Cho v. Superior Court

• Decision Date: 19 October 1995
• Docket Number: No. B093767,B093767
• Citation: 39 Cal.App.4th 113,45 Cal.Rptr.2d 863
• Court: California Court of Appeals Court of Appeals
• Parties: , 95 Cal. Daily Op. Serv. 8237, 95 Daily Journal D.A.R. 14,192 Jennifer Donghee CHO, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent, CHO HUNG BANK, et al., Real Parties in Interest.

Page 863

45 Cal.Rptr.2d 863

39 Cal.App.4th 113, 95 Cal. Daily Op. Serv. 8237,

95 Daily Journal D.A.R. 14,192

Jennifer Donghee CHO, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent CHO HUNG BANK, et al., Real Parties in Interest.

No. B093767.

Court of Appeal, Second District, Division 4, California.

Oct. 19, 1995.

As Modified on Denial of Rehearing

Nov. 17, 1995.

Review Denied Jan. 31, 1996.

Irwin M. Friedman, Long Beach and David Zweig, Los Angeles, for petitioner.

No appearance for respondent.

Graham & James, Stephen T. Owens, James B. Woodruff, Allen C. Kim and Elizabeth C. Moeller, Los Angeles, for Real Party in Interest Cho Hung Bank.

J.W. Lee & Associates, Los Angeles and Frederick H. Choi, Pasadena, for Real Party in Interest Jang W. Lee.

EPSTEIN, Associate Justice.

The issue in this case is whether a law firm must be disqualified as counsel in a lawsuit after employing the retired judge who had presided over the action and had received ex parte confidences from the opposing party in the course of settlement conferences. We conclude that screening procedures are not sufficient to preserve public trust in the justice system in these circumstances and therefore the firm must be disqualified.

FACTUAL AND PROCEDURAL SUMMARY

Petitioner is the plaintiff in an action entitled Jennifer Donghee Cho v. Cho Hung Bank and Jang W. Lee (No. BC080299, "the action") pending in respondent court. This writ proceeding stems from the denial of petitioner's motion to disqualify the law firm of Graham & James, counsel for Real Party in Interest Cho Hung Bank, after Eric E. Younger, the judge who had presided over the action, retired and joined Graham & James in an "of counsel" capacity.

Judge Younger was assigned to the action and held three settlement conferences at various stages of the proceedings. The petition for writ of mandate states: "Petitioner's posture in the settlement conferences accordingly changed at such stages, not the least of which was disclosure of Petitioner's bottom line settlement." A declaration by David Zweig, counsel for petitioner, submitted in support of her motion to disqualify, stated that Judge Younger had been privy to confidences relating to the merits of petitioner's case. Mr. Zweig declared: "Before Judge Younger left the bench at the end of 1994, His Honor made effort to settle the case and held at least 3 settlement conferences. In separate conference, Judge Younger asked plaintiff's counsel to speak candidly about the strengths and weaknesses of plaintiff's case, to which counsel responded openly and divulged information to His Honor in confidence. No such information would have been divulged but for the fact that it was in a confidential setting." Irwin Friedman, another attorney for petitioner, declared that confidential information, including petitioner's " 'bottom line' settlement" had been divulged to Judge Younger in settlement conferences.

Judge Younger retired in late December 1994, with the action still pending. Graham & James substituted into the lawsuit as counsel for real party in interest Cho Hung Bank on February 17, 1995. Within the next few days, a partner at Graham & James, Stephen Owens, reviewed the court docket sheet and discovered for the first time that Judge Younger had presided over the case until his retirement. Mr. Owens had heard that Judge Younger was joining the firm, and he told the managing partner, Henry David, of Judge Younger's role in the action. After researching the issues, Graham & James decided to impose a " 'cone of silence' " around Judge Younger before he began his formal relationship with the firm. A memorandum was circulated throughout Graham & James directing all personnel that Judge Younger was not to be involved in the action in any way; that it was not to be discussed in his presence; that Judge Younger was not to discuss his role or any information he had obtained; and that he was not to have access to any files or written materials about the action.

Judge Younger began his work with Graham & James on March 1, 1995. Petitioner's attorney first learned of this from Jang W. Lee at a deposition on March 22, 1995. Mr. Lee is a former attorney for Cho Hung Bank, and is a real party in interest in these proceedings. On the same day that petitioner's counsel learned of Judge Younger's affiliation with Graham & James, a letter from that firm was delivered to the court and counsel in the action formally informing them of Judge Younger's relationship with that firm, and of the steps taken to screen him from any involvement in the action.

