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Pinnacle in Home Care, LLC v. 1 Source Senior Care LLC

2025-12-04

Summary

Holding. Affirmed. The trial court properly disqualified RMP from representing Pinnacle because RMP's representation of Pinnacle created a conflict of interest under Rule 1.9 of the Arkansas Rules of Professional Conduct, as Pinnacle's interests are materially adverse to those of RMP's former clients, the individual defendants.

Pinnacle In Home Care and individual defendants (including former 1 Source employees) were sued by 1 Source for breach of noncompete agreements, defamation, and related business torts. The law firm RMP represented all defendants initially but withdrew as counsel for the individual defendants due to conflicts of interest as they separated from Pinnacle's employment. RMP then continued representing only Pinnacle. When 1 Source moved to disqualify RMP from representing Pinnacle, the trial court granted the motion, finding that RMP's representation created a conflict under professional conduct rules.

On appeal, Pinnacle argued that its interests were not materially adverse to those of the former employee defendants and that the disqualification motion was filed for tactical reasons. The court rejected both arguments. The court found that Pinnacle and the individual defendants occupy adversarial positions because the complaint attributes tortious conduct to employees acting within the scope of their employment at Pinnacle's direction, creating a question of relative fault. Additionally, Pinnacle's own pleadings—disclaiming responsibility for the individual defendants' actions and asserting it had no control over them—demonstrated material adversity that made continued representation problematic under the applicable professional conduct rule.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether representation of a current client conflicts with prior representation under Rule 1.9 when interests are 'materially adverse'
  • Whether defendants' interests are adversarial when a complaint alleges employees acted within scope of employment at company direction
  • Effect of a defendant's affirmative pleadings disclaiming control over and responsibility for co-defendants' conduct

Procedural posture

Pinnacle appealed an interlocutory order from the Washington County Circuit Court disqualifying its counsel, RMP LLP and its attorneys, based on a conflict of interest with former clients.

Authorities cited

Opinion

majority opinion

Cite as 2025 Ark. 193

SUPREME COURT OF ARKANSAS

No. CV-24-782

Opinion Delivered: December 4, 2025

PINNACLE IN HOME CARE, LLC

APPELLANT

APPEAL FROM THE WASHINGTON

COUNTY CIRCUIT COURT

V. [NO. 72CV-21-1883]

HONORABLE JOHN THREET,

1 SOURCE SENIOR CARE, LLC

JUDGE

APPELLEE

AFFIRMED.

BARBARA W. WEBB, Justice

This is an interlocutory appeal from the Washington County Circuit Court’s order

disqualifying attorneys Timothy Hutchinson and Scott Tidwell, along with their law firm

RMP LLP, as counsel for appellant Pinnacle In Home Care, LLC (Pinnacle). On appeal,

Pinnacle argues that (1) the circuit court erred when it disqualified Pinnacle’s counsel

because Pinnacle’s position is not “materially adverse” to its codefendants; and (2) appellee

1 Source Senior Care, LLC (1 Source), moved to disqualify opposing counsel for tactical

purposes. We have jurisdiction pursuant to Arkansas Supreme Court Rule 1-2(a)(5), as this

appeal pertains to this court’s power to regulate the practice of law. We affirm.

I. Background

Pinnacle and 1 Source are competitors that are both licensed to provide targeted

case-management and personal-care services. On August 27, 2021, 1 Source filed its initial

complaint against Pinnacle and individual defendants Sarah and Anthony Sanchez, both of whom were Pinnacle employees at the time of filing. The complaint alleged that the

Sanchezes, former 1 Source employees, had breached noncompete agreements to leave for

Pinnacle; defamed 1 Source; violated confidentiality agreements, as well as their duty of

loyalty; and committed conversion. In addition, 1 Source asserted that defendants had

tortiously interfered with its business relationships, were unjustly enriched, and were

collectively involved in a civil conspiracy.

Tim Hutchinson, of the law firm RMP LLP, filed an answer on behalf of all

defendants, wherein it acknowledged that Sarah is deceased. As a result, 1 Source moved to

appoint a special administrator and for substitution of that administrator in place of Sarah.

RMP subsequently moved to withdraw as counsel for the Sanchezes due to Sarah’s

death and the fact that Anthony was no longer employed by Pinnacle. RMP noted that

Anthony leaving Pinnacle’s employ “created a potential conflict of interest” between the

two parties. The circuit court granted the motion and permitted Hutchinson to withdraw

as the attorney of record for the Sanchezes.

The circuit court later held a hearing on 1 Source’s motion for appointment of special

administrator for Sarah. No one appeared for any of the defendants. The circuit court

granted the motion and appointed Anthony as special administrator for his late wife and

substituted him as a party in her place.

During the pending litigation, Amanda Sumpter also left 1 Source to work for

Pinnacle, allegedly in violation of her noncompete agreement. As a result, 1 Source filed an

amended complaint adding Sumpter as a defendant. Hutchinson and Scott Tidwell, also an

attorney with RMP, filed an answer to the amended complaint on behalf of Pinnacle and

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Sumpter. No answer was filed on behalf of the Sanchezes. After Sumpter left her

employment with Pinnacle, RMP moved to withdraw as counsel for her, again noting the

potential conflict of interest between Sumpter and Pinnacle. The circuit court granted the

motion

In March 2023, 1 Source submitted requests for admission to Anthony individually

and in his capacity as special administrator for Sarah. Anthony never answered the requests

for admission, and they were therefore deemed admitted. Although the requests were not

directed to Pinnacle, it nevertheless filed responses averring that any “admission or failure

to deny any of these requests should not be imputed to Pinnacle.”

1 Source subsequently filed a second amended complaint. RMP filed a response on

behalf of Pinnacle. Neither the Sanchezes nor Sumpter filed an answer.

