Castaneda v. Superior Court of L.A. Cnty.

• Decision Date: 24 June 2015
• Docket Number: B259950
• Citation: 237 Cal.App.4th 1434,188 Cal.Rptr.3d 889
• Court: California Court of Appeals Court of Appeals
• Parties: Jesus CASTANEDA, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Perrin Bernard Supowitz, Inc., Real Party in Interest.

237 Cal.App.4th 1434

188 Cal.Rptr.3d 889

Jesus CASTANEDA, Petitioner

v. The SUPERIOR COURT of Los Angeles County, Respondent;Perrin Bernard Supowitz, Inc., Real Party in Interest.

B259950

Court of Appeal, Second District, Division 8, California.

Filed June 24, 2015

Livingston Bakhtiar, Ebby S. Bakhtiar ; Shegerian & Associates, Santa Monica, Carney Shegerian, for Petitioner.

No appearance for Respondent.

Ballard Rosenberg Golper & Savitt, Glendale, Linda Miller Savitt, Christine T. Hoeffner and Philip Reznik, for Real Party in Interest.

RUBIN, ACTING P.J.

INTRODUCTION

In Cho v. Superior Court (1995) 39 Cal.App.4th 113 (Cho ), the Court of Appeal held that when a judicial officer receives confidential information from a party while presiding over a settlement conference, and the judicial officer subsequently joins a law firm, that law firm may not represent an opposing party in the same action, regardless whether the law firm establishes screening procedures to prevent the former judicial officer from having any involvement with the case. As the court explained: “No amount of assurances or screening procedures, no ‘cone of silence,’ could ever convince the opposing party that the confidences would not be used to its disadvantage. When a litigant has bared its soul in confidential settlement conferences with a judicial officer, that litigant could not help but be horrified to find that the judicial officer has resigned to join the opposing law firm—which is now pressing or defending the lawsuit against that litigant. No one could have confidence in the integrity of a legal process in which this is permitted to occur without the parties' consent.” (Id . at p. 125, 45 Cal.Rptr.2d 863, fn.omitted.)

In this case, we hold the same standard applies when an attorney serves as a settlement officer in a mandatory settlement conference conducted by a judge and two volunteer attorneys. If the attorney receives confidential information from one of the parties to the action, that attorney's law firm may not subsequently agree to represent an opposing party in the same action, regardless of the efficacy of the screening procedures established by the law firm.

In this writ proceeding, the plaintiff challenges an order denying its motion to disqualify a law firm that substituted in to represent the defendant approximately six months after one of the law firm's attorneys served as a settlement officer in the case. The trial court ruled the law firm could represent the defendant because, even assuming the attorney received confidential information during the settlement conference—an issue the trial court did not resolve—the law firm had established adequate screening procedures to ensure the attorney did not discuss the case with anyone at the firm. We hold this was error. Because the trial court did not resolve the disputed factual question whether the attorney received confidential information while serving as a settlement officer, we grant the petition and remand for further proceedings so the trial court can determine whether the attorney was privy to any confidential information.

FACTUAL AND PROCEDURAL BACKGROUND

In February 2013, petitioner Jesus Castaneda filed this action for wrongful termination, violation of the California Fair Employment and Housing Act (Gov. Code, § 12900 et seq. ) and related claims against his former employer, real party in interest Perrin Bernard Supowitz, Inc. (the employer).

In December 2013, and pursuant to rule 3.1380 of the California Rules of Court, the trial court ordered the parties to participate in the Los Angeles County Superior Court's CRASH settlement conference program for employment cases.¹ CRASH—which stands for civil referee assisted settlement hearing—is a mandatory settlement conference program. Although the record contains no official documentation describing the mechanics of the CRASH program, the parties agree that three persons conduct a CRASH settlement conference—a judicial officer and two volunteer attorneys.²

The settlement conference took place at the end of January 2014. One of the two attorney panelists was Elsa Bañuelos, then senior counsel with the law firm of Ballard Rosenberg Golper & Savitt (the Ballard law firm).

The case did not settle. In late July 2014—a little less than six months after the settlement conference—Ballard law firm partner Linda Miller Savitt substituted in to represent the employer in the action. According to Savitt, she was unaware that Bañuelos had served as a settlement officer in the case.

