Opinion
A150378
05-10-2018
JAN ROSEN, Plaintiff and Respondent, v. JOSEPH CREAM, JR. et al., Defendants and Appellants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SCV258755)
We consider whether the trial court properly granted a motion to disqualify an attorney and her law firm from representing Cream's Dismantling, Inc. (the Company), Joseph Cream, Jr. (Joey), and Amanda Cream (Amanda) (collectively, Defendants). Jan Rosen (Rosen) is Joey's sister and Amanda's aunt. In 2011, the Sonoma County District Attorney filed criminal charges against the Company, Joey, Rosen, and their father, alleging violation of environmental laws in relation to the Company's operations. During the criminal proceeding, there was a joint defense agreement between the attorney for Rosen and the attorney for the Company and Joey.
Because some of the parties share a common surname, we refer to them by first name for clarity, intending no disrespect.
In 2016, Rosen sued Defendants alleging contamination of real property, and interference with her attempts to sell the property. Attorney Cannata's law firm filed an answer to Rosen's complaint on behalf of Defendants. Rosen moved to disqualify Attorney Cannata and her law firm. The trial court granted the motion. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
We summarize the facts relevant to the issues on appeal.
A. The Company
The Company is a "family run business" in Santa Rosa, California, started by Joseph Cream, Sr. He passed away in 2013. In early 2011, his daughter, Rosen, became the owner of some of the real property upon which the Company operated, and, by mid-2013, his son, Joey, became the owner of the Company. From 2009 to 2013, Rosen worked for the Company as part of the "management team." According to Joey, she was an officer of the corporation.
Rosen states the Company "operated its business on two adjacent properties located at 3615 and 3621 Copperhill Lane in Santa Rosa," and that her father transferred the property located at 3615 Copperhill Lane to her in 2011. Joey states his father gave "the business property located at 3621 Copperhill Lane" to Rosen. The parties do not explain the discrepancy, but it is not relevant to the issues on appeal.
B. The Criminal Case and the Joint Defense Agreement
In 2011, the Sonoma County District Attorney filed a 23-count criminal complaint against the Company, Joey, Rosen, and their father, alleging violation of environmental laws in relation to the Company's operations from September 2010 to May 2011. During the criminal proceeding, Therese Cannata (Attorney Cannata) represented the Company and Joey; Stephen Turer (Attorney Turer) represented Rosen, and a public defender represented their father.
Attorney Cannata and Attorney Turer entered into a joint defense agreement, and they had the authority to communicate with the other attorney's clients. Attorney Cannata acknowledged "there was a joint defense agreement and there were communications at the time among the attorneys and the parties," but Attorney Cannata denied she gave Rosen "legal advice in connection with or related to the criminal case." Rosen's recollection of events differed. In her declaration in support of the motion to disqualify, Rosen averred: "[A]ttorney Turer [was] in charge of defending against lay witness testimony and [A]ttorney Cannata [was] in charge of defending against expert witness testimony. Pursuant to [the joint defense] agreement . . . , there was a complete sharing of all information, including confidential information. . . . [A]ttorney Cannata contacted me by telephone almost daily during the criminal proceeding, especially during the 29-day preliminary hearing. During these discussions, [A]ttorney Cannata discussed case strategy and gave legal advice to me about my testimony. Attorney Cannata also discussed defense case strategy and Joey's defense strategy, explaining the charges and the District Attorney's burden, and detailed the evidence the District Attorney needed to obtain to convict the defendants. I believed that the information I provided to [A]ttorney Cannata during the criminal proceedings would remain confidential and would not be used to the advantage of Cream's, Joey or Amanda in later proceedings."
The parties do not provide specific information regarding the criminal charges, but the criminal case was eventually dismissed as to all defendants, including Rosen.
C. Disputes Between Rosen and the Company
In her declaration, Attorney Cannata stated that Rosen left the Company in 2013, and her niece, Amanda, began working for the Company, assuming Rosen's former responsibilities. Rosen, represented by an attorney, proposed a lease agreement between herself as the landlord and the Company as the tenant, and Rosen's attorney provided Attorney Cannata with a copy of the proposed lease for her review. Attorney Cannata, on behalf of the Company, communicated with Rosen's attorney regarding the proposed lease, but it was never executed.
