Sagonowsky v. Kekoa
Filed 7/23/13 Sagonowsky v. Kekoa CA1/2
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opinion has not been certified for publication or ordered published for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
FIRST
APPELLATE DISTRICT
DIVISION
TWO
CHRISTINA
M. SAGONOWSKY et al.,
Plaintiffs and Appellants,
v.
CURTIS
KEKOA, JR., et al.,
Defendants and Respondents.
A135726
(San Mateo County
Super. Ct. No. CIV501548)
Plaintiff
Christina M. Sagonowsky, individually and as Executor for the Estate of
Leocadia Sagnowsky (Sagonowsky), appeals after the trial court granted the
motion of defendant Curtis Kekoa, Jr. (Kekoa) for disqualification of
Sagonowsky’s counsel, Bradley R. White, for reviewing and utilizing certain
attorney-client privileged emails and voicemails, in this
series of legal proceedings between former spouses Sagonowsky and Kekoa. Sagonowsky contends the trial court erred in
disqualifying White from representing her in this action and ordering her to
return communications between Kekoa and his former attorney, Robert Sprague,
claiming that Kekoa’s motion was an abusive tactic meant to prevent the fair
resolution of the malicious prosecution case.
In
particular, Sagonowsky asserts the order must be reversed because (1) she made
a prima facie showing that Kekoa unreasonably delayed in bringing his motion;
(2) the court failed to make the required finding that her attorney’s review of
the communications was likely to affect the outcome of the case; (3) the court
failed to determine whether Kekoa waived the attorney-client privilege as to
these communications; (4) the court erred in finding that the crime-fraud
exception to the attorney-client privilege did not apply; (5) under the unusual
circumstances of this case, the communications should not be considered
confidential attorney-client communications; and (6) the court abused its
discretion in disqualifying her attorney, who had received the communications
from Sagonowsky, after Sprague intentionally provided them to her.
We
agree with Sagonowsky that, in making its ruling, the trial court failed to
exercise its discretion to determine whether White’s review and use of the
communications was genuinely likely to affect the outcome of the case. Such a determination was required before the
court could properly take the extreme action of disqualifying Sagonowsky’s
counsel. We therefore shall reverse and
remand the matter to the trial court so that it can exercise its discretion on
this question.
Numerous
lawsuits have been filed over the years between Sagonowsky and Kekoa, as well
as between each of them and Kekoa’s former attorney, Sprague. The original lawsuit from which all of the
subsequent actions sprang was a marital dissolution action filed by Sagonowsky
against Kekoa in San Francisco Superior Court on November 10, 2003. Sagonowsky filed this malicious prosecution
case in San Mateo County Superior Court on December 15, 2010, based on both
Kekoa’s prior unsuccessful civil action against her and her late mother,
Leocadia, as well as on several claims in the divorce action, in which he made
numerous allegations related to supposed misconduct
by Sagonowsky and her mother in their financial dealings with him.
On or
about January 9, 2012, Kekoa filed a motion to disqualify Sagonowsky’s counsel,
White. The motion was based on White’s
use of six partially redacted emails and a series of voicemails between Kekoa
and Sprague at Kekoa’s October 13, 2011, deposition and his refusal to return
them to Kekoa. White had received these
communications from Sagonowsky, who had previously received them from Sprague,
and his paralegal, Monica Blake.
On
April 30, 2012, the trial court granted Kekoa’s motion and issued an order
disqualifying White and ordering the return of the emails and voicemails.
On
June 13, 2012, Sagonowsky filed a notice
of appeal from the trial court’s disqualification order.
Privileged Communications Would Affect the Outcome of the Case
Sagonowsky
challenges the trial court’s failure to make any finding as to whether her
attorney, White’s, possession, review, and use of the communications in
question was truly likely to affect the outcome of the case.
A. Trial
Court Background
In
granting Kekoa’s motion to disqualify White from further representation of
Sagonowsky in this action, the trial court found, inter alia, that “Mr. White
received attorney-client privileged communications between Mr. Kekoa and Mr.
