I. Introduction

Weigel v. Albertson arises from a breakdown in a closely held business relationship involving Veritas Crane, LLC (“Veritas”), a North Dakota company providing crane and hoist inspection and training services. Jason Albertson founded Veritas in 2018 and brought Alan Weigel into the business in 2019. The parties disputed control and ownership, each claiming at least a 50% interest.

The business conflict escalated after bank-access and facility-access disputes. Albertson requested a bank lockout; Alerus Bank imposed an “administrative hold” requiring joint direction or court order. Albertson refused to authorize release, and Weigel restricted Albertson’s access to Veritas’s facilities. Weigel then sued, naming both himself and Veritas as plaintiffs and asserting both direct claims and derivative claims on behalf of Veritas. Albertson countered with both direct counterclaims against Weigel and derivative counterclaims on behalf of Veritas.

The key issues on appeal/supervisory petition were:

• Appellate jurisdiction: whether an attorney-disqualification order in a civil case is immediately appealable (statutorily or under the collateral order doctrine).
• Supervisory review: whether the Supreme Court should exercise supervisory jurisdiction to review a nonappealable disqualification order.
• Ethics/conflict: whether Weigel’s counsel (Joel Fremstad) had an attorney-client relationship with Veritas and, if so, whether concurrent representation of Weigel and Veritas was prohibited under N.D.R. Prof. Conduct 1.7(a) given Albertson’s derivative claims on Veritas’s behalf.

II. Summary of the Opinion

The Supreme Court dismissed Weigel’s appeal for lack of appellate jurisdiction, holding that in civil cases an order granting disqualification, like an order denying disqualification, is not immediately appealable under N.D.C.C. § 28-27-02(3) or the collateral order doctrine.

However, the Court exercised supervisory jurisdiction to review the disqualification order because an appeal from final judgment would not provide an adequate remedy. On the merits, the Court held the district court did not abuse its discretion in disqualifying Fremstad due to a concurrent conflict: the record supported the factual finding that Fremstad represented Veritas as well as Weigel, and Albertson’s derivative claims placed Weigel and Veritas on opposite sides of the same litigation.

The Court also identified a harmless legal error in the district court’s reasoning: the mere fact that counsel prosecutes shareholder derivative claims does not necessarily establish an attorney-client relationship with the company. Still, independent evidence supported the relationship here (including communications portraying Fremstad as counsel to the business and advice given in Weigel’s managerial capacity), so the disqualification stood and the supervisory writ was denied.

III. Analysis

A. Precedents Cited (and How They Drove the Outcome)

1. Appealability and the collateral order doctrine

• Allen v. White Drug of Minot, Inc., 346 N.W.2d 279 (N.D. 1984): The cornerstone for the Court’s jurisdictional analysis. Allen held an order denying disqualification in a civil case is not immediately appealable and explained why disqualification orders are not “injunctions” for purposes of N.D.C.C. § 28-27-02(3). Here, the Court extended Allen’s logic to orders granting disqualification in civil cases, rejecting collateral-order review.
• Young v. White, 267 N.W.2d 799 (N.D. 1978), and Sheets v. Letnes, Marshall & Fiedler, Ltd., 311 N.W.2d 175 (N.D. 1981): Cited through Allen to emphasize that appeal rights are statutory and generally limited to final judgments or enumerated orders.
• Almon v. Am. Carloading Corp., 380 Ill. 524, 44 N.E.2d 592 (1942): Used (again via Allen) to support the proposition that attorney-disqualification orders are not “injunctive” in nature.

2. Supervisory jurisdiction as the vehicle for immediate review

• Heringer v. Haskell, 536 N.W.2d 362 (N.D. 1995): Frames the constitutional source and discretionary nature of supervisory writs—available to rectify errors and prevent injustice when no adequate alternative remedy exists.
• Thompson v. Goetz, 455 N.W.2d 580 (N.D. 1990): Supplies two critical propositions: (i) the abuse-of-discretion standard governing disqualification rulings, and (ii) the “protected interest” a civil litigant has in counsel of choice, coupled with caution against strategic disqualification motions.
• Olson v. District Court, 271 N.W.2d 574 (N.D. 1978): Supports the idea that an appeal can be inadequate where the cost, delay, and burden of retrial makes post-judgment review illusory.
• Gonzalez ex rel. Colonial Bank v. Chillura, 892 So. 2d 1075 (Fla. Dist. Ct. App. 2004): Persuasive authority treating disqualification as a “material injury without remedy on appeal,” reinforcing the Court’s choice to employ supervisory review.
• Roe v. Rothe-Seeger, 2000 ND 63, 608 N.W.2d 289: Provides a limiting principle—mere increased time/expense is not always enough for supervisory intervention—helping the Court distinguish ordinary interlocutory burdens from the unique harms of disqualification.