Attorney Cannata further declared that Rosen, represented by other attorneys, filed two unlawful detainer actions against the Company in June and August 2015. In both actions, Attorney Cannata represented the Company. After Attorney Cannata filed a motion to quash the first unlawful detainer complaint, Rosen dismissed the action. In September 2015, the Company vacated the property, and Rosen dismissed her second unlawful detainer complaint.
D. Rosen's Complaint
In May 2016, Rosen filed a complaint alleging Defendants engaged in activities that contaminated her property, including "dismantling and pressure washing of derelict vehicles, mishandling of large diesel tanks, spillage from tanks, poor cleaning practices, diesel dumping, and failing to properly store spent vehicle batteries." Rosen alleged that after she "acquired the Property in 2011, she took steps to prevent . . . contamination . . . ." Rosen also alleged Defendants withheld rent and failed to pay property taxes, forcing Rosen to sell the property, and they interfered with her sale "by harassing prospective purchasers." Based on these allegations, Rosen asserted causes of action for contamination of real property, intentional and negligent interference with contract, intentional and negligent interference with prospective economic relations, civil conspiracy, and strict liability for authorizing or participating in ultra-hazardous activities.
E. The Court Disqualifies Attorney Cannata and Her Law Firm
Attorney Cannata's law firm filed an answer to the complaint on behalf of Defendants. Rosen moved to disqualify Attorney Cannata and her law firm, claiming Attorney Cannata previously represented Rosen and obtained confidential information from her.
The trial court held a hearing on the motion and granted it. Defendants appealed, and simultaneously petitioned this court for a writ of supersedeas seeking a stay of the trial court proceedings during the pendency of the appeal. We denied the petition without prejudice because Defendants failed to demonstrate they had exhausted their remedies in the trial court. Defendants subsequently moved for a stay of proceedings in the trial court, which granted a limited 60-day stay. Defendants filed another writ of supersedeas in this court, which we granted, staying all proceedings pending resolution of this appeal.
DISCUSSION
On appeal, Defendants make six arguments. First, they argue the trial court "erroneously held that a prior attorney-client relationship was established between Ms. Rosen and [Attorney] Cannata." Second, they contend the trial court "erroneously relied on the 'substantial relationship' test" to presume the disclosure of confidential information. Third, they argue Rosen failed to meet her burden of proving she actually disclosed confidential information to Attorney Cannata, either in a personal capacity or pursuant to the joint defense agreement. Fourth, they contend the trial court relied on inadmissible evidence to conclude Rosen met her burden of showing a conflict of interest. Fifth, Defendants argue the trial court did not properly take into account the "devastating effects of disqualification." Sixth, they argue the motion to disqualify was untimely and brought in bad faith. For the reasons explained below, we affirm the disqualification order.
I.
Standard of Review and Disqualification Principles
"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 substantial evidence. [Citations.] . . . However, the trial court's discretion is limited by the applicable legal principles." (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1143-1144 (SpeeDee Oil).) " 'In viewing the evidence, we look only to the evidence supporting the prevailing party. [Citation.] . . . Where the trial court has drawn reasonable inferences from the evidence, we have no power to draw different inferences, even though different inferences may also be reasonable.' " (Kennedy v. Eldridge (2011) 201 Cal.App.4th 1197, 1203 (Kennedy).)
A motion to disqualify a party's counsel raises several important interests. (SpeeDee Oil, supra, 20 Cal.4th at p. 1144.) Depending on the circumstances, "a disqualification motion may involve such considerations as a client's right to chosen counsel, an attorney's interest in representing a client, the financial burden on a client to replace disqualified counsel, and the possibility that tactical abuse underlies the disqualification motion." (Id. at p. 1145, fn. omitted.) However, "determining whether a conflict of interest requires disqualification involves more than just the interests of the parties." (Ibid.) "The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar." (Ibid.) The importance of the concerns underlying a disqualification order mandates "careful review of the trial court's exercise of discretion." (Id. at p. 1144.)
In successive representation cases, courts apply the "substantial relationship" test to determine whether an attorney should be disqualified from the successive representation of clients with potentially adverse interest. (Flatt v. Superior Court (1994) 9 Cal.4th 275, 283.) "Where the requisite substantial relationship between the subjects of the prior and the current representations can be demonstrated, access to confidential information by the attorney in the course of the first representation (relevant, by definition, to the second representation) is presumed and disqualification of the attorney's representation of the second client is mandatory . . . ." (Ibid.)
