Opinion
B313432
09-30-2022
JAMES A. FRIEDBERG, as Co- trustee, etc., Plaintiff and Appellant, v. THOMAS F. FRIEDBERG, as Co-trustee, etc., Defendant and Respondent.
Greenberg Glusker Fields Claman &Machtinger, Ricardo P. Cestero and Ira M. Steinberg for Plaintiff and Appellant. Withers Bergman, Jeremiah J. Moffit and Matthew R. Owens for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County, No. 20STPB02271 Lee R. Bogdanoff, Judge.
Greenberg Glusker Fields Claman &Machtinger, Ricardo P. Cestero and Ira M. Steinberg for Plaintiff and Appellant.
Withers Bergman, Jeremiah J. Moffit and Matthew R. Owens for Defendant and Respondent.
ADAMS, J. [*]
This appeal arises out of a dispute between two siblings, James A. Friedberg and Thomas F. Friedberg, over James's proposed modification of the restated family trust established by their deceased father, Herman R. Friedberg. Thomas moved to disqualify James's counsel, who had previously represented Herman in connection with his estate planning and drafted the current version of the trust. The trial court granted Thomas's motion. James now appeals, contending Thomas unreasonably delayed in bringing the motion, Thomas lacked standing, and there was no valid basis for disqualification. We affirm the trial court order.
We refer to the Friedbergs by their first names for the sake of clarity. No disrespect is intended.
FACTS AND PROCEDURAL BACKGROUND
I. The Friedberg trust
Herman and Phyllis were a married couple with two sons, James and Thomas. Herman established a revocable trust in 1967 (the trust). Attorney Marc Stern of Greenberg Glusker Fields Claman &Machtinger LLP (the firm), represented Herman in preparing his estate plan. Stern drafted amendments to the trust and the final 2001 restatement of the trust.
When Herman died in 2007, the bulk of the trust assets were divided into sub-trusts for Phyllis's primary benefit. When Phyllis died in 2013, the sub-trusts were to be divided between a trust exempt from the generation-skipping transfer tax and a non-exempt trust. Because Thomas has no children, the exempt trust was held solely for James's benefit, and the non-exempt trust was divided, pursuant to the trust's equalization clause, such that the aggregate value of James's exempt trust and non- exempt trust equaled the value of Thomas's non-exempt trust. The exempt trust is irrevocable.
Since Herman's death, James and Thomas have served as co-trustees of the trust, and as trustees of their respective subtrusts. In 2014, James and Thomas arbitrated disputes related to the administration of the trust, including the division of assets between the sub-trusts and the application of the trust's equalization clause. Stern and the firm represented James throughout those proceedings. Excerpts from arbitration pleadings indicated Thomas raised the issue of Herman's intent at least twice. James's witness list included Stern. The parties resolved the arbitration by settlement in June 2017.
Despite James's several assertions that Thomas placed Stern on his witness list, the citations he has provided only reflect James's witness list.
II. James's petition to modify the trust
In March 2020, James, represented again by Stern and the firm, filed a petition to modify the trust's terms regarding the power of appointment. Under a section of the restated trust titled "Child's Limited Powers Of Appointment," a child may appoint "all or any portion of the principal and undistributed income of his Non-Exempt Trust . . . in favor of any one or more persons or entities other than the child himself, his estate or the creditors of the child or of the child's estate." However, as to the exempt trust, a child is permitted to appoint only "in favor of any one or more of the Settlor's issue, other than the child himself or his estate."
James's petition sought a modification that would enable him to exercise his power of appointment over exempt trust assets in favor of his spouse, Susan. James asserted that in light of the affection Herman and Susan developed for each other in the last years of Herman's life, "Herman would have wanted to allow [James] to appoint the Exempt Trust property in favor of Susan, in trust, as well as in favor of Herman's issue."
James did not serve Thomas with the petition until the court ordered him to do so in July 2020. That same month, Thomas's counsel informed Stern of Thomas's opposition to the modification petition. Thomas's counsel also asserted Stern and the firm had a conflict due to the firm's prior representation of Herman, and Stern's status as a necessary witness in the proceedings.
III. Thomas's motion to disqualify
In December 2020, Thomas moved to disqualify Stern and the firm, contending their duties to their former client, Herman, directly conflicted with their representation of James. Thomas argued Stern sought to change the trust he previously drafted for Herman, in favor of James, potentially thwarting Herman's intent and negatively impacting the remainder beneficiaries, namely Thomas and Herman's grandchildren. Because Thomas refused to waive the conflict, disqualification was required. Alternatively, Thomas argued Stern's continued involvement violated the advocate-witness rule, independently requiring disqualification. Each side was likely to call Stern as a witness because he was the primary attorney responsible for drafting the trust at issue and was privy to confidential information about Herman's estate planning and his intent regarding the restatement.
