Opinion
B312625
08-12-2022
LUMAR, LLC, et al., Plaintiffs, Cross-Defendants and Respondents, v. RONALD SINGER, Individually and as Trustee, etc., Defendant and Cross-Complainant; LURIE, ZEPEDA, SCHMALZ, HOGAN & MARTIN, Objector and Appellant.
Lurie, Zepeda, Schmalz, Hogan &Martin, Elizabeth L. Tran and Kurt L. Schmalz for Objector and Appellant. Alpha Trial Group, Richard K. Welsh and Jeff Zuidema for Plaintiffs, Cross-Defendants, and Respondents.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. 20SMCV00078, H. Jay Ford III, Judge. Affirmed as modified.
Lurie, Zepeda, Schmalz, Hogan &Martin, Elizabeth L. Tran and Kurt L. Schmalz for Objector and Appellant.
Alpha Trial Group, Richard K. Welsh and Jeff Zuidema for Plaintiffs, Cross-Defendants, and Respondents.
WILLHITE, J.
The law firm Lurie, Zepeda, Schmalz, Hogan &Martin ("the Firm") appeals from an order by the superior court in pending litigation granting a motion by plaintiffs Lumar, LLC and ZU+, Inc., and by cross-defendant Gustavo Zinkewich, to disqualify the Firm and attorneys Andrew Zepeda and Jimmy Chang, from representing defendant and cross-complainant Ronald Singer. The basis of the motion was that the Firm previously represented cross-defendant Zinkewich, thereby creating a conflict of interest. The trial court granted the motion and disqualified the Firm. It also prohibited the future transfer of "any confidential attorney work product" (italics omitted) relating to the current case or the prior representation of Zinkewich, apparently referring to work product concerning Zinkewich that was purportedly made nondisclosable by virtue of the Firm's conflict of interest.
The Firm appeals, raising several claims of error. It first contends that the court erred by finding a direct attorney-client relationship between itself and Zinkewich in a prior real estate transaction. The Firm also contends the court applied the wrong legal standard (the "substantial relationship" test) when determining whether to disqualify the Firm. Finally, the Firm contends the court erred by finding Zinkewich did not waive his right to seek disqualification, and by restricting the Firm's communications with Singer and his new counsel. As discussed more fully below, we strike the portion of the court's order prohibiting the transfer of "any confidential attorney work product" (italics omitted) in the Firm's possession, and in all other respects affirm.
Though not a party to the underlying action, the Firm has standing to challenge the disqualification order. (A.I. Credit Corp., Inc. v. Aguilar & Sebastinelli (2003) 113 Cal.App.4th 1072, 1077.)
FACTUAL AND PROCEDURAL BACKGROUND
We recite the factual history from declarations submitted in support of and in opposition to the motion to disqualify the Firm.
1. The Tower Grove Development Project and Atico, LLC
As trustee of the Marcia Singer Trust, Ronald Singer owns a large parcel of land in Beverly Hills known by the parties as "the Tower Grove property." Singer was introduced to Zinkewich, an architect, and Heriberto Schoeffer, a construction manager, by Andrew Zepeda, currently a shareholder of the Firm. Singer, Zinkewich, and Schoeffer thereafter conceived a development project involving the subdivision of the Tower Grove property into two parcels of land, Parcel A and Parcel B. The project contemplated Singer retaining ownership of Parcel A, while the three men developed a luxury residence for resale on Parcel B.
In October 2012, Singer contacted Zepeda and requested legal assistance for the three men in forming Atico, LLC ("Atico"). Despite sending Singer, Zinkewich, and Schoeffer a draft operating agreement of Atico, Zepeda never received an executed operating agreement.
In June 2014, Singer, Zinkewich, and Schoeffer signed the operative "Operating Agreement of Atico, LLC" which was prepared without the assistance of Zepeda or the Firm. The operating agreement confirmed Atico's formation on or around October 26, 2012. Under the operating agreement, Lumar, LLC, a separate limited liability corporation owned by Zinkewich and Schoeffer, was designated the managing member of Atico with a 50 percent interest, and Singer was designated the non-managing member with an equal 50 percent interest. Atico was formed for the purpose of collaborating with another entity, Three Tower Development, LLC ("TTD"), to subdivide and develop the Tower Grove property. The operating agreement provided that Singer would retain ownership of Parcel A while the parties would develop and transfer Parcel B to TTD under separate agreement. Through a first amendment to the operating agreement executed in December 2014, Singer, Zinkewich, and Schoeffer agreed that if the collaboration with TTD failed, Singer would transfer ownership of Parcel B to Atico on several conditions not relevant to this appeal.