Other disqualification cases present a question as to whether there was a prior attorney-client relationship, such as when the attorney and purported client engaged in preliminary consultations. (SpeeDee Oil, supra, 20 Cal.4th at pp. 1147-1148.) "The primary concern is whether and to what extent the attorney acquired confidential information. [Citation.] That question is not necessarily answered by the amount of time involved. . . . An attorney represents a client—for purposes of a conflict of interest analysis—when the attorney knowingly obtains material confidential information from the client and renders legal advice or services as a result." (Id. at p. 1148.)
A disqualifying conflict may also occur when an attorney owes a duty of confidentiality to the moving party, "regardless of whether a lawyer-client relationship existed." (DCH Health Services Corp. v. Waite (2002) 95 Cal.App.4th 829, 832.) In these cases, "some sort of confidential or fiduciary relationship must have existed before a party is entitled to prevail on a motion to disqualify an attorney predicated on the actual or potential disclosure of confidential information." (Dino v. Pelayo (2006) 145 Cal.App.4th 347, 353.) "[C]onflicts can arise in California (and disqualification motions can be granted) based on the conjunction of (1) implicit obligations a lawyer takes on to maintain the confidences of a nonclient received in the course of representing a client, and (2) the unfair advantage that might accrue were such a lawyer to pursue substantially related litigation against the nonclient." (Acacia Patent Acquisition, LLC v. Superior Court (2015) 234 Cal.App.4th 1091, 1099 (Acacia Patent Acquisition).)
II.
The Court Did Not Abuse Its Discretion in Disqualifying Attorney Cannata
Here, we assume, without deciding, that there was no attorney-client relationship between Attorney Cannata and Rosen. Nonetheless, based on the standard of review, and Attorney Cannata's duty of confidentiality to a non-client, we affirm the trial court's order granting the motion to disqualify. We begin with a review of the trial court's stated reasons for granting the motion.
A. The Hearing on the Motion
The trial court did not provide a statement of decision. At the start of the hearing on the motion, the trial court stated "[f]or all intents and purposes, Attorney Cannata previously represented Plaintiff Ms. Rosen in a substantially related matter and obtained confidential information from Ms. Rosen, directly relevant to the instant action, which could be used to Ms. Rosen's disadvantage. [¶] Given the extensive history of direct and at times lengthy communication between a very experienced attorney and a then mutual client, it is impossible to find that there is no conflict." After hearing argument from the parties, the court found "that the plaintiff has met her burden on confidential information," and granted the disqualification motion. At oral argument, the parties agreed the trial court found there was a prior attorney-client relationship between Attorney Cannata and Rosen, it applied the substantial relationship test, and concluded Rosen disclosed confidential information to Attorney Cannata.
B. By Entering into the Joint Defense Agreement, Attorney Cannata Assumed a Duty of Confidentiality to Rosen
Here, during the prior criminal proceeding, Rosen was formally represented by Attorney Turer, not Attorney Cannata. Rosen argues she had an "implied-in-fact attorney-client relationship" with Attorney Cannata. Even if we assume there was no attorney-client relationship, Attorney Cannata assumed a duty of confidentiality to Rosen based on their communications pursuant to the joint defense agreement. As a result of this duty, Attorney Cannata's disqualification from this case was reasonable.
In Meza v. H. Muehlstein & Co., Inc. (2009) 176 Cal.App.4th 969 (Meza), a number of defendants moved to disqualify the plaintiff's law firm because one of its attorneys had previously represented one of the defendants in the same action, and he participated in meetings with other defendants' attorneys where they disclosed work product relating to their common interests. (Id. at p. 973.) The court of appeal affirmed the trial court's order disqualifying the law firm from representing the plaintiff because there was evidence the attorney who went to work for the plaintiff's law firm "was privy to some confidential attorney work product that was reasonably shared among defense counsel in furtherance of common interests." (Id. at pp. 973, 983.)