Petitioner moved to recuse or disqualify Graham & James in March 1995. In opposition to the motion, Real Party in Interest Cho Hung Bank submitted the declaration of Judge Younger, which stated that "While I did conduct settlement discussions in chambers with each side (in the other's absence), I do not believe I ever learned any confidential information from plaintiff; if I did, I certainly did not remember it for any period of time." ¹

The parties stipulated that Judge Dell (retired), sitting as a referee, would conduct an evidentiary hearing on the motion to disqualify. That hearing was not reported. Petitioner filed an evidentiary objection to the declaration by Judge Younger filed in opposition to the motion.

Judge Dell issued a written statement of decision, in which he reviewed the declarations submitted and the oral representations of Messrs. Zweig and Owens and Judge Younger. The oral representations were "treated with the same dignity and effect as sworn testimony." The statement of decision also reviewed three cases cited by the parties--Flatt v. Superior Court (1994) 9 Cal.4th 275, 36 Cal.Rptr.2d 537, 885 P.2d 950; Rosenfeld Construction Co. v. Superior Court (1991) 235 Cal.App.3d 566, 286 Cal.Rptr. 609; and Higdon v. Superior Court (1991) 227 Cal.App.3d 1667, 278 Cal.Rptr. 588.

Judge Dell made the following findings: "1. There was no concealment by Graham & James from plaintiff or the Court of Judge Younger's association with that firm; at most there was an inadvertent delay in notification which caused no prejudice to plaintiff. [p] 2. The preponderance of evidence is that the Bank's initial contact with Graham & James relative to the Cho case commenced in February 1, 1995. [p] 3. There is no likelihood that any information received by Eric Younger, at settlement conferences or otherwise, while presiding as a judge in the Cho case, will cause any detriment to plaintiff by virtue of Judge Younger's employment at Graham & James. [p] 4. Appropriate screening procedures have been instituted by Graham & James to insure that Eric Younger will have no participation in the Cho case. [p] 5. Judge Younger's role as 'of counsel' with Graham & James is that of a part-time employee, not a partner, and not a profit participant; the outcome of the Cho case will have no effect on his compensation." Based on these findings, the referee recommended that the motion to disqualify be denied.

The trial court adopted the referee's recommendations and denied the motion to disqualify Graham & James. Petitioner filed her petition for writ of mandate challenging this ruling on June 23, 1995. We issued an alternative writ, established a briefing schedule, and issued a stay of the trial in the action.

DISCUSSION

This case presents an issue of first impression in California--whether a law firm must be disqualified when it employs a former judge who in his official capacity received ex parte confidences, bearing on the merits of a lawsuit over which he was presiding, from an adverse party in the identical litigation in which the motion to disqualify is brought. We conclude that the firm must be disqualified.

We first dispose of a procedural issue. The parties dispute the appropriate standard of appellate review. Real Party in Interest Cho Hung Bank urges us to apply the abuse of discretion standard on the ground that we may not substitute our judgment for the trial court's resolution of disputed factual issues. While this is a correct statement of the accepted rule (see Rosenfeld, supra, 235 Cal.App.3d at pp. 572-573, 286 Cal.Rptr. 609; Higdon, supra, 227 Cal.App.3d at p. 1670, 278 Cal.Rptr. 588), the problem with its application to this case is that the referee made no finding on the only factual dispute identified by the parties: whether Judge Younger received confidences from petitioner during settlement conferences. Where there are no disputed factual issues, we independently review the trial court's determination as a question of law. (See Moomjian v. Zolin (1993) 12 Cal.App.4th 1606, 1612, 16 Cal.Rptr.2d 335.)

The parties acknowledge that Judge Younger is disqualified from participating in the action by virtue of his role as judge. There is no California rule of professional conduct which governs the issue of disqualification of Graham & James. Petitioner urges us to adopt the "substantial relationship" test applied in Rosenfeld. Real Party in Interest Cho Hung Bank argues that we should apply the analysis employed by the court in Higdon. As we shall explain, neither analysis resolves the issues presented here.

The reported decision closest to ours is Higdon, supra, 227 Cal.App.3d 1667, 278 Cal.Rptr. 588. In that case, a court commissioner resigned and joined a law firm representing a party to a marital dissolution action on which he had heard contested matters. There was no indication that the commissioner had been party to confidences divulged by either side in the case.

The Higdon court began its analysis with a review of the authority under which disqualification may be ordered. "A trial court's authority to order disqualification of counsel is found at Code of Civil Procedure section 128, subdivision (a)(5), which provides that the court shall have the power to 'control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any...