Sprague that plaintiff Christina Sagonowsky obtained from Mr. Sprague through
his paralegal, Monica Blake. In a
declaration filed on September 16, 2011, in this action, Ms. Sagonowsky admits
that she received copies of confidential attorney-client voicemail and
partially redacted email communications from Mr. Sprague through his paralegal
Monica Blake. [Kekoa’s] counsel Mr.
Martini avers that he first learned of the disclosure of the voicemails at Mr.
Kekoa’s deposition on October 13, 2011.
Mr. Martini objected that the voicemails were privileged communications
and demanded their return by Mr. White.
Mr. White refused. The Court
finds that Mr. White possessed these privileged voicemail communications,
reviewed them excessively and used them in this litigation.
“The
Court excludes from its ruling and the scope of the order that follows the
emails that were produced at the depositions of Mr. Sprague and Monica Blake in
2007. Mr. Kekoa does not dispute that
these documents were subsequently identified, produced and/or attached to court
filings in various proceedings between the parties. Mr. Kekoa has known of the disclosure of
these documents since 2007 and has had the opportunity [to] seek appropriate
protective orders as to these documents since that time. The Court declines to rule whether there has
been an implied or actual waiver of privilege as to any of these
documents. Mr. Kekoa may raise the issue
of the admissibility of these documents before the trial judge or at an
appropriate time.â€
The
court also rejected Sagonowsky’s argument that use of the communications was
permissible under the crime-fraud exception to the attorney-client privilege
found in Evidence Code section 956, ruling that Sagonowsky had made a prima
facie showing that Kekoa had obtained the services of Sprague to aid him in a
malicious prosecution, but not to aid him in committing fraud or any other
crime.
In
addition to its order disqualifying White from representing Sagonowsky in her
malicious prosecution action, the court ordered return of the communications in
question and further ordered Sagonowsky and White to destroy any additional
copies of the documents they possessed and to refrain from discussing their
contents with any future attorney of Sagonowsky in this matter. Finally, the court stated that its order did
not preclude Sagonowsky from obtaining any of the documents through
discovery.
B. Legal
Analysis
“The
trial court’s power ‘[t]o control in furtherance of justice, the conduct of its
ministerial officers’ is the basis upon which it may disqualify an
attorney. [Citations.]†(Gregori
v. Bank of America (1989) 207 Cal.App.3d 291, 299-300 (Gregori), quoting Code Civ. Proc., § 128, subd. (5).) We review the trial court’s ruling on this
issue for an abuse of discretion. (
court must make a ‘reasoned judgment’ and compl[y] with the ‘. . . legal
principles and policies appropriate to the particular matter at issue.’ [Citations.]â€
(Ibid.)
In
(1999) 70 Cal.App.4th 644, 656 (State
Fund), the appellate court discussed the ethical obligations of an attorney
when he or she comes into possession of privileged materials without the
privilege’s holder having waived it:
“When a lawyer who receives materials that obviously appear to be
subject to an attorney-client privilege or otherwise clearly appear to be
confidential and privileged and where it is reasonably apparent that the
materials were provided or made available through inadvertence, the lawyer
receiving such materials should refrain from examining the materials any more
than is essential to ascertain if the materials are privileged, and shall
immediately notify the sender that he or she possesses material that appears to
be privileged.†Subsequently, in
42 Cal.4th 807, 818 (Rico)
confirmed the importance of these obligations, which are rooted in an
attorney’s duty to “ ‘respect the legitimate interests of fellow members of the
bar, the judiciary, and the administration of justice.’ â€
In
policy considerations presented by motions to disqualify counsel: “On the one hand, a court must not hesitate
to disqualify an attorney when it is satisfactorily established that he or she
wrongfully acquired an unfair advantage that undermines the integrity of the
judicial process and will have a continuing effect on the proceedings before
the court. [Citations.] On the other hand, it must be kept in mind
that disqualification usually imposes a substantial hardship on the
disqualified attorney’s innocent client, who must bear the monetary and other
costs of finding a replacement.