James filed an opposition arguing Thomas had unreasonably delayed in bringing the motion and therefore waived any right to disqualify. He characterized the motion as merely tactical, noting Thomas had not sought to disqualify Stern or the firm previously, including during the arbitration proceedings. James further contended Thomas lacked standing to disqualify Stern and the firm because Thomas was not their client and had no confidential relationship with them. On the merits, James urged that the mere allegation that his petition was contrary to Herman 's intent did not create a conflict. Further, James argued Thomas had not established that Stern's testimony was necessary; continued representation by the firm was permissible under rule 3.7(b) of the Rules of Professional Conduct because Stern would not serve as James's "primary [advocate]"; and, in any event, Stern could act as an advocate and witness under rule 3.7(a) with James's consent. James argued disqualification of his counsel would prejudice him as it would be costly and time consuming for new counsel to achieve Stern's level of familiarity with the case.
All further rule references are to the Rules of Professional Conduct.
Thomas argued in reply that disqualification was not warranted during the prior arbitration because those proceedings concerned different subject matters and did not require Stern's testimony. Thomas asserted James would not suffer extreme prejudice from disqualification since the instant proceeding had just begun. Further, Thomas argued he had standing as a successor co-trustee whose consent was required to waive any conflict, and even were that not the case, the trial court had inherent authority to disqualify counsel.
In May 2021, the trial court granted Thomas's motion.Although the court determined Thomas lacked standing as a successor trustee, it considered the motion under its inherent authority to disqualify an attorney, even when the disqualification is not requested by someone with an attorneyclient relationship with the attorney. The trial court found disqualification was required because Stern and the firm's continued representation of James conflicted with their duty of loyalty to Herman, and Herman was not capable of consenting to the conflict. The trial court reasoned that the parties' proffers failed to make clear whether Stern was "acting in accordance with Herman's wishes or following the instructions of [James] and then clothing the Petition as fulfilling what Herman 'would have wanted.'" Allowing the firm to continue representing James "would undermine the public perception of the integrity of the judicial process in the proper administration and adjudication of estate and trust matters." That Stern would serve as both an advocate and witness, which the trial court determined was likely necessary given his role in preparing the restatement, did "not help matters," either.
In late April 2021, the court conducted a hearing on the disqualification motion. The court briefly discussed issues related to the underlying modification petition, but indicated that it was not making a ruling and, if called upon to decide the petition, the court would have an "open mind" and would decide the petition "without any preconceived notions." The court then heard specific argument related to disqualification. At the conclusion of the hearing, the court informed counsel it would not issue a ruling until after May 5, 2021, and, if James's counsel chose to request a dismissal of the modification petition without prejudice before that date, the court would grant the request and deny the disqualification motion as moot.
Finally, the trial court found Thomas did not waive his right to seek disqualification. Based on the "murky" and "limited" record of the arbitration proceedings before the trial court, it appeared that the current proceedings, which were "not far along," sought to amend a discrete component of the trust, while the arbitration had only sought to construe several portions of the trust, such that Thomas could not have been expected to seek disqualification previously. Alternatively, the trial court concluded it nonetheless had inherent authority to disqualify Stern and the firm. The trial court found James would not suffer extreme prejudice from the disqualification.
James timely appealed.
DISCUSSION
I. The trial court did not err in granting the disqualification motion
A. Standard of review
"[A] trial court's decision on a disqualification motion is [generally] 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.] When substantial evidence supports the trial court's factual findings, the appellate court reviews the conclusions based on those findings for abuse of discretion. [Citation.] However, the trial court's discretion is limited by the applicable legal principles. [Citation.] Thus, where there are no material disputed factual issues, the appellate court reviews the trial court's determination as a question of law. [Citation.] In any event, a disqualification motion involves concerns that justify careful review of the trial court's exercise of discretion." (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1143-1144 (SpeeDee Oil); O'Gara Coach Co., LLC v. Ra (2019) 30 Cal.App.5th 1115, 1123-1124 (O'Gara Coach).)
B. Applicable legal principles
"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.' [Citations.] Ultimately, disqualification motions involve a conflict between the clients' right to counsel of their choice and the need to maintain ethical standards of professional responsibility. [Citation.] The 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.)
"The prohibition against representation of a new client whose interests are adverse to those of a former client is grounded in both the California State Bar Rules of Professional Conduct and governing case law." (City National Bank v. Adams (2002) 96 Cal.App.4th 315, 323 (City National Bank).) Under rule 1.9(a) (formerly, rule 3-310(e)): "A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client gives informed written consent." Rule 1.7(b) provides that absent the informed written consent of each client, a lawyer is prohibited from representing a client if there is a "significant risk" the lawyer's representation of the client will be "materially limited" by the lawyer's responsibilities to or relationships with a former client.
Former rule 3-310 provided, in relevant part: "(C) A member shall not, without the informed written consent of each client: [¶] (2) Accept or continue representation of more than one client in a matter in which the interests of the clients actually conflict .... [¶] (E) A member shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment."
