## Facts

- Christopher Thomas Kalla was admitted to practice law in Minnesota in 2003 and had no prior disciplinary history.
- The conflict arose from Kalla’s representation of two clients referred to as “Client A” and “Client B.”
- In 2006, Client A borrowed money from an individual lender to fund a home down payment; the loan was secured by a mortgage on the home.
- Client B, a real estate agent and businessowner, assisted Client A with the home purchase and connected Client A to the lender.
- Client B’s company, Future Mortgage, arranged the mortgage that secured Client A’s loan.
- After Client A later attempted to refinance, a mortgage broker flagged potential legal problems and referred Client A to Kalla.
- Kalla concluded the loan was usurious and, in October 2007, filed a usury lawsuit on Client A’s behalf seeking to invalidate the loan and mortgage.
- The lender answered and counterclaimed, identifying Future Mortgage as the broker of the loan, thereby placing Client B and Future Mortgage at issue in Client A’s lawsuit.
- While investigating Client A’s claim, Kalla learned Client B had also borrowed money from the same lender and discussed potential usury issues with Client B.
- On December 21, 2007, Kalla filed a second usury lawsuit against the same lender on behalf of Client B.
- Before undertaking Client B’s representation, Kalla did not inform Client B that Client B or Future Mortgage were identified in Client A’s lawsuit.
- Before Client B and Future Mortgage were added to Client A’s lawsuit, the lender’s attorney told Kalla that a conflict of interest would arise between Client A and Client B if the lender brought Client B and Future Mortgage into Client A’s case.
- The lender later filed a third-party complaint in Client A’s action naming Client B and Future Mortgage as third-party defendants.
- After receiving the third-party complaint, Kalla sought conflict waivers from both clients; Client A signed, but Client B did not.
- Despite the lack of a signed waiver from Client B, Kalla continued to represent both clients in matters that had become directly adverse in the same lawsuit.
- Kalla later withdrew from representing Client B but continued representing Client A in the action in which Client B and Future Mortgage remained parties, without obtaining Client B’s written informed consent as a former client.
- In September 2010, the Director of the Office of Lawyers Professional Responsibility filed a petition alleging Kalla’s conduct violated the Minnesota Rules of Professional Conduct; after a hearing, a referee found misconduct and recommended a public reprimand and two years of supervised probation.

## Issues

1. Did Kalla violate the Minnesota Rules of Professional Conduct by concurrently representing Client A and Client B once Client B and Future Mortgage became adverse parties to Client A in the same lawsuit, without informed consent confirmed in writing from both clients?
2. Did Kalla violate the former-client conflict rule by continuing to represent Client A after withdrawing from Client B, without Client B’s written informed consent in a matter that was the same as, or substantially related to, the former representation and materially adverse to Client B?
3. What discipline was appropriate for the conflict-of-interest misconduct found by the referee?

## Decision

- The Minnesota Supreme Court concluded the referee’s factual findings were not clearly erroneous.
- The court determined Kalla committed professional misconduct by continuing a concurrent conflict after Client B and Future Mortgage were brought in as third-party defendants, without the required written, informed consent from Client B.
- The court also determined Kalla committed professional misconduct by continuing to represent Client A after withdrawing from Client B, without obtaining Client B’s written, informed consent as a former client.
- The court publicly reprimanded Kalla and ordered two years of supervised probation.

## Legal Principles

- A lawyer may not represent a client if the representation involves a concurrent conflict of interest, including representation of clients directly adverse to each other in the same matter, unless the requirements for a consentable conflict are met and each affected client gives informed consent confirmed in writing. (Minn. R. Prof. Conduct 1.7.)
- A lawyer may not represent a client in the same or a substantially related matter in which that client’s interests are materially adverse to a former client’s interests unless the former client gives informed consent confirmed in writing. (Minn. R. Prof. Conduct 1.9.)
- When a lawyer represents a plaintiff and also represents (or has recently represented) a party brought into that same lawsuit as a third-party defendant, the conflict is direct and demands strict compliance with the written-consent requirements.
- In attorney-discipline proceedings, the Minnesota Supreme Court gives deference to a referee’s factual findings and will not set them aside unless clearly erroneous, but the court independently determines the appropriate sanction.
- Public discipline and supervised probation may be warranted for conflict-of-interest violations where protection of the public and the legal system requires monitoring of the lawyer’s practice.

## Conclusion

The Minnesota Supreme Court held that Christopher Thomas Kalla violated Minnesota’s conflict-of-interest rules by continuing to represent Client A while also representing Client B after Client B and Future Mortgage became third-party defendants in Client A’s lawsuit without Client B’s written consent, and by continuing to represent Client A against Client B’s interests after withdrawing from Client B without Client B’s written consent; the court imposed a public reprimand and two years of supervised probation.


In re Petition for Disciplinary Action Against Christopher Thomas Kalla, 811 N.W.2d 576 (2012)