FL: Contract Negotiations
FACTS: The appellant, Donald Rudolf along with others, appealed a summary judgment in favor of the appellee, Gray, Harris and Robinson (GHR). The appellant’s suit was based on an alleged conflict of interest the appellee had. The appellants were physician-shareholders of Anesthesiologists of Central Florida (ACF). ACF had an exclusive contract with Orlando Regional Healthcare System (ORHS) for five years with an ORHS option to renew for a sixth year. OCHS did not renew, but left negotiations open with ACF to initiate a new contract. Murbach, Stockton and Appleblatt, the president, secretary, and treasurer respectively, were planning to and eventually did form a new corporation to do business with ORHS. Prior to these events, the appellants waived all conflicts of interest between the appellee’s representation of ACF and any individual shareholders. Also, the appellants waived any conflict of interest regarding the individual shareholders’ use of any consultants, accountants, attorneys, advisors, or appraisers previously used by ACF. The appellate court affirmed the trial court’s summary judgment.
ISSUE: Whether there was a valid conflict of interest issue amounting to legal malpractice?
RULING: No. The appellee represented ACF, but was not involved in the contract renewal with ORHS. In addition, the appellee did not owe the individual appellants any duty aside from the duty owed to ACF. And even if there were conflict of interest, the appellants waived all conflicts of interests between appellee’s representation of ACF and individual shareholders. The appellees also “waived conflict of interests regarding any individual shareholders’ use of any consultants, accountants, attorneys, advisors, or appraisers previously used by ACF.”
LESSON: Waiving conflict of interest rights as a shareholder can have a huge impact on potential legal malpractice claims. And according to the Florida Rules of Professional Conduct, an individual shareholder is only owed a duty to the extent of the company.
Posted in: Florida