Opinion
NOT TO BE PUBLISHED
Appeal from an order of the Superior Court of Orange County No. 30-2008-00068712 Randall J. Sherman, Judge.
Cox, Castle & Nicholson and Stanley W. Lamport for Objector and Appellant.
Ernest L. Hayward for Petitioner and Respondent.
OPINION
O’LEARY, J.
The trial court awarded attorney fees to Ernest L. Hayward (Hayward) as part of the conservator’s final accounting following the death of conservatee, Frances Gdowski (Frances). Frances’ conservator, Judith Okonski, hired Hayward to assist her in what proved to be a highly contentious conservatorship proceedings. Frances’ daughter, Diana Gdowski (Diana) objected to the fee award due to a purported conflict of interest. We find the court did not abuse its discretion in awarding Hayward his attorney fees and affirm the order.
The members of the Gdowski family are referred to by their first names for convenience and clarity, no disrespect is intended.
We note this appeal is not the first one to be considered by this court. In June 2009, a different panel of this court considered Diana’s appeal of the trial court’s order to issue a protective order under the Elder Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code, § 15600 et seq.) prohibiting Diana from contacting, striking or otherwise abusing her 83-year-old father, Michael Gdowski (Michael), and requiring her to stay away from his residence. The order was reversed, not due to insufficient evidence, but because the trial court improperly relied upon the aggressive and confrontational style of cross-examination used by Diana’s trial counsel. (Gdowski v. Gdowski (2009) 175 Cal.App.4th 128.)
In addition, Diana currently has another appeal before this court challenging the fees awarded to Frances’ court-appointed attorney based on a different purported conflict of interest. Our opinion affirming this order is filed concurrently with the opinion in this case. (Conservatorship of Gdowski (July 7, 2011) G043583 [nonpub. opn.].) The briefing in that appeal and the one before us now both reflect Diana is still distraught about the way her mother died and she is extremely unhappy with the way her mother’s conservatorship was handled. However, both appeals are utterly without merit. They appear to be misguided and bitterly motivated attempts to have the last say in the case by punishing those who dared to disagree with her.
We have been informed Diana filed a civil legal malpractice action in Superior Court against her former lawyers in this conservatorship proceeding, . (Case No. 30-2010-00346992.)
I
The facts relating to this fee dispute date back to early 2008 when Diana first began legal battles against her father and sister about Frances’ care and treatment. Diana’s father, Michael, and her sister, Sandra Wright Schulz (Sandra) contacted the Orange County Adult Protective Services (APS) complaining about Diana’s abusive behavior. Michael obtained a restraining order against Diana. Diana was prohibited from visiting Michael and Frances.
Diana determined she needed to find a criminal lawyer to help her with the elder abuse accusations and a lawyer to help protect Frances from Michael and Sandra. Diana was certain they were neglecting and abusing her mother.
After meeting with several different lawyers, Diana called Hayward on April 30, 2008. Diana claimed they had a very candid conversation about her situation and her mother. Diana maintained she told Hayward information that she would not want revealed to anyone or used against her relating to her physician, who was also Frances’ physician. She also discussed legal advice she had received from a criminal attorney. Hayward recalled the conversation much differently. He claimed Diana called several times and was repeatedly told he would not represent her. Their conversation consisted of a general discussion about how conservatorships are established. Hayward asserted any information Diana told him about her disagreement with her father and sister were disclosed in the pleadings, by other parties, and by Diana’s own agressive conduct.
At the end of 2008, Diana retained an attorney and filed a petition to name Okonski temporary conservator of Frances, who was diagnosed with a neurological condition that severely compromised her ability to speak, write, or otherwise communicate. Michael and Sandra filed a competing petition to be co-conservators of Frances. The court rejected their petition and on October 7, 2008, it granted Diana’s petition for appointment of a professional conservator, Okonski. The court also appointed Theresa Gorman to serve as Frances’ legal counsel. Okonski retained Hayward to represent her, and he sent a letter to the parties on October 20 2008, stating he had agreed to take the case.
