Jarosz v. Palmer

Jarosz (plaintiff) hired Palmer (defendant), an attorney, to help him and his business partners acquire a company called Union Products. After they acquired Union Products, Jarosz and the partners had a falling out. The partners fired Jarosz. Jarosz sued the partners and Union Products for wrongful termination and breach of fiduciary duty. Palmer was the attorney for the partners and Union Products in this suit (the Union Products case). Jarosz moved to disqualify Palmer based on conflict of interest because Palmer had represented Jarosz when he and the partners acquired Union Products. The judge denied Jarosz’s motion and found that Jarosz did not show an attorney-client relationship existed between him and Palmer during the acquisition. After filing suit against the partners, Jarosz also sued Palmer for breach of contract, breach of fiduciary duty, and malpractice. Palmer denied that an attorney-client relationship existed between him and Jarosz. He filed a motion for judgment on the pleadings, arguing that the judge’s finding in the Union Products case that no attorney-client relationship between him and Jarosz was proven precluded Jarosz from relitigating this issue. The judge found that issue preclusion applied and granted Palmer’s motion for judgment on the pleadings. Jarosz appealed. The appellate court found that issue preclusion did not bar Jarosz’s claim against Palmer because the issue of whether an attorney-client relationship existed between Jarosz and Palmer was not essential in the earlier suit. The appellate court reversed the trial court’s order and remanded the case.