3. Standards of review and fact-finding

• Martinson v. Martinson, 2010 ND 110, 783 N.W.2d 633: Defines “abuse of discretion” (arbitrary/unreasonable action; misapplication of law; lack of rational mental process).
• Cavare, Inc. v. Kjelgren, 2021 ND 236, 968 N.W.2d 141, and Kunz v. Slappy, 2021 ND 186, 965 N.W.2d 408: Provide the “clearly erroneous” test for factual findings, which mattered because the existence of an attorney-client relationship can be implied from conduct and thus turns on factual inferences.

4. Attorney-client relationship and the “practice of law”

• In re Disciplinary Action Against Ward, 2016 ND 115, 881 N.W.2d 226: Key authority for the principle that an attorney-client relationship may be implied from conduct and circumstances, without a contract or payment of fees.
• Cain v. Merchants Nat'l Bank & Tr. Co. of Fargo, 66 N.D. 746, 268 N.W. 719 (1936): Supports the proposition that giving legal advice constitutes the practice of law—relevant to determining whether Fremstad’s actions amounted to representing the company.

5. Derivative claims and concurrent conflicts (Rule 1.7(a))

• Nodak Mut. Ins. Co. v. Ward Cnty. Farm Bureau, 2004 ND 60, 676 N.W.2d 752: Supplies North Dakota’s description of a derivative claim as belonging to the entity and asserted on its behalf, which sets up why the entity’s interests can diverge from the individual insider’s interests.
• In re Disciplinary Action Against Bullis, 2006 ND 228, 723 N.W.2d 667: Used to underscore the strictness of Rule 1.7(a) and the point that, unlike Rule 1.7(c), Rule 1.7(a) has no consent-based “safe harbor” once adversity exists.
• Shen v. Miller, 150 Cal. Rptr. 3d 783 (2012); Gonzalez ex rel. Colonial Bank v. Chillura, 892 So. 2d 1075 (Fla. Dist. Ct. App. 2004); Simms v. Rayes, 316 P.3d 1235 (Ariz. Ct. App. 2014): Persuasive authorities for the Court’s correction of the district court’s reasoning: representing a shareholder in a derivative suit does not automatically create an attorney-client relationship with the corporation/LLC. These cases help distinguish derivative standing (suing in the entity’s name/interest) from entity representation (the lawyer owing duties to the entity as a client).
• Edison v. Edison, 2024 ND 196, 13 N.W.3d 110: Provides the harmless-error standard used to uphold the order despite the district court’s mistaken rationale about derivative suits automatically implying entity representation.

B. Legal Reasoning

1. Nonappealability: closing a potential gap left by prior case law

The Court reaffirmed two jurisdictional propositions: appeal rights are statutory, and interlocutory appeals are limited. It rejected Weigel’s attempt to characterize disqualification as an “injunction” appealable under N.D.C.C. § 28-27-02(3), following Allen v. White Drug of Minot, Inc.. It then held that the collateral order doctrine does not provide immediate appeal for disqualification orders in civil cases—expressly extending Allen’s approach from orders denying disqualification to orders granting disqualification.

Doctrinal development: after Allen (which addressed denial of disqualification), Weigel supplies the missing symmetry: neither granting nor denying disqualification in a civil case is immediately appealable under the collateral order doctrine.

2. Supervisory jurisdiction: immediate review without expanding appealability

Having foreclosed an appeal, the Court nonetheless reviewed the order via supervisory authority because the harm from erroneous disqualification is unusually difficult to cure after final judgment: the party is deprived of counsel of choice, and prejudice is hard to prove retrospectively; retrial is costly. The Court balanced this against the caution in Roe v. Rothe-Seeger that time/expense alone is not enough, concluding disqualification is qualitatively different.