A detailed discussion of the conservatorship proceedings are discussed in greater detail in our concurrently filed case concerning Gorman’s fee award. Suffice it to say, Diana’s approval of Okonski was very short lived after the appointment. She became angry when Okonski failed to immediately arrange for visits with Frances and seek modification of the restraining order. Diana disapproved of practically all the decisions related to Frances’ care, and was highly critical of Okonski’s decision to leave Frances at home in the care of Michael and Sandra. When Frances’ health declined, Diana wanted to keep her on a “full code” status, out of hospice, and transferred to a hospital that would insert a feeding tube. After seeking the court’s approval and instructions, Okonski accomplished all these tasks. Nevertheless, Diana was not satisfied and repeatedly requested Okonski be removed as conservator.
The record reflects Diana’s complaints and objections grew progressively more aggressive over time. At every hearing, Diana blamed everyone for causing Frances’ medical problems and failing health. She repeatedly insisted Frances was not dying. She was certain Okonski, Michael, and Sandra intended to hasten Frances’ demise by starving and abusing her. Despite her very vocal accusations of neglect, and objections to Okonski’s performance, the trial court continued to give Okonski instructions to carry out relating to Frances’ medical care. It denied Okonski’s petition to resign and conferred on Okonski additional authority over financial and medical decisions. After a trial in June 2009, the court appointed Okonski the permanent conservator, over Diana’s objection. Ten days later Frances died (July 16, 2009).
In connection with the final accounting, Okonski requested her attorney be awarded $27,500 fees for his services. Diana filed an objection to the fees stating Hayward had a conflict of interest. She revealed that during her telephone conversation with Hayward in 2008, she told him confidential information he used against her throughout the conservatorship proceedings. She would not reveal the nature of the confidential information but indicated it was used to prevent her from visiting Frances and to discredit her before the court.
The court ruled Diana had standing to object to the accounting under Probate Code section 2622. It overruled the objection, concluding “the evidence is insufficient to establish that Hayward used any confidential communications with Diana ... against her in representing Okonski. [Diana] also waived her objection by failing to bring a motion to disqualify Hayward....”
All further statutory references are to the Probate Code, unless otherwise indicated.
II
I. Appealability
Rulings in conservatorship proceedings are not appealable unless expressly made appealable by statute. (Conservatorship of Rich (1996) 46 Cal.App.4th 1233, 1235; see 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 152, p. 229.) Section 1300 identifies specific orders that are appealable. One of those orders is an order “[f]]ixing, authorizing, allowing, or directing payment of compensation or expenses of an attorney.” (§ 1300, subd. (e).) The trial court’s order awarding Hayward fees falls within this category.
II. Standing
Even if an order is appealable, a party must have standing to appeal. (Code Civ. Proc., § 902; Serrano v. Stefan Merli Plastering Co., Inc. (2008) 162 Cal.App.4th 1014, 1026-1027 (Serrano).) To meet the standing requirement, a party must be “legally aggrieved” by the appealable order. (In re Jasmine S. (2007) 153 Cal.App.4th 835, 841-842.) A party is legally aggrieved for appeal purposes only if his or her rights or interests are “injuriously affected” by the judgment. (County of Alameda v. Carleson (1971) 5 Cal.3d 730, 737(County of Alameda); Crook v. Contreras (2002) 95 Cal.App.4th 1194, 1201.) The rights or interests “injuriously affected” must be “‘“immediate, pecuniary, and substantial and not nominal or a remote consequence of the judgment.”’” (County of Alameda, supra, 5 Cal.3d at p. 737; Howard Contracting, Inc. v. G.A. MacDonald Construction Co. (1998) 71 Cal.App.4th 38, 58.) And the rights must be “‘recognizable by law.’” (In re Pacific Std. Life Ins. Co. (1992) 9 Cal.App.4th 1197, 1201, italics omitted.)
“The issue of whether a party has standing to appeal is a question of law. [Citation.] ‘Standing to appeal is “jurisdictional and therefore cannot be waived.” [Citation.]’ [Citation.] Thus, if a party has no standing to appeal, this court has no jurisdiction to consider the appeal.” (Estate of Bartsch (2011) 193 Cal.App.4th 885, 890 (Estate of Bartsch).)