TTD was formed in or around March 2014. Its members include Atico and Tower Grove Drive, LLC, an entity owned and operated by non-party Jeffrey Vance.
2. Singer, Zinkewich, and Schoeffer Retain Zepeda: The July 2015 Engagement Letter
In May 2015, Singer requested Zepeda's assistance in selling Parcel B and an access easement to a Saudi Arabian prince. Zepeda prepared an engagement letter on the Firm's letterhead dated July 28, 2015, and presented it by email to the three men individually. The engagement letter provided as follows.
"Dear Ron [Singer], Gustavo [Zinkewich] and Heriberto [Schoeffer]: [¶] It is our pleasure to represent you ('you' or 'your') in the negotiation of the sale of the parcel anticipated to result from the subdivision of [Singer's] property together . . . and the retention by the purchaser of [Zinkewich] and [Schoeffer] to provide architectural and construction management services." Pursuant to the letter, each individual agreed to supply the Firm "all relevant information concerning the matter."
The engagement letter also identified potential "adverse consequences to the clients. At this time, we [(the Firm)] foresee the following possible conflicts. . . . These possible conflicts could lead to one or more of you filing a lawsuit against the other(s).... Each of you herby expressly consents to the multiple representation despite the possibility of conflict. Each of you acknowledges that . . . we cannot keep information or communications confidential from any of you."
"The negotiations may stall if [Singer] is unwilling to accept what the purchaser offers for the emergency easement or the improvements to be performed in conjunction with that easement, while the other parties are satisfied with what the purchaser offers. Likewise, the negotiations will stall if [Zinkewich] and [Schoeffer] are unwilling to accept what the purchaser proposes to pay them for architectural and construction management servies [sic], even though the other parties are satisfied with what the purchaser offers them. Or, you may disagree regarding how to split the monies to be paid for the lot to be created. Or, you may disagree with each other on negotiating strategy."
The last page of the engagement letter included separate signature blocks for Singer, Zinkewich, and Schoeffer, and Atico and its manager. Above the signature blocks is the affirmation that "[t]he foregoing is agreed to and accepted and we authorize [the Firm] to represent us in this matter and we waive any conflicts of interest as set forth above." (Emphasis omitted.) Singer, Zinkewich, and Schoeffer all signed on their individual signature blocks. No signature was provided on the block designated for Atico.
Negotiations with the Saudi prince were unsuccessful, and in August 2015, Zepeda ended his representation.
3. Zepeda Resumes Representation: The Vance Dispute
In Spring 2016, Zepeda was again approached by Singer, this time to assist Singer, Zinkewich, and Schoeffer in separating from Vance and TTD. The Firm did not provide the individuals with an additional engagement letter. Zepeda and a Firm associate, Jimmy Chang, provided legal advice to the three men between 2016 and 2017 on matters pertaining to the Vance dispute, and assisted the men in securing building permits and subdivision approvals on Parcel B. After Vance, Singer, Zinkewich, and Schoeffer could not agree to terms of a settlement, Vance commenced a lawsuit against the three men in July 2019.
4. The Current Lawsuit Commenced by Lumar and ZU+
At the same time Singer, Zinkewich, and Schoeffer attempted to separate from TTD and Vance, their own relationships with one another began to deteriorate. Between May 2018 and August 2019, Zepeda and Chang represented Singer in unsuccessful negotiations with Lumar on additional proposed amendments to the Atico operating agreement. As of April 2019, the permits obtained for developing Parcel B lapsed due to inactivity.
According to Zinkewich, Lumar had obtained development approvals and completed subdivision plans for Parcel B by and through ZU+. As of December 2018, Singer "effectively froze Lumar out of the project and again sought to renegotiate the overall economics of" the development project.