These rules reflect the twin duties an attorney owes to both current and former clients, the duty of confidentiality and the duty of loyalty. (City National Bank, supra, 96 Cal.App.4th at p. 329, fn. 4.)"' "[T]he effective functioning of the fiduciary relationship between attorney and client depends on the client's trust and confidence in counsel. [Citation.] The courts will protect clients' legitimate expectations of loyalty to preserve this essential basis for trust and security in the attorney-client relationship." '" (Fremont Reorganizing Corp. v. Faigin (2011) 198 Cal.App.4th 1153, 1174, quoting SpeeDee Oil, supra, 20 Cal.4th at pp. 1146-1147.) Even after the attorney-client relationship ends, an attorney" 'may not do anything which will injuriously affect his former client in any matter in which he formerly represented him nor may he at any time use against his former client knowledge or information acquired by virtue of the previous relationship.'" (O'Gara Coach, supra, 30 Cal.App.5th at p. 1124.)
When analyzing a potential conflict arising from the successive representation of clients with adverse interests, courts have focused on whether there is a" 'substantial relationship'" between the former and current representations. (City National Bank, supra, 96 Cal.App.4th at pp. 324-325.) "The 'substantial relationship' test mediates between two interests that are in tension in such a context-the freedom of the subsequent client to counsel of choice, on the one hand, and the interest of the former client in ensuring the permanent confidentiality of matters disclosed to the attorney in the course of the prior representation, on the other. 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; indeed, the disqualification extends vicariously to the entire firm." (Flatt v. Superior Court (1994) 9 Cal.4th 275, 283 (Flatt).)
C. The trial court properly concluded there was a conflict necessitating disqualification
Here, there is no dispute that Stern and the firm formerly represented Herman, that the former matter is "substantially related" to the instant matter, or that Herman has not consented to his former counsel's representation of James. However, James contends the trial court erred in finding the interests of James and Herman are materially adverse. James further contends the trial court improperly disqualified his counsel without a finding that the representation would violate Stern and the firm's duty of confidentiality. We disagree.
i. Materially adverse interests
James argues that his interests are not "materially adverse" to Herman's because his petition seeks a modification of the trust that he asserts is consistent with Herman's intent to provide for his two sons and their families equally. He contends there could be no outcome at odds with Herman's intent because, if the trial court ultimately concluded the proposed modification contravenes Herman's intent, it would deny the petition.
Alternatively, James argues-in a manner somewhat at odds with his other contentions-that the trial court should have held a trial or at least reviewed further evidence of Herman's intent before rendering a decision on the disqualification motion.
The trial court did not err in rejecting these arguments. As the court explained, and could evaluate simply by looking at the terms set forth in the trust document, the restated trust expressly limits each child's power of appointment, differentiating between the non-exempt and exempt trusts. During the trial court hearing on the disqualification motion, James's counsel indicated he was not contesting Thomas's representation that "in connection with the restatement of the . . . trust in June 2001 as to which [the firm] served as counsel and draftsperson, the trust was modified to remove [James's right] to name his spouse as a beneficiary of the exempt trust." The proposed modification would reverse that change. Further, the modification petition does not assert the proposed change is consistent with the express terms of the trust. Instead, the petition asserts the proposed change is what Herman would have wanted based on circumstances that later developed, but which did not cause him to further amend the trust prior to his death.
Thus, although the modification petition is not a direct attack on the validity of a provision of the trust, this case remains analogous to those in which the interests of a former and current client have been recognized to be unquestionably adverse, such as when an attorney performs work on behalf of one client, then later challenges the results of that work on behalf of a subsequent client. (See Grove v. Grove Valve &Regulator Co. (1963) 213 Cal.App.2d 646, 649-651 [conflict of interest where attorney first handled patent work for company and subsequently represented former employee claiming inventions for which company had filed patents were his property]; see also Comment, rule 1.9 [lawyer could not properly seek to rescind on behalf of a new client a contract drafted on behalf of former client]; ABA Formal Ethics Opn. No. 21-497 (2021) p. 3 ["When a lawyer represents a current client challenging the lawyer's own prior work done for a former client on the same or a substantially related matter, the situation creates a materially adverse conflict"]; ABA Formal Ethics Opn. No. 64 (1932) p. 549 [attorney who drafts a will may not after testator's death represent devisees in efforts to defeat the purposes and objects of the will; attorney should not attempt to nullify his own work and death of former client does not release attorney from obligation].)
James cites the trial court's statements at the hearing on the motion as an indication the court accepted James's counsel's arguments that the petition was not akin to an attorney seeking to attack the validity of a contract the attorney previously drafted on behalf of a former client. However, the court's statements during the hearing were not its ruling. In the court's written ruling, it described the dispute as "whether the document's terms should be set aside in accordance with a decedent's 'true intent,'" and further explained: "Stern, in his representation of [James], is seeking to change the trust he drafted at Herman's request (and which was restated at variance to what [James] is now seeking). The issue is not just interpretation of a document." (Italics in original.)
Moreover, the trial court may properly consider interests adverse and warranting disqualification in circumstances more subtle than an open attack on an instrument an attorney previously drafted. While former rule 3-310(E) did not include the term "materially adverse," it by its terms applied to situations in which an attorney might accept "employment adverse" to a client or former client. Indeed, adverse interests have long been a hallmark of what constitutes a conflict affecting an attorney's representation of a client. In the context of transactions between an attorney and a client, our Supreme Court defined adversity as" 'acting against or in a contrary direction . . . hostile, opposed, antagonistic[,] [or] in opposition to one's interests." (Ames v. State Bar (1973) 8 Cal.3d 910, 917.) Similarly, in David Welch Co. v. Erskine &Tulley (1988) 203 Cal.App.3d 884, 891, the court explained" 'adverse' . . . connotes being 'opposed to one's interest' or 'unfavorable.'" (See State Bar Standing Com. on Prof. Responsibility &Conduct, Formal Opn. No. 2011-182, pp. 2-3 ["adverse" representation puts the lawyer "in a position of potential injury to the client"].)