3. Implied entity representation: outward manifestations mattered more than formalities

The conflict question turned on whether Fremstad represented Veritas in addition to Weigel. Applying In re Disciplinary Action Against Ward, the Court treated the attorney-client relationship as potentially implied from conduct. Several “objective manifestations” supported the district court’s finding:

• Veritas and Weigel were co-plaintiffs, and Fremstad signed pleadings as “Attorney for Plaintiffs.”
• Fremstad declared he “represented the plaintiffs,” including Veritas.
• Fremstad engaged the opposing side about restoring banking access, a core operational issue for the business.
• A pivotal email: Weigel, identifying himself as Veritas’s “CEO” and “member manager,” told employees his lockout actions were “per my attorney’s recommendation” and directed them to contact “the attorney, Joel Fremstad” on business access issues.

This was not merely litigation posture; it was evidence of legal advice and availability for business operations—conduct that, under Cain v. Merchants Nat'l Bank & Tr. Co. of Fargo, aligns with practicing law for the business.

4. Concurrent adversity under Rule 1.7(a): derivative claims create “opposite sides” when the entity is also a client

The Court explained that a derivative claim belongs to the entity. When Albertson asserted derivative claims on behalf of Veritas against Weigel, Veritas’s interests (as plaintiff in the derivative posture) were adverse to Weigel’s defense. If Fremstad represented both, he simultaneously owed duties to clients on opposite sides of the derivative controversy.

The Court treated Rule 1.7(a) as categorically prohibiting such concurrent representation when one client’s interests adversely affect the lawyer’s ability to act for the other. It emphasized that Rule 1.7(a), unlike Rule 1.7(c), contains no consent-based exceptions in the Court’s framing: once the lawyer represents adverse clients in the same matter, continuing is prohibited.

5. The district court’s legal error—and why it did not change the result

The Supreme Court corrected a common conceptual mistake: the fact that a lawyer brings derivative claims “on behalf of” the entity does not, by itself, make the entity the lawyer’s client. Citing Shen v. Miller, Gonzalez ex rel. Colonial Bank v. Chillura, and Simms v. Rayes, the Court held the district court erred to the extent it suggested derivative pleading automatically established entity representation.

The error was harmless under Edison v. Edison because other evidence independently supported the finding that Fremstad did represent Veritas (notably the email and advice provided in Weigel’s managerial capacity). Thus, the conflict and disqualification analysis remained valid.

C. Impact

IV. Complex Concepts Simplified

1. “Derivative claims” vs. “direct claims”

• Direct claim: the owner sues for harm done to the owner personally (e.g., being excluded, misrepresentations made to the owner).
• Derivative claim: the owner sues on behalf of the company for harm done to the company (e.g., misuse of company funds). Any recovery typically belongs to the company.

2. Why derivative counterclaims can create adversity between an owner and the company

In a derivative claim, the company is the “real party in interest.” When a member (Albertson) asserts a derivative claim against another member (Weigel), the company’s interests are aligned with the claimant against the accused insider. If the same lawyer represents both the accused insider and the company, the lawyer’s duties collide.

3. “Implied” attorney-client relationship

You can form an attorney-client relationship without a signed engagement letter if conduct objectively shows the lawyer is providing legal advice or services for the person/entity. Here, telling employees to contact “the attorney” about business operations and acting “per my attorney’s recommendation” supported an inference that counsel was advising the company as such.

4. Collateral order doctrine (why it didn’t apply)

The collateral order doctrine is a narrow exception that allows immediate appeal of certain nonfinal orders. North Dakota applied it in Allen v. White Drug of Minot, Inc. and, in Weigel, refused to treat civil disqualification orders as fitting the doctrine—channeling urgent review instead through supervisory writ practice.

V. Conclusion

Weigel v. Albertson establishes two clarifying rules for North Dakota civil practice: (1) attorney-disqualification orders—whether granting or denying disqualification—are not immediately appealable under N.D.C.C. § 28-27-02(3) or the collateral order doctrine; and (2) while supervisory jurisdiction can provide prompt review, disqualification will be upheld where the record supports an implied attorney-client relationship with the entity and concurrent adversity exists under Rule 1.7(a).

Equally important, the Court corrected a doctrinal misconception: a lawyer’s prosecution of derivative claims does not automatically make the entity the lawyer’s client. In closely held-entity disputes, the case serves as a caution that operational advice and communications can create entity-client status—triggering hard conflicts once members litigate in derivative form.