Chih Teh Shen v. Miller
212 Cal. App. 4th 48
| Cal. Ct. App. | 2012Background
- Miller appeals an order denying disqualification of Walton (Shen's counsel) in four related actions involving Amon Development Group, Inc. and Shen and Miller as 50/50 shareholders.
- Amon is a real estate development corporation owned collectively by Miller and Shen; they are co-presidents and directors.
- Shen filed individual claims against Miller; Miller sought court supervision of Amon’s winding up and Shen filed related actions including a derivative suit on behalf of Amon.
- Walton was substituted as Shen's counsel in the individual action and winding up, and Shen filed a derivative action naming Walton as Shen’s counsel.
- Miller argued Walton represents Amon in the derivative action, which would create conflicting representations in the related cases.
- The trial court denied disqualification, holding there was no attorney-client relationship between Walton and Amon.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Walton have an attorney-client relationship with Amon? | Miller asserts Walton represents Amon in the derivative action. | Shen argues Walton does not represent Amon; no client relationship exists. | No attorney-client relationship found; disqualification affirmed. |
| Does Shen’s derivative action create representation of Amon by Walton in related cases? | Derivative action creates corporate representation by Walton for Amon. | No basis Walton represents Amon; derivative filing does not establish client relationship. | Not persuasive; derivative action does not establish Walton's representation of Amon. |
| Is Walton subject to disqualification due to a duty of fidelity/confidentiality to Amon? | Walton owed loyalty/confidentiality to Amon as a potential nonclient in related matters. | No such duty arises without an attorney-client relationship. | No duty of fidelity/confidentiality to Amon established; not grounds for disqualification. |
Key Cases Cited
- Flatt v. Superior Court, 9 Cal.4th 275 (1994) (distinct tests for conflicting interests; loyalty in simultaneous representations)
- SpeeDee Oil Change Systems, Inc. v. Superior Court, 20 Cal.4th 1135 (1999) (attorney-client relationship existence governed by law; possible important interests)
- Koo v. Rubio’s Restaurants, Inc., 109 Cal.App.4th 719 (2003) (burden on disqualification movant to prove attorney-client relationship)
- Jacuzzi v. Jacuzzi Bros., Inc., 218 Cal.App.2d 24 (1963) (guardian ad litem context; conflicts and prior representation considerations)
- Dayco Corp. Derivative Securities Litigation, 102 F.R.D. 624 (S.D. Ohio 1984) (one counsel can represent stockholder both in derivative and individual actions)
- Blue Water Sunset, LLC v. Markowitz, 192 Cal.App.4th 477 (2011) (automatic disqualification analysis; fact-specific differentiation from derivative contexts)
- Raley v. Superior Court, 149 Cal.App.3d 1042 (1983) (conflict from attorney’s nonclient relationship and confidential information)
- Morrison Knudsen Corp. v. Hancock, Rothert & Bunshoft, 69 Cal.App.4th 223 (1999) (monitoring/confidentiality concerns; prior representation of insurers)