In re Petition for Disciplinary Action Against Christopher Thomas Kalla

Lawyer Christopher Kalla (defendant) represented two clients: Client A, a home purchaser, and Client B, a realtor and businessowner. In 2006, Client B helped Client A purchase Client A’s home and connected Client A to an individual lender. Client A borrowed money from the lender to afford the down payment. Client B’s company, Future Mortgage, arranged a mortgage that secured Client A’s loan. In 2007, Kalla filed a usury lawsuit against the lender on behalf of Client A. The lender’s answer and counterclaim to Client A’s lawsuit identified Future Mortgage as the broker of the loan. Kalla later filed a second usury lawsuit against the lender on behalf of Client B. Kalla did not notify Client B before filing Client B’s lawsuit that Client B or Future Mortgage were mentioned in Client A’s lawsuit. Before the lender brought Client B and Future Mortgage into Client A’s lawsuit as third-party defendants, the lender’s attorney informed Kalla that a conflict of interest would arise between Client A and Client B. After receiving the lender’s third-party complaint, Kalla asked Clients A and B to sign conflict-of-interest waivers. Client A signed the waiver, but Client B did not. Nevertheless, Kalla continued to represent both clients. In 2010, the Director of the Office of Lawyers Professional Responsibility (plaintiff) filed a disciplinary petition alleging that Kalla’s actions constituted an impermissible conflict of interest. After a hearing, a referee determined that Kalla’s conflict of interest violated the Minnesota Rules of Professional Conduct, and the referee recommended a public reprimand and two years of supervised probation. The Minnesota Supreme Court reviewed the referee’s recommendation.