Koo v. Rubio's Restaurants, Inc.

• Citation: 135 Cal.Rptr.2d 415,109 Cal.App.4th 719
• Decision Date: 11 June 2003
• Docket Number: No. G031093.,G031093.
• Court: California Court of Appeals Court of Appeals
• Parties: Gabriel KOO et al., Plaintiffs and Respondents, v. RUBIO'S RESTAURANTS, INC, Defendant and Appellant; Kerry 0. Bartlett et al. Plaintiffs and Respondents, v. Rubio's Restaurants, Inc., Defendant and Appellant.

135 Cal.Rptr.2d 415

109 Cal.App.4th 719

Gabriel KOO et al., Plaintiffs and Respondents, v. RUBIO'S RESTAURANTS, INC, Defendant and Appellant; Kerry 0. Bartlett et al. Plaintiffs and Respondents, v. Rubio's Restaurants, Inc., Defendant and Appellant.

No. G031093.

Court of Appeal, Fourth District, Division 3.

June 11, 2003.

Carlton, DiSante & Freudenberger, Timothy M. Freudenberger, San Diego, and Jennifer White-Sperling, for Defendant and Appellant.

Righetti Wynne, Matthew Righetti, John Glugoski; McInerney & McInerney, Kevin McInerney and Kelly McInerney for Plaintiffs and Respondents.

OPINION

MOORE, J.

An attorney representing a corporate defendant in a class action lawsuit concerning overtime wages for managers declared before the court that his firm represented both the defendant and its managers. He later clarified that his only intention in so declaring was to put opposing counsel on notice that the defendant corporation's managerial agents were "represented parties" to the extent provided in State Bar Rules of Professional Conduct, rule 2-100,¹ but that he certainly did not mean to convey the impression that he represented the managers in their individual capacities. Of course, the obvious albeit unspoken corollary, was that if the proscriptions of rule 2-100 were successfully invoked, his client would gain a tactical advantage in discovery. In any event, the attorney's supplemental declarations were too late. He had already conveyed the impression that he baldly professed to represent all parties to the action, both the plaintiffs and the defendant. The trial court disqualified his firm from further participation in the case. The defendant challenges the disqualification on appeal.

We hold that an attorney's unilateral declaration regarding representation cannot, by itself, create an attorney-client relationship when none otherwise exists. Here, there was no evidence, other than the erroneous declaration, that the law firm in fact represented the interests of the managers both as corporate representatives and as potential class members. There was no evidence that any of the potential class members had hired the law firm. There being no attorney-client relationship, it was an abuse of discretion to disqualify the law firm, thereby necessitating that the defendant find another law firm to pick up the ball and continue the defense of the potentially massive and costly lawsuit. We reverse and remand.

I FACTS

A. Class Action Filings

Kerry O. Bartlett (Bartlett) filed a class action complaint, on behalf of himself and others similarly situated, alleging that defendant Rubio's Restaurants, Inc. (Rubio's) failed to pay salaried general managers and assistant managers overtime compensation (Bartlett v. Rubio's Restaurants, Inc. (Super. Ct. Orange County, No. 01CC00319)) (the Bartlett Action). Gabriel Koo (Koo) filed a similar class action complaint (Koo v. Rubio's Restaurant, Inc. (Super. Ct. Orange County, No. 01CC00231)) (the Koo action).

B. Motion to Compel

The law firm of Righetti Wynne (Righetti), representing Bartlett, sought to discover the names, addresses and telephone numbers of all of Rubio's managers. Rubio's objected to the request. Consequently, Righetti filed a motion to compel responses to interrogatories, stating the information sought was directly relevant to class certification.

In response to the motion to compel, the law firm of Carlton, DiSante & Freudenberger (Carlton), representing Rubio's, filed an opposition, a responsive separate statement, and a supporting declaration of counsel. The responsive separate statement and declaration of counsel each contained wording that may have been merely sloppy, or may have been crafted when the writer's attention was focused on winning the immediate discovery battle.

Among other things, Rubio's responsive separate statement contained the following language: "[Rule] 2-100 prohibits ex parte communications with a represented party about the subject of the representation. Here, Rubio's counsel represents Rubio's current assistant and general managers. (Freudenberger Decl., [¶] 2.) Therefore, Plaintiffs counsel cannot directly contact these individuals without Rubio's consent."² The responsive statement, in distinguishing the case of Atari Inc. v. Superior Court (1985) 166 Cal.App.3d 867, 212 Cal.Rptr. 773 (dealing with the right of the defendant to contact potential class members), also stated: "Further, Atari does not address a plaintiffs counsel's right to directly contact current managerial employees represented by defendant's counsel, as is the case here." In his declaration in support of the opposition, Attorney Timothy M. Freudenberger (Freudenberger) stated flatly: "Rubio's has retained my law firm to represent all of its district managers, general managers, and assistant managers in connection with this lawsuit. As such, my firm represents all current managerial employees of Rubio's in this matter."

