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Lavender v. Protective Life Corporation

United States District Court, N.D. Alabama, Southern Division

January 31, 2017




         Presently before the court is Protective Life Corporation's motion to disqualify Kimberly Lavender's counsel, Reginald McDaniel and the McDaniel Law Firm, LLC, doc. 17, and various other related motions.[1] The motion to disqualify is fully briefed, docs. 51; 62; 63; 65, and ripe for review after a hearing and oral argument. For the reasons stated below, Protective's motion is due to be granted, and McDaniel and all attorneys at the McDaniel Law Firm, LLC, including Robert Beeman, are disqualified from representing Lavender in this case.


         Kimberly Lavender, a former employee of Protective Life, filed this lawsuit, alleging race discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Doc. 1. Lavender is represented by Reginald McDaniel, based on a referral by her then coworker, Robert Beeman, Esquire. Doc. 65-5 at 109. Beeman, a licensed lawyer, was an officer at Protective until he resigned when Protective confronted him about his involvement in this case. In a nutshell, Protective asserts that Beeman provided legal representation to Lavender by working on her case while employed at Protective, even though he previously served as legal counsel to Protective on similar discrimination matters. Doc. 17. To support its contentions, Protective presents evidence suggesting that Beeman and McDaniel are partners at the McDaniel Law Firm, LLC. Based on this partnership and evidence that Beeman worked on this case, Protective asserts that Beeman violated Rules 1.7 and 1.9 of the Alabama Rules of Professional Conduct, and that, pursuant to Rule 1.10, McDaniel and the McDaniel Law Firm, LLC are disqualified from representing Lavender in this action based on Beeman's association with the law firm. See generally doc. 51.[2]


         Beeman worked at Protective for over eighteen years. Doc. 17 at 25. Starting in 1998, Beeman served as associate counsel and ultimately senior associate counsel in the Legal Department. Doc. 65-5 at 55. For “six or seven years” as associate counsel, Beeman counseled the Human Resources Department by working with the chief HR officer to address employee grievances and “thorny” personnel decisions, to investigate discrimination and employment complaints, respond to EEOC charges, and implement and ensure compliance with HR policies. Id. at 55-56. During this period, Beeman was the primary contact person for ten employment lawsuits, including six involving discrimination allegations. Doc. 65-5 at 59-62.[3]

         In March 2003, Beeman transitioned to the HR Department. Docs. 62-2 at 3; 65-5 at 57. In his new role, although Beeman still worked as senior associate counsel, he became the primary attorney for the HR Department. Docs. 62-2 at 3; 65-5 at 47. Beeman worked primarily on employment matters and policies for the next three years. Docs. 62-2 at 3; 65-5 at 57. For example, Beeman wrote in his 2005 “Annual Performance Review Memo” that he “served as primary legal counsel to HR, ” that Protective only had one EEOC charge in 2004, that he “assumed sole and full responsibility for interpleader related actions, ” and “served as in-house HIPAA counsel.” Doc. 65-5 at 82-83. From 2002 to 2006, Beeman “authored at least seven legal update memos including information on legal developments and updates on the number and type of EEOC charges and lawsuits that Protective . . . had pending at that time.” Id. at 66.

         Around May 2005, Protective promoted Beeman to Second Vice President. Id. at 57. In this role, Beeman attended quarterly meetings with over one hundred other vice presidents. Id. at 103. Around that same time, Beeman transitioned to a non-legal position, working in an ethics, diversity, and compliance position within the HR Department. Docs. 62-2 at 3; 65-5 at 57. In that role, Beeman worked on diversity initiatives, compliance with and the review and modification of Protective's business code of ethics, and helped determine what employee-related conflicts of interest, if any, the company needed to resolve. Doc. 65-5 at 102.

         In 2010 or 2011, Beeman moved laterally to the Protective Life Foundation, and, on May 9, 2011, Protective also appointed Beeman as an officer of the company. Id. at 103, 139, 145. As a Second Vice President and officer of Protective, “Beeman was eligible to receive a bonus based on the financial success of Protective . . . on a yearly basis.” Id. at 139. At the Foundation, Beeman worked as a loaned executive to United Way and also helped with Protective's corporate charitable initiatives. Id. at 103. Beeman worked in this role until his resignation on August 23, 2016. Doc. 17 at 25.

         Beeman met McDaniel at some point in the last three years. Doc. 65-5 at 103. Beeman and McDaniel apparently discussed working together because in May of 2014, McDaniel posted the following on his firm's Facebook page: “Happy to announce a new partnership with my Harvard Law School partner, Robert L. Beeman, Esq. Miles Law School and Harvard coming together to form a formidable legal team!” Docs. 17 at 19; 65-5 at 104. Consistent with their discussions, sometime in 2014 - and while still employed at Protective, Beeman became “of counsel” to McDaniel's law firm. Doc. 65-5 at 107. Around that same time, Beeman also rented office space at the same address as McDaniel's law firm, and there is evidence to support that Beeman and McDaniel have presented themselves to clients as law partners. See Id. at 111; docs. 17 at 16, 19; 65-2 at 33- 35, 39-67; 65-9 at 173-184. Beeman has worked and currently is working with McDaniel on other legal matters. Docs. 65-5 at 104; 65-9 at 40-41, 83. However, Beeman states he and McDaniel never formed a legal partnership. Doc. 65-5 at 107.

