BEHNAM KHANI et al., Plaintiffs and Appellants, v. FORD MOTOR COMPANY et al., Defendants and Respondents.
No. B239611
Court of Appeal of California, Second District, Division Four
April 2, 2013
215 Cal. App. 4th 916
Strategic Legal Practices, Payam Shahian; Gieleghem & Associates and Neil Gieleghem for Plaintiffs and Appellants.
Baker & Hostetler, Mary L. Arens, Rosslyn Hummer and Jack Samet for Defendants and Respondents.
EPSTEIN, P. J.—Behnam Khani and his trial counsel, Payam Shahian and Strategic Legal Practices, appeal from an attorney disqualification order. We reverse.
FACTUAL AND PROCEDURAL SUMMARY
On August 11, 2011, Khani, represented by Shahian and his law firm, Strategic Legal Practices, sued Ford Motor Company (Ford) and its dealer, Galpin Motors, Inc., under the Song-Beverly Consumer Warranty Act (
On December 31, 2011, Ford filed a motion to disqualify Shahian and his law firm. The motion was accompanied by the declaration of Brian Takahashi, a partner at the law firm Bowman and Brooke, which employed Shahian between June 2004 and July 2007. Bowman and Brooke was Ford‘s corporate counsel, and during his tenure there Shahian worked on 150 cases, including California lemon law cases. According to Takahashi, Shahian was “privy to confidential client communications and information relating to the defense of” such cases, as well as to “pre-litigation strategies, tactics, and case handling procedures.” Shahian provided unspecified “input” to Ford‘s Office of General Counsel and Consumer Affairs and communicated regularly with Ford about lemon law cases.
The court granted the disqualification motion, ruling that the legal issues in lemon law cases are substantially similar, and presuming that Shahian‘s previous work exposed him to confidential information about Ford‘s handling of such cases. The court did not address Shahian‘s argument that Ford had waived its right to seek his disqualification.
This timely appeal followed.
DISCUSSION
“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
In the case of successive representation of clients with adverse interests, a disqualification motion juxtaposes the client‘s right to be represented by his or her counsel of choice with the attorney‘s duty to maintain the confidences of his or her former client. (City and County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal.4th 839, 846 (Cobra Solutions).) In a case like this, “the trial court must balance the current client‘s right to the counsel of its choosing against the former client‘s right to ensure that its confidential information will not be divulged or used by its former counsel.” (Ibid.)
In order to disqualify the attorney, the former client must show that the subjects of the successive representations are substantially related. (Cobra Solutions, supra, 38 Cal.4th at p. 847.) A substantial relationship exists where “the attorney had a direct professional relationship with the former client in which the attorney personally provided legal advice and services on a legal issue that is closely related to the legal issue in the present representation. (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 710-711.) If the former representation involved such a direct relationship with the client, the former client need not prove that the attorney possesses actual confidential information. (Id. at p. 709.)” (Cobra Solutions, at p. 847.) The attorney is conclusively presumed to possess confidential information “if the subject of the prior representation put the attorney in a position in which confidences material to the current representation would normally have been imparted to counsel.” (Ibid.; see Flatt v. Superior Court (1994) 9 Cal.4th 275, 283; H. F. Ahmanson & Co. v. Salomon Brothers, Inc. (1991) 229 Cal.App.3d 1445, 1453.)
In Farris v. Fireman‘s Fund Ins. Co. (2004) 119 Cal.App.4th 671 (Farris), the court clarified that “the Jessen evaluation of whether the two representations are substantially related centers precisely upon the factual and legal similarities of the two representations.” (Id. at pp. 679-680, citing Jessen, supra, 111 Cal.App.4th at pp. 709-710.) The Farris court explained that Jessen did not adopt a “playbook approach” to the substantial relationship test or create “a lifetime prohibition against representation adverse to a former client.” (Farris, at p. 680.) The attorney‘s acquisition of general information about the former client‘s ” ‘overall structure and practices’ would not of itself require disqualification unless it were found to be ‘material‘—i.e., directly in issue or of critical importance—in the second representation. [Citation.] The same is true about information such as the first client‘s ‘litigation philosophy’ or ‘key decision makers.’ ” (Farris, at p. 680.) The substantial relationship test requires comparison not only of the legal issues involved in successive representations, but also of evidence bearing on the materiality of the information the attorney received during the earlier representation.
The attorney in Farris had worked as a coverage counsel for an insurance company for over 10 years. (Farris, supra, 119 Cal.App.4th at p. 677.) He had shaped the company‘s practices and procedures in handling California coverage claims. (Id. at p. 688.) Six months after the attorney had stopped working for it, the company denied an insured‘s request for a defense. (Id. at p. 686.) The court held the attorney was disqualified from representing the insured in the ensuing bad faith case, reasoning that the claims processing practices and procedures the attorney shaped would likely be at issue in the bad faith case, and senior claims personnel with whom the attorney closely worked would likely be called as witnesses. (Id. at pp. 685, 688.)
The trial court abused its discretion in concluding that the prior cases were substantially related to the current case just because they involved claims under the same statute. The substantial relationship test does not subject an attorney to automatic disqualification on this ground alone. (See Banning Ranch Conservancy v. Superior Court (2011) 193 Cal.App.4th 903, 918 [successive representations in cases under
Since we conclude that the court abused its discretion in disqualifying Shahian and his law firm, we do not decide whether Ford impliedly waived attorney disqualification by not filing its motion in a timely fashion.
The order is reversed. Appellants are entitled to their costs on appeal.
Willhite, J., and Suzukawa, J., concurred.