Hayward asserts Diana was not “injuriously affected” by the challenged order. Hayward was not Diana’s attorney and he owed her no fiduciary duty. The purported conflict did not affect Diana’s legal rights. Moreover, Diana was not paying Hayward’s fees and would not be financially disadvantaged by the estate paying those fees. (Cf. Estate of Bartsch, supra, 193 Cal.App.4th 885.) Diana had no hope of someday inheriting money from the estate. All of the estate’s proceeds passed intestate to Diana’s father, who had disinherited Diana. Hayward concluded the asserted conflict affecting fees did not affect Diana’s legitimate interests and without some showing that her personal rights are affected she lacked standing to challenge the court’s fee award.
All these points are true and we question Diana’s motivation in pursuing this appeal as she has nothing to gain financially or personally if she succeeds. There is very little left of the estate for her father. However, we cannot overlook the fact the Probate Code broadly confers standing on any friend, relative or “other interested person” to file written objections to a conservator’s accounting in a conservatorship proceeding. A statutory right to object would be meaningless if there was no avenue to review the court’s ruling. We conclude Diana was aggrieved by the court’s ruling solely due to this statutory conferred right to object.
Section 2622 provides, “The ward or conservatee, the spouse of the ward or the spouse or domestic partner of the conservatee, any relative or friend of the ward or conservatee, or any creditor or other interested person may file written objections to the account of the guardian or conservator, stating the items of the account to which objection is made and the basis for the objection.”
We recognize this statutory provision appears to create an exception to the large body of legal authority holding a party is “legally aggrieved” for appeal purposes only if his or her rights or interests are “injuriously affected” by the judgment. Thankfully, the legislature did not liberally confer standing and took measures to limit the broad class of potential objectors to those with good faith objections. Section 2622.5 provides, “If the court determines that the objections were without reasonable cause and in bad faith, the court may order the objector to pay the compensation and costs of the conservator or guardian and other expenses and costs of litigation, including attorney’s fees, incurred to defend the account. The objector shall be personally liable to the guardianship or conservatorship estate for the amount ordered.”
III. Conservator’s Counsel’s Fees
The Probate Code gives the trial court authority and discretion to award reasonable fees to counsel for an appointed conservator. (§ 2640.) We review the trial court’s order awarding or denying attorney fees for abuse of discretion. (Conservatorship of Levitt (2001) 93 Cal.App.4th 544, 549.)
IV. General Law Regarding Forfeiture of Fees
“The rule that an attorney who engages in conflicting representation without obtaining informed consent is not entitled to compensation is not based on the premise that the attorney must pay a penalty so much as on the principle that ‘payment is not due for services not properly performed.’” (Cal Pak Delivery, Inc. v. United Parcel Service, Inc. (1997) 52 Cal.App.4th 1, 14, fn. 2.)
In Goldstein v. Lees (1975) 46 Cal.App.3d 614, 617 (Goldstein), the case Diana primarily relies upon, a corporation had retained an attorney as outside counsel beginning in February 1965. For several years attorney served as corporate, or in-house, counsel to the corporation. In 1971, the attorney undertook representation of a minority shareholder in a proxy fight to gain control of the corporation. The attorney “‘knew the operations of the corporation intimately’” and his knowledge of “corporate secrets [was] material to the proxy fight.” (Id. at p. 618.) The attorney candidly admitted his “‘insight into the facts’” was the reason he decided to undertake the representation. (Ibid.) In a subsequent suit by the attorney against the minority shareholder to recover attorney fees, the Court of Appeal, relying in part on the Rules of Professional Conduct, held that “such representation is improper and that a contract to provide such services is void for reasons of public policy.” (Id. at p. 617.)
Diana argues that under Goldstein, disqualification for a violation of Rules of Professional Conduct, Rule 3-310(E), always mandates a denial of attorney fees. We do not read Goldstein so broadly. That case involved an attorney who, having served as corporate counsel for years, turned against the corporation in a takeover attempt. (See Goldstein, supra, 46 Cal.App.3d at pp. 617, 618.) “Conflicts of interest such as these cannot be tolerated.” (Id. at p. 623.)