Further, while"' "[s]peculative contentions" '" of a conflict are insufficient to disqualify counsel (DCH Health Services Corp. v. Waite (2002) 95 Cal.App.4th 829, 833; see Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 302 ["hypothetical conflict" does not warrant disqualification]), it is well established that the disqualification remedy is necessarily" 'prophylactic'" (Hetos Investments, Ltd. v. Kurtin (2003) 110 Cal.App.4th 36, 48), and absolute "certainty" of a conflict is never a prerequisite to disqualification. (Comden v. Superior Court (1978) 20 Cal.3d 906, 913.) This is because delaying a conflict decision can exacerbate the extent of the hardship to each side should the conflict fully ripen. (Comden v. Superior Court, supra, 20 Cal.3d at pp. 913-914; see San Diego Navy Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358, 371, fn. 7 [conflict "should be identified early in the proceedings so it can be treated effectively before prejudice has occurred to either party"].) The above-catalogued definitions of "adversity" or "material adversity" corroborate this approach, supplying a court with necessary flexibility to intervene before the extent of any adverse interests, and resulting detriment, are fully crystallized. (See ABA Formal Ethics Opn., No. 21-497 (2021) p. 4; Cal. State Bar Standing Com. on Prof. Responsibility &Conduct, Formal Opn. No. 2011-182, pp. 2-3; Rest.3d Law Governing Lawyers, § 132.)
Here, the trial court properly recognized the adversity of interests presented by James's proposed modification of the trust. We agree with the trial court's assessment that the modification petition "raises to the forefront the issue of whether Stern [is] advocating to enact Herman's testamentary intent or to fulfill [James's] wishes in spite of Herman's intent," creating a stark risk of the "division of loyalty between a former and current client on the core issue in dispute in this case." The trial court afforded extensive consideration to James's arguments, but nonetheless concluded that the risk of a compromised process was too grave, under these particular facts, to allow existing counsel to continue to represent James. This conclusion was well within its discretion. The trial court correctly recognized the chief concern in a conflict analysis is preservation of public trust in the process. (SpeeDee Oil, supra, 20 Cal.4th at p. 1145.) This required the trial court to look not only to possible outcomes of the proceedings, but to potential impairments to the quality of the representation and the nature of the proceedings that the trial court was charged with managing going forward. (Rest.3d Law Governing Lawyers, § 121, com. c(i).)
We further find no merit in James's assertion that the trial court impermissibly delved into the merits of the modification petition or made findings of fact about Herman's intent in resolving the disqualification motion. The trial court's analysis avoided the ultimate questions presented by the litigation. After perceiving a conflict or contradiction between a specific term in the trust document, and the petition to modify that term to allow what the document itself disallowed, the trial court properly concluded Stern and the firm's continued representation of James would run afoul of the ethical rules" 'designed not alone to prevent the dishonest practitioner from fraudulent conduct, but as well to preclude the honest practitioner from putting himself in a position where he may be required to choose between conflicting duties, or be led to an attempt to reconcile conflicting interests, rather than to enforce to their full extent the rights of the interest which he should alone represent.'" (Earl Scheib, Inc. v. Superior Court (1967) 253 Cal.App.2d 703, 706.)
James's reliance on Baker Manock &Jensen v. Superior Court (2009) 175 Cal.App.4th 1414 (Baker), for a contrary result is misplaced. In Baker, a law firm represented a testator, including in drafting a will that named two of her sons as coexecutors and left certain property to her husband. Two other sons were omitted from the will. Following the death of the testator, the law firm represented one of the sons, George, in his capacity as executor of the will and in his individual capacity as a beneficiary of the will. After the testator's husband died, disputes arose regarding the proper disposition and distribution of certain assets, including community property. One of the omitted sons, Marvin, was appointed the executor of the husband's estate; he petitioned to disqualify the law firm from representing George in his individual capacity as a beneficiary under the testator's will. (Id. at pp. 1417-1419.)
The appellate court reversed a trial court order granting disqualification and rejected the argument that there was an attorney-client relationship between the law firm and Marvin resulting from the law firm having drafted the testator's will. (Baker, supra, 175 Cal.App.4th at pp. 1420-1422.) The appellate court further held that as to the law firm and Marvin, "an attorney who has drafted a will is not bound to a beneficiary of the will by the duties of an attorney to his or her client." (Id. at p. 1422.) In addition, an attorney for the executor of a will "does not have a conflict of interest merely because he or she represents one beneficiary of a will in a dispute with another beneficiary, unless such representation presents a conflict between two clients of the attorney, namely, the executor and the represented beneficiary." (Ibid.) Since Marvin's petition would remove assets from the testator's estate, George, as the executor, could properly object. And, "where the executor has a good faith belief that a contestant . . . seeks to deprive the estate of assets rightfully belonging to the estate, it cannot be a conflict of interest for the executor's attorney merely to represent the executor in the discharge of the executor's duty to preserve the estate." (Id. at p. 1423.)
