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Lancaster v. Harrow

United States District Court, M.D. Florida, Tampa Division

February 21, 2018

AMBER LANCASTER, BRITTANY CRIPLIVER, BROOKE TAYLOR JOHNSON, CIELO JEAN GIBSON, CORA SKINNER, GEMMA LEE FARRELL, HEATHER RAE YOUNG, IRINA VORONINA, JESSE GOLDEN, JESSA HINTON, JOANNA KRUPA, KATARINA VAN DERHAM, MAYSA QUY, PAOLA CANAS, SANDRA VALENCIA, SARA UNDERWOOD, TIFFANY SELBY, TIFFANY TOTH, VIDA GUERRA, and KIM COZZENS, Plaintiffs,
v.
ANDREW HARROW, SUSAN HARROW, EYES WIDE SHUT, LLC, BYOB CLUB, INC., and THE BOTTLE CLUB, LLC, Defendants.

          REPORT AND RECOMMENDATION

          JULIE S. SNEED UNTIED STATES MAGISTRATE JUDGE.

         THIS MATTER is before the Court on Plaintiffs' Petition for Ex Parte Temporary Restraining Order With Asset Freeze and Motion to Disqualify M. Sean Moyles and Defendants' Bankruptcy Attorney As Counsel for All Defendants (“Motion”) (Dkt. 118), and Defendants' response in opposition (Dkt. 137). The presiding district court judge denied Plaintiffs' request for a temporary restraining order and referred the motions for preliminary injunction and to disqualify counsel to the undersigned to conduct an evidentiary hearing and enter a report and recommendation. (Dkt. 120.) On February 8, 2018, the Court held an evidentiary hearing on the Motion, after which the parties filed post-evidentiary hearing briefs. (Dkts. 151, 152). For the reasons that follow, it is recommended that the Motion be denied.

         INTRODUCTION

         Plaintiff filed the Motion as a result of a conversation between Defendant Andrew Harrow and Plaintiffs' attorney Ludmila Khomiak which took place after Mr. Harrow's January 4, 2018 deposition. Ms. Khomiak avers that, after Mr. Harrow's deposition concluded, Mr. Harrow “informed [her] in the presence of his attorney, M. Sean Moyles, Esq., and the court reporter, Yvonne Corrigan, that he has retained a bankruptcy attorney for the purpose of bankrupting all the Defendants and making sure that the Plaintiffs ‘do not receive any money out of this lawsuit.'” (Dkt. 118-1.) She also avers that Mr. Harrow informed her “that he [h]as already moved all assets out of the Defendants' bank accounts and hid them and the reason why he believes the Plaintiffs would not be able to ‘go after' him, his wife or the remainder of the Defendants is because he has done this before in another matter where a judgment was entered against one of his companies and he was able to successfully hide the assets and file for bankruptcy.” (Id.) Finally, she avers that Mr. Harrow stated that his bankruptcy attorney would attend the (now-canceled) January 19, 2018 mediation (Dkts. 123, 123), to make sure that Plaintiffs “‘do not get anything.'” (Id.)

         Based on Mr. Harrow's statements, Plaintiffs argue that Mr. Moyles and Defendants' (unnamed) bankruptcy attorney must be disqualified as Defendants' counsel because “they are witnesses in this matter and may also have direct knowledge of the fraudulent transfer of assets.” (Dkt. 118 at 3.) Plaintiffs also seek an order freezing Defendants' assets, and assets of any affiliated companies, to prevent further transfers until it can be determined whether assets were transferred and, if so, where they were transferred. (Id.)

         In response to the Motion, Mr. Moyles avers that he witnessed the conversation and heard Mr. Harrow tell Ms. Khomiak that he was considering filing for bankruptcy and had met with bankruptcy counsel. Mr. Moyles further avers, however, that he did not hear Mr. Harrow make any of the other comments Plaintiffs' counsel attributes to him, including that Mr. Harrow had moved or hidden Defendants' assets. (Dkt. 136-1 ¶¶ 3, 5.) Accordingly, Defendants contend that there is no factual basis for Plaintiffs' request to freeze Defendants' assets and disqualify their counsel. (Dkt. 137 at 3.)