A similar analysis applies here. Like the defendants who moved for disqualification in Meza, supra, 176 Cal.App.4th 969, Rosen moved for disqualification based, in part, on communications made pursuant to a joint defense agreement. In her declaration in support of disqualification, Rosen stated that "[p]ursuant to [a joint defense] agreement between attorneys Cannata and Turer, there was a complete sharing of all information, including confidential information. . . . [A]ttorney Cannata contacted me by telephone almost daily during the criminal proceeding, especially during the 29-day preliminary hearing. During these discussions, [A]ttorney Cannata discussed case strategy and gave legal advice to me about my testimony. Attorney Cannata also discussed defense case strategy and Joey's defense strategy, explained the charges and the District Attorney's burden, and detailed the evidence the District Attorney needed to obtain to convict the defendants."
Attorney Cannata does not deny there was a joint defense agreement, or that she was in almost daily contact with Rosen, especially during a 29-day preliminary hearing, but she does deny she provided legal advice to Rosen. According to Attorney Cannata, the communications pursuant to the joint defense agreement "all abid[ed] strictly to the rules necessary to preserve and protect the privilege."
Defendants concede that we "may infer from a joint defense agreement a limited duty to the non-client[] to maintain confidences." This duty of confidentiality supports the trial court's decision to disqualify Attorney Cannata. For example, if Attorney Cannata were to depose or cross-examine Rosen in the present case, then there is a significant risk Attorney Cannata would be relying upon information she learned pursuant to the joint defense agreement. (Kennedy, supra, 201 Cal.App.4th at pp. 1207-1208 [affirming motion to disqualify where there was "a significant danger" that, as a result of prior litigation, attorney "acquired relevant confidential information about" a non-client "to which it otherwise would not have had access"].)
C. Given Attorney Cannata's Duty of Confidentiality to Rosen, the Court Had Discretion to Disqualify Attorney Cannata
In the absence of an attorney-client relationship, the party moving for disqualification based on an attorney's receipt of confidential information must establish the information is relevant to the current matter. (Morrison Knudsen Corp. v. Hancock, Rothert & Bunshoft (1999) 69 Cal.App.4th 223, 231 (Morrison Knudsen).) In making this determination, some courts rely on the substantial relationship test from successive representation cases. (Id. at p. 234; see also Acacia Patent Acquisition, supra, 234 Cal.App.4th at p. 1102 ["If an attorney is deemed to have a duty of confidentiality to a nonclient arising out of . . . a past representation, courts apply the substantial relationship test from successive representation doctrine to determine whether to disqualify counsel in a case against the nonclient."].) In Morrison Knudsen, the court of appeal applied the substantial relationship test and concluded the trial court did not abuse its discretion in disqualifying a law firm from representing the plaintiff, even though the firm had not previously represented the defendant. (Morrison Knudsen, at pp. 234-237.)
In Kennedy, supra, 201 Cal.App.4th at pages 1205-1208, another case where the attorney had not previously represented the party moving for disqualification, the court applied the substantial relationship test, but also considered whether " ' "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." ' " (Id. at p. 1205.) The court of appeal upheld the trial court's disqualification order, finding the attorney's firm "obtained, or must be presumed to have obtained, confidential information in the prior case that could be used to gain an unfair advantage over [the non-client] in the present litigation." (Id. at p. 1208.)
As we will explain, applying either of these tests, the trial court acted well within its discretion when it disqualified Attorney Cannata.
Under the substantial relationship test, courts "should 'focus on the similarities between the two factual situations, the legal questions posed, and the nature and extent of the attorney's involvement with the cases.' " (H.F. Ahmanson & Co. v. Salomon Brothers, Inc. (1991) 229 Cal.App.3d 1445, 1455.) " ' "When a substantial relationship has been shown to exist between the former representation and the current representation, and when it appears by virtue of the nature of the former representation or the relationship of the attorney to his [or her] former client confidential information material to the current dispute would normally have been imparted to the attorney . . . , the attorney's knowledge of confidential information is presumed." ' " (Adams v. Aerojet-General Corp. (2001) 86 Cal.App.4th 1324, 1331.)
Applying this test, this case is substantially related to the prior criminal proceeding. First, the facts and legal questions in the two cases are the same or similar. In this case, Rosen alleges Defendants engaged in activities that contaminated her property, including "dismantling and pressure washing of derelict vehicles, mishandling of large diesel tanks, spillage from tanks, poor cleaning practices, diesel dumping, and failing to properly store spent vehicle batteries." In the prior criminal proceeding, the Sonoma County District Attorney alleged "violation of environmental laws in relation to Cream's operations on the property . . . from September of 2010 to May 9, 2011," and filed a 23-count criminal complaint against the Company, Joey, Rosen, and their father. Second, Attorney Cannata's involvement in defending against the criminal charges was significant. Indeed, Attorney Cannata and Rosen were in "almost daily" contact, especially during a 29-day preliminary hearing. Thus, the cases are substantially related, and the trial court did not abuse its discretion in disqualifying Attorney Cannata.
