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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
SUSAN M. FERGUSON and MICHAEL D. FERGUSON, Plaintiffs, v. DDP
PHARMACY, INC., MAURICE LYNCH, PENNY ROSE, and DEBBIE LYLES,
Filed: 15 November 2005
1. Appeal and Error_appealability--motion to disqualify counsel
An order granting a motion to disqualify counsel is immediately appealable.
2. Attorneys_disqualification as counsel_discretion of judge
The decision to disqualify counsel is discretionary with the trial judge and is not generally
reviewable, absent abuse of discretion.
3. Attorneys_disqualification of firm_conflict of interest
The trial court did not abuse its discretion by disqualifying counsel under the North
Carolina Rules of Professional Conduct where one partner in a firm represented plaintiff in a
criminal matter involving forged prescriptions, and another partner in the same firm attempted to
represent defendant in a civil action by plaintiff alleging malicious prosecution and other claims.
Rules of Professional Conduct 1.9 and 1.10.
Appeal by defendant DDP Pharmacy, Inc. from order entered 17
November 2004 by Judge Quentin T. Sumner in Halifax County Superior
Court. Heard in the Court of Appeals 19 October 2005.
Poyner & Spruill L.L.P., by J. Nicholas Ellis, for plaintiffs-
Chichester & Walker, PC, by Gilbert Chichester and Haywood,
Denny & Miller, L.L.P., by John R. Kincaid, for defendant-
No brief filed for defendants-appellees Maurice Lynch, Penny
Rose, and Debbie Lyles.
DDP Pharmacy, Inc. (defendant) appeals from order entered
disqualifying attorney Gilbert W. Chichester (Chichester) from
serving as attorney for defendant. We affirm.
Pharmacy technicians, Debbie Lyles and Penny Rose, were
working in the Roanoke Rapids Drugco Pharmacy when an individual
came in and attempted to pick up a prescription for Oxycontin, a
Schedule II controlled substance under the North Carolina
Controlled Substances Act. N.C. Gen. Stat. § 90-113.3 (2003). The
individual left without being detained or questioned. The
employees called the police. One of the employees identified the
individual who came into the store as Susan M. Ferguson
Following the employee's identification of plaintiff as the
suspect, Detective W.F. Bowens (Detective Bowens) of the Roanoke
Rapids Police Department contacted plaintiff on 4 February 2002.
Plaintiff agreed to meet at the police department with Detective
Bowens, who informed her that a Drugco employee had identified her
as the individual who attempted to pick up a forged prescription
for Oxycontin. Plaintiff denied any involvement and was not
immediately charged with any crime following her meeting with
On 5 February 2002, plaintiff contacted attorney Turner
Stephenson (Stephenson), a partner with Chichester, Walker &
Stephenson. Plaintiff told Stephenson a Drugco employee had
identified her as the suspect who had attempted to pickup a forged
prescription. Stephenson advised plaintiff to avoid further
contact with the Roanoke Rapids Police Department. Stephenson told
plaintiff he would contact Police Captain Moody and inform himplaintiff was consulting with Stephenson and that she would have no
further contact with the department. Stephenson also advised
plaintiff that he would request that no additional action be taken
by the Roanoke Rapids Police Department against plaintiff.
Plaintiff met with Stephenson at his office on 8 February
2002. At that meeting, Stephenson informed plaintiff that one of
his law partners was representing Donna Rogers who had been
criminally charged in connection with the same incident regarding
a forged prescription. Stephenson advised plaintiff he could not
further represent her. Stephenson is no longer a partner with
Chichester, Walker & Stephenson.
On 28 February 2002, plaintiff was charged with attempting to
obtain a controlled substance by means of forgery or fraud.
Plaintiff was taken into custody, photographed, and fingerprinted.
In July 2002, at the criminal trial, none of the Drugco
employees identified plaintiff as the individual who attempted to
pickup the prescription on 26 January 2002. The State voluntarily
dismissed all charges against plaintiff on 8 July 2002.
On 3 May 2003, plaintiff and Michael M. Ferguson
(collectively, plaintiffs) filed a complaint in Halifax County
Superior Court against defendant and several of its employees.
Plaintiffs asserted causes of action for malicious prosecution,
intentional or reckless infliction of emotional distress, slander,
negligence, punitive damages, and loss of consortium.
Plaintiffs filed a notice of voluntary dismissal regarding
defendants: Drugco Discount Pharmacy, David Smith, Steve Bass,Gene Minton Consulting Service Inc., and GWM, Inc. On 5 December
2003, defendants filed a motion for summary judgment. The trial
court granted summary judgment for defendants Gene W. Minton and
Sybil Minton concerning all of plaintiffs' claims and for all
defendants regarding plaintiffs' claim for slander.
