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Weinberger v. Tucker
United States Court of Appeals for the Fourth Circuit
510 F.3d 486 (2007)
Attorney Stefan Tucker (defendant) represented two clients, ASCII Group, Inc. and Voltfsun, and introduced them to each other. Before ASCII and Voltfsun invested together in a third company, TechNet, Tucker sent ASCII a waiver-of-conflict letter stating that he represented only Voltfsun, not ASCII. ASCII signed a guaranty protecting Voltfsun’s interest in the transaction. When the investment soured, Voltfsun sued TechNet and ASCII. Tucker’s law firm, Venable, represented Voltfsun in that litigation, but Tucker did not handle the case himself. ASCII filed a motion to disqualify the law firm from representing Voltfsun, alleging a conflict of interest because Tucker previously represented ASCII, but the court denied the motion because of Tucker’s waiver-of-conflict letter. The court ultimately entered judgment in Voltfsun’s favor and enforced the guaranty, holding ASCII liable for Voltfsun’s losses. Then ASCII’s chairman and majority stockholder, Alan Weinberger, sued Tucker for breach of fiduciary duty, fraud, and professional negligence. Tucker moved to dismiss the lawsuit on collateral estoppel grounds, arguing that the ruling on the motion to disqualify him in the first lawsuit that upheld his waiver-of-conflict letter bound Weinberger in the second lawsuit as well. The trial court agreed and dismissed the lawsuit. Weinberger appealed, arguing that collateral estoppel did not apply because the parties in the two lawsuits were not identical. Specifically, the first lawsuit named ASCII not Weinberger personally, and Weinberger claimed his interests in the underlying litigation were distinct from ASCII’s. Moreover, Weinberger argued Tucker was not in privity with any party in the first lawsuit because he appeared only as Voltfsun’s attorney.
Rule of Law
Holding and Reasoning (Gregory, J.)
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