Costello v. Buckley

• Decision Date: 16 March 2016
• Docket Number: D068536
• Citation: 245 Cal.App.4th 748,199 Cal.Rptr.3d 891
• Court: California Court of Appeals Court of Appeals
• Parties: Leslie A. COSTELLO, Plaintiff and Respondent, v. Peter C. BUCKLEY, Defendant and Appellant.

245 Cal.App.4th 748

199 Cal.Rptr.3d 891

Leslie A. COSTELLO, Plaintiff and Respondent,

v.Peter C. BUCKLEY, Defendant and Appellant.

D068536

Court of Appeal, Fourth District, Division 1, California.

Filed March 16, 2016

Robert W. Buckley for Defendant and Appellant.

John A. Messina, Jr., Los Angeles, for Plaintiff and Respondent.

PRAGER, J.^*

INTRODUCTION

Leslie A. Costello (Leslie)¹ sued her former boyfriend, Peter C. Buckley (Peter), seeking to collect money she allegedly loaned him during their relationship. Peter retained his brother, attorney Robert Buckley (Robert), to defend him against Leslie's lawsuit. Because Robert had previously represented Leslie in another matter, Leslie moved to disqualify Robert on the grounds that during the time that Robert had served as Leslie's attorney, Robert had learned confidential information about Leslie's relationship with Peter that could be used against her. We conclude that the trial court properly granted the motion.

FACTUAL AND PROCEDURAL BACKGROUND

Leslie and Peter have known each other since high school. After reconnecting in 2010, they had a dating relationship which lasted until late 2011. Between October 2010 and November 2011, Leslie loaned Peter $92,000, which Leslie alleges Peter promised to repay.

During Leslie and Peter's relationship, Leslie's neighbor sued her seeking to enforce an easement for access to his water heater, which was located in her garage. In August 2011, on Peter's recommendation, Leslie retained Robert to represent her in the easement dispute. Robert actively represented Leslie for almost a year. While acting as Leslie's attorney, Robert acquired confidential information about Leslie and Peter's romantic relationship. In late 2011, while Robert was actively litigating the easement case, Peter and Leslie broke up. Robert offered to withdraw as Leslie's attorney feeling she may have been uncomfortable with his continued representation. Nevertheless, Robert continued to represent her until the trial concluded in June 2012. Leslie paid Robert almost $40,000 for his services.

Approximately two years after the conclusion of the easement litigation, Leslie sued for the $92,000. Peter retained Robert to defend against Leslie's lawsuit. In February 2015, Robert filed an answer to the complaint and propounded discovery to Leslie. Among other things, a request for admissions asked Leslie to admit that she engaged in a romantic relationship with Peter and that during the relationship, she gave money to him with no expectation of repayment.²

Leslie promptly requested that Robert withdraw as Peter's attorney because of the conflict of interest. Robert declined to withdraw as Peter's counsel and requested that the responses to his request for admissions be submitted on time. Leslie then filed a motion to disqualify Robert contending that the confidential information he acquired in the previous representation could be used against her interests. At the hearing on the motion to disqualify Robert, the trial court acknowledged that the easement dispute and the collection case were completely unrelated. Nevertheless, the court determined that during the time that Robert represented Leslie in the easement case, he acquired confidential information with him about the nature of her romantic relationship with Peter.³ Further, the court recognized that Robert was basing Peter's defense on the contention that during that romantic relationship, Leslie gave Peter money with no expectation of repayment. The court concluded that Robert's potential use of confidential information acquired while representing former client, Leslie, against her interests, constituted a conflict of interest.

Because of this conflict of interest between former and current client, the trial court granted the motion to disqualify. Peter appeals from that order.

DISCUSSION

I. Standard of Review

"An order granting or denying a disqualification motion is an appealable order [citation] and is reviewed for abuse of discretion. [Citation.] The trial court's ruling is presumed correct [citation] and reversal is permissible ‘only when there is no reasonable basis for the trial court's decision.’ [Citation.] We accept as correct all of the court's express or implied findings that are supported by substantial evidence. [Citation.] [¶] ‘In viewing the evidence, we look only to the evidence supporting the prevailing party. [Citation.] We discard evidence unfavorable to the prevailing party as not having sufficient verity to be accepted by the trier of fact. [Citation.] Where the trial court has drawn reasonable inferences from the evidence, we have no power to draw different inferences, even though different inferences may also be reasonable.’ " (Kennedy v. Eldridge (2011) 201 Cal.App.4th 1197, 1203, 135 Cal.Rptr.3d 545.) We review a lower court's decision under the abuse of discretion standard. (SpeeDee Oil Change Systems,supra, 20 Cal.4th at pp. 1143–1144, 86 Cal.Rptr.2d 816, 980 P.2d 371.)