On 30 September 2004, Chichester served a notice of appearance
on behalf of defendant. On 15 October 2004, plaintiffs moved to
disqualify Chichester because of his firm's prior representation of
plaintiff in a related matter. The trial court granted plaintiffs'
motion to disqualify Chichester on 17 November 2004. Defendant
Defendant argues the trial court erred by entering an order
disqualifying Chichester as defendant's attorney on the grounds
that: (a) there was no prior representation of plaintiff by
Chichester's firm; (b) Chichester and his firm acquired no
protected or material information about plaintiff; (c) there is no
conflict of interest sufficient to require Chichester's
disqualification as a matter of law; and (d) the court's ruling was
otherwise contrary to the provisions of the Rules of Professional
III. Interlocutory Appeal
 Generally, there is no right of immediate
appeal from interlocutory orders and
judgments. The North Carolina General
Statutes set out the exceptions under which
interlocutory orders are immediately
appealable. N.C.G.S. § 1-277(a) provides:
an appeal may be taken from every judicial
order or determination of a judge of asuperior or district court, upon or involving
a matter of law or legal inference, whether
made in or out of session, which affects a
substantial right claimed in any action or
Goldston v. American Motors Corp., 326 N.C. 723, 725, 392 S.E.2d
735, 736 (1990). Our Supreme Court has held that an order granting
a motion to disqualify counsel is immediately appealable. Id. at
727, 392 S.E.2d at 737 ([O]nce the attorney was admitted under the
statute, [the client] acquired a substantial right to the
continuation of representation by that attorney - just as with any
other attorney duly admitted to practice law in the State of North
Carolina . . . Thus, when the trial court's order disqualifying
counsel was entered, [the client] correctly moved to appeal that
decision immediately before proceeding with further discovery and
the trial.). Defendant's appeal is properly before this Court.
IV. Standard of Review
 This court has stated absent a showing of an abuse of
discretion, a decision regarding whether to disqualify counsel is
discretionary with the trial judge and is not generally reviewable
on appeal. In re Condemnation of Lee, 85 N.C. App. 302, 310, 354
S.E.2d 759, 764-65, disc. rev. denied, 320 N.C. 513, 358 S.E.2d 520
(1987). An abuse of discretion occurs when the trial court's
ruling 'is so arbitrary that it could not have been the result of
a reasoned decision.' Chicora Country Club, Inc. v. Town of
Erwin, 128 N.C. App. 101, 109, 493 S.E.2d 797, 802 (1997) (quoting
White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)),
disc. rev. denied, 347 N.C. 670, 500 S.E.2d 84 (1998).
V. Rules of Professional Conduct
 Defendant argues the trial court erred when it granted
plaintiffs' motion to disqualify Chichester from representing
defendant under Rule 1.9(a) of the North Carolina Revised Rules of
Rule 1.9(a) 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,
confirmed in writing.
North Carolina Revised Rules of Professional Conduct, Rule 1.9(a)
For plaintiff to prevail on her claim that Chichester's
representation of defendant violated Rule 1.9(a) she had to show:
(1) an attorney-client relationship existed between Stephenson and
her regarding her criminal charges; (2) the civil lawsuit is the
same as or a substantially related matter to the criminal case; and
(3) defendant's position is materially adverse to plaintiff's
Whether an attorney-client relationship
existed between plaintiffs and defendants is a
question of fact for the trial court and our
appellate courts are bound by the trial
court's findings of facts where there is some
evidence to support these findings, even
though the evidence might sustain findings to
Cornelius v. Helms, 120 N.C. App. 172, 175, 461 S.E.2d 338, 339-40
(1995) (quoting In re Montgomery, 311 N.C. 101, 110-11, 316 S.E.2d
246, 252-53 (1984)).
While the record does not show a financial arrangement between
plaintiff and Stephenson, this court has stated the attorney-client
relationship may be implied from the conduct of the parties, and
is not dependent on the payment of a fee, nor upon the execution of
a formal contract. Id. at 175, 461 S.E.2d at 340 (quoting The
North Carolina State Bar v. Sheffield, 73 N.C. App. 349, 358, 326
S.E.2d 320, 325, cert. denied, 314 N.C. 117, 332 S.E.2d 482, cert.
denied, 474 U.S. 981, 88 L. Ed. 2d 338 (1985)).
The ethics commentary following Rule 1.9 notes that a free
consultation may in fact create an attorney-client relationship.
The question is whether defendant's conduct was such that an
attorney-client relationship could reasonably be inferred by the
purported client. Sheffield, 73 N.C. App. at 358, 326 S.E.2d at
Plaintiff contacted Stephenson, a partner with Chichester,
Walker & Stephenson, on 5 February 2002, seeking legal advice
concerning potential criminal charges after meeting with and being
questioned by a police officer. Stephenson advised her to have no
further contact with the police. Stephenson also advised plaintiff
that he would contact Police Captain Moody and inform the police
department that plaintiff would have no further contact with the
police. Stephenson scheduled a time for plaintiff to meet and met
her at his law office. At that meeting, Stephenson told plaintiffhe could no longer represent her because his law partner was
representing another client charged in the incident. Sufficient
evidence was presented from which the trial court could find and
conclude an attorney-client relationship was formed between
plaintiff and Chichester, Walker & Stephenson.
