Rosenfeld Construction Co. v. Superior Court

• Citation: 286 Cal.Rptr. 609,235 Cal.App.3d 566
• Decision Date: 22 October 1991
• Docket Number: No. F015413,F015413
• Court: California Court of Appeals
• Parties: ROSENFELD CONSTRUCTION COMPANY, INC., Petitioner, v. The SUPERIOR COURT of Fresno County, Respondent, Paul SIVAS et al., Real Parties in Interest.

Page 609

286 Cal.Rptr. 609

235 Cal.App.3d 566

ROSENFELD CONSTRUCTION COMPANY, INC., Petitioner, v. The SUPERIOR COURT of Fresno County, Respondent Paul SIVAS et al., Real Parties in Interest.

No. F015413.

Court of Appeal, Fifth District, California.

Oct. 22, 1991.

[235 Cal.App.3d 568] Kimble, MacMichael & Upton, D. Tyler Tharpe, Thomas T. Watson, Fresno, for petitioner.

No appearance for respondent.

Wild, Carter, Tipton & Oliver, Steven E. Paganetti, Fresno, for real parties in interest.

OPINION

VARTABEDIAN, Associate Justice.

This is a petition for writ of mandate following respondent court's denial of the motion of petitioner, Rosenfeld Construction Company, Inc., to disqualify the law firm of Wild, Carter, Tipton & Oliver (hereafter Wild) in its representation of real parties in interest, Paul Sivas and Jeanet Sivas. We grant the petition in part, directing respondent court to conduct a new hearing utilizing the proper standard, which we discuss herein.

PROCEDURAL AND FACTUAL BACKGROUND

Petitioner brought a motion for disqualification of opposing counsel, the Wild firm, on the basis it had formerly represented petitioner in a related matter.

The memorandum in support of the motion recited that in 1982, John Rosenfeld, petitioner's president, consulted Wild for advice and representation in a dispute with Mr. and Mrs. George Lawson regarding the Lawsons' failure to pay petitioner for constructing a home; the Lawsons answered the complaint and cross-complained asserting that petitioner had failed to construct the home in conformity with the construction contract and industry standards. Petitioner asked the court to take judicial notice of the contents of the court's file concerning the "Lawson controversy."

There was no reporter at the hearing on the motion. ¹ Nor is there any indication whether the trial court took judicial notice as requested. The request has not been renewed in our court.

Wild acknowledged it represented petitioner for nearly four years in "relatively few matters," including the Lawson controversy.

The Lawsons had contended that the construction of their home was defective in the following respects: cabinetry, flooring, doors, water penetration into rooms and foundation, roof penetrations, moldings, painting, tile work and the grading of the property on which the house was constructed.

On November 18, 1988, real parties initiated a lawsuit against petitioner, alleging that it breached its contract with them by failing to construct their residence in conformity with the construction contract and industry standards, in particular in the following areas: cabinetry, flooring, doors, water penetration, painting, and grading of the lot on which the house was constructed.

At the time the lawsuit was commenced, real parties were represented by the law firm of Dowling, Magarian, Phillips & Aaron (hereafter Dowling). On January 8 or 9, 1991, as a consequence of attorney Steven E. Paganetti's change of employment from the Dowling firm to Wild, the Wild firm was substituted as counsel for real parties.

Petitioner's attorney, D. Tyler Tharpe, received the notice of substitution of attorneys on January 14, 1991. Tharpe had been present at the deposition of John Rosenfeld nearly a year earlier, at which time Rosenfeld had mentioned that petitioner was once represented by Wild. On February 1, 1991, Tharpe reviewed the deposition testimony, which reminded him of petitioner's prior representation by Wild.

On February 4, 1991, the next business day, Tharpe called the matter to John Rosenfeld's attention; on that same day, Rosenfeld instructed Tharpe to contact Wild, demanding that it immediately withdraw as counsel for real parties. Tharpe did so. Wild declined.

Before respondent court, petitioner argued that the appropriate test to apply to determine if disqualification was necessary was the substantial relationship standard. Claiming that the subject matters of the two lawsuits were substantially related, petitioner asked the court to disqualify Wild from the representation of real parties in the instant matter.

Rosenfeld's declaration in support of the motion to disqualify contained his statement that he spent "dozens of hours" with Robert H. Oliver, Trevor C. Clegg, William H. Leifer, and Victor D. Ryerson of the Wild firm concerning the Lawson dispute. Rosenfeld declared:

"[O]ver the course of those many years (1) I surrendered to WCT & O [Wild] all of the business' work files relating to the Lawson project, (2) I explained in detail to each of the above-mentioned attorneys at WCT & O my company's manner of operation, methods of construction and provision of warranty work, and (3) I disclosed to the same attorneys my strategies as they relate to handling customer complaints and the attorneys shared their strategies with me."

