## Facts

- Walter Benton Dunagan, a Florida lawyer, represented William and Paula Leucht in 1992 in connection with acquiring a restaurant business known as “Biscuits ’N’ Gravy ’N’ More” (B & G).
- Dunagan prepared a bill of sale transferring restaurant assets to the joint ownership of William and Paula.
- When he prepared the fictitious-name registration for the business, Dunagan inadvertently omitted Paula’s name as an owner.
- After the acquisition, Dunagan continued to represent B & G and both Leuchts in business-related matters, including:
  - A commercial lease dispute filed by Bay-Walsh Properties naming B & G, William, and Paula as defendants, in which Dunagan represented all and moved to dismiss Paula as an improper party.
  - Negotiations related to opening another B & G restaurant.
  - An eminent-domain action involving the Florida Department of Transportation.
- On or about February 23, 1996, Dunagan wrote to the Port Orange Police Department (and also communicated with the city attorney) stating he represented William, asserting William was the sole owner of B & G, and referencing a bill of sale that was “considered to put the business in the name of William and Paula,” but claiming it was determined that William would remain the sole owner.
- The letters stated William intended to terminate two employees, that they were not welcome on the premises, and that the police might be called to prevent a breach of the peace if disputes arose.
- Several days later, Dunagan filed a petition for dissolution of marriage on behalf of William against Paula.
- Dunagan did not seek or obtain Paula’s informed consent to represent William in a matter directly adverse to her.
- Soon after, Paula was told by a restaurant employee that William was the sole owner and that she was not to enter the restaurant; when she went anyway, police removed her and arrested her for disorderly conduct as she insisted she was a co-owner.
- In the divorce proceeding, the trial judge ultimately ordered that the restaurant business be distributed equally between William and Paula.
- Paula filed a legal malpractice suit against Dunagan, and The Florida Bar brought disciplinary charges based on the conflict and related conduct.
- After a hearing, a referee made findings and recommended discipline, including a ninety-one-day suspension; Dunagan sought review in the Supreme Court of Florida.

## Issues

1. Whether Dunagan violated Florida conflict-of-interest rules by representing William in a divorce and related ownership dispute after previously representing both William and Paula in substantially related matters involving the restaurant business.
2. Whether Dunagan violated duties to a former client by failing to obtain Paula’s informed consent before undertaking representation directly adverse to her.
3. Whether Dunagan improperly used information relating to the prior joint representation to Paula’s disadvantage, including through letters to law enforcement asserting William’s sole ownership.
4. Whether a ninety-one-day suspension (a rehabilitative suspension requiring proof of rehabilitation for reinstatement) was an appropriate sanction.

## Decision

- The Supreme Court of Florida approved the referee’s findings of fact and conclusions of law.
- The Court found Dunagan violated the Rules Regulating The Florida Bar governing conflicts and duties to former clients (including Rules 4-1.7 and 4-1.9).
- The Court held the divorce and related ownership dispute were substantially related to Dunagan’s prior representation of both spouses regarding the restaurant’s ownership and operation, and that the later representation was directly adverse to Paula.
- The Court determined Dunagan did not obtain Paula’s informed consent to represent William against her.
- The Court concluded Dunagan’s communications to law enforcement and the city attorney—asserting William’s sole ownership and referencing prior ownership documentation—used information connected to the earlier representation to Paula’s disadvantage.
- The Court imposed a ninety-one-day suspension from the practice of law, with reinstatement conditions consistent with a suspension exceeding ninety days.

## Legal Principles

- A lawyer may not represent a client in a matter directly adverse to a former client if the matter is the same as, or substantially related to, the prior representation, unless the former client gives informed consent.
- Prior joint representation of spouses in a closely held business can create duties to both clients that bar later representation of one spouse against the other when business ownership and control are contested.
- A lawyer’s duty to a former client includes limits on using information relating to the prior representation to the former client’s disadvantage, unless an exception applies.
- When misconduct involves a serious conflict and resulting harm or risk of harm, a suspension longer than ninety days may be warranted, triggering reinstatement requirements that include proof of rehabilitation.

## Conclusion

In Florida Bar v. Dunagan, the Florida Supreme Court disciplined attorney Walter Benton Dunagan for switching from representing both William and Paula Leucht in restaurant-business matters to representing William alone in a divorce where the business ownership was contested, without Paula’s informed consent, and for using information tied to the earlier representation in communications asserting William’s sole ownership. The Court approved the referee’s findings and imposed a ninety-one-day suspension with reinstatement conditions.


Florida Bar v. Dunagan, 731 So. 2d 1237 (1999)