Liberty National Enterprises v. Chicago Title Insurance, 194 Cal. App. 4th 839

Liberty owns the Broadway Trade Center in downtown Los Angeles and was sued in May 2002 over its exclusive BTC ownership.
Liberty tendered defense to Chicago Title Insurance, which Chicago refused, prompting Liberty to sue Chicago for bad-faith denial.
The trial proceeded in phases, with coverage resolved in Liberty’s favor before Chicago changed counsel and sought to disqualify Liberty’s counsel McDougal.
McDougal previously represented Chicago’s insureds from 1987–1995, but claimed he never worked on bad-faith claims and sometimes reviewed only coverage issues, not claims handling procedures.
Liberty’s case progressed through discovery and trial; in 2009, Chicago moved to disqualify McDougal on grounds of confidential knowledge, asserting he was a witness as well; the trial court denied the motion, and Chicago appealed.
The appellate court held that disqualification could be waived, delay was unreasonable, prejudice to Liberty was extreme, and McDougal’s role as a witness did not require disqualification under the circumstances, affirming the order and Liberty’s costs

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was the disqualification motion timely and properly waived?	Liberty argues delay should not bar disqualification.	Chicago contends prompt action justified disqualification.	Delay was unreasonable and not waived.
Was the prejudice to Liberty extreme if McDougal were disqualified?	McDougal’s long representation and case mastery would harm Liberty if replaced.	Chicago argues no extreme prejudice shown.	Prejudice to Liberty would be extreme.
Should McDougal be disqualified because he is also a witness?	Liberty consented, and the trial court’s analysis considered justice.	Conflict with McDougal’s witness role requires disqualification.	Not disqualified on grounds of witness role given consent and evidence.
Can disqualification be impliedly waived by failure to move earlier?	Waiver should be recognized due to delay.	Delay must be extreme or prejudicial to amount to waiver.	Disqualification can be impliedly waived; delay here not extreme where exercise of discretion supported.
Did the trial court properly consider detriment to the opponent or integrity of process?	Court should consider harm to Chicago and integrity if McDougal testifies.	No need to reassess where consent and factors show non-disqualification.	Court properly weighed interests; not dispositive here.

In re Complex Asbestos Litigation, 232 Cal.App.3d 572 (Cal. App. 1991) (disqualification timing and waiver principles apply to complex cases)
Regents of University of California v. Sheily, 122 Cal.App.4th 824 (Cal. App. 2004) (record support required for asserted facts; record discipline on statements)
In re Marriage of Zimmerman, 16 Cal.App.4th 556 (Cal. App. 1993) (late-stage disqualification considerations must avoid undue hardship)
Western Continental Operating Co. v. Natural Gas Corp., 212 Cal.App.3d 752 (Cal. App. 1989) (delay as factor in evaluating waiver and prejudice)
Forrest v. Baeza, 58 Cal.App.4th 65 (Cal. App. 1997) (delay insufficiently extreme to constitute waiver)
Glover v. Libman, 578 F.Supp. 748 (N.D. Ga. 1983) (delay and confidentiality breach considerations in disqualification)
SpeeDee Oil Change Systems, Inc., 20 Cal.4th 1135 (Cal. 1999) (governs appellate review standards for disqualification decisions)
State ex rel. Oklahoma Bar Assn. v. Berry, 969 P.2d 975 (Okla. 1998) (ethical rule enforcement considerations in disqualification)