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Kilpatrick v. Wiley12/14/2001
pany partners, as well as other related documents, to Richard Wiley and John Quale, Wood's supervising partner. By virtue of this representation, MWT Company and the MWT Company partners became Wiley Rein's clients.
Wood presented the MWT Company partners and other potential investors with several detailed projections to demonstrate the immense value of the Channel 13 license and the future income and distributions stemming from the license. Wood estimated that, when Channel 13 initially went on the air, it would be worth between $30 and $40 million.
Five applicants, including MWT Company, were vying for the Channel 13 license before the FCC. In 1984, Wood represented MWT Company and the MWT Company partners at an FCC evidentiary hearing. Despite the efforts of MWT Company and the MWT Company partners, the FCC awarded the Channel 13 license to another applicant in 1985. MWT Company was ranked second of the five applicants, and Wood advised the MWT Company partners to appeal the FCC decision. The FCC appeal ended in the same result.
After the appeal, Wood was convinced the winning applicant would be willing to sell its position. Under FCC regulations, MWT Company could still obtain the license at this point by buying out each of the other applicants. Accordingly, Wiley Rein encouraged MWT Company and the MWT Company partners to pursue a buyout of each of the other applicants to secure the Channel 13 license. MWT Company and the MWT Company partners elected to pursue this course, and they began to seek a financing partner to aid in buying out the other applicants and constructing and starting the new station to operate as Channel 13.
At this same time, Wiley Rein began representing Adams Communications, which owned several broadcast properties, most notably, KSTU Channel 20, a Salt Lake UHF television station. Because MWT Company planned to compete directly against Channel 20, MWT Company and the MWT Company partners objected to Wiley Rein's representation of Adams. Wiley Rein assured them there was no immediate conflict of interest, and if there ever were, Wiley Rein would not represent either party. Nevertheless, in January of 1986, without plaintiffs' knowledge, Wiley Rein represented Adams in exploring the possible purchase of Channel 13 and sale of Channel 20; however, such a transaction was never completed.
Northstar Communications, Inc., a Delaware corporation primarily owned by Allstate Insurance Company, was created in early 1986 to invest in communications properties. Unbeknownst to MWT Company and the MWT Company partners, Wiley Rein represented Northstar, and Richard Wiley was one of Northstar's two directors. In the spring of 1986, two Northstar officers approached Wood regarding the possibility of acquiring an interest in Channel 13. Wood responded that Wiley Rein was then representing MWT Company in its attempt to secure the Channel 13 license, and if Wiley Rein were to represent Northstar in acquiring an interest in Channel 13, it would have conflicting interests. Accordingly, Wood advised the two Northstar officers to seek other legal counsel in the matter.
In June 1986, Richard Wiley and Quale went to Wood's office to discuss with him the Channel 13 license. They informed Wood that Wiley Rein would represent Northstar in its efforts to acquire an interest in the Channel 13 license. Wood objected, reiterating that such representation would create impermissible conflicts of interest and that Northstar should secure separate counsel. Richard Wiley told Wood, however, that "this is just the start of something that's going to be very big. They [Northstar] have all this money behind them from Allstate," another Wiley Re
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