In January 2020, Lumar and ZU+ filed the action involved in this appeal against Singer individually and as trustee of the Marcia Singer Trust. In their operative first amended complaint, Lumar and ZU+ alleged that Singer had thwarted the parties' efforts at securing financing, investment, and construction needed to timely subdivide and develop the Tower Grove property. Lumar and ZU+ asserted causes of action for breaches of contract, breach of good faith and fair dealing, unjust enrichment, and a request for a judicial declaration that Atico owned Parcel B under the operating agreement and first amendment.
At the time the original complaint was filed, Zinkewich was the sole member of Lumar and was the Chief Operating Officer of ZU+.
Singer filed an answer and cross-complaint against Lumar, ZU+, Zinkewich, and Atico, alleging Lumar had breached the Atico operating agreement and first amendment by failing pay for subdivision costs and refusing to act in good faith to acquire investors and project financing. Under the circumstances, Singer alleged he was not obligated to contribute Parcel B to Atico under the terms of the operating agreement or first amendment. The operative second amended cross-complaint asserted causes of action for declaratory relief, breaches of contract, and a request to dissolve Atico.
A. The Motion to Disqualify Zepeda, Chang, and the Firm
On November 30, 2020, Lumar and Zinkewich filed a motion to disqualify Zepeda, Chang, and the Firm from representing Singer in the current litigation. In relevant part, the motion sought disqualification for the Firm's violation of the Rules of Professional Conduct by previously representing Zinkewich on the "same matters that are the subject of this lawsuit-i.e., the subdivision, development, and sale" of the Tower Grove property. The motion argued that the shared subject matter of the former and current adverse representations created a conclusive presumption that confidential information had passed to Zepeda and the Firm from Zinkewich as a former client.
Subsequent references to rules are to the Rules of Professional Conduct. Current rule 1.9(a), adopted in November 2018, provides that "[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."
In his supporting declaration, Zinkewich stated that he recalled "instances" in which Zepeda and Chang provided him, Singer, and Schoeffer "legal advice concerning the development project." Zinkewich also recalled having communications and meetings with Zepeda and Chang, "including some at [the Firm] that did not include Mr. Singer." Zinkewich did not consent to Zepeda, Chang, or the Firm's representation of Singer in matters adverse to the interests of Zinkewich or Atico.
According to declarations submitted by Richard Welsh and Jeffrey Zuidema (counsel for Lumar, ZU+, and Zinkewich), Zepeda was first asked about his prior representation of Singer, Zinkewich, and Schoeffer in October 2019. In response, Zepeda informed Welsh that the Firm "only ever represented Mr. Singer and never represented any of the other parties." However, on October 29, 2020, Zuidema and Welsh discovered an unsigned version of the July 2015 engagement letter. To further ascertain Zepeda's prior representation, Welsh contacted Zepeda again to discuss the engagement letter. Zepeda indicated he would look into the matter further, and asked if Welsh "[had] any reason to believe it was ever signed by anyone?" Zepeda did not provide any further response. Then, on November 18, 2020, while reviewing documents that had been produced during the course of this dispute, Zuidema "discovered an email from Mr. Singer to Mr. Zepeda with a copy of the engagement letter he signed. [Zuidema] also discovered an email from Mr. Schoeffer to Mr. Zepeda" in which Schoeffer indicated he had sent a signed hardcopy of the engagement letter with a check for Zepeda's services. To his declaration in support of the motion to disqualify, Zuidema attached an unsigned version of the July 2015 engagement letter, and a page containing Singer's individual signature.
B. The Opposition and Reply
In his opposition to the motion to disqualify, Singer argued in relevant part that Zepeda, Chang, and the Firm had never represented Zinkewich "individually or directly, but only as part of a joint venture" among Singer, Zinkewich, and Schoeffer. Singer also argued that Zinkewich had waived any possible conflict by signing the July 2015 engagement letter and waiting nearly a year after commencing litigation to file the disqualification motion. According to Singer and Zepeda's declarations, Zepeda had been Singer's lawyer "for many years." Whenever Zinkewich or Schoeffer's interests diverged during the joint venture (Atico), they "always had their own legal counsel." At no point during the prior representation did Zepeda receive from Zinkewich any personal or professional confidential information. Nevertheless, Zepeda conceded that all "three men signed [the July 2015 engagement letter] as individuals in the signature blanks, [and] no one signed on behalf of Atico." Thus establishing that all three individuals signed the engagement letter, Zepeda attached to his declaration the "counterpart signature pages" in which Zinkewich and Schoeffer individually signed the July 2015 engagement letter.