Alternatively, applying the test articulated in Kennedy, supra, 201 Cal.App.4th at page 1205—whether it is reasonably probable the attorney obtained confidential information that could be used advantageously in the present litigation—we conclude Attorney Cannata's disqualification was reasonable. Attorney Cannata and Rosen communicated almost daily, especially during a 29-day preliminary hearing in the criminal case, so it is difficult to conceive how Rosen could not have shared confidential information with Attorney Cannata that could be used advantageously in the current dispute. (William H. Raley Co. v. Superior Court (1983) 149 Cal.App.3d 1042, 1047-1048 [attorney's firm disqualified from representing plaintiff based on attorney's access to confidential information about non-client that "may be pertinent" to plaintiff's lawsuit].)
According to Rosen, Attorney Cannata "discussed case strategy and gave legal advice to me about my testimony. Attorney Cannata also discussed defense case strategy and Joey's defense strategy, explained the charges and the District Attorney's burden, and detailed the evidence the District Attorney needed to obtain to convict the defendants." These prior conversations were apparently productive because the criminal charges were dismissed. Rosen now alleges Joey and the Company contaminated her property, so it is reasonable to conclude Attorney Cannata may have acquired information "that could be used to gain an unfair advantage over" Rosen in the present litigation. (Kennedy, supra, 201 Cal.App.4th at p. 1208.) Under either the substantial relationship test, or the Kennedy test, the trial court did not abuse its discretion in disqualifying Attorney Cannata.
D. Defendants' Authorities Do Not Establish the Trial Court Should Have Denied the Disqualification Motion
In arguing against the trial court's disqualification order, Defendants contend Rosen has not identified "any confidential information that she disclosed to [Attorney] Cannata in her individual capacity, as opposed to merely fulfilling her disclosure obligations as an officer of the corporation." At oral argument, Defendants focused on Rosen's role as an officer of the Company, and Attorney Cannata's role as corporate counsel. In Meehan v. Hopps (1956) 144 Cal.App.2d 284 (Meehan), a case in which the court affirmed the denial of a disqualification motion, the court noted an attorney for a corporation represents its officers "in their representative capacity," not personally, and, if the attorney represents the corporation in an action brought by it against an officer, then the attorney may use information received from the officer in connection with company matters. (Id. at p. 290.)
Defendants' reliance on Meehan is unavailing, and we are not persuaded Attorney Cannata's status as corporate counsel establishes the trial court abused its discretion by granting the motion for her disqualification. Here, unlike in Meehan, there was a joint defense agreement and evidence of extensive communications pursuant to that agreement. Moreover, Rosen was named in the criminal proceeding as an individual defendant, and, at the time, she was the owner of at least some of the property upon which the Company operated. In her declaration, Rosen averred Attorney Cannata, in the criminal proceeding, "discussed case strategy and gave legal advice to me about my testimony." Rosen also declared she "sought the advice of [A]ttorney Cannata on how to stop Joey from illegally pressure washing vehicles on 3615 Copperhill Lane," a matter of concern to Rosen in her individual capacity as owner of the property. It is reasonable to infer that some of the conversations that occurred pursuant to the joint defense agreement pertained to Rosen's defense of the charges against her, not the Company. (Kennedy, supra, 201 Cal.App.4th at p. 1203 [" 'we look only to the evidence supporting the prevailing party. . . . Where the trial court has drawn reasonable inferences from the evidence, we have no power to draw different inferences . . . .' "].)
Next, Defendants contend Rosen was required "to present evidence of actual disclosure of confidential information," and she failed to meet her burden of doing so. In making this argument, Defendants rely primarily on a federal district court case, where the court stated that "[w]hile a joint defense agreement does impose a duty of confidentiality, that duty is limited in that the showing required to establish a conflict of interest arising from prior participation in a joint defense agreement is significantly higher than that required to make out a conflict based on former representation of a client." (U.S. v. Stepney (N.D.Cal. 2003) 246 F.Supp.2d 1069, 1076.) According to the federal district court, the party moving for disqualification has the burden of showing "the attorney actually obtained confidences." (Ibid.)