The court's analysis thus concerned an alleged conflict arising out of the law firm's simultaneous representation of George as executor and George as a beneficiary, or the law firm's representation of one beneficiary against another. (Baker, supra, 175 Cal.App.4th at p. 1424.) The appellate court did not analyze or consider any alleged conflict between the decedent testator and George, the executor and beneficiary. The litigation that prompted the disqualification motion was initiated by Marvin, a contestant to the will. George was opposing the contestant's petition, not challenging or seeking to modify the will himself. Thus, the Baker court explained: "Marvin's proposed construction of the community property language of the will conflicts with the construction of that language asserted by the executor [George]. Obviously, we would be confronted with a different case if the law firm sought to represent Marvin's point of view while continuing to represent the executor's conflicting point of view. No one would deny the firm had a conflict of interest if it attempted to represent clients on two sides of an issue in the same litigation." (Ibid., italics in original.)
Baker thus provides no support for James's position in this case. Here, it is James who is seeking to modify the trust in a manner that is facially at odds with the trust document itself. The disqualifying conflict is not based on Stern and the firm's representation of James in a role acting on behalf of the trust and James as a beneficiary, nor is it related to direct adversity between James and Thomas, as was the alleged conflict in Baker. Instead, the conflict arises out of Stern and the firm's prior representation of Herman and the current representation of James-successive clients on two sides of an issue in the same matter.
ii. Duty of confidentiality
We likewise reject James's contention that the trial court erred in failing to find a violation of the duty of confidentiality as a prerequisite to disqualification. James points to the State Bar's executive summary to Rule 1.9 and cases suggesting that, in considering conflicts arising from successive representation, the "chief" concern is client confidentiality. (Flatt, supra, 9 Cal.4th at p. 283.) According to James, the trial court failed to properly weigh the fact that no violation of Herman 's confidential and privileged information could be alleged here, because James and Thomas have equal access to that information. (Evid. Code, §§ 957, 962.)
As an initial matter, when, as here, a substantial relationship between the subjects of the former and current representations is 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." (Flatt, supra, 9 Cal.4th at p. 283.) "Normally, where a substantial relationship is shown, the inquiry ends and disqualification should be ordered." (Western Continental Operating Co. v. Natural Gas Corp. (1989) 212 Cal.App.3d 752, 760 (Western Continental).)
This is not a case where James has shown "there was no opportunity for confidential information to be divulged." (City National Bank, supra, 96 Cal.App.4th at pp. 327-328.) To the contrary, it is undisputed that Stern assisted Herman in drafting the restatement which contained the limited power of appointment, the very provision James now seeks to modify." '[S]ubsequent representation of another against a former client is forbidden not merely when the attorney will be called upon to use confidential information obtained in the course of the former employment, but in every case when, by reason of such subsequent employment, he may be called upon to use such confidential information.'" (Earl Scheib, Inc. v. Superior Court, supra, 253 Cal.App.2d at p. 707.)
Further, as our Supreme Court has opined, in evaluating a disqualification motion based upon representation adverse to the interest of a former client, both the misuse of confidential information and conduct otherwise injurious to the client are relevant. (Wutchumna Water Co. v. Bailey, supra, 216 Cal. at pp. 573-574; SpeeDee Oil, supra, 20 Cal.4th at p. 1146; see Kim v. The True Church Members of Holy Hill Community Church (2015) 236 Cal.App.4th 1435, 1456 [ethical bar against acting in a manner adverse to a former client's interests implicates "not just the duty to maintain client confidences, but the duty of loyalty"].)
While former rule 3-310(E) prohibited an attorney from accepting employment adverse to a client or former client where the attorney had obtained confidential information material to the employment, current rule 1.9 eliminated the explicit reference to confidential information. Comment 1 to the rule expressly states that after the termination of an attorney-client relationship, the attorney "owes two duties to a former client"- a continuing duty of loyalty and the duty of confidentiality. (Rules Prof. Conduct, rule 1.9, cmt. [1], italics added.) Another comment provides that two matters are substantially related for the purposes of a conflict analysis where there is a "substantial risk of a violation of one of the[se] two duties to a former client[.]" (Rules Prof. Conduct, Rule 1.9, cmt. [3], italics added.) This is consistent with caselaw, which has long recognized both the duty of confidentiality and the duty of loyalty may be implicated when an attorney successively represents clients with adverse interests. (Wutchumna Water Co. v. Bailey (1932) 216 Cal. 573, 573-574; SpeeDee Oil, supra, 20 Cal.4th at p. 1146.)