“Additionally,
as courts are increasingly aware, motions to disqualify counsel often pose the
very threat to the integrity of the judicial process that they purport to
prevent. [Citation.] Such motions can be misused to harass
opposing counsel [citation], to delay the litigation [citation], or to
intimidate an adversary into accepting settlement on terms that would not
otherwise be acceptable. [Citations.] In
short, it is widely understood by judges that ‘attorneys now commonly use
disqualification motions for purely strategic purposes . . . .’ [Citations.]â€
(Fns. omitted.)
In
determining future prejudice before disqualifying counsel: “Since the purpose of a disqualification
order must be prophylactic, not punitive, the significant question is whether
there exists a genuine likelihood that the status or misconduct of the attorney
in question will affect the outcome of the proceedings before the court. Thus, disqualification is proper where, as a
result of a prior representation or through improper means, there is a
reasonable probability counsel has obtained information the court believes
would likely be used advantageously against an adverse party during the course
of the litigation. Though such information
cannot be unlearned, and the lawyer who obtained it cannot be prevented from
giving it to others, disqualification still serves the useful purpose of
eliminating from the case the attorney who could most effectively exploit the
unfair advantage. [Citation.] Disqualification is inappropriate, however,
simply to punish a dereliction that will likely have no substantial continuing
effect on future judicial proceedings.
[Citation.].†(Accord,
prophylactic measure to prevent future prejudice to the opposing party from
information the attorney should not have possessedâ€]; Oaks Management Corp. v. Superior Court (2007) 145 Cal.App.4th 453,
457, 469 [reversing disqualification order after finding disclosure of
financial information would have no substantial continuing effect on future
proceedings]); Cal Pak Delivery, Inc. v.
United Parcel Service, Inc.
(1997) 52 Cal.App.4th 1, 11 [trial court properly found that attorney’s
unethical conduct was likely to have a continuing effect on litigation]; but
see In re Complex Asbestos Litigation
(1991) 232 Cal.App.3d 572, 591-592 [disagreeing with Gregori’s focus on possible effect of disclosure on outcome of
proceeding].)
In
the present case, we conclude the trial court omitted a crucial step in the
exercise of its discretion in that it failed to determine “whether there exists
a genuine likelihood†that White’s possession of the privileged communications
in question would affect the outcome of the litigation. (Gregori,
supra, 207 Cal.App.3d at p. 309; see
109 Cal.App.4th 1118, 1124 [“ ‘The failure to exercise discretion is an abuse
of discretion’ â€]; compare Clark, at
p. 54 [noting that petitioner did not suggest trial court misunderstood
applicable legal principles guiding exercise of its discretion, but instead, he
“disagree[d] with how the court
exercised its discretionâ€]; Cal Pak
Delivery, Inc. v. United Parcel Service, Inc., supra, 52 Cal.App.4th at p. 13 [trial court did not abuse its
discretion when it found, after a balancing of interests, that probable
continuing effect of attorney’s unethical conduct on litigation warranted
disqualification].)
There
are many aspects of this case that are atypical and do not fit neatly into any
category for purposes of deciding whether the remedy of disqualification is
appropriate. (Cf. In re Complex Asbestos Litigation, supra, 232 Cal.App.3d at p. 587 [“this case is yet another square
peg that does not fit the round holes of attorney disqualification rulesâ€].)
Division affirmed the trial court’s ruling against Kekoa in a legal malpractice
action Kekoa brought against his former attorney, Sprague, agreeing with the
trial court’s conclusion that the relationship between Sprague and Kekoa was
not that of attorney-client, but of employer-employee, with Kekoa (who is also
an attorney) engaging Sprague as an employee to assist him in his dissolution
action.
v. Kekoa (Dec. 8, 2009, A122018) [nonpub. opn.].) In the present matter, Sagonowsky gave the
communications in question to her attorney, White, after receiving them from
Sprague through his paralegal, Monica Blake.