About three weeks after the substitution of counsel was served, counsel for Castaneda, Ebby Bakhtiar, e-mailed Savitt, informed her of Bañuelos's involvement in the settlement conference, and inquired whether she and the Ballard law firm intended to withdraw as counsel for the employer. Savitt responded by e-mail, noting that she “knew nothing about the case from [Bañuelos] and [Bañuelos] is not on the file and will not be doing any work on it.... We only have files from the client or from prior counsel.” Savitt stated she did not intend to disqualify herself. Castaneda filed a motion to disqualify the Ballard law firm the following day.

According to the disqualification motion, during the settlement conference, “[Settlement Officer] Bañuelos received ex-parte confidences concerning the merits of Plaintiff's case, his trial strategy, legal analysis and other highly confidential appraisal and evaluations, which his attorney would not have divulged had it not been for the confidential setting of the conference.” The motion was supported by declarations from two of Castaneda's attorneys. Ebby Bakhtiar stated in his declaration that he participated in the settlement conference telephonically. He claimed: “During the conference, I was called by the Judge in charge of the matter and placed on speaker phone. At that time, I was informed that the defense was not present and [was] asked questions about the case. Accordingly, I answered the questions and in so doing, I openly discussed Plaintiff's trial strategy, legal analysis, bottom-line settlement figures and revealed [rather] highly confidential evaluations I had made. When I engaged in the above discussions with the CRASH panel, I spoke candidly about the strengths and weaknesses of Plaintiff's case, divulging important information in confidence. I would not have disclosed any such information had it not been for the confidential nature of the conference.” Bakhtiar did not specify who was present at the conference or who informed him the defense was not present when he allegedly disclosed confidences during the telephone conference.

The second attorney declaration in support of the disqualification motion was from David Harris who, in contrast to Bakhtiar, was physically present at the conference. Harris stated in his declaration: “During the conference, I was introduced to the panelists, one of whom was Elsa Bañuelos. The conference lasted several hours, during which I answered questions about the case directed to me by the panelists, including Bañuelos, while outside of the presence of defense counsel. In so doing, I freely discussed Plaintiff's trial strategy, legal analysis and revealed other highly confidential evaluations [that] I, Mr. Bakhtiar and Mr. Shegerian [another of Castaneda's attorneys] had made. When I engaged in the above discussions with the CRASH panel, including Bañuelos, I spoke candidly about the strengths and weaknesses of Plaintiff's case, divulging important information in confidence. I would not have disclosed any such information had it not been for the confidential nature of the conference.”

Harris also maintained that defense counsel were not present when the settlement panel conducted the telephone conference with Bakhtiar and that, during this conference, “Mr. Bakhtiar responded to the Judge's and panelists' questions about the case, providing his thoughts, his impressions, his evaluations and also discussed settlement figures, etc.”

The employer opposed the motion. It argued that “no confidential information was conveyed to Ms. Bañuelos at the ... settlement conference.” The employer offered several declarations in support of this assertion. One was from Bañuelos, who stated that while she did “not recall details of the case,” she remembered that the judge presiding over the conference was upset that Bakhtiar was not physically present. According to Bañuelos, the entire telephone conference with Bakhtiar took place in the presence of defense counsel and other employer representatives, and the judge specifically pointed this out to Bakhtiar. Bañuelos also maintained that, at no point during the conference did Bakhtiar or his associate who was physically present “disclose any weaknesses in Plaintiff's case or any other confidential information regarding the case; nor did they reveal any ‘fall back’ or ‘bottom line’ settlement position.” Bañuelos acknowledged that after the discussion in the presence of the defense, the judge “took the call off of the speakerphone and left the room to speak separately with Mr. Bakhtiar, but I did not hear any of their conversation.” Bañuelos did not expressly say whether the judge told her what he had discussed with Bakhtiar during their private telephone conversation.

The employer also offered the declaration of Howard Knee, its former counsel who represented it at the settlement conference. Knee also maintained that the judge advised Bakhtiar that defense counsel and other employer representatives were present and that, during the conference, he (Knee) responded at times to Bakhtiar's statements. In another declaration, the employer's senior human resources manager also stated that she, defense counsel, and other employer representatives were present during the telephone conference with Bakhtiar, and that the judge who presided over the conference alerted Bakhtiar to the presence of these persons.

The employer further argued that the Ballard law firm should...