2] emphasizes the risk of prejudice that the Embassy would suffer if Ugwuonye were permitted to represent ECU Associates:
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The opposing party has proper objection where the combination of roles may prejudice that party's rights in the litigation. A witness is required to testify on the basis of personal knowledge, while an advocate is expected to explain and comment on evidence given by others. It may not be clear whether a statement by an advocate-witness should be taken as proof or as an analysis of the proof.
Comment [2] to Rule 3.7. The Court should disqualify Ugwuonye from acting as counsel for ECU Associates because the Rule establishes a mandate that an attorney "shall not" represent a party in a case in which he will be a witness and the Embassy would suffer undue prejudice if Ugwuonye were permitted to represent ECU Associates.1
E. Ugwuonye Has a Conflict of Interest with ECU Associates
Ugwuonye cannot represent ECU Associates due to a conflict of interest with ECU Associates. Rule 1.7(b)(4) of the District of Columbia Rules of Professional Conduct provides:
[A] lawyer shall not represent a client with respect to a matter if: … The lawyer's professional judgment on behalf of the client will be or reasonably may be adversely affected by the lawyer's responsibilities to or interests in a third party or the lawyer's own financial, business, property, or personal interests.
Ugwuonye's personal misconduct is at issue in this case, and his personal conduct may place him at odds with ECU Associates. For example, Ugwuonye and ECU Associates both were engaged by the Embassy to obtain the tax refund, and Ugwuonye deposited the $1.55 million into an ECU Associates bank account. See First Amended Complaint at ¶ 19. Ugwuonye then proceeded to withdraw all of those funds and withhold them from the Embassy.
Page 7, Footnote: 1 None of the exceptions to Rule 3.7 apply. For example, the exception in Rule 3.7(a)(2) only permits counsel to testify concerning "the nature and value of legal services rendered in the case" (emphasis added). See also Comment [3] of Rule 3.7 (the exception applies only "where the testimony concerns the extent and value of legal services rendered in the action in which the testimony is offered") (emphasis added). Ugwuonye's testimony would not concern the nature and value of legal services rendered to ECU Associates, but rather would pertain to the events the Embassy alleged in its First Amended Complaint, including Ugwuonye's breaches of contract and his fiduciary duties by withholding and converting $1.55 million of the Embassy's funds.
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See id. at ¶¶ 19, 21-23. Whether Ugwuonye was acting on behalf of ECU Associates when he took the Embassy's funds may be an important issue for the jury. Ultimately, Ugwuonye may try to hold ECU Associates responsible and absolve himself of any wrongdoing, and ECU Associates may try to shift the blame to Ugwuonye. That Ugwuonye is himself a defendant in this action exacerbates the conflict.
The Rules of Professional Conduct are clear: "The lawyer's own interests should not be permitted to have an adverse effect on representation of a client." Comment [11] to Rule 1.7. "For example, if the probity of a lawyer's own conduct in a transaction is in serious question, it may be difficult or impossible for the lawyer to give a client detached advice." Id. That is the case here. The Court should preempt the conflict and disqualify Ugwuonye from representing ECU Associates.
F. Ugwuonye is Not Qualified to Represent Any Client in Litigation
Ugwuonye cannot meet the requirements of Rules 1.1 and 1.3 of the District of Columbia Rules of Professional Conduct and, therefore, cannot represent ECU Associates. Rule 1.1 provides that "[a] lawyer shall provide competent representation to a client," which "requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation." Competent handling of a matter "includes adequate preparation, and continuing attention to the needs of the representation to assure that there is no neglect of such needs." Comment [5] to Rule 1.1. Rule 1.3 requires a lawyer to represent a client "diligently" and with "reasonable promptness."
Ugwuonye has an established record in this case demonstrating that he is not capable of meeting the needs and obligations of ECU Associates, which would include participating in discovery and complying with court deadlines. Ugwuonye should be motivated to adequately
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defend himself against the Embassy's claims, yet he has not done so. The Court granted the Embassy's motion to compel and for sanctions after Ugwuonye failed to respond to the Embassy's discovery requests. See Dkt. #91. Ugwuonye has failed on multiple occasions to meet filing deadlines. See Dkt. #91 at 2 (failure to timely oppose motion to compel); Dkt. #81 (Ugwuonye seeking leave to file a late opposition to a cross-motion for default judgment); Dkt. #85 at 4 (Ugwuonye admitting he "has been late in the past in responding to motions"); Dkt. #96 at 10-11 ("The Court notes that this is not the first time Defendant Ugwuonye has missed a deadline in this action.") and 11-12 ("It would seem that there could be nothing so untimely as a late reply on a motion for leave to file a late opposition. Furthermore, Ugwuonye failed to file an opposition to the Embassy's motion to strike…."). Ugwuonye also has made untimely filings without seeking leave of the Court to do so. See Dkts. ##85, 86. As Ugwuonye has demonstrated that he cannot adequately represent his own interests as a defendant in this action, he cannot adequately represent the interests of ECU Associates.
III. CONCLUSION
For the foregoing reasons, the Embassy respectfully requests that the Court grant its motion to disqualify Ugwuonye as counsel for ECU Associates.
Date: January 9, 2013 Respectfully submitted,
/s/ T. Michael Guiffré
T. Michael Guiffré (D.C. Bar No. 465745)
PATTON BOGGS LLP
2550 M Street, NW
Washington, DC 20037
Phone: (202) 457-6000
Fax: (202) 457-6315
Counsel for Plaintiff Embassy of the
Federal Republic of Nigeria
__._,_.___
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