Decisions following Goldstein have held there is not a bright line rule regarding forfeiture of fees and the issue falls to the trial court’s discretion. “Although the breach of a rule of professional conduct may warrant a forfeiture of fees, forfeiture is not automatic but depends on the egregiousness of the violation. (Pringle v. La Chapelle (1999) 73 Cal.App.4th 1000, 1005–1006 [neither the Bus. & Prof. Code nor the Rules of Prof. Conduct provide for deprivation of fees whenever rule of professional conduct is violated; whether forfeiture of the right to collect fees is required depends on the egregious nature of the violation].)” (Mardirossian & Associates, Inc. v. Ersoff (2007) 153 Cal.App.4th 257, 278.) In short, there must be evidence of a serious violation of the attorney’s responsibilities before an attorney who violates an ethical rule is required to forfeit fees. (A.I. Credit Corp., Inc. v. Aguilar & Sebastinelli (2003) 113 Cal.App.4th 1072, 1079 [disqualification was not based on a “mere technical violation of ethical rules”]; see also Pringle v. La Chapelle, supra, 73 Cal.App.4th at p. 1000, 1006.)
For example, in Sullivan v. Dorsa (2005) 128 Cal.App.4th 947, the court held that the attorney was entitled to fees where “the [plaintiffs] fail[ed] to show that any violation of the rules governing representation of adverse interests was serious enough to compel a forfeiture of fees. Insofar as these questions were entrusted either to the trial court’s discretion or its factfinding powers, we cannot substitute our judgment for the trial court’s except on a clear showing that those powers were abused.” (Id. at pp. 965-966.)
We conclude the trial court did not abuse its discretion because there is substantial evidence to support its conclusion Hayward did not breach any ethical duty to Diana. We also agree with the trial court’s conclusion any purported conflict was effectively waived by Diana’s failure to bring a timely motion to disqualify Hayward. Very telling was Diana’s decision to withhold the purported conflict issue until after Frances’ death. The objection to the accounting merely served to keep her father from his inheritance, reduce the value of the estate with the cost of further litigation, and prevent Okonski from completing her accounting. Moreover, Diana’s unreasonable delay in seeking a remedy tends to prove the alleged breach of confidentiality was not seen as serious or substantial by Diana during the conservatorship proceedings. Although the court gave two valid reasons to deny Diana’s objection, we will limit our analysis in this opinion to the waiver ruling because it alone is dispositive.
V. Waiver
“We recognize that there are some courts that have held that disqualification of counsel cannot be waived even when the motion is brought after an extremely long passage of time. [Citations.] The rationale of these cases is that ethical rules serve a public interest, which precludes representation by a lawyer who should be disqualified. California, however, is not one of the jurisdictions adhering to this view. [Citations.] In fact, the majority view appears to be that attorney disqualification can be impliedly waived by failing to bring the motion in a timely manner. [Citation.] [¶] It appears that, at least in California, the delay has to be extreme or unreasonable before it operates as a waiver. [Citations.]” (Liberty National Enterprises, L.P. v. Chicago Title Ins. Co. (2011) 194 Cal.App.4th 839, 844-845 (Liberty).)
Here the question before us is whether the trial court abused its discretion in granting the petition to award Hayward attorney fees despite a purported conflict with Diana. In large part, the court’s decision was based on Diana’s delay and failure in bringing a motion to disqualify. We therefore address the question whether the delay or failure to file was unreasonable. Our standard of review is abuse of discretion.
“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.] 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.)
In October 2008, the court appointed Okonski and she retained Hayward. Hayward sent a letter to all parties stating he had taken the case. The conservatorship remained a contested proceeding until Frances’ death in July 2009. Diana first began having difficulties with Okonski (and Hayward) almost immediately after Okonski’s appointment as temporary conservator. Diana alleges in her opening brief that “not long after his appearance” Hayward began using the confidential information against her.