In his supplemental declaration, Rosenfeld further declared:

"3. ... Every attorney who assisted in representing ROSENFELD in the Lawson controversy met with me at one time or another, some more than others, and I shared confidential information with them about the nature of the complaints and the manner of ROSENFELD's construction as it related to the complaints. During the course of the prior representation, I shared my strategies with the WCT & O attorneys and they shared their strategies with me related to proving ROSENFELD's case against the Lawsons and defeating the Lawsons' claims against ROSENFELD.

"4. There is no question in my mind that the attorneys at WCT & O, owing to their extended representation of ROSENFELD, each had access to and actually accessed information which is confidential in nature and which is substantially related to the present action."

Four attorneys from Wild submitted declarations in opposition to the motion.

Robert Oliver declared that his firm represented Rosenfeld personally or the petitioner corporation "in relatively few matters through approximately 1985." He acknowledged that Wild represented petitioner in the controversy with the Lawsons and that the case ultimately involved litigation and arbitration, which was handled primarily by associate Victor Ryerson, who left the firm in early 1985. The case was concluded by Trevor Clegg and William Leifer.

Oliver further declared that Paganetti had not discussed the "substance of the Rosenfeld Construction Company, Inc./Lawson case" with him. Oliver went on:

"The file containing the Rosenfeld Construction vs. Lawson case has been closed for several years and stored in a location removed from our law offices. Only upon receiving correspondence alleging conflicts of interest was the file brought to this office so that declarations could be prepared by various partners in this firm."

William H. Leifer submitted a declaration in which he admitted he had reviewed the office file entitled Rosenfeld Construction Company, Inc. v. Lawson et al. Leifer noted:

"Even after reviewing the file and reviewing the documents that I could find in the file, I still have no recollection of ever having talked to John Rosenfeld in person. I have no notes indicating any phone conversations that I might have had with Mr. Rosenfeld. I find no correspondence with Mr. Rosenfeld that would indicate or refresh my recollection with any meetings I might have had with Mr. Rosenfeld. As I prepare this declaration, I have not talked with Steven Paganetti about any of the issues having to do with the Rosenfeld and Sivas matter other than I am aware that this has to do with construction issues on a residence. I have not in any fashion discussed with Mr. Paganetti any of the issues having to do with the Lawson matter and could not because I have no actual knowledge of the underlying facts giving rise to that case and I was not involved in any of the merits of the case except on a very limited basis as to the fact that it concerned a residence."

Trevor Clegg acknowledged that in 1983 he prepared and filed a complaint seeking foreclosure of petitioner's mechanic's lien on the Lawsons' residence and damages for breach of contract Clegg went on to note:

"4. ... In the course of preparing the complaint, I did conduct discussions with Mr. John Rosenfeld, ... To the best of my recollection, those discussions were neither lengthy nor detailed. They did touch on the Lawsons' complaints, but with the exception noted below, I do not recall any extended or detailed discussion of those complaints....

"5. The one complaint that Mr. Rosenfeld and I discussed in some detail involved land subsidence or slippage around and under the Lawson residence. Mr. Rosenfeld maintained that the entire problem was the Lawsons' fault....

"6. The only materials in our file that we received from Rosenfeld Construction consisted of rather unenlightening communications to and from the Lawsons and the Contractors License Board; a few scribbled notes by Mr. Rosenfeld; and a chronology of events prepared by Mr. Rosenfeld."

Paganetti declared that he never had any conversations with any of his fellow attorneys at Wild concerning the Lawson matter, nor had he seen any written documents relating to the Lawson matter. His comments included:

"All of the information I have obtained which I intend to use in the prosecution of the present action on behalf of plaintiffs has been generated solely from discovery performed by me. I do not intend to communicate in any manner with any other member of the law firm of Wild, Carter, Tipton & Oliver concerning the preparation of this matter through trial nor do I intend on reading any document concerning the Rosenfeld Construction Company, Inc. v. Lawson matter."

The minute order of the court's ruling reads in its entirety, "Motion to disqualify is denied. No present counsel at 'Wild, Carter, Tipton & Oliver' have sufficient knowledge of prior 'Rosenfeld' representation to disqualify the firm from representing the Sivas. The court finds no actual or potential present conflict."

Petitioner asks that a...