In Wutchumna Water Co. v. Bailey, supra, 216 Cal. at page 573, our high court explained the" 'test of inconsistency is not whether the attorney has ever appeared for the party against whom he now proposes to appear, but it is whether his accepting the new retainer will require him, in forwarding the interests of his new client, to do anything which will injuriously affect his former client in any matter in which he formerly represented him, and also whether he will be called upon, in his new relation, to use against his former client any knowledge or information acquired through their former connection.'" Even where the record does not indicate whether the attorney acquired confidential information from a former client, "the prohibition is in the disjunctive: [the attorney] may not use information or 'do anything which will injuriously affect his former client.'" (People ex rel. Deukmejian v. Brown (1981) 29 Cal.3d 150, 156.)
We agree with the trial court that Fiduciary Trust Internat. of California v. Superior Court (2013) 218 Cal.App.4th 465 (Fiduciary Trust), is instructive on this point. There, a law firm drafted wills and trusts for a husband and wife. After the death of both spouses, a dispute arose between the wife's personal representative and the trustees of a marital trust regarding whether the terms of the husband's will required the marital trust to pay estate and inheritance taxes due on the wife's assets. The law firm that previously represented the husband and wife, and that had drafted the couple's original wills and the trusts, represented the trustees of the marital trust in the dispute. The wife's personal representative moved to disqualify the law firm, urging that the firm's prior representation of the wife precluded it from representing the trustees. The trial court denied the request to disqualify, and the wife's representative filed a petition for writ of mandate. (Id. at p. 470.)
The appellate court granted the petition for writ of mandate and ordered the trial court to disqualify the law firm. The reviewing court concluded that although any attorney-client communications would not have been privileged as between the husband and wife, who were joint clients of the firm, the firm's duty of loyalty to the wife as a former client precluded its representation of an interest adverse to hers. It reasoned that, despite the history of joint representation, the firm was now asserting, on behalf of the husband's representatives, "that the documents it prepared during the joint representation should be interpreted in a manner that would substantially reduce the value of [wife's] estate (or her trust), thereby harming her interests." (Fiduciary Trust, supra, 218 Cal.App.4th at p. 485.) Further, and irrespective of potential injuries to the parties, disqualification was warranted to" 'preserve public trust in the scrupulous administration of justice and the integrity of the bar.'" (Ibid.)
Similarly, in this case, even if Stern and the firm could represent James without violating the duty of confidentiality they continue to owe Herman, the trial court properly concluded the duty of loyalty remained an obstacle. The danger in this case was in the likelihood of Stern and the firm being in a position of needing to choose between fidelity to Herman's intent and aims, and those of James in the present. (Woods v. Superior Court (1983) 149 Cal.App.3d 931, 936 ["where ethical considerations are concerned, disqualification should be ordered not only where it is clear that the attorney will be adverse to his former client but also where it appears that he might."].)
On appeal, James asserts there is no compelling reason for disqualification because Stern and the firm have no confidential information regarding Thomas, and James and Thomas have "equal access to Herman's confidential information." James cites provisions of the Evidence Code which relate to the attorney-client privilege. (Evid. Code, §§ 957, 962.) Yet, not only does the duty of confidentiality cover a broader body of information than the attorney-client privilege (Western Continental, supra, 212 Cal.App.3d at pp. 761-762; Goldstein v. Lees (1975) 46 Cal.App.3d 614, 621, fn. 5), as the trial court properly reasoned, citing Fiduciary Trust, disqualification matters are not "determined solely by reference to evidentiary rules." (Fiduciary Trust, supra, 218 Cal.App.4th at p. 486; Meza v. H. Muehlstein & Co., Inc. (2009) 176 Cal.App.4th 969, 980 [protection of attorney-client privilege is not the only ground for disqualification motion].)
The involvement of Stern, who represented Herman in drafting the restated trust, and now represents James, further supports the trial court's findings. The trial court reasonably accepted Thomas's proffer that the necessity of James's counsel's testimony was manifest in light of the issues the petition presented. As the trial court reasoned, that the outcome was unclear only underscored the problematic nature of the firm's involvement. Because the petition's outcome may turn upon Stern's recollection of the drafting process, Stern's testimony in these proceedings while serving as James's counsel would evince an unmistakable appearance of divided loyalties-where counsel's duty of loyalty to James would be pitted against his duty of loyalty to Herman-that the trial court was not required to countenance. (See Gregori v. Bank of America (1989) 207 Cal.App.3d 291, 309 [likelihood of ethical breach affecting proceeding's outcome is "significant question" for conflict analysis]); see also Apple Computer, Inc. v. Superior Court (2005) 126 Cal.App.4th 1253, 1273 [disqualification warranted in light of firm's placement in position of divided loyalties, in addition to institutional concerns]; Woods v. Superior Court, supra, 149 Cal.App.3d at p. 937 [similar].)
Because James's remaining arguments-that the trial court improperly shifted the burden to James to prove that he was likely to prevail on the petition, improperly credited Thomas's account of Herman's intent over James's, and erroneously equated modifying the trust with contravening Herman's intent-merely repackage these contentions, we reject them as meritless or otherwise without record support. To the extent that James separately contends that the trial court abused its discretion in "leverag[ing] the disqualification [m]otion to force [James] to dismiss his [p]etition" when it announced its position on the petition's merits before addressing the disqualification motion, his failure to cite any law in support of that contention has forfeited the argument. (Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146, 1161-1162.) Moreover, based upon our independent review of the hearing transcript, we discern no basis for ascribing an improper motive to the trial court.
