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Murphy & Demory, Ltd., et. al. v. Admiral Daniel J. Murphy, U.S.N. (Ret.), et. al.

Chancery No. 128219 (June 6, 1994)

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Murphy & Demory, Ltd., et. al. v. Admiral Daniel J. Murphy, U.S.N. (Ret.), et. al.

Virginia Circuit Court

Chancery No. 128219 (June 6, 1994)

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Facts

Admiral Daniel Murphy (defendant), an employee of Murphy & Demory, Ltd. (Murphy & Demory) (plaintiff), desired to either take over control of Murphy & Demory or form his own competing company before resigning. Admiral Murphy enlisted the help of Siemer and Mendelson, two attorneys employed by a law firm involved in providing legal counsel to Murphy & Demory, Pillsbury, Madison & Sutro (Pillsbury) (defendant). Pillsbury placed Siemer in charge of identifying conflicts in the firm's dual representation of Admiral Murphy and Murphy & Demory. Mendelson held a position of seniority in the firm. Siemer and Mendelson tried to recruit the director of Murphy & Demory to support Admiral Murphy’s takeover bid and prepared legal documents to effectuate the proposed takeover. Siemer and Mendelson organized employee meetings and helped Admiral Murphy prepare remarks intended to entice other employees of Murphy & Demory to quit and join his competing company. Siemer and Mendelson helped some employees write resignation letters. Siemer and Mendelson also prepared letters intended for use by current Murphy & Demory clients, authorizing transfer of their files and business to Admiral Murphy’s proposed new company. After being terminated from representation of Murphy & Demory, Siemer and Mendelson sued, seeking a court order to dissolve Murphy & Demory. Murphy & Demory filed a lawsuit, which included claims of malpractice, against the attorneys and Pillsbury.

Rule of Law

Issue

Holding and Reasoning (Roush, J.)

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