Teja v. Saran, 28761-3-I
| Decision Date | 22 February 1993 |
| Docket Number | No. 28761-3-I,28761-3-I |
| Citation | 846 P.2d 1375,68 Wn.App. 793 |
| Court | Washington Court of Appeals |
| Parties | Mohinder Singh TEJA, Appellant, v. Sukhpal Singh SARAN, Respondent. |
Michael B. King, Bruce P. Weiland, Lane Powell Spears Lubersky, Seattle, for appellant.
Satwant S. Pandher, Everett, for respondent.
Mohindar Singh Teja appeals an adverse judgment, alleging as error the trial court's refusal to disqualify the respondent's attorney on the basis of a conflict of interest. We find that a conflict existed, but affirm the judgment.
Teja was a former client of the respondent's attorney, Satwat Singh Pandher. Teja was jailed on a domestic violence charge in January 1988. During Teja's confinement, he consulted and retained Pandher to represent him in that action. Pandher also represented Teja's acquaintance and business partner, the respondent, Sukhpal Singh Saran, on unrelated matters. During one of Teja's consultations with Pandher, Teja questioned Pandher about a possible claim against Saran based upon a business dispute. Teja and Pandher disagree as to the length and substance of the conversation. At a minimum, both parties agree Teja told Pandher that Saran owed him money and the amount of the alleged debt. Pandher told Teja the amount was too small to warrant attorney involvement and advised Teja to file a claim in small claims court. Teja also claims he showed Pandher the bills, receipts, and documentation regarding his claim, discussing the claim in greater detail.
The association between Teja and Pandher deteriorated during the pendency of the domestic violence action, and Teja asked Pandher to withdraw. Teja subsequently filed a claim against Saran in small claims court for $1,900. The day before trial in small claims court, Pandher appeared in the action for Saran and filed a counterclaim for approximately $17,000, together with a motion to remove the case to superior court. The motion was granted. Teja appeared in the action pro se and amended his claim to approximately $34,000. The case was arbitrated, and when Teja's claim was denied in arbitration, he requested a trial de novo.
Two weeks before trial, Teja filed a motion to disqualify Pandher as attorney for Saran, alleging a conflict of interest. Pandher contested the motion and maintained no conflict existed because he had not received material confidential information relating to the current claim. The trial court denied the disqualification motion, basing its decision upon Pandher's contention that no material confidences were disclosed. The trial court entered judgment for Teja in the amount of $1,600 and for Saran in the amount of $5,340. Teja now challenges the trial court's denial of his motion to disqualify and seeks to reverse and remand the judgment.
The initial inquiry in this case is whether an attorney/client relationship existed between Teja and Pandher with regard to the action for the debt. The parties both acknowledge that Pandher was actively representing Teja in the unrelated domestic violence case, but Pandher maintains the allegedly short conversation regarding Saran's debt was insufficient to create an attorney/client relationship in the context of the disputed debt.
The existence of an attorney/client relationship is a question of fact, the essence of which may be inferred from the parties' conduct or based upon the client's reasonable subjective belief that such a relationship exists. Bohn v. Cody, 119 Wash.2d 357, 363, 832 P.2d 71 (1992). Even a short consultation may suffice to create an attorney/client relationship, and an important factor in determining the existence of the relationship is the client's subjective belief. In re McGlothlen, 99 Wash.2d 515, 522, 663 P.2d 1330 (1983); State ex rel. Slusser v. Billet, 52 Wash.App. 561, 563-64, 762 P.2d 350 (1988), review denied, 111 Wash.2d 1032 (1989).
Pandher's advice to Teja, viewed in light of their existing professional relationship, demonstrates behavior consistent with an attorney/client association. Pandher's actions were sufficient to support Teja's reasonable belief that such a relationship existed. Teja acted consistently with Pandher's suggestion and filed suit in small claims court against Saran. Although none of these incidents in isolation might be enough to establish an attorney/client relationship, the circumstances in their entirety were sufficient to form an attorney/client association with regard to the subject matter of this claim. We also note that if Teja and Pandher had not already established a professional relationship the exchange between Teja and Pandher would probably be insufficient in itself to create such a relationship.