B. Related Matter
Rule 1.9(a) prohibits representation of an adverse client in
a matter that is the same, or substantially related to, that of a
former client. Rule 1.9, Comment 2 states, [t]he underlying
question is whether the lawyer was so involved in the matter that
the subsequent representation can be justly regarded as a changing
of sides in the matter in question.
Stephenson represented plaintiff in the case involving forged
prescriptions. Stephenson agreed to call the police on plaintiff's
behalf to inform them she would have no further contact with the
department. Stephenson met with plaintiff at his office and
informed her he could not further represent her because a law
partner represented another defendant charged in the same incident.
After the criminal case was dismissed, plaintiff filed a civil
suit arising from the same operative facts as the criminal case.
By purporting to represent defendant in the civil suit by
plaintiff, a former client, a court could find Chichester is
changing sides in the matter. Rule 1.9, Comment 2 prohibits
Chichester from a changing of sides to defend plaintiff's claims.
C. Materially Adverse Position
According to Rule 1.9, a new client's interests must not be
materially adverse to the interests of a former client. Even if
the representing attorney leaves the firm, Rule 1.9, Comment 6
states, [a] lawyer may have general access to files of all clients
of a law firm and may regularly participate in discussions of their
affairs; it should be inferred that such a lawyer in fact is privy
to all information about all the firm's clients.
Plaintiffs named defendant in their civil suit and sought
damages for several causes of action. Defendant denies any
liability to plaintiffs. Plaintiffs' interests are materially
adverse to defendant's interests. Even though Stephenson is no
longer a partner with Chichester, Walker & Stephenson, nothing in
the record shows the remaining lawyers in the firm, Chichester
included, were not privy to confidential information about
plaintiffs and the facts giving rise to the case while Stephenson
represented plaintiff. According to Rule 1.9, Comment 6, the
burden of proof should rest upon the firm whose disqualification is
sought to prove the information about plaintiff was not shared
with other members of the firm. Nothing in the record shows the
firm met this burden. Defendant has failed to demonstrate any
abuse of discretion in the trial court's ruling.
D. Rule 1.10(b)
Defendant argues that since Stephenson is no longer a partner
with Chichester, Walker & Stephenson, the trial court improperly
granted plaintiffs' motion under Rule 1.9. Defendant contends theproper rule to apply is Rule 1.10(b) of the North Carolina Revised
Rules of Professional Conduct.
Rule 1.10(b) states:
(b) When a lawyer has terminated an
association with a firm, the firm is not
prohibited from thereafter representing a
person with interests materially adverse to
those of a client represented by the formerly
associated lawyer and not currently
represented by the firm, unless:
(1) the matter is the same or substantially
related to that in which the formerly
associated lawyer represented the client; and
(2) any lawyer remaining in the firm has
information protected by Rules 1.6 and 1.9(c)
that is material to the matter.
North Carolina Revised Rules of Professional Conduct, Rule
Chichester's representation of defendant could violate Rule
1.10(b), as well as Rule 1.9(a). Stephenson represented plaintiff
while he was a partner at Chichester, Walker & Stephenson.
Stephenson gave plaintiff legal advice regarding her conduct and
interaction with the police department. He assured plaintiff he
would inform the police on her behalf that she would have no
further contact with them and scheduled a time to meet with
plaintiff to discuss the case.
The facts involved in the two cases are substantially
related. Rule 1.10(b)(1). The underlying reason plaintiffs filed
suit against defendant was because plaintiff anticipated and later
was in fact charged with criminal acts for which she specifically
consulted with Stephenson. From these facts, a court couldreasonably find and conclude that Chichester's representation of
defendant would violate plaintiff's attorney-client privilege.
Rule 1.10(b)(2) prohibits representation of a client whose
interests are adverse to a former lawyer's client's interests when
any lawyer remaining in the firm has information protected by
Rules 1.6 and 1.9(c) that is material to the matter. The burden
rests upon the law firm to prove the former attorney did not share
any information about the former client with the remaining
attorneys in the firm. Rule 1.9, Comment 6. Rule 1.10, Comment 2
states, a firm of lawyers is essentially one lawyer for purposes
of the rules governing loyalty to the client . . . .
The information plaintiff shared with Stephenson was
confidential. She had been investigated for, questioned about, and
was aware of potential of criminal charges for attempting to
possess scheduled narcotics on a forged prescription. Plaintiff
shared this information with Stephenson in confidence. The law
firm bore the burden to prove Stephenson did not share the
confidential information with the other members of the firm. The
record is devoid of such evidence. Defendant failed to show any
abuse of discretion in the trial court's ruling. This assignment
of error is overruled.
Chichester, Walker & Stephenson represented plaintiff in the
criminal matter involving forged prescriptions. Under either Rule
1.9 or Rule 1.10, the trial court's grant of plaintiffs' motion to
disqualify Chichester from representing defendant in the related
civil matter was proper. The law firm failed to prove that
Stephenson did not share plaintiff's confidential information withthe other members of the firm. Rule 1.9, Comment 6. Defendant
failed to show the trial court abused its discretion to warrant
reversal of its order. The trial court's order is affirmed.
Judges JACKSON and JOHN concur.
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