         As to Lavender's case, while still an employee and an officer at Protective, Beeman worked on Lavender's lawsuit by, among other things, helping McDaniel draft a letter to the EEOC relating to Lavender's claims and damages against Protective. Id. at 109. In fact, Beeman acknowledges that he represented Lavender in her dispute against Protective and that his role as her chief counsel only ceased when he referred her case to McDaniel:

Q: At what point did you believe that you ceased to be her lawyer?
A: Certainly in any representative capacity, probably until she met with Mr. McDaniel.

Id. at 110. However, there is evidence showing that Beeman continued to represent Lavender afterwards. Specifically, Beeman helped McDaniel draft the complaint and the Rule 30(b)(6) deposition notice to Protective in this case. Id. at 109, 118- 119. Indeed, despite Lavender's adverse interests to Protective, Beeman communicated with McDaniel about this case in person and via e-mail, because “[Beeman's] intent was to help Mr. McDaniel.” Id. at 118. Moreover, Beeman, McDaniel, and Lavender have met on at least two occasions to discuss Lavender's case. Id. at 111-12. Beeman states, however, that he never disclosed to Lavender his affiliation with McDaniel's law firm. Id. at 111.

         On August 22, 2016, Beeman's supervisor, Kate Cotton, found a fax on her desk that Beeman sent to McDaniel from Protective's facsimile machine, regarding a separate legal matter. Docs. 17 at 2; 52 at 32. Cotton handed the document to Wendy Evesque, Chief HR Director. Doc. 52 at 32. Because Protective recognized McDaniel as Lavender's counsel in this case, Protective initiated an investigation that led to it discovering that the McDaniel Law Firm had Beeman listed as an attorney on its website and as a partner of the law firm on its Facebook page. Docs. 17 at 2-3, 17, 19; 52 at 33-34. Although Protective's conflict of interest policy required that he do so, Beeman never disclosed to Protective that he performed outside legal work or that he received compensation for such work and referrals. Id. at 3, 21-23. In light of the information, the IT Department conducted a search of Protective's server for e-mails relating to McDaniel and found an exchange between Beeman and McDaniel related to the Lavender case. Doc. 52 at 35.

         When Evesque and Senior Associate Counsel Amy Savoie questioned Beeman about these findings, Beeman denied any affiliation with McDaniel's firm or that he had communicated with McDaniel about Lavender's case outside of the referral. Docs. 17 at 2-3; 52 at 37-38. Shortly after Evesque informed Beeman of the decision to suspend him with pay pending an investigation, docs. 17 at 2-3; 52 at 39, Beeman resigned, stating in part:

After 18 plus years of service to Protective Life Corporation, I deem it appropriate at this time to resign my employment. I do not feel this is where my final and most productive working years should be spent. I have serious concerns about the manner in which employees are treated and the complexion of the organization.
This decision is effective immediately and with no restraints on the practice of law and who I may choose to accept or take on as a client.

Docs. 17 at 4, 25 (emphasis added); 52 at 39.

         Following Beeman's abrupt departure, Protective searched Beeman's office and discovered evidence on Beeman's computer that he was actively involved in a number of outside legal cases, some of which were in collaboration with McDaniel, including this lawsuit. Docs. 17 at 4-5; 52 at 40-41. The evidence included drafts of the complaint in this case, requests for interrogatories and a deposition notice to Protective, and draft correspondence to the EEOC regarding Lavender's EEOC charge against Protective. Docs. 17 at 5; 52 at 42.

         The discovery of Beeman's involvement in this case led to the filing of the emergency motion to disqualify McDaniel, Lavender's counsel of record. In the motion, Protective alleges that Beeman and McDaniel violated Alabama Rules of Professional Conduct 1.7(b), [4] 1.9, [5] and 1.10(a).[6] The court has adopted these rules through its local rules which require, in part, “[e]ach attorney . . . who appears in this court . . . to be familiar with, and shall be governed by, the Local Rules of this court and, to the extent not inconsistent with the preceding, the Alabama Rules of Professional Conduct adopted by the Alabama Supreme Court; . . . .” L.R. 83.1(f). The court will now address the merits of the motion.


         “Motions to disqualify are governed by two sources of authority. First, attorneys are bound by the local rules of the court in which they appear . . . . Second, federal common law also governs attorneys' professional conduct because motions to disqualify are substantive motions affecting the rights of the parties.” Herrmann v. GutterGuard, Inc., 199 F. App'x 745, 752 (11th Cir. 2006) (citations omitted). “The party bringing the motion to disqualify bears the burden of proving the grounds for disqualification.” Herrmann, 199 F. App'x at 752 (citing In reBellSouth Corp., 334 F.3d 941, 961 (11th Cir. 2003)). “Because a party is presumptively entitled to counsel of his choice, that right may be overridden only if compelling reasons exist.” Id. (internal quotations omitted). Disqualification is a “harsh sanction, ” which courts should use “sparingly.” Id. at 752 (quoting Norton v. Tallahassee Mem'l Hosp., 689 F.2d 938, 941 n.4 (11th Cir. 1982)). Finally, objections by opposing counsel “should be viewed with caution . . . for [such ...

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