We do not conclude, as James suggests, that a lawyer who drafts a testamentary document is always disqualified from representing a different party in a dispute that implicates the testator's intent. Because "conflicts of interest can arise in numerous contexts in the estate planning and probate field," due to frequent "close and overlapping interconnections" between various parties, some of whom "may have used the services of the same lawyer at various times[,]" the conflict analysis necessarily depends upon the parties' proffers and the facts of the particular case. (Baker, supra, 175 Cal.App.4th at p. 1424.) But here, there was a" 'reasonable basis for the trial court's decision'" disqualifying Stern and the firm due to a conflict of interest. (Kennedy v. Eldridge (2011) 201 Cal.App.4th 1197, 1203 (Kennedy).) We need not decide whether the advocate-witness rule independently required disqualification.
We find no error in the trial court's discussion of the policies underlying the advocate-witness rule in support of its ultimate conclusions. (See Kennedy, supra, 201 Cal.App.4th at p. 1202 [disqualification proper where it was likely the attorney would provide important testimony in addition to serving as counsel].)
D. The trial court did not abuse its discretion in concluding Thomas did not waive the right to seek disqualification
James contends that Thomas brought his disqualification motion so late that he waived the right to do so, and the trial court abused its discretion in concluding otherwise. We find no error.
A party seeking disqualification may impliedly waive that right by failing to bring the motion in a timely manner. (Liberty National Enterprises, L.P. v. Chicago Title Ins. Co. (2011) 194 Cal.App.4th 839, 844 (Liberty National).) "Where the party opposing the [disqualification] motion can demonstrate prima facie evidence of unreasonable delay in bringing the motion causing prejudice to the present client, disqualification should not be ordered. The burden then shifts back to the party seeking disqualification to justify the delay. [Citation.] Delay will not necessarily result in the denial of a disqualification motion; the delay and the ensuing prejudice must be extreme." (Western Continental, supra, 212 Cal.App.3d at pp. 763-764.)
The trial court rejected James's argument that the delay in this case was unreasonable or extreme. The court noted there was little evidence in the record about the arbitration, describing the available record as "murky," and, implicitly, as limiting the court's ability to determine whether the conflict was apparent during the arbitration. The court did reason, however, that the instant case "involves something far different from just a dispute between two beneficiaries over the proper construction of [Herman's trust]." On appeal, James contends this analysis was improper because it focused on the differences between the arbitration and the instant petition, rather than assessing whether Thomas knew of the issues he believed required disqualification and failed to timely act.
The trial court did not err in considering the differences between the arbitration and the modification petition as part of the analysis. Since James has asserted Thomas was aware of the bases for disqualification because of the prior proceeding, the court's analysis necessarily entailed some assessment of whether the arbitration's subject matter and circumstances should have precipitated a disqualification motion, rendering any delay unreasonable.
In any event, we find no abuse of discretion in the court's finding that disqualification would not cause James extreme prejudice. James claims the trial court failed to adequately account for the fact that Stern and the firm have "represented him for nearly a decade," and depriving him of their institutional knowledge from drafting the trust documents, as well as from the arbitration proceedings, is sufficiently prejudicial. Yet, we note the only period James identifies in which Stern and the firm were representing him was during the arbitration, which lasted approximately three years. It appears there was then a three-year gap before James initiated the instant case.
In addition, as the trial court correctly observed, James failed to explain what specific knowledge from the arbitration was germane to the subject matter of the modification petition. The instant proceedings were in their early stages when Thomas sought disqualification. Beyond James's assertion that Stern gained knowledge while representing Herman and drafting the testamentary instruments, James has not identified specific legal work his counsel has performed relevant to the trust provision he seeks to modify. (In re Complex Asbestos Litigation (1991) 232 Cal.App.3d 572, 599-600 [loss of services of knowledgeable counsel of party's choice and need to retain new counsel is not type of prejudice required to avoid disqualification].)
This case is therefore unlike Liberty National, on which James relies. In Liberty National, during the two-year delay that preceded the disqualification motion, counsel for the party opposing the motion litigated at least one demurrer, conducted discovery, and completed the first phase of trial. (Liberty National, supra, 194 Cal.App.4th at p. 843.) Similarly, in River West, Inc. v. Nickel (1987) 188 Cal.App.3d 1297, 1313, the court found extreme prejudice where counsel had expended over 3,000 hours in the litigation and had a record of extensive work product. No such record was presented to the trial court in this case.
It is incumbent upon the party claiming waiver to make a thorough record of not just extreme delay, but also extreme prejudice. The trial court did not abuse its discretion in concluding James failed to make that showing.
E. The trial court properly ordered disqualification, irrespective of Thomas's relationship to Stern and the firm
James further argues that the trial court erred in disqualifying his counsel because Thomas lacked standing since he was never a client of Stern or the firm; Thomas did not demonstrate any particularized harm he would suffer absent disqualification; there was no assertion that Stern or the firm ever obtained Thomas's confidential information; and there was no manifest or glaring ethical breach that would justify disqualification despite the lack of an attorney-client relationship between counsel and Thomas. We find no error.