We disagree. As explained above, California cases adopt a different approach when an attorney has assumed a duty of confidentiality to a non-client, and in any event we are not bound by federal district court decisions, especially on questions of state law. (Qualified Patients Assn. v. City of Anaheim (2010) 187 Cal.App.4th 734, 764.) Under California law, when an attorney has assumed a duty of confidentiality to a non-client, there is a conflict of interest if the attorney seeks to represent an adverse party in a substantially related matter or if it is reasonably probable confidential information was disclosed to the attorney that could be used against the non-client in the current case. (Acacia Patent Acquisition, supra, 234 Cal.App.4th at p. 1102; Kennedy, supra, 201 Cal.App.4th at p. 1205; Morrison Knudsen, supra, 69 Cal.App.4th at pp. 234-237.)
Here, there was evidence of extensive communications pursuant to a joint defense agreement, including evidence of "almost daily" communications during a 29-day preliminary hearing. While a party moving for disqualification can prevail by showing the attorney "actually possesses confidential information," the party is not required to do so. (Costello v. Buckley (2016) 245 Cal.App.4th 748, 754; Elliott v. McFarland Unified School Dist. (1985) 165 Cal.App.3d 562, 572.) In joint representation cases, what is required is that there be "some showing of the nature of the communications or a statement of how they relate to the current representation without disclosing what was actually communicated." (Elliot, at p. 572; see also Oaks Management Corporation v. Superior Court (2006) 145 Cal.App.4th 453, 459, fn. 2 ["Generally, a party moving for disqualification is not required to disclose the actual information contended to be confidential, but must advise the court of the nature of the material and its relationship to the litigation."].) Similarly here, given the evidence of extensive communications during the prior criminal proceeding pursuant to a joint defense agreement, Rosen met her burden of showing the nature of the communications were such that Attorney Cannata could use the disclosed information to Rosen's disadvantage in the present case.
Defendants also contend the trial court erred by relying on inadmissible evidence presented for the first time in support of Rosen's reply brief. This evidence consisted of Rosen's telephone records, and a declaration from her former attorney in the criminal proceeding. We do not address this argument because we have not relied upon this evidence in deciding this appeal.
Next, based on a number of other cases discussing disqualification principles in joint representation cases, Defendants contend "there could be no reasonable expectation on Ms. Rosen's part that her communications with Ms. Cannata would not be shared with defendants." Defendants also suggest it was " 'futile in terms of furthering the purpose of the rule' " for the trial court to disqualify Attorney Cannata because Rosen had to have appreciated that her communications would be shared with Joey or the Company.
We disagree. Defendants rely primarily on Cornish v. Superior Court (1989) 209 Cal.App.3d 467, where the court of appeal found no basis for disqualification of an attorney because the petitioner had "not established that any of the communications were made in confidence with a reasonable expectation the communication would not be shared with [the attorney's] other client." (Id. at p. 475.) But in Cornish, the attorney had expressly advised the party moving for disqualification, in writing, that if that party and the attorney's other client became adversaries in future litigation, then the attorney could continue representing its other client, and no conflict of interest would be deemed to exist. (Id. at p. 472.) Here, unlike in Cornish, there is no indication the parties put their joint defense agreement in writing or that Rosen signed a waiver of a conflict. Under this circumstance, we conclude it was reasonable for Rosen to expect that Attorney Cannata would not use any confidential information Rosen disclosed to Attorney Cannata against her in later cases.
Our concern is not that Rosen must have known Attorney Cannata would share the information Rosen disclosed to her during the prior criminal proceeding with her clients, Joey and the Company. Instead, our concern is that Attorney Cannata risks breaching her duty of confidentiality to Rosen because, for example, if Attorney Cannata is involved in deposing or cross-examining Rosen, Attorney Cannata risks relying on information disclosed to her in confidence. In U.S. v. Henke (9th Cir. 2000) 222 F.3d 633, the Ninth Circuit Court of Appeals determined two defense attorneys should have been permitted to withdraw when they were unable to cross-examine a government witness regarding confidential information disclosed during joint defense meetings. (Id. at p. 637.) A similar concern supports the trial court's decision to disqualify Attorney Cannata.