         FINDINGS OF FACT

         At the evidentiary hearing, Ms. Khomiak's testimony was consistent with her declaration. She testified that after Mr. Harrow's deposition, in the presence of Mr. Moyles and the court reporter, Mr. Harrow told her that he was not making a threat, but that he had contacted a bankruptcy attorney who will be present at the parties' mediation instead of Mr. Moyles. (Dkt. 149 at 10:1-11:2.) He told her that he had “already moved all of my money, all of my assets, out of the defendants' in this case bank accounts, ” which he had done before in other, unrelated lawsuits. (Id. at 11:3-11, 14:1-3.) She testified that she was shocked because Mr. Harrow's “whole intent [was] to make sure that my plaintiffs do not get any money out of this.” (Id. at 11:20-12:1, 14:4-9, 18:4-6.) She testified that, other than Mr. Harrow's statements, Plaintiffs have no other evidence of Defendants' transferring their assets. (Id. at 14:10-14, 17:20-18:1, 21:9-19, 28:18-29:4.)

         On cross examination, when asked if she had any reason to believe that Mr. Harrow was using Mr. Moyles's services in commission of these alleged transfers, Ms. Khomiak answered that her basis was Mr. Moyles's being present during this conversation and not interjecting. (Id. at 19:3-20:5.) She further testified that she had no reason to believe Mr. Harrow had used Mr. Moyles's services to transfer Defendants' assets. (Id. at 20:6-11.) As for the unnamed bankruptcy attorney, Ms. Khomiak testified that she had no evidence that Mr. Harrow had used or was using this attorney's services to transfer Defendants' assets other than the statements Mr. Harrow made to her. (Id. at 20:12-21:19.)

         Ms. Corrigan testified that she recalled Mr. Harrow telling Ms. Khomiak that he was going to file for bankruptcy but does not recall any other statements. (Id. at 39:10-25.) Mr. Harrow testified that he told Ms. Khomiak that he had visited bankruptcy attorneys “to hopefully end the litigation” and that Plaintiffs would not get “that much, or any money” at the end of the litigation. (Id. at 48:10-49:5.) He testified that he meant that the bankruptcy court would “take over” and “handle” the case and denied that he meant that Plaintiffs would not receive a settlement. (Id. at 67:21-68:11.) Finally, he testified that no Defendant moved or hid assets or intends to file for bankruptcy. (Id. at 57:18-20, 59:2-12, 60:14-21, 62:9-15.)

         ANALYSIS

         I. Disqualification of Defendants' Counsel

         As the movants, Plaintiffs bear the burden to prove grounds for Defendants' counsel's disqualification. In re BellSouth Corp., 334 F.3d 941, 961 (11th Cir. 2003). “Because a party is presumptively entitled to the counsel of his choice, that right may be overridden only if compelling reasons exist.” Id.; see Alexander v. Tandem Staffing Sols., Inc., 881 So.2d 607, 608-09 (Fla. 4th DCA 2004) (“Motions for disqualification are generally viewed with skepticism because disqualification of counsel impinges on a party's right to employ a lawyer of choice, and such motions are often interposed for tactical purposes.”). Courts limit disqualification to instances where the attorney's conduct violates specific Rules of Professional Conduct, unless the conduct at issue threatens “the orderly administration of justice” or deliberately challenges the court's authority, in which cases courts are given wide latitude in disqualification determinations. Schlumberger Techs., Inc. v. Wiley, 113 F.3d 1553, 1561 (11th Cir. 1997); see Kleiner v. First Nat. Bank of Atlanta, 751 F.2d 1193, 1210 (11th Cir. 1985) (disqualifying an attorney who deliberately disobeyed the court's protective order where the attorney's client contacted potential class members in “attempts to manipulate the decision of class members to join or opt out of class membership”).

         A. ...


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