Jerry Lipps, Inc. v. Postell Et Al., 139 Ga. App. 595, 229 S.E.2d 78 (1976)

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Long, Weinberg, Ansley & Wheeler, W. Meade Burns, Jr., Dan B. Wingate, Louis F. McDonald, John D. Jones, for appellees.Levine, D'Alessio & Cohn, Sam F. Lowe, Jr., for appellant.

The relationship of attorney and client is fiduciary in character, but this does not extend beyond the subject matter for which the services of the lawyer have been retained. Where it appears that certain legal specialists in ICC work were employed by a motor carrier strictly on a case by case basis, and where the attorneys had never been informed that the corporation was interested in acting on certain route information furnished it, an agreement to represent an employee desirous of going into business for himself in regard to the subject matter of nonconfidential information furnished several months previously, in which the corporation had manifested no interest, and after the attorney-client relation terminated, was not a breach of a fiduciary duty.

The appellees Postell and Hall are attorneys who specialize in motor carrier appearances and litigation, among their clients being Jerry Lipps, Inc., a corporation largely owned by Jerry Lipps and specializing in large multi-state trucking operations. Between November, 1969, and March, 1971, the corporation had employed the firm in a number of representations involving legal fees of approximately $37,000. The representation was on a case by case basis, it being understood that the corporation first offered its business to a Chicago firm and, on declination, then turned the specific problem over to the appellees, and also it was understood that they in turn were at liberty to represent other motor carriers.

This litigation started when the attorneys sued their former corporate client for a balance on the fee. Jerry Lipps, Inc. then filed a superior court action against Postell, Hall and Jerry Todd (the latter a managerial employee of the company), alleging a conspiracy between them to create a new competing business within Lipps' territory by forming a Florida corporation, obtaining for themselves assignments of operating authorities Lipps was attempting to purchase through the defendants as his agents for the use of the competing firm, failing to negotiate for him in good faith, and otherwise breaching their fiduciary duties as his agents. A restraining order was granted as to the civil court case. Postell and Hall thereafter moved for and were granted summary judgment, and the appeal is from this adjudication.

The record in this case runs over 2,000 pages, including lengthy depositions by all parties concerned, and it is clear that there was a full airing of all the facts. We will therefore not concern ourselves with the generally conclusory allegations of the verified complaint. Resolute Ins. Co. v. Norbo Trading Corp., 115 Ga. App. 737 (165 SE2d 441). As we view the case, any liability on the part of the attorneys, the only defendants here involved, depends on the simple question of whether they breached a fiduciary duty arising out of their relationship with Jerry Lipps, Inc. which resulted in damage to the latter. This in turn depends primarily on a chronological statement of events to ascertain whether these defendants, while acting as agents for Lipps, acted for themselves to the detriment of their client (Code 4-204; Smith v. Pennington, 233 Ga. 951, 955 (213 SE2d 837): "All transactions between an attorney and his client are closely scrutinized by the courts, and the attorney's duty in these circumstances is a much higher duty than is required in ordinary business dealings where the parties trade at arms length." In that case the question is whether an attorney who had previously represented a client should, when their interests became adverse, have advised him to seek other counsel. Here the peculiar contract relationship between the law firm and Lipps left them free at the outset to seek any employment not involved in pending representation. Acceptance of the representation of Todd eight or nine months after the offer had been made to Lipps, and he had either indicated no interest or definitely refused the opportunity, was not a breach of the legal contract between the parties. The fiduciary relationship of the parties must be confined to the subject matter of the contract. Hardin v. Baynes, 198 Ga. 683 (2-c) (32 SE2d 384); Grand Isle Campsites, Inc. v. Cheek, 249 S2d 268, 273.

The grant of the summary judgment was not error.

Judgment affirmed. Quillian and Webb, JJ., concur.

1976

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