With regard to a former client's confidences, an attorney is barred from both "disclosing or using the former client's confidential information against the former client." (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 823.) We see no reason why a similar rule should not apply when an attorney assumes a duty of confidentiality to a non-client, particularly where there is no written joint defense agreement that provides otherwise. Even if all the information Rosen shared with Attorney Cannata was subsequently disclosed by Attorney Cannata to her clients, Attorney Cannata's representation of Defendants risks putting Attorney Cannata in a position where she will be required to breach her duty of confidentiality to Rosen. An attorney should not "have to 'engage in a subtle evaluation of the extent to which [s]he acquired relevant information in the first representation and of the actual use of that knowledge and information in the subsequent representation.' " (Global Van Lines, Inc. v. Superior Court (1983) 144 Cal.App.3d 483, 489.)
E. No Evidence of Unreasonable Delay, Tactical Abuse, or Undue Hardship
Defendants argue they would be "prejudiced if forced to retain new counsel, due to the expense and delays it would take for new counsel to become familiar with the case and the history of the business," and they also contend Rosen's motion was untimely and brought in bad faith.
A disqualification motion requires a careful balancing of competing interests, including "the financial burden on a client to replace disqualified counsel, and the possibility that tactical abuse underlies the disqualification motion." (SpeeDee Oil, supra, 20 Cal.4th at p. 1145.) In River West, Inc. v. Nickel (1987) 188 Cal.App.3d 1297, the court of appeal reversed a disqualification order where the motion to disqualify was filed 47 months after the moving party's answer to the plaintiffs' complaint, and where, in the meantime, the plaintiffs' attorneys had engaged in over 3,000 hours of litigation effort. (Id. at p. 1300.) Similarly, in In re Marriage of Zimmerman (1993) 16 Cal.App.4th 556, the court of appeal affirmed the denial of a disqualification motion brought at a "late stage" of a "protracted case." (Id. at p. 565.)
Here, there is no evidence of tactical abuse or unreasonable delay. Rosen's complaint was filed in May 2016, Defendants' answer was filed in June 2016, and, only two months later, in August 2016, counsel for Rosen raised the issue of Attorney Cannata's conflict of interest, and sent a follow-up letter a few weeks later. In September 2016, the parties agreed to conduct mediation prior to discovery and to postpone discovery responses and depositions until 30 days after completion of mediation. Rosen filed her motion to disqualify in November 2016, just over two weeks after Attorney Cannata cancelled the scheduled mediation. This delay, if any, was not unreasonable.
Defendants point out that Rosen began acting adversely to the Company in 2013, including by attempting to enter into a lease with the Company, and by filing two unlawful detainer actions against the Company in 2015. Defendants complain that Rosen did not seek to disqualify Attorney Cannata or her law firm in those cases. But those matters did not concern allegations Joey and the Company contaminated Rosen's property, an issue substantially related to the allegations in the prior criminal proceeding. Thus, it was not unreasonable or improper for Rosen to first raise the question of a conflict of interest after Defendants filed an answer to Rosen's complaint represented by Attorney Cannata's law firm.
While the disqualification of Attorney Cannata will likely impose a financial burden on Defendants, this case is not so complex, and Attorney Cannata's professional expertise is not so specialized, as to impose an undue hardship. In any event, our "paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar. The important right to counsel of one's choice must yield to ethical considerations that affect the fundamental principles of our judicial process." (SpeeDee Oil, supra, 20 Cal.4th at p. 1145.) Pursuant to a joint defense agreement in the prior criminal proceeding, Attorney Cannata assumed a duty of confidentiality to Rosen. There was evidence of numerous communications between Attorney Cannata and Rosen regarding matters substantially related to Rosen's present lawsuit. Based on the risk that Attorney Cannata could breach her duty of confidentiality if she represents Defendants in this action, the trial court did not abuse its discretion in disqualifying her.
Defendants do not argue the trial court erred by disqualifying both Attorney Cannata and the law firm of Cannata, O'Toole, Fickes & Almazon LLP. Accordingly, we do not address the trial court's decision to disqualify the entire firm. --------
DISPOSITION
The order granting the motion for disqualification is affirmed. The stay imposed shall be lifted upon issuance of the remittitur. Rosen is entitled to costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
/s/_________
Jones, P. J. We concur: /s/_________
Simons, J. /s/_________
Bruiniers, J.