In their reply, Lumar and Zinkewich argued that the 2015 engagement letter did not limit the scope of the Firm's representation to a particular joint venture or time period. Instead, Zepeda and the Firm continued to represent Singer, Zinkewich, and Schoeffer during the Vance dispute and assisted the men in obtaining development permits in 2018.
C. Hearing and Ruling
Following a hearing, the court granted the motion to disqualify Zepeda, Chang, and the Firm. In its written ruling, the court found that a direct attorney-client relationship existed between the Firm and Zinkewich on matters substantially related to the current litigation, thereby raising a conclusive presumption that confidential information had passed between Zinkewich and the Firm. The court rejected Singer's argument that Zinkewich had expressly or impliedly waived his right to seek disqualification on prospective litigation between himself and Singer.
DISCUSSION
1. Zepeda, Chang, and the Firm Were Properly Disqualified
A. Standard of Review and Governing Law
We review an attorney's disqualification for an abuse of discretion (Jessen v. Hartford Casualty Ins. Co. (2003) 111 Cal.App.4th 698, 705 (Jessen)), and "accept[ ] as correct all of [the court's] express or implied findings supported by substantial evidence." (City National Bank v. Adams (2002) 96 Cal.App.4th 315, 322.) We presume the trial court's order is correct, and we indulge all presumptions to support the order, resolving conflicts in favor of the prevailing party and the trial court's resolution of any factual disputes. (In re Marriage of Zimmerman (1993) 16 Cal.App.4th 556, 561-562.) "In exercising discretion, the trial court is required to make a reasoned judgment which complies with applicable legal principles and policies." (Id. at p. 561.)
Motions to disqualify counsel based on conflicts of interest typically arise in two scenarios: "'(1) in cases of successive representation, where an attorney seeks to represent a client with interests that are potentially adverse to a former client of the attorney; and (2) in cases of simultaneous representation, where an attorney seeks to represent in a single action multiple parties with potentially adverse interests.' [Citation.]" (A.F. v. Jeffrey F. (2022) 79 Cal.App.5th 737, 748.) In such cases, trial courts must consider an attorney's duty of confidentiality to his or her former client, and the preservation of public trust in the administration of justice. (See ibid.; City and County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal.4th 839, 846 (Cobra); see also Code Civ. Proc, § 128, subd. (a)(5).)
A lawyer's duties to a former client are well-established. As relevant here, Rule 1.9(a) prohibits a lawyer "who has formerly represented a client in a matter [from representing] 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." (See also O'Gara Coach Co., LLC v. Ra (2019) 30 Cal.App.5th 1115, 1124 [the prohibition against injuriously affecting a former client is grounded in Rule 1.9(a) "and governing case law"].)
B. Analysis
Here, it is undisputed that Zepeda and the Firm's former representation is substantially related to the current litigation, and that the interests of Zinkewich and Singer in this litigation are materially adverse. (See Farris v. Fireman's Fund Ins. Co. (2004) 119 Cal.App.4th 671, 681 [substantial similarity pertains to "'the legal problem[s]'" involved in the former and current representation].) The dispute centers on (1) whether the Firm directly represented Zinkewich such that confidential information is conclusively presumed for purposes of disqualification; and (2) whether Zinkewich waived his right to seek disqualification.
