An Annapolis law firm breached no ethical rules by representing both Woodward & Lothrop Inc. and Annapolis Mall as they fought over the mall's right to expand, a county Circuit Court judge ruled yesterday.
After nearly eight hours of testimony, Judge Eugene M. Lerner denied Woodies' motion to stop Linowes & Blocher from representing Annapolis Mall Limited Partnership, the mall's owner, as the mall expands with a Nordstrom department store and 45 smaller stores.
For the past two decades, testimony showed, the firm also has handled real estate and tax appeal cases for Woodies, which operates a store in nearby Parole Plaza and has launched a campaign against mall expansion plans.
Judge Lerner found none of the work the firm performed for Woodies substantially related to the firm's land-use work for the mall. And he disagreed with Woodies' attorneys, ruling that the retailer faced no risk of having confidential information used against it in the mall dispute.
"I think any conflict was thrust upon Linowes & Blocher by Woodward & Lothrop," he said, adding that the firm had worked for the mall for five years and "it's not until June that an alleged conflict arises."
Attorneys for Linowes & Blocher had argued that when various lawyers at the firm handled unrelated cases for the mall and for Woodies, the mall and the retailer were not adversaries and were, in fact, negotiating to have Woodies open a new, larger store at the mall.
Woodies challenged the firm on ethical grounds only after talks broke off and Woodies learned that Nordstrom instead would open at the mall, attorneys representing the mall said.
Rodney D. Haynes, vice president of development for the mall, and Kathryn Dahl, the mall's Linowes & Blocher attorney, both testified that the mall already had spent $337,000 in legal fees over five years getting the proper zoning and permits. They said the mall would be irreparably harmed by losing an attorney familiar with the case at this late stage of development.
Neil T. Proto, an attorney for Woodies, said the chain, which fired its Linowes & Blocher attorney when it learned of the conflict, will bear an even greater burden. The firm had been handling four land-use cases, he said.
Mr. Proto, who appeared incredulous at the judge's decision, said he feared the ruling could set a dangerous precedent.
"He exempts law firms from responsibility for conflicts," he said. "If lawyers are immune from responsibility, there's no way of checking conflicts."
James F. Hibey, another Woodies attorney, had argued the law firm breached the code of ethics by doing nothing after realizing in January it represented two adversaries. He said the firm should have obtained Woodies' consent to represent the mall.
"The conduct and attitude of lawyers playing both sides of the table here in a cavalier approach was a direct conflict," he said.
Annapolis Mall attorneys characterized Woodies' motion as an 11th-hour scheme to strip the mall of legal representation as it heads into a hearing today before the county Board of Appeals.
The board will hear Woodies' appeal of the mall's formal development plan. Woodies also has appealed state permits and threatened the county, state and federal governments with suits on environmental and due-process grounds. Additionally, the retailer challenged a county growth plan for Parole, claiming the plan channels retail growth away from the Woodies store in Parole Plaza and toward the mall.
"I think the judge realized these were delay tactics," Mr. Haynes said after the ruling. "They had ample opportunity to raise the conflict issue and waited for the week before the hearing."
Mr. Haynes, who said Woodies is fighting mall expansion to stop rival Nordstrom, testified that both Robert Mulligan, Woodies' vice chairman, and G. Gerard Barnett, senior vice president of real estate, told him they'd use any means possible to stop mall expansion if Woodies wasn't a part of it.
Mr. Haynes quoted Mr. Barnett as saying that his attorney, Neil fTC Proto, "is a real pro. We can take any and all action necessary to tie this project up forever."
During their testimony yesterday, both Mr. Barnett and Mr. Mulligan denied making any such statements.