However, Diana offered few specifics on how the information was used against her. It appeared to us based on our review of the record that Diana and Okonski shared the same goals of prolonging Frances’ life. The trial court specifically focused on this point at the hearing to appoint a permanent conservator. It highly praised both Diana and Okonski for their efforts. It stated, “Okonski is actually part of the reason why Frances... still lives. I remember her testimony from the hearing with UCI where she indicated that she could not accept the conclusions of the doctors and wanted an opportunity to see if she could find alternative medical care and another physician. She did that. And partially because of that, Frances... lives today.” It would seem Diana and Okonski were not adversaries with respect to the conservatee.
Diana was also not Okonski’s adversary in a typical plaintiff/defendant litigation context. Diana’s appellate briefing skims over this fact. We conclude this is an unusual case because Diana’s unspecific claims Hayward used confidential information against her arises in the context of his attempts to defend Okonski’s performance as conservator. Almost immediately after her appointment, Okonski was faced with Diana’s many criticisms, objections, and requests that she be removed as conservator.
For example, in January 2009 Okonski petitioned to resign in part because she felt Diana would file a lawsuit against her after Frances’ death. Okonski explained she wished to resign “in order to avoid the threat of being embroiled in future, post-death litigation regarding allegations of her actions or inactions as temporary conservator of the person, in the event of aggravations to the medical conditions... or the unexpected death” of Frances. She concluded, “In [my] estimation, there is absolutely no solution or decision that can be made by [me]... that will meet the approval of all the warring family members, and it is all but certain that each will seek to blame [me] for [my] decision permitting action or inaction which should or should not have been made, regardless of medical advice, and of course proceeding with lawsuits based on allegations made with crystal clear 20-20 hindsight, long after the fact.”
In support of this motion, Judy Marchetti, one of Okonski’s employees, submitted a declaration recounting one of Diana’s emotional outbursts during a visit. Marchetti also threatened to resign if Diana did not stop screaming at her and Okonski. She stated, “[T]he shouting, accusations, and attempts at intimidation by Diana... are offensive and interfere with [my] duties.... and in attending to the needs of the [c]onservatee, and [it] must be stopped if [I am] to continue to administer care to the weakened [c]onservatee.” Diana asserts Marchetti’s declaration contained some of the confidential information she disclosed to Hayward and he used it to discredit her. She concludes the declaration, drafted by Hayward’s office, had the effect of preventing Diana from visiting Frances. Diana points out Hayward used the fact she could not visit Frances in later proceedings.
The argument is not persuasive because Diana cites to no evidence showing Marchetti’s declaration was based on something other than Marchetti’s personal knowledge. Moreover, the declaration recounting Diana’s verbal abuse was filed to support Okonski’s petition to resign. Given that Diana desired Okonski’s resignation, the declaration would appear to support Diana’s ultimate interests.
In any event, returning to the waiver issue, it appears Diana was fully aware as early as January 2009 that Hayward was purportedly using confidential information against her. Yet, she did not move to disqualify him. At the hearing regarding Okonski’s petition to resign, Haywood informed the court about the disputed conflict because Okonski’s fear of losing her attorney was one of the reasons she offered for wishing to resign.
Hayward told the court he spoke briefly with both Diana and Sandra long before he was retained by Okonski. He did not recall being told any confidential information. Hayward reported Diana’s counsel recently sent him a letter threatening to disqualify him and Okonski did not want to proceed without the counsel of her choosing. Hayward denied there was conflict and Okonski would rather resign than obtain new counsel unfamiliar with the ongoing threats of litigation. Hayward suggested one option would be appointment of a public guardian, which he opined would “be one heck of a mess for the whole family, won’t it be.” The court agreed that was not a situation it wanted to see happen.
Diana did not to move for disqualification at that hearing. Nor did she seek to disqualify Hayward at the next contested hearing regarding Frances’ need for a feeding tube, or the subsequent trial regarding appointment of a permanent conservator.
On appeal, Diana claims Hayward actively used the confidential information against her throughout the proceedings. There are no citations to the record where this might be shown. Diana did not raise any objections to use of the purported information. Her general assertion the confidential information undermined her credibility is problematic given our record containing many facts, including her own conduct, that negatively reflected on her credibility.