1. The Firm Directly and Personally Represented Zinkewich
Regarding the nature of the Firm's former representation, courts "have recognized two different [tests], depending on whether the attorney's representation of the former client was 'direct and personal' or 'peripheral [and] attenuated.'" (Fiduciary Trust Internat. of California v. Superior Court (2013) 218 Cal.App.4th 465, 479 (Fiduciary Trust), quoting Jessen, supra, 111 Cal.App.4th at pp. 710-711.) When the attorney "directly" represents the former client by personally imparting legal advice, the question whether the attorney is disqualified turns on whether a "substantial relationship" exists between the subject matter of the prior and current representation. (Ibid.; see Cobra, supra, 38 Cal.4th at p. 847 [in such contexts, "the former client need not prove that the attorney possesses actual confidential information"].) If a substantial relationship exists, courts conclusively presume the transfer of confidential information, and "'disqualification of the attorney's representation of the second client is mandatory.'" (Fiduciary Trust, supra, at p. 479, quoting Flatt v. Superior Court (1994) 9 Cal.4th 275, 283.) On the other hand, if the "'former attorney-client relationship was peripheral or attenuated, rather than direct and personal,'" the court will not presume transmission of confidential information "absent a showing 'the attorney was in a position vis-[a]-vis the client to likely have acquired confidential information material to the current representation.'" (Fiduciary Trust, supra, at p. 479, quoting Jessen, supra, at p. 710.)
Here, the Firm contends that the evidence shows only that it had a direct relationship only with the joint venture, Atico, and not with Atico's individual members, including Zinkewich. (Citing Rule 1.13(a) [a lawyer who is retained by a joint venture or partnership "shall conform his or her representation to the concept that the client is the organization itself'].) We disagree.
"'[T]he attorney-client relationship is created by some form of contract, express or implied, formal or informal.' If there is a court appointment or an express agreement by the partnership attorney to represent an individual partner, the attorney-client relationship is established and application of the conflict of interest rules follows as of course." (Responsible Citizens v. Superior Court (1993) 16 Cal.App.4th 1717, 1732 (Responsible Citizens), citations omitted; see also Aragon v. Pappy, Kaplon, Vogel &Phillips (1989) 214 Cal.App.3d 451, 464 [contract may establish "a direct attorney -client relationship"].)
If there is no express agreement to represent an individual partner, courts may consider various "factors which might support, or undercut, implication of an attorney-client relationship with an individual partner in any particular case." (Responsible Citizens, supra, 16 Cal.App.4th at p. 1733.) Those factors include the type and size of the partnership; the nature and scope of the attorney's engagement by the partnership; the attorney's access to information relating to the individual partner's interests; and the kind and extent of any contacts between the attorney and individual partner.
Here, there is an express agreement by the Firm to represent Singer, Zinkewich, and Schoeffer as individuals. The engagement letter, as drafted by the Firm, is not ambiguous. The Firm addressed the letter to Singer, Zinkewich, and Schoeffer as individuals, and the letter was signed by them individually. Atico (through its managing member Lumar, or its nonmanaging member Singer) did not sign the engagement letter. This evidence alone is sufficient to support the trial court's finding that the F irm had a direct relationship with Zinkewich.
Notwithstanding the existence of such a contract, the Firm contends the record demonstrates that it represented only individual members of Atico in matters in which each member had a mutual interest. In the Firm's view, the context of such representation overcomes any finding that the Firm personally represented the interests of each individual.
But the factors used to infer a relationship between an attorney and an individual member of a partnership or joint venture reasonably supports a direct relationship in this case. As to the type and size of the joint venture, Atico was a small, limited liability company with no more than three members. (See Responsible Citizens, supra, 16 Cal.App.4th at p. 1732.) With respect to the scope of the relationship and types of contacts between the Firm and each individual, Zinkewich recalled "instances" in which Zepeda and Chang provided him, Singer, and Schoeffer "legal advice concerning the development project." Zinkewich also recalled various instances in which he communicated and met with Zepeda and Chang in the absence of Singer. (See id. at p. 1733.) As to the Firm's access to information, the July 2015 engagement letter required each individual to provide all information relevant to subdividing, developing, and selling a portion of the Tower Grove property. Thus, when viewed in context, sufficient evidence established a direct attorney-client relationship between the Firm and Zinkewich.
The Firm also contends that under Croce v. Superior Court (1937) 21 Cal.App.2d 18 (Croce), the so-called "joint-client exception" to Rule 1.9(a) applies in this case. In Croce, the court relied on an evidentiary principle that "communications made by parties united in a common interest to their joint or common counsel, while privileged against strangers, are not privileged as between such parties nor as between their counsel and any of them, when later they assume adverse positions." (Id. at p. 20; see also Evid. Code, § 962.)