Because an attorney/client relationship existed, Pandher's actions are governed by the Rules of Professional Conduct. The determination of whether an attorney has violated the Rules of Professional Conduct is a question of law and reviewed de novo. Eriks v. Denver, 118 Wash.2d 451, 457-58, 824 P.2d 1207 (1992); State v. Greco, 57 Wash.App. 196, 200, 787 P.2d 940, review denied, 114 Wash.2d 1027, 793 P.2d 974 (1990).
The Rules of Professional Conduct (RPC) govern subsequent representations adverse to former clients. 1 RPC 1.9 provides:
A lawyer who has formerly represented a client in a matter shall not thereafter:
(a) Represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents in writing after consultation and a full disclosure of the material facts; or
(b) Use confidences or secrets relating to the representation to the disadvantage of the former client, except as rule 1.6 would permit.
Teja asserts that Pandher violated RPC 1.9(a) by representing Saran in the same or substantially related matter when Saran's interests were materially adverse to Teja. Teja argues that he need not prove material confidences were also disclosed to Pandher. Saran disagrees, contending that Teja must show the matter was substantially related and Pandher acquired material confidential information. 2
Saran supports his position by relying on decisions that focus on former client conflicts created when one incoming attorney in a firm has confidential information about a client from his former firm now adverse to the new firm's current client. These cases address the extent to which that conflict may be imputed to others in the firm. 3 Such situations are governed by RPC 1.10, which requires that the matter be substantially the same and that the incoming lawyer acquired material confidences or secrets. RPC 1.10(b). These decisions are inapposite, however. The instant case concerns a sole practitioner who has personally represented both the former and current client. Accordingly, the narrow question before this court is whether in such a case the former client must prove that the matter is substantially the same and that confidential material information was exchanged in order to disqualify the attorney.
Under the plain language of RPC 1.9, the test is stated in the alternative: an attorney may not proceed if (1) he or she is utilizing confidences to the disadvantage of the former client, or (2) the former client's interests are adverse and the matter is substantially related. In defining the scope of the second requirement, the comment to Rule 1.9 of the Model Rules of Professional Conduct states:
The scope of a "matter" for purposes of Rule 1.9(a) may depend on the facts of a particular situation or transaction. The lawyer's involvement in a matter can also be a question of degree. When a lawyer has been directly involved in a specific transaction, subsequent representation of other clients with materially adverse interests clearly is prohibited.... The underlying question is whether the lawyer was so involved in the matter that the subsequent representation can be justly regarded as a changing of sides in the matter in question.
Model Rules of Professional Conduct Rule 1.9 comment, at 38 (1983). 4 This prohibition against side-switching is based not only upon the duty prohibiting the disclosure of confidences, but also upon a duty of loyalty. 5 Few Washington cases have addressed the issue of an attorney switching sides and representing a party adverse to a former client in the same matter. 6
The plain language of RPC 1.9 indicates actual proof of disclosure of confidential information is not necessary if the matters are substantially related. The weight of authority from other jurisdictions similarly interprets the rule as not requiring proof of disclosure of confidential information. 7 We agree and hold that under RPC 1.9(a), former clients need not prove that actual confidences were divulged. Because Teja consulted Pandher about the underlying circumstances of the current suit between Teja and Saran and the matter is substantially related, Pandher was precluded from continuing his representation of Saran absent consent from Teja. At that point, Pandher should have withdrawn. 8 The trial court erred by not granting the motion to disqualify.
Teja argues the trial court's error requires reversal of the judgment, urging this court to adopt a "per se" presumption of prejudice when the trial court errs by refusing to disqualify an attorney on the basis of a client conflict of interest. Despite Teja's assertion that this is an issue of first impression, the Washington Supreme Court has held that when a motion for disqualification is challenged after judgment has been entered, the judgment will not be reversed unless the breach of ethics prejudiced the interests of the former client. First Small Business Inv. Co. of Cal. v. Intercapital Corp. of Or., 108 Wash.2d 324, 331-32, 738 P.2d 263 (1987). Teja attempts to distinguish First Small Business on the basis that it concerned imputed disqualification and relationships of attorneys within firms. However, the...
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