The motion to compel in the Bartlett action was heard before Judge Raymond J. Ikola. Judge Ikola indicated a need to impose some regulation on Bartlett's contact with the current Rubio's managers. Counsel for Bartlett remarked at the hearing that Rubio's counsel was claiming to represent both the employer and certain members of the potential class. He further expressed his opinion that it was a conflict of interest. In response, Freudenberger stated, "My firm represents Rubio's. We have an attorney-client relationship with Rubio's. By virtue of that, we represent the managerial agents—the managers of Rubio's in—in the case of any communication or depositions with the plaintiffs' counsel."

The judge remarked that little discovery had been done and that in order to develop facts relevant to class certification Bartlett could take a representative sampling of the depositions of current Rubio's managers. He further explained to Bartlett's counsel that he could have full access to the current managers, but only by deposition. A formal order to that effect was entered.

C. Consolidation

Subsequently, the Bartlett and Koo actions were consolidated, with the Koo action designated the lead case. The cases were assigned to Judge C. Robert Jameson for all purposes.

D. Motion to Disqualify

Shortly thereafter, Righetti, on behalf of Bartlett, filed a motion to disqualify Carlton, on the basis of the statements Rubio's and Freudenberger had made in opposing the motion to compel. The motion to disqualify cited the language contained in Rubio's responsive separate statement and in Freudenberger's declaration.

Rubio's filed an opposition to the motion to disqualify, coupled with a second declaration of Freudenberger. Rubio's tried hard to clarify its previous loose language with respect to Carlton's representation of the individual managers. It endeavored to make clear that the statements of both itself and Freudenberger, made in opposition to the motion to compel, were not intended to establish an attorney-client relationship with the current managing agents of the corporation. Rather, they were intended only to assert the application of rule 2-100 with respect to those managing agents and to put Righetti on notice that it was required to comply with the rule.

Rubio's further explained why it was so important to inform Righetti of its assertion that rule 2-100 was applicable, given the prior history between Righetti and Carlton in unrelated litigation. Righetti and Carlton had previously opposed each other in another class action, Perry v. U.S. Bank (Super. Ct. Alameda County, No. 824460) (the Perry action). According to Rubio's, Righetti, representing the named plaintiff in the Perry action, had contacted numerous current managerial employees of the defendant corporation by mail and telephone. Carlton, on behalf of the defendant corporation, filed a motion to disqualify Righetti. Attorney Edward J. Wynne of the Righetti firm filed a declaration in the Perry action explaining that Righetti's communications with absent class members took place in order to investigate the case. He further declared that until he was served with the motion to disqualify his firm, he "had no idea that [d]efense counsel claimed to represent any absent class members...." Rubio's anticipated that Righetti would employ the same tactics in this litigation, unless put on notice of the claimed application of rule 2-100.

Despite Rubio's explanation, at the hearing on Bartlett's motion to disqualify, the court indicated Carlton appeared to have an irremediable conflict. In response, Freudenberger reiterated that Carlton was "not counsel to any current managers of Rubio's. [It was] counsel to Rubio's, the corporate defendant, and only Rubio's." He continued: "[W]e represent Rubio's only. And our representation of managerial agents of Rubio's is only in their representative capacity as managerial agents of Rubio's. We absolutely do not, have not, have never stated that we represent current managers in their individual capacity. We certainly do not. We represent Rubio's only, the corporate defendant."³ The court, having heard Freudenberger's explanation, granted the motion to disqualify.

E. Motion for Reconsideration

Having been unsuccessful on its legal arguments in its opposition to the motion to disqualify, Rubio's resolved to try to put some factual information before the court concerning the lack of any actual attorney-client relationship between Carlton and Rubio's individual managers. It filed a motion for reconsideration. In that motion, Rubio's conceded that the first Freudenberger declaration was poorly worded.

In addition, Rubio's stated: "The declaration was incorrectly interpreted as meaning that [Carlton] had undertaken the representation of the individual interests of Rubio's current assistant and general managers, in addition to Rubio's interests, in this litigation. Any such interpretation, however, is completely inaccurate. [Carlton] has been retained...