But "[a]s thoroughly examined and explained" in subsequent caselaw, the purported exception identified in Croce "to the bar against adverse successive representations has been widely rejected, and its continued viability has been called into question." (Kim v. The True Church Members of Holy Hill Community Church (2015) 236 Cal.App.4th 1435, 1455 (Kim); accord, Fiduciary Trust, supra, 218 Cal.App.4th at p. 482 ["[s]everal courts have rejected Croce's implication that Evidence Code section 962 creates a blanket exception to the prohibition on adverse, successive representations in cases" involving joint representation]; Western Continental Operating Co. v. Natural Gas Corp. (1989) 212 Cal.App.3d 752, 761-762 (Western Continental).) We agree with the line of cases rejecting Croce: "the mere fact of joint representation does not preclude disqualifying an attorney when two jointly represented clients' interests diverge." (Kim, supra, 236 Cal.App.4th at p. 1455 .)
In sum, we conclude substantial evidence supports the trial court's finding that the Firm directly and personally represented Zinkewich in the course of the prior representation. In light of that finding, we further conclude that the court properly applied the substantial relationship test to conclusively presume the transmission of confidential information between Zinkewich and the Firm. (Fiduciary Trust, supra, 218 Cal.App.4th at p. 479; Jessen, supra, 111 Cal.App.4th at pp. 710-711.)
We reject the Firm's alternative contention that the substantial relationship test should not have been applied in this case. Zador Corp. v. Kwan (1995) 31 Cal.App.4th 1285 (Zador), on which the Firm relies, does not restrict application of the substantial relationship test whenever an attorney seeks to represent one former joint client against another in the same or related matter. Rather, Zador sets forth the unremarkable observation that whenever confidences "are necessarily disclosed" in a joint representation, courts need not utilize the substantial relationship test to determine whether "confidences were likely disclosed." (Id. at p. 1294.)
2. Zinkewich Did Not Waive his Right to Seek Disqualification
The Firm contends that even if it had a direct relationship with Zinkewich giving rise to a conflict of interest, Zinkewich waived the conflict through the July 2015 engagement letter and by engaging in dilatory conduct pursuing the Firm's disqualification. The trial court expressly rejected these theories in its written order. We conclude that substantial evidence supports the trial court's ruling.
The Firm relies on the rule that automatic disqualification of a conflicted attorney is not required if the effected clients provide "informed written consent." (Rule 1.9(a).) To make an informed decision, the client must be sufficiently aware of the risks of the representations, potential conflicts involved, and the alternatives available as required by the particular circumstances. (Sharp v. Next Entertainment Inc. (2008) 163 Cal.App.4th 410, 430.) Rule 1.9(a) mandates that waiver be in writing in order to "'avoid disputes or ambiguities that might later occur in the absence of a writing.' [Citation.]" (See id. at pp. 430-431.)
By written agreement during a period of contemporaneous representation, one client may consent to the attorney's continued and future representation of another client notwithstanding the possibility of future conflict. (Zador, supra, 31 Cal.App.4th at p. 1301.) And while that agreement need not separately explain "every conceivable ramification" of a potential conflict (Maxwell v. Superior Court (1982) 30 Cal.3d 606, 622, disapproved on another ground in People v. Doolin (2009) 45 Cal.4th 390), it must reflect an intention by the client to consent to the attorney's "continued representation" of the other client. (See, e.g., Zador, supra, 31 Cal.App.4th at pp. 1289-1290, 1301-1302 [client consented to the law firm's "'continued and future representation of [another client] and agree not to assert any such conflict of interest or to seek to disqualify'" the firm from future representation]; accord, Cornish v. Superior Court (1989) 209 Cal.App.3d 467, 472, 477-478; Elliott v. McFarland Unified School Dist. (1985) 165 Cal.App.3d 562, 568.)
Here, the evidence supports the trial court's determination that Zinkewich did not expressly waive future conflicts arising out of the Firm's former representation. The July 2015 engagement letter did not state that the Firm would continue representing Singer in the event of conflict. On the contrary, the engagement letter confirmed the Firm would continue its "multiple representation" of Singer, Zinkewich, or Schoeffer even if one client "fil[ed] a lawsuit against the other(s)."