On January 8, 2024, RMP filed notices to depose its former clients, Anthony and

Sumpter. 1 Source later moved to disqualify RMP from representing Pinnacle. In its

motion, 1 Source asserted that RMP had a conflict of interest between its current client,

Pinnacle, and its former clients, the Sanchezes and Sumpter. According to 1 Source, this

conflict violated Rule 1.9 of the Arkansas Rules of Professional Conduct. Following a

hearing on the motion, the circuit court entered an order disqualifying Hutchinson and

Tidwell, along with their firm RMP, from representing any of the defendants in this case.

Accordingly, Hutchinson and Tidwell were removed as counsel of record for Pinnacle. This

appeal followed.

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II. Discussion

On appeal, we review a circuit court’s decision to disqualify an attorney under an

abuse-of-discretion standard. Sturdivant v. Sturdivant, 367 Ark. 514, 241 S.W.3d 740

(2006). An abuse of discretion may arise from an erroneous interpretation of the law. Craig

v. Carrigo, 340 Ark. 624, 12 S.W.3d 229 (2000). The Arkansas Rules of Professional

Conduct are applicable in disqualification proceedings. Park Apts. at Fayetteville, LP v. Plants,

2018 Ark. 172, 545 S.W.3d 755. And the issue of whether an attorney violated the Arkansas

Model Rules of Professional Conduct is relevant to the issue of his or her disqualification.

SEECO, Inc. v. Hales, 334 Ark. 134, 969 S.W.2d 193 (1998).

At issue in this case is whether RMP’s continued representation of Pinnacle created

a conflict of interest under Rule 1.9 of the Arkansas Rules of Professional Conduct, which

provides:

(a) A lawyer who has formerly represented a client in a matter shall not

thereafter represent another person in the same or a substantially related matter in

which that person’s interests are materially adverse to the interests of the former client

unless the former client gives informed consent, confirmed in writing.

Ark. R. Prof’l Conduct 1.9(a) (emphasis added). Pinnacle argues that the circuit court erred

by disqualifying RMP as counsel because its position is not “materially adverse” to its

codefendants.

In its complaint, 1 Source alleges that separate defendants acted within the course

and scope of their employment with Pinnacle and at Pinnacle’s encouragement to commit

tortious acts. This necessarily creates a tension between defendants as to the attribution of

liability. Were separate defendants acting for their own benefit or for the benefit of Pinnacle

and at its behest?

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In First American Carriers, Inc. v. Kroger Co., we affirmed the disqualification of

counsel, concluding that a conflict of interest existed between the firm’s former client and

its current clients in the same matter. 302 Ark. 86, 787 S.W.2d 669 (1990). We recognized

that the “appearance of impropriety” prohibition of Canon 9 of the American Bar

Association Code of Professional Responsibility was not part of the Model Rules of

Professional Responsibility, which we have adopted. 302 Ark. at 90, 787 S.W.2d at 671.1

Nevertheless, we found the principle of Canon 9 applies “because its meaning pervades the

Rules and embodies their spirit.” Id. at 92, 787 S.W.2d at 672.2 In consideration of both

Rule 1.9 and Canon 9, we concluded that the interests of the defendants were “adversarial

as the issue of relative fault between these parties will be litigated.” Id. at 93, 787 S.W.2d at

673. Likewise, defendants in this case will be in an adversarial position as the issue of

individual liability is litigated.

Moreover, certain admissions that were deemed admitted after Anthony failed to file

a response contained material facts adverse to Pinnacle’s position, such as the admission that

Pinnacle instructed and encouraged Anthony “to contact 1 Source clients and make

derogatory and defamatory statements about 1 Source in an attempt to induce the clients to

stop doing business with 1 Source and move their business to Pinnacle.” In its answer,

Pinnacle denied that the Sanchezes made defamatory statements while within the scope of

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Canon 9 provides that “[a] lawyer should avoid even the appearance of professional impropriety.”

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Comment 10 of Rule 1.9 does provide that a “duty to avoid the appearance of impropriety discussed in Comment [37] to Rule 1.7 is likewise applicable to Rule 1.9 and Rule 1.10.” Ark. R. Prof’l Conduct 1.9 cmt. [10].

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their employment. This further illustrates the adversity between Pinnacle and separate

defendants.

Pinnacle responds that its interests are aligned with those of separate defendants in

denying the allegations made in 1 Source’s complaint. It further suggests that it will pursue

a common defense. Yet this claim is belied by Pinnacle’s answer to 1 Source’s second

amended complaint, wherein it affirmatively pleaded that 1 Source’s “damages or losses, if

any, were caused by persons over whom Pinnacle had no control and for whom Pinnacle

is not responsible.” Thus, Pinnacle has made clear that it will disavow the actions of separate

defendants if necessary to avoid liability. Even more, RMP acknowledged in its motions to

withdraw “potential conflict[s] of interest” arising between Pinnacle and separate defendants

now that separate defendants were no longer employed with Pinnacle. As such, we conclude

that the interests of defendants in this case are materially adverse, and therefore, RMP’s

representation of Pinnacle cannot continue under Rule 1.9.

Pinnacle also argues that 1 Source moved to disqualify RMP for tactical reasons. We

review a circuit court’s decision to disqualify under an abuse-of-discretion standard; we do

not attempt to ascertain opposing counsel’s motive for filing a motion. Because the circuit

court did not abuse its discretion by disqualifying RMP, we affirm.

Affirmed.

Special Justice TIFFANY BROWN joins.

WOOD, J., not participating.

RMP LLP, by: Timothy C. Hutchinson and Mallory D. Shamoon, for appellant.

Littler Mendelson, P.C., by: Eva C. Madison and Kyle D. Kennedy, for appellee.

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