Khani v. Ford Motor



























Filed 4/2/13
Khani v. Ford Motor CA2/4















NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS







California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.





IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA



SECOND APPELLATE DISTRICT



DIVISION FOUR








>

BEHNAM KHANI et al., Plaintiffs and Appellants, v. FORD MOTOR COMPANY et al., Defendants and Respondents.	B239611 (Los Angeles County Super. Ct. No. BC466626)

APPEAL from
order of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Los Angeles
County, Amy D. Hogue, Judge. Reversed.

Strategic
Legal Practices, Payam Shahian, Gielegheim & Associates and
Neil Gielegheim, for Plaintiffs and Appellants.

Baker &
Hostetler, Mary L. Arens, Rosslyn Hummer, and Jack Samet for Defendants and
Respondents.

______________________________

Behnam Khani and his trial
counsel, Payam Shahian and Strategic Legal Practices, appeal from an attorney href="http://www.fearnotlaw.com/">disqualification order. We reverse.


>FACTUAL AND PROCEDURAL SUMMARY

On August 11, 2011, Khani,
represented by Shahian and his law firm, Strategic Legal Practices, sued Ford
Motor Company (Ford) and its dealer, Galpin Motors, Inc., under the
Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq., popularly known
as California’s Lemon Law) for defects in a 2008 Lincoln Navigator. On September 16, 2011, Ford’s counsel sent a letter to
Shahian, requesting his withdrawal from the litigation on the ground that he
previously had defended Ford in lemon law cases. On October 4, 2011, Shahian responded, refusing to
withdraw.

On December 31, 2011, Ford
filed a motion to disqualify Shahian
and his law firm. The motion was
accompanied by the declaration of Brian Takahashi, a partner at the law firm
Bowman and Brooke, which employed Shahian between June 2004 and July 2007. Bowman and Brooke was Ford’s corporate counsel,
and during his tenure there Shahian worked on 150 cases, including California
Lemon Law cases. According to Takahashi,
Shahian was “privy to confidential client communications and information
relating to the defense of” such cases, as well as to “pre-litigation
strategies, tactics, and case handling procedures.” Shahian provided unspecified “input” to
Ford’s Office of General Counsel and Consumer Affairs and communicated
regularly with Ford about lemon law cases.


The court
granted the disqualification motion, ruling that the legal issues in lemon law
cases are substantially similar, and presuming that Shahian’s previous work
exposed him to confidential information about Ford’s handling of such
cases. The court did not address
Shahian’s argument that Ford had waived its right to seek his
disqualification.

This timely
appeal followed.

>DISCUSSION

“Generally,
a trial court’s decision on a disqualification motion is reviewed for abuse of
discretion. [Citations.] If the trial court resolved disputed factual
issues, the reviewing court should not substitute its judgment for the trial
court’s express or implied findings supported by href="http://www.fearnotlaw.com/">substantial evidence. [Citations.]
When substantial evidence supports the trial court’s factual findings,
the appellate court reviews the conclusions based on those findings for abuse
of discretion. [Citation.] However, the trial court’s discretion is
limited by the applicable legal principles. [Citation.]
Thus, where there are no material disputed factual issues, the appellate
court reviews the trial court’s determination as a question of law. [Citation.]
In any event, a disqualification motion involves concerns that justify
careful review of the trial court’s exercise of discretion.” (People
ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999)
20 Cal.4th 1135, 1143–1144.) Since
the principal issue in this case is whether the court applied the correct legal
test, we review its determination independently.

In the case
of successive representation of clients with adverse interests, a
disqualification motion juxtaposes the client’s right to be represented by his
or her counsel of choice with the attorney’s duty to maintain the confidences
of his or her former client. (>City and >County> of San Francisco> v. Cobra Solutions, Inc. (2006)
38 Cal.4th 839, 846 (Cobra Solutions).) In a case like this, “the trial court must
balance the current client’s right to the counsel of its choosing against the
former client’s right to ensure that its confidential information will not be
divulged or used by its former counsel.”
(Ibid.)

In order to
disqualify the attorney, the former client must show that the subjects of the
successive representations are substantially related. (Cobra
Solutions, supra,
38 Cal.4th. at p. 847.) A
substantial relationship exists where “the attorney had a direct professional
relationship with the former client in which the attorney personally provided
legal advice and services on a legal issue that is closely related to the legal
issue in the present representation. (>Jessen v. Hartford Casualty Ins. Co.
(2003) 111 Cal.App.4th 698, 710–711 [(Jessen)].) If the former representation involved such a
direct relationship with the client, the former client need not prove that the
attorney possesses actual confidential information. (Id.
at p. 709.)” (Cobra Solutions, at p. 847.)
The attorney is conclusively presumed to possess confidential
information “if the subject of the prior representation put the attorney in a
position in which confidences material to the current representation would
normally have been imparted to counsel.”
(Ibid.; see also >Flatt v. Superior Court (1994) 9 Cal.4th
275, 283; H. F. Ahmanson & Co. v.
Salomon Brothers, Inc. (1991) 229 Cal.App.3d 1445, 1453.)

