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Reinecke v. Danforth, (1992); pg. 184, briefed 2/19/97

1. Jesse by Reinecke v. Danforth, (1992); pg. 184, briefed 2/19/97


2. Facts: Danforth was part of a group of doctors who hired an attorney to assist them in the creation of a corporation for the purchase of an MRI.  Jesse sued Danforth for medical malpractice unrelated to the activities of the MRI corporation.


3. Procedural Posture: Jesse hired an attorney from the same office as the one which incorporated the MRI corporation.  Danforth moved to disqualify the plaintiffís attorney alleging that the firm had a conflict of interest based on Danforth being a former client of the firm.


4. Issue: Whether one of the founders of a corporation may be treated as a present or former client of a firm for the purposes of the conflict of interest rule when the founders' only contact with the firm was for the purpose of incorporation, and not for personal representation.


5.  Holding: No.


6. Reasoning:  The entity rule contemplates that where a lawyer represents a corporation, the client is the corporation, and not the corporation’s constituents.  Thus, if a person who retained a lawyer for the purpose of forming a corporation were considered a client, then there would be automatic dual-representation of the person and the corporation once the corporation was formed.  But this is the exact effect that the entity rule is designed to avoid.  Thus, the entity rule must apply retroactively to the person who retained the lawyer, so long as the lawyerís involvement with the person was limited to matters of incorporation.