This court has previously explained that "[g]enerally, before the disqualification of an attorney is proper, the complaining party must have or must have had an attorneyclient relationship with that attorney." (Great Lakes Construction, Inc. v. Burman (2010) 186 Cal.App.4th 1347, 1356 (Great Lakes).) In Great Lakes, a panel of this court considered a disqualification motion filed by parties who were not present, former, or prospective clients of the opposing counsel they sought to disqualify. (Id. at p. 1350.) Although the parties seeking disqualification purported to identify a conflict in the opposing counsel's joint representation of two of the moving parties' adversaries in the litigation, this court concluded the moving parties had "no legally cognizable interest in [the opposing counsel's] undivided loyalty to his clients." (Id. at p. 1351.) Under such circumstances, any conflict was of no concern to the moving parties, and they failed to show how any ethical breach of the duty of loyalty affected a just determination of the moving parties' claims against either of the opposing counsel's clients. (Id. at p. 1359.)
In contrast, in Kennedy, a later case involving multiple entangled familial relationships between the parties and counsel, the reviewing court acknowledged that "no California case has held that only a client or former client may bring a disqualification motion. The reason is simple:' "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.'" '" (Kennedy, supra, 201 Cal.App.4th at p. 1204; see Code Civ. Proc., § 128, subd. (a) ["Every court shall have the power to do all of the following: [¶] . . . [¶] (5)[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."].)
" '[W]here 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 claims' [citation], a nonclient might meet the standing requirements to bring a motion to disqualify based upon a third party conflict of interest or other ethical violation.'" (Kennedy, supra, 201 Cal.App.4th at p. 1204.)
Further, "[i]t makes no sense for a court to stand idly by and permit conflicted counsel to participate in a case merely because neither a client nor former client has brought a motion. As one court put it, 'Protection of the attorney-client privilege is not the only ground for a motion to disqualify an attorney.' [Citation.] '[T]he court has an independent interest in ensuring trials are conducted within ethical standards of the profession and that legal proceedings appear fair to all that observe them.' [Citation.] Accordingly, . . . 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 pp. 12041205.) However, "a court is limited to exercising this inherent authority only when the misconduct 'will have a continuing effect on the judicial proceedings.'" (In re Marriage of Murchison (2016) 245 Cal.App.4th 847, 852.)
Here, the trial court correctly recognized its authority to remedy the asserted ethical breaches to uphold the integrity of the judicial process. While the trial court found there was no attorney-client relationship between Thomas and Stern or the firm, as in Kennedy, this case still involved "[a] plethora of family entanglements, potential misuse of confidential information, a [potential] conflict posed by the near-certain prospect that counsel will have to testify, and the preservation of the integrity of the judicial system," which supported the trial court's disqualification order. (Kennedy, supra, 201 Cal.App.4th at p. 1200.) The former client, Herman, is unable to protect his own interests, while Thomas stands to be affected, as a co-trustee and beneficiary, by Stern and the firm's representation of interests adverse to those of Herman.
Unlike cases in which the moving party's interests could not have been affected by counsel's conflict, or where any conflict could be waived by the affected parties (see, e.g., Great Lakes, supra, 186 Cal.App.4th at p. 1359; Moreci v. Scaffold Solutions, Inc. (2021) 70 Cal.App.5th 425, 441-444; In re Marriage of Murchison (2016) 245 Cal.App.4th 847, 853), here the interrelated nature of the parties' relationships and interests indicates Stern and the firm's conflict would have a continuing effect on the proceedings, and one of the affected parties, Herman, is no longer available to waive any conflict.
A court is plainly empowered to consider the significant and conflicting policy concerns unique to disqualification (SpeeDee Oil, supra, 20 Cal.4th at p. 1145), and, where necessary, to address ethical improprieties and ensure the administration of justice. (Code Civ. Proc., § 128, subd. (a).) Although Thomas is a nonclient, he is not, as was the case in Great Lakes, a legally disinterested party who could not possibly be harmed by a violation of the duty of loyalty Stern and Greenberg owe to both Herman and James. Thomas remains Herman's issue, a co- trustee of the trust, and a remainder beneficiary of the exempt trust James seeks to modify. He would continue to be affected by any division of loyalties that places Stern and the firm in a position of acting injuriously to Herman's interests in providing for his issue.
The unique context of disqualification distinguishes cases discussing standing in other contexts, such as People ex rel. Becerra v. Superior Court (2018) 29 Cal.App.5th 486, 495-496, upon which James relies.
The trial court correctly recognized the continuing effect of the ethical violations on the proceedings, given the nature of the relationships between the parties, the manifest conflict, and Stern's anticipated testimony and its bearing upon his duty of loyalty. We find no merit in James's assertion that the trial court failed to sufficiently consider or weigh any tactical motive for the disqualification motion. The record reflects that the trial court considered all aspects of the motion and remained appropriately concerned about a conflict that would undermine the integrity of the judicial process. As noted above, "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.) The trial court properly granted the disqualification motion.
DISPOSITION
The order is affirmed. Respondent is awarded his costs on appeal.
We concur: EDMON, P. J., EGERTON, J.
[*] Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.