The trial
court in this case was under the impression that Cobra Solutions requires consideration of only the legal issues
involved in successive representations, and it assumed that all lemon law cases
raise similar legal issues. In >Cobra Solutions, our Supreme Court
reviewed the legal principles established in Jessen and other cases. (>Cobra Solutions, supra, 38 Cal.4th. at p. 847.)
The Jessen court made clear
that where the attorney had a direct relationship with the former client, the
substantial relationship test requires that “the evidence before the trial
court support[] a rational conclusion that information material to the
evaluation, prosecution, settlement or accomplishment of the former
representation given its factual and legal issues is also material to the
evaluation, prosecution, settlement or accomplishment of the current
representation given its factual and legal issues. [Citations.]”
(Jessen, supra, 111 Cal.App.4th at p. 713.)

In >Farris v. Fireman’s Fund Ins. Co. (2004)
119 Cal.App.4th 671 (Farris), the
court clarified that “the Jessen
evaluation of whether the two representations are substantially related centers
precisely upon the factual and legal similarities of the two
representations.” (Id. at p. 679, citing Jessen,
supra, 111 Cal.App.4th at pp.
709–710.) The Farris court explained that Jessen
did not adopt a “playbook approach” to the substantial relationship test or
create “a lifetime prohibition against representation adverse to a former
client.” (Farris, at p. 680.) The
attorney’s acquisition of general information about the former client’s
“‘overall structure and practices’ would not of itself require disqualification
unless it were found to be ‘material’—i.e., directly in issue or of critical
importance—in the second representation.
[Citation.] The same is true
about information such as the first client’s ‘litigation philosophy’ or ‘key
decision makers.’” (Farris, at p. 680.) The
substantial relationship test requires comparison not only of the legal issues
involved in successive representations, but also of evidence bearing on the
materiality of the information the attorney received during the earlier
representation.

The
attorney in Farris had worked as a
coverage counsel for an insurance company for over 10 years. (Farris,
supra, 119 Cal.App.4th at p.
677.) He had shaped the company’s
practices and procedures in handling California coverage claims. (Id.
at p. 688.) Six months after the
attorney had stopped working for it, the company denied an insured’s request
for a defense. (Id. at p. 686.) The court
held the attorney was disqualified from representing the insured in the ensuing
bad faith case, reasoning that the claims processing practices and procedures
the attorney shaped would likely be at issue in the bad faith case, and senior
claims personnel with whom the attorney closely worked would likely be called
as witnesses. (Id. at pp. 685, 688.)

The
evidence in this case does not establish that any information to which Shahian
was exposed during his representation of Ford would be material to his
representation of Khani in this case.
While Ford presented evidence that Shahian represented it in California
Lemon Law cases, it did not establish that any confidential information about
the defense in those cases would be at issue in this case. Neither the allegedly defective 2008 Lincoln
Navigator nor its repair history by Galpin Motors was the subject of any
lawsuit in which Shahian represented Ford.
Takahashi’s declaration does not show that Ford had any policies,
practices, or procedures generally applicable to the evaluation, settlement or
litigation of California Lemon Law cases at the time Shahian represented Ford,
or that any such policies, practices, or procedures continued in existence
unchanged between 2007 and 2011. Nor
does it show that the same decision makers that were involved in cases Shahian
handled for Ford are involved in this case.


The trial
court abused its discretion in concluding that the prior cases were
substantially related to the current case just because they involved claims
under the same statute. The substantial
relationship test does not subject an attorney to automatic disqualification on
this ground alone. (See >Banning Ranch Conservancy v. Superior Court
(2011) 193 Cal.App.4th 903, 918 [successive representations in cases under
California Environmental Quality Act not substantially related].)href="#_ftn1" name="_ftnref1" title="">[1] The court also incorrectly assumed that
Shahian’s exposure to playbook information in prior lemon law cases was
sufficient to disqualify him in this case without any showing of its
materiality. (See Farris, supra, 119
Cal.App.4th at p. 680; see also Elliott v.
McFarland Unified School Dist. (1985) 165 Cal.App.3d 562, 572
[conclusory statements insufficient].)
Ford’s bare-bones evidence in this case is insufficient to establish
that Shahian’s previous representation of Ford in California Lemon Law cases
exposed him to confidential information that would be material to his current
representation of Khani.

Since
we conclude that the court abused its discretion in disqualifying Shahian and
his law firm, we do not decide whether Ford impliedly waived attorney
disqualification by not filing its motion in a timely fashion.

>DISPOSITION

The order
is reversed. Appellants are entitled to
their costs on appeal.

>NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS







EPSTEIN,
P. J.

We
concur:







WILLHITE, J. SUZUKAWA,
J.