We note, Diana hints that Haywood likely disclosed some confidences to Michael and Sandra who sought to “paint [Diana] in a negative light through a litany of vile and false accusations.” Again she provides no record references or specific facts to support this allegation. No objection was made during the proceedings. And we conclude it is rank speculation based on the presumption Michael’s accusations were not based on his own experiences and familial knowledge of Diana’s character. Michael had ample independent grounds to portray Diana in a negative light. After all, Michael sought a restraining order to stop her perceived abuse and he was forced to defend himself from her elder abuse allegations. It does not appear that Michael needed additional reasons to be critical and negative towards Diana. The family strife existed long before Diana spoke to Hayward.
Diana’s solution to Hayward’s alleged use of confidential information was to wait until he had completed his representation of Okonski in the case and raise an objection to the estate paying his fees. She offers no excuse for her delay on appeal. She argues the objection was not waived because the appeal does not concern a disqualification motion but whether the court may compensate Hayward. Exactly! Diana’s failure to timely seek disqualification but still seek forfeiture of his earned fees after the litigation is over is simply unreasonable.
There are many cases holding the stage of the litigation is an important consideration when deciding whether the delay in bringing the motion to disqualify is unreasonable. “It stands to reason that the later the motion is made, the more difficult it is to replace counsel. [In a case where the motion is made] roughly midway through the case, [it] is a very bad time to have to change lawyers, especially in a case that involves the interplay of many documents and several witnesses.” (Liberty, supra, 194 Cal.App.4th at p. 847.) In reviewing motions to disqualify, courts also take into account whether the case was difficult. Replacing counsel becomes “a very dicey proposition” especially in cases requiring specialized legal knowledge. (Ibid.) Finally, “Delay is significant not only from the perspective of prejudice to the nonmoving party, it is also an indication that the alleged breach of confidentiality was not seen as serious or substantial by the moving party. (E.g., Glover v. Libman (N.D.Ga. 1983) 578 F.Supp. 748, 767 [delay can be seen as an admission that confidentiality and conflict are not significantly at stake].)” (Liberty, supra, 194 Cal.App.4th at p. 847.)
We found no case in which a party delayed until after the litigation was over to complain about a purported conflict. Indeed, Diana provides no authority, and we found none, to support the contention a party learning early in the proceedings of a conflict can wait until after the case is over to attempt to deprive the attorney of his or her earned fees. At the end of the case there is no reason to change lawyers as the ultimate outcome obviously remains the same. If the breach had been considered serious or substantial the motion to disqualify would have been raised in a timely fashion.
To the extent Diana implies she had to wait because “Frances’ life quite literally hung in the balance, ” we are not persuaded this was a valid excuse. It cannot be reconciled with the many attempts Diana made to remove Okonski as conservator. At the hearing regarding Okonsk’s petition to resign, Okonski explained she wanted to keep the attorney of her choosing particularly in light of the threats of lawsuits. She wished to resign if Hayward was to be replaced. Hayward simply noted Okonski’s resignation may not be in Frances’ best interests. Given that Diana appeared to desperately want Okonski removed as conservator, we find no merit to her argument Hayward’s observation was a threat to harm Frances or to silence Diana. If she had moved to disqualify Hayward it is likely she would have gotten what she desired, i.e., Okonski’s resignation.
In light of our above discussion, we conclude there was sound reasoning behind the trial court’s decision to award fees. Diana’s timing in raising and seeking a remedy for the purported conflict after the proceedings had ended was properly considered by the trial court to be a waiver. Her timing was unfair to Hayward and reflects a real lack of concern over the alleged breach of confidentiality when it most mattered. We conclude the court did not abuse its discretion in concluding Diana’s timing in this case was unreasonable and amounted to a waiver.
III
The order denying the objection to Hayward attorney fees is affirmed. Respondent shall recover her costs on appeal.
WE CONCUR: RYLAARSDAM, ACTING P. J., IKOLA, J.