In
addition, the six redacted emails were but a fraction of the many hundreds of
similar—and some perhaps identical—communications
that were previously produced in this or related actions and that were
expressly excluded from the trial court’s disqualification and protective
order. This raises a question regarding
whether White’s possession and use of these particular emails truly gave him an
unfair advantage in the litigation or even whether they can be said to have
“obviously appear[ed] to be subject to an attorney-client privilege or
otherwise clearly appear[ed] to be confidential and privileged†when he
received them from Sagonowsky and used them in the litigation. (State
Fund, supra, 54 Cal.App.4th at p. 656.)
Nor did the court discuss the relevance of the communications,
particularly the voicemails, to the malicious prosecution action. This would of course be a factor to consider
in determining whether the outcome of the case is genuinely likely to be
affected. (Gregori, supra, 207
Cal.App.3d at p. 309.)
Finally,
we observe that the litigation between Sagonowsky and Kekoa has been bitter in
the extreme and has continued for years, without an end in sight. As Sagonowsky notes, Kekoa filed his motion
for disqualification on or about January 9, 2012, shortly after the trial court
had denied several other motions he filed against her and had also granted a
motion she filed. The orders going
against Kekoa included the court’s April 11, 2011 order denying his anti-SLAPP
motion;
the September 21, 2011, order denying his motion to transfer and consolidate
this case with the San Francisco divorce case; and the October 5, 2011, order
denying his motion to dismiss. In
addition, on September 28, 2011, the court had granted Sagonowsky’s motion to
compel Kekoa to appear for his deposition and produce documents, and for
sanctions. Trial on Sagonowsky’s
malicious prosecution claims was also approaching: a trial setting date had been calendared for
June 11, 2012. (See
misused “to harass opposing counsel,†“to delay the litigation,†“or to
intimidate an adversary into accepting settlement on terms that would not
otherwise be acceptableâ€].)
We
believe that all of these factors are relevant to the trial court’s
determination of whether White’s disqualification was in fact necessary to keep
the disclosure of the privileged documents from having a “substantial
continuing effect on future proceedings†or whether other remedies are better
suited to safeguarding Kekoa’s confidences while upholding the integrity of the
judicial process. (See
Cal.App.4th at p. 657 [disqualification may be justified in appropriate case, “
‘assuming other factors compel disqualification’ â€].)
“Rather
than disqualification of counsel, other sanctions can suffice. [Citation.]
Client confidences can be protected from unwarranted public disclosure
by less drastic measures such as:
protective orders, limiting the admission of evidence; in camera
proceedings; the use of sealed records; payment of attorney fees and costs; and
disciplinary sanctions through the State Bar of California in appropriate
circumstances.†(Neal v. Health Net, Inc. (2002) 100 Cal.App.4th 831, 844, citing,
inter alia, Gregori,
308-309.) It is particularly important
in this case, in light of its tortuous history and the ubiquitous nature of the
many communications between Kekoa and Sprague, that the trial court realistically
assess whether other remedies would be sufficient to avoid prejudicing Kekoa
before resorting to the drastic remedy of disqualification.
Accordingly,
the matter must be reversed and remanded to permit the trial court to exercise
its discretion to answer the “significant question,†of whether, in light of
all of the circumstances, Kekoa would be likely to in fact suffer future
prejudice from White’s continued representation of Sagonowsky or whether,
instead, other remedies would suffice. (
109 Cal.App.4th at p. 1124.)
The
order of disqualification is reversed and the matter is remanded to the trial
court with directions to exercise its discretion to determine whether
disqualification of Sagonowsky’s counsel is necessary and appropriate
herein. Each party shall bear its own
costs on appeal.
_________________________
Kline,
P.J.
We concur:
_________________________
Haerle, J.
_________________________
Lambden, J.
P. Sprague, Kekoa’s former attorney, represented Kekoa in the civil action and
the parts of the divorce action from which Sagonowsky’s malicious prosecution
action arose, and is also a defendant in the malicious prosecution action. He has not, however, filed a brief in
response to Sagonowsky’s appeal of the court’s grant of Kekoa’s
disqualification motion.
include here, and in the Discussion, only those facts necessary to a basic understanding
of the case and our holding.