II. Rules of attorney disqualification

"A motion to disqualify counsel brings the client's right to the attorney of his or her choice into conflict with the need to maintain ethical standards of professional responsibility. [Citations.] The paramount concern is the preservation of public trust in the scrupulous administration of justice and the integrity of the bar. [Citations.]

"A trial court's authority to disqualify an attorney derives from the court's inherent power to ‘control in the furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto.’ " (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 705, 3 Cal.Rptr.3d 877 (Jessen ).)

A. Successive Representation as Grounds for Disqualification

" ‘The obligation to represent the client with undivided fidelity does not end with the matter in which the lawyer may have been employed. Thenceforth the lawyer must refrain not only from divulging the client's secrets or confidences, but also from acting for others in any matters where such secrets or confidences or knowledge of the client's affairs acquired in the course of the earlier employment can be used to the former client's disadvantage.’ " (Wutchumna Water Co. v. Bailey (1932) 216 Cal. 564, 571, 15 P.2d 505.) In short, an attorney may never "use against his former client knowledge or information acquired by virtue of the previous relationship." (Id. at p. 574, 15 P.2d 505 ; People ex. rel. Deukmejian v. Brown (1981) 29 Cal.3d 150, 155, 172 Cal.Rptr. 478, 624 P.2d 1206 ; Kraus v. Davis (1970) 6 Cal.App.3d 484, 490, 85 Cal.Rptr. 846.) The effective functioning of the fiduciary relationship between the attorney and client depends on the client's trust and confidence in counsel. " ‘The courts will protect clients' legitimate expectations of loyalty to preserve this essential basis for trust and security in the attorney-client relationship.’ " (Pound v. DeMera DeMera Cameron (2005) 135 Cal.App.4th 70, 77–78, 36 Cal.Rptr.3d 922.) It is the duty of an attorney to "maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets of his or her client." (Bus. & Prof.Code, § 6068, subd. (e)(1).) This obligation continues after the termination of the attorney-client relationship. (People ex rel. Dept. of Corporations v. SpeeDee Oil Systems, Inc. (1999) 20 Cal.4th 1135, 1147, 86 Cal.Rptr.2d 816, 980 P.2d 371.)

Rule 3–310(E) of the Rules of Professional Conduct of the State Bar of California provides in pertinent part, "A member shall not, without the informed written consent of the ... former client, accept employment adverse to the ... former client where, by reason of the representation of the ... former client, the member has obtained confidential information material to the employment." Where an attorney's conflict arises from successive representation of clients with potentially adverse interests, " ‘the chief fiduciary value jeopardized is that of client confidentiality.’ " (Flatt v. Superior Court (1994) 9 Cal.4th 275, 283, 36 Cal.Rptr.2d 537, 885 P.2d 950 (Flatt ).) Where such a conflict of interest exists, and the former client has not consented to the current representation, disqualification follows as a matter of course. The trial court does not engage in a balancing of equities between the former and current clients. The rights and interests of the former client will prevail. (River West, Inc. v. Nickel (1987) 188 Cal.App.3d 1297, 1304, 1308, 234 Cal.Rptr. 33.)

"A former client may seek to disqualify a former attorney from representing an adverse party by showing the former attorney actually possesses confidential information adverse to the former client." (H.F. Ahmanson & Co. v. Salomon Bros. (1991) 229 Cal.App.3d 1445, 1452, 280 Cal.Rptr. 614 (Ahmanson ).) There is no strict requirement of precise relationship between the factual and legal issues of the two cases. "[T]he attorney may acquire confidential information about the client or the client's affairs which may not be directly related to the transaction or lawsuit at hand but which the attorney comes to know in providing representation to the former client with respect to the previous lawsuit or transaction." (Jessen, supra, 111 Cal.App.4th at. p. 712, 3 Cal.Rptr.3d 877.)

In order to disqualify former counsel who could have acquired confidential information from a former client that could be used in a subsequent case against the former client, the client need not prove "what is in the mind of the attorney. Nor should the attorney have to ‘engage in a subtle evaluation of the extent to which he acquired relevant information in the first representation and of his actual use of that knowledge and information in the subsequent representation.’ " (Global Van Lines v. Superior Court (1983) 144 Cal.App.3d 483, 489, 192 Cal.Rptr. 609 (Global Van Lines ).) Further, in such a case, an attorney is not only...