The evidence also supports the trial court's determination that Zinkewich's delay in bringing the motion did not constitute an implied waiver of the right to disqualify the Firm. (See Antelope Valley Groundwater Cases (2018) 30 Cal.App.5th 602, 625 ["[e]ven if implied consent were not a legally sufficient basis for denying [a] disqualification motion," disqualification may impliedly be waived by failing to bring the motion in a timely manner].) To show an implied waiver, the initial burden rests on the party opposing disqualification to offer prima facie evidence of "'"an unreasonable delay by the former client in making the motion and resulting prejudice to the current client."'" (Kim, supra, 236 Cal.App.4th at p. 1457.) If such a showing is made, the burden shifts to the party moving for disqualification to justify the delay. (Ibid., citing Fiduciary Trust, supra, 218 Cal.App.4th at p. 490.)
Here, substantial evidence supports the trial court's ruling that Singer failed to set forth a prima facie case of unreasonable delay. The motion to disqualify the Firm was filed 10 months after the underlying litigation had been commenced, while the case was still in the pleading stage. (See Ontiveros v. Constable (2016) 245 Cal.App.4th 686, 702 (Ontiveros) [courts should focus not "on the age of the litigation" when the motion is filed, but "on the stage of the litigation"].) During the hearing on the motion to disqualify, the court referred to a pending demurrer and motion for summary judgment for which the court had yet to rule.
The parties' conduct also explains the ten-month delay by Lumar and Zinkewich in seeking disqualification. From the time counsel was retained to pursue this litigation in October 2019, Welsh and Zuidema (counsel for Lumar and Zinkewich) inquired of Zepeda's prior representation of the individual members of Atico, including Zinkewich, and suggested that the Firm end its representation in this case due to a conflict of interest. In response, Zepeda asserted that the Firm had not formerly represented Zinkewich, and he questioned whether there "was any reason to believe" the engagement letter had been signed. It was only when Zuidema uncovered emails on November 18, 2020, confirming each member of Atico in their individual capacities had signed the engagement letter that Zuidema and Welsh understood the nature of the Firm's prior representation. Less than two weeks later, Lumar and Zinkewich filed their motion to disqualify. In short, substantial evidence supports the trial court's finding that Singer failed to meet his initial burden of showing an unreasonable delay. (Accord, Ontiveros, supra, 245 Cal.App.4th at pp. 701-702; Western Continental, supra, 212 Cal.App.3d at pp. 763-764.)
2. Modification of the Court's Disqualification Order
Singer further contends, and we agree, that the court erred by including in its written order of disqualification an additional order prohibiting future transfer of any materials of "any confidential attorney work product . . . relating to this case or [the Firm's] prior representation of Gustavo Zinkewich." (Italics omitted.) The prohibition apparently referred to the Firm's work product containing any confidential information pertaining to the current litigation or the Firm's prior representation of Zinkewich that had not already been disclosed to Singer or his new counsel.
Before issuing its final disqualification order, the court held two hearings to discuss whether it should prohibit future communications between the Firm on the one hand, and Singer and his new counsel on the other. After the first hearing and before the second, the court issued a tentative ruling.
Paragraph 2 of the tentative permitted the Firm to transfer all Singer's "client materials and property" as defined in Rule 1.16(e)(1) of the Rules of Professional Conduct to Singer or his new counsel. Paragraph 4 ordered the Firm not to communicate with Singer or his new counsel except as necessary to transfer the client materials; and paragraph 3 ordered the Firm not to disclose to Singer or his new counsel "any confidential attorney work product" (italics omitted) created in the current lawsuit or created in the prior representation of Zinkewich.
The transcript of the second hearing suggests that the court intended to delete paragraph 3 of the tentative. In the final written order, however, the language of paragraph 3 of the tentative was not deleted, but rather made part of paragraph 2 of the final order. That paragraph in the final order permits the Firm to transfer all Singer's "client materials and property" to Singer or his new counsel, but prohibits any future transfer of "any confidential attorney work product . . . relating to this case or [the Firm's] prior representation of . . . Zinkewich." (Italics omitted.) Paragraph 3 of the final order contains the language of former paragraph 4 of the tentative ruling, and orders the Firm not to communicate with Singer or his new counsel except as necessary to transfer the client materials. In this order, the trial court was concerned with suppressing any confidential information, including attorney work product, in the Firm's possession that had formed the basis of the disqualification motion but had not yet been conveyed to Singer or his new counsel.
At one point the court stated that it was "not inclined to sua sponte issue mandatory injunctive relief regarding turnovers [of case materials]" or "to issue preliminary injunctive relief that restricts conversations that may or may not happen" other than the prohibition of paragraph 4, which prohibited the Firm from communicating with Singer or his new counsel except as necessary to transfer the client materials. The court added: "So maybe the cleanest solution is to simply delete No. 3 altogether, knowing that number- paragraph No. 4 that prohibits any communication about the case, encompasses work product." Later, at the conclusion of the hearing, the court stated that it was "going to revise this order to delete paragraph 3 in its entirety, because it's duplicative.... [P]aragraph 4, about any communication with the caveat, except it is necessary to transfer the . . . client materials, will be adopted."
We agree with Singer that the order's prohibition on future disclosure of potentially confidential attorney-work product "relating to this case or [the Firm's] prior representation of Gustavo Zinkewich" is unworkable. In a case neither party has cited in this appeal, a similar order issued by the trial court was rejected in Mills Land &Water Co. v. Golden West Refining Co. (1986) 186 Cal.App.3d 116 (Golden West), superseded by rule on another point as stated in La Jolla Cove Motel &Hotel Apartments, Inc. v. Superior Court (2004) 121 Cal.App.4th 773. In Golden West, the trial court issued an order prohibiting the disqualified attorney from "'discussing, disclosing or otherwise divulging any information or documents obtained by virtue of'" conduct giving rise to the attorney's disqualification. (Id. at pp. 136-137.) The suppression order also prohibited the use of any "'such information in the conduct of this litigation.'" (Id. at p. 137.)
To the extent it could construe the order as prohibiting the attorney "from any communication . . . because he has been disqualified," the court upheld the order prohibiting future communication. (Golden West, supra, 186 Cal.App.4th at p. 137.) Beyond that prohibition, the court rejected the order as overly broad. (See ibid. ["[a]s a blanket order suppressing 'everything' it is defective because it cannot be determined what was suppressed"].) Instead, the court determined the best course was to wait until an actual controversy arose, in which case the party for whom the disqualification motion was granted could object to specific items of evidence as being privileged. (Id. at p. 138; see also Continental Ins. Co. v. Superior Court (1995) 32 Cal.App.4th 94, 111, fn. 5 ["we question whether a protective or suppression order is warranted by showing only a violation of [a Rule of Professional Conduct] without an additional showing that the violation led to the disclosure of confidential communications protected by the attorney-client privilege . . . or created an unfair advantage, or impacted the fairness of the trial or the integrity of the judicial system"].)
As did the court in Golden West, we conclude that any future limitation on communications between the Firm and Singer and his new counsel must be determined in an evidence-specific context by means of an objection to disclosure. We therefore modify the disqualification order by striking from the order the prohibition that the Firm "shall not disclose to Mr. Singer or his new counsel any confidential attorney work product of [the Firm] relating to this case or [the Firm's] prior representation of Gustavo Zinkewich." (Italics omitted.)
Because we adhere to the reasoning in Golden West, we find the Firm's reliance on inapposite out-of-state authorities (First Wisconsin Mortgage Trust v. First Wisconsin Corporation (7th Cir. 1978) 584 F.2d 201; In re George (Tex. 2000) 28 S.W.3d 511) unavailing.
DISPOSITION
The disqualification order is modified by striking the following language from paragraph two on page eight of the order dated March 1, 2021: "In the future, Lurie Zepeda shall not disclose to Mr. Singer or his new counsel any confidential attorney work product of Lurie Zepeda relating to this case or Lurie Zepeda's prior representation of Gustavo Zinkewich." (Italics omitted.) As modified, the order is affirmed. Each party shall bear its own costs on appeal.
We concur: MANELLA, P. J., CURREY, J.