Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. CV801713
Premo, J.
Plaintiffs Sirous Maali and Kevin Bonyadi sued defendant Hamid Abtahi and others for negligence, fraud, and related causes of action after a real estate purchase transaction failed, causing them to lose a deposit and incur other damages. Following a court trial, the trial court rendered a judgment against defendant for approximately $149,000 in compensatory damages plus $50,000 in punitive damages. On appeal, defendant contends that the judgment should be reversed because his trial counsel represented conflicting interests. We affirm the judgment.
BACKGROUND
Defendant was a real estate agent working under the broker’s license of Rosenthal Enterprises, Inc. Representing both sides of the transaction, he arranged for plaintiffs to purchase an ARCO service station from sellers with whom he had an undisclosed prior business relationship. The sales agreement provided that Rosenthal was to receive a flat-fee commission of $25,000. Pursuant to the sales agreement, plaintiffs deposited approximately $210,000 in escrow. During escrow, the parties released approximately $149,000 to the sellers and plaintiffs took possession of the station under an operating agreement. The operating agreement resulted from a contract proposal faxed to plaintiffs from Rosenthal falsely stating that ARCO had agreed to plaintiffs’ possession of the station pending completion of the sale. The sellers’ franchise contract with ARCO forbade interim transfers, and the sellers had told such to defendant. Thereafter, defendant left Rosenthal’s umbrella and worked under the broker’s license of MOOB, Inc. ARCO then refused to allow the franchise transfer. Plaintiffs vacated the premises, but the sellers refused to return the money. Plaintiffs sued the sellers, defendant, Rosenthal, and MOOB.
At trial, defendant and MOOB were jointly represented while Rosenthal had separate counsel. Among other findings, the trial court found Rosenthal vicariously liable for the tortious acts of defendant under the doctrine of respondeat superior. It did not make the same finding as to MOOB because it concluded that defendant’s acts were perpetrated before MOOB became involved in the transaction.
In explaining its finding in favor of MOOB, the trial court articulated in its statement of decision that “The fraud perpetrated by agent Beheshti having preceded any involvement of broker [MOOB] . . . .” Beheshti was one of the sellers. Since the agent in this case was defendant, the trial court appears to have misnamed the agent.
DISCUSSION
Without making a cognizable argument to the effect that the trial court committed any sort of error, defendant complains about “a potential conflict of interest that no-one addressed; not the Court, not the law firm representing [him and MOOB], and not the other attorneys involved in this case.” According to defendant, there was a potential conflict because (1) there was dual representation without a waiver, (2) he was found liable but MOOB was not, (3) he and Rosenthal were found liable but MOOB was not, (4) his counsel did not prepare him for trial, (5) his counsel did not rehabilitate him with questions, objections or argument, and (6) his counsel rehabilitated MOOB with questions.
Since it is axiomatic that it is an appellant’s burden to articulate trial court error in order to obtain reversal of a judgment, defendant’s failure to identify any assertedly erroneous ruling by the trial court is fatal to this appeal. As defendant concedes, the point he raises here was not raised as an issue below. It follows that there is no error for us to review.
In any event, disqualification-of-counsel questions are not reviewable on appeal from a judgment. If the question is properly presented to the trial court for resolution, an order resulting from a disqualification motion is appealable. (Machado v. Superior Court (2007) 148 Cal.App.4th 875, 882.) An appealable order from which no appeal was taken cannot be reviewed on appeal from the final judgment. (Id. at p. 884.)
We nevertheless observe that it is implausible that trial counsel’s supposed breach of duty to defendant should work to plaintiffs’ detriment without any fault on the part of plaintiffