Leon v. Pearson Realty





















Filed 4/17/13
Leon v. Pearson Realty CA5

















NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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

FIFTH APPELLATE DISTRICT


>

MARIO LEON, et al., Plaintiffs and Appellants, v. PEARSON REALTY, INC., et al., Defendants and Respondents.

F064513 (Super. Ct. No. 11CECG00809) >OPINION

THE COURThref="#_ftn1"
name="_ftnref1" title="">^*

APPEAL from
an order of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Fresno
County. M. Bruce Smith, Judge.

Miller
& Ayala, Nathan S. Miller for Plaintiffs and Appellants.

McCormick,
Barstow, Sheppard, Wayte & Carruth, David R. McNamara and Scott M. Reddie,
for Defendants and Respondents.

-ooOoo-

Plaintiffs
and appellants Mario Leon, Cesar Culqui, MSC Restaurants, Inc., dba Rumba,
Robin Kraemer, David Fansler, Yosemite Ranch Investors, LLC, Michelle Maxwell
and William Maxwell (collectively appellants) appeal from an order denying their
motion to disqualify opposing
counsel. Appellants contend the trial
court erred by not recognizing that disqualification was required because
opposing counsel improperly communicated with plaintiff Michelle Maxwell
(Maxwell) without her attorney’s consent, and in doing so, threatened and
intimidated her. We conclude that
appellants lacked standing to bring a disqualification motion and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The
underlying lawsuit in this case arises from leases appellants entered into for
a shopping center. Appellants sued
defendants and respondents Pearson Realty, Mike Mele and John Lee (collective
respondents) for alleged misrepresentations as to the shopping center including
the presence of a specialty supermarket within the center that eventually
became a Dollar Store. Appellants are
represented by Nathan Miller, while respondents are represented by David R.
McNamara (McNamara) and his law firm, McCormick, Barstow, Sheppard, Wayte &
Carruth, LLP (the law firm).

In January
2012, appellants filed a motion to disqualify McNamara and the law firm from
representing respondents. Appellants
asserted disqualification was required because McNamara improperly communicated
with an adverse party, Maxwell, knowing she was represented by counsel, in
violation of Rule 2-100 of the Rules of Professional Conduct, and also violated
Rule 5-310 of the Rules of Professional Conduct by threatening and intimidating
Maxwell.

Maxwell asserted in her accompanying
declaration that while attending a football game in San Francisco on September
3, 2011, McNamara, who was obviously intoxicated, walked up to her at a
tailgate party, put his arm around her and said “I hope we can still be friends
after you lose your case.” Maxwell, who
did not “really know who he was,” asked what he was talking about. McNamara responded that he was representing
Pearson Realty and he “was going to come down really hard” on her when he
deposed her. McNamara also said he hoped
she was not expecting to win with her retained counsel, Miller, because Miller
had already lost a case to him; he also hoped she was not paying Miller a lot
of money because he was not worth it.
McNamara hoped that after the deposition and case were done, they could
still be friends and laugh about it over a beer because she was going to
lose. McNamara also said he was going to
be very hard on the other plaintiffs and there was no way they would win
because it was a slam dunk case; he could not believe “he is wasting his time
and money with this case.” Maxwell
claimed she was “very shaken and intimidated” by McNamara’s comments.

In Miller’s accompanying
declaration, he stated that on September 15, 2011, after learning of McNamara’s
comments, he e-mailed McNamara and asked him to voluntarily withdraw from the
case. McNamara refused to do so. Miller
further stated that he believed McNamara’s continued presence in the action was
unfair to his client, and he would be forced to file motions for protective
orders whenever McNamara or someone else from the law firm deposes his client
or examines her at trial. He also
believed the conflict would make it nearly impossible for his client to receive
a fair trial, as there was no way to shield her from respondents’ counsel and
she should not be forced to be subjected to “that type of environment.”

In
opposition, respondents admitted that McNamara had a brief conversation with
Maxwell at the football game. McNamara
stated in his declaration that he had met Maxwell before, in July 2011, while
on vacation with mutual friends. He
claimed that when he saw Maxwell at the football game, he went up to her and
told her he was representing Pearson Realty, and they then “joked and laughed
about the situation,” including taking her deposition. He admitted telling Maxwell that he had tried
a similar case against Miller, he was confident this case would end in the same
way, and he hoped Miller took the case on a contingency. McNamara asserted his comments were meant
only in jest, and it appeared to him and his wife that Maxwell took the
comments in a joking manner. He did not
intend to try to intimidate, offend or embarrass Maxwell. McNamara further stated that at no time
during any conversation he had with Maxwell did they discuss any confidential
information about the case, and Maxwell did not share any information about the
case.

Based on
McNamara’s declaration, respondents argued that McNamara’s communication with
Maxwell would not have a substantial continuing effect on the litigation and
would not prejudice appellants’ case, as she did not reveal any confidential
information.

In reply,
appellants submitted Maxwell’s supplemental declaration, in which she stated
that although she knew who McNamara was when he approached her at the football
game, she did not have any idea what type of attorney he was or the types of
cases he handled. She was “surprised and
offended” that McNamara would claim he made the statements in jest and allude
to the idea that she took him the wrong way.
She asserted that McNamara was obviously intoxicated, told her he was
going to tear her apart and probably make her cry, and they were going to
lose. She took his comments as threats
that were “extremely intimidating” to her.

The trial
court issued a tentative ruling, which became the ruling of the court after
appellants withdrew their request for oral argument. In its ruling, the trial court found that
while McNamara “may have exercised poor judgment” in his conversation with
Maxwell, the “transgression” did not require disqualification. The trial court explained that a court may
disqualify an attorney based on a violation of Rule 2-100(A) of the Rules of
Professional Conduct only if the violation would have a continuing effect on
the proceedings. The trial court found
that there was no evidence or contention McNamara improperly obtained
information about the case through the conversation and it did not appear that
the communication would have a continuing effect on the proceedings; moreover,
McNamara’s conduct was not so severe that protective orders would be warranted
to shield Maxwell from him.

>DISCUSSION

This appeal
presents the issue of whether a party who has no attorney-client, fiduciary or
other confidential relationship with an attorney can nevertheless prevail on a
motion to disqualify that attorney. For
the reasons set forth below, the answer is “No.”

“A trial court’s authority to disqualify an attorney derives from the
power inherent in every court, ‘[t]o control in furtherance of justice, the
conduct of its ministerial officers, and of all other persons in any manner
connected with a judicial proceeding before it, in every matter pertaining
thereto.’” (In re Complex Asbestos
Litigation (1991) 232 Cal.App.3d 572, 585; Code Civ. Proc., § 128, subd.
(a)(5).) An order denying a motion to
disqualify opposing counsel is appealable “either as a denial of injunctive
relief or as a collateral matter unrelated to the merits of the underlying
litigation.” (Gregori v. Bank of
America (1989) 207 Cal.App.3d 291, 300; Meehan v. Hopps (1955) 45
Cal.2d 213, 216-217.) “Generally, a
trial court’s decision on a disqualification motion is reviewed for abuse of
discretion.” (People ex rel. Dept. of
Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135,
1143.) But the outcome of this appeal
depends on whether appellants had standing to bring the motion to
disqualify. Because standing is a
question of law, we exercise de novo review.
(See IBM Personal Pension Plan v. City and County of San Francisco
(2005) 131 Cal.App.4th 1291, 1299.)

“Standing generally requires that the plaintiff be able to allege
injury, that is, an invasion of a legally protected interest.” (Great
Lakes Construction, Inc. v. Burman (2010) 186 Cal.App.4th 1347, 1356 (>Great Lakes).) “A ‘standing’ requirement is implicit in
disqualification motions. Generally,
before the disqualification of an attorney is proper, the complaining party
must have or must have had an attorney-client relationship with that attorney.”
(Ibid.) In the absence of an attorney-client
relationship, “the moving party must have an expectation of
confidentiality.” (Ibid.)
When the moving party has such an expectation, standing arises from a
breach of the duty of confidentiality owed to the moving party. (Ibid.) Thus, in Great Lakes, the appellate
court held that a party to whom opposing counsel owed no duty of loyalty
lacked standing to bring a motion to disqualify counsel for simultaneously
representing clients with conflicting interests. (Id.
at pp. 1358-1359; see also Dino v. Pelayo (2006) 145 Cal.App.4th 347,
357 [moving party with “no recognizable confidential relationship” with
opposing counsel lacked standing to bring disqualification motion based on
alleged breach of duty of confidentiality]; DCH Health Services Corp. v.
Waite (2002) 95 Cal.App.4th 829, 832 [“only a party with an expectation of
confidentiality can disqualify a lawyer,” italics and initial capitalization
omitted].) Lack of standing may be
raised at any time in the proceeding, including for the first time on
appeal. (Blumhorst v. Jewish Family Services of Los Angeles (2005) 126
Cal.App.4th 993, 1000.)

Here, Maxwell had no relevant relationship with McNamara; the two never
had an attorney-client or confidential relationship, and appellants did not
show that Maxwell had any expectation of confidentiality. Moreover, there is no evidence that any
confidential information changed hands, that McNamara had a substantive
discussion about this case with Maxwell, or that he acquired any confidential
information during the conversation that could be used to respondents’
advantage.

Appellants nevertheless assert they were injured when McNamara
communicated with Maxwell in a threatening and intimidating manner about the
subject of the litigation, knowing she was a represented party, in violation of
rules 2-100 and 5-310 of the Rules of Professional Conduct.href="#_ftn2" name="_ftnref2" title="">^[1]
Citing Kennedy v. Eldridge
(2011) 201 Cal.App.4th 1197, 1204-1205 (Kennedy),
they contend they have standing because McNamara’s breach of professional rules
was “manifest and glaring” and “has infected the litigation.”

In Kennedy, the appellate
court held that a non-client with no prior attorney-client relationship had
standing to move to disqualify an opposing attorney because the opposing
attorney likely acquired confidential facts that could be used to his
advantage. (Kennedy, supra, 201
Cal.App.4th at pp. 1205, 1207-1208.) In
so holding, the court explained that one does not necessarily need to be a
present or former client of an attorney to bring a disqualification motion;
instead, a non-client might meet the standing requirements “‘based upon a third
party conflict of interest or other ethical violation[,]’” where “‘the ethical
breach is “‘manifest and glaring’” and so “infects the litigation in which
disqualification is sought that it impacts the moving party’s interest in a
just and lawful determination of [his or] her claim”’.” (Id. at
p. 1204, citing Great Lakes, >supra, 186 Cal.App.4th at p. 1357.) Noting that the court has “‘an independent
interest in ensuring trials are conducted within ethical standards of the
profession and that legal proceedings appear fair to all who observe them[,]’”
the appellate court concluded that “where an attorney’s continued representation
threatens an opposing litigant with cognizable injury or would undermine the
integrity of the judicial process, the trial court may grant a motion for
disqualification, regardless of whether a motion is brought by a present or
former client of recused counsel.” (>Kennedy, supra, 201 Cal.App.4th at p. 1205, italics omitted.)

Appellants’ reliance on Kennedy
is misplaced, as here there is no evidence that McNamara obtained confidential
information during the conversation; neither is there evidence that his continued
representation of respondents will threaten Maxwell, or any of the other
appellants, with cognizable injury or undermine the integrity of the judicial
process. As respondents point out,
appellants have not cited a single case where a court has disqualified counsel
based on a conversation between that counsel and an opposing represented party
where there was no prior attorney-client relationship and no exchange of
confidential information or information that was relevant to the merits of the
case. Absent an exchange of confidential
information, there is no legal basis to disqualify McNamara and the law
firm. (See, e.g., Cooke v. Superior Court (1978) 83 Cal.App.3d 582, 591-592
[disqualification is to protect a relationship of confidence and entrustment;
appellate court knew of no case “where disqualification was imposed purely as a
punitive or disciplinary measure, and where there was no prior representation
or confidential professional relationship between the complaining party and the
attorney or law firm sought to be disqualified”].)

In sum, appellants have failed to
show they have suffered a legally cognizable injury for which they may
disqualify McNamara and the law firm, and therefore they do not have standing
to bring the motion.

>DISPOSITION

The order denying the motion to
disqualify is affirmed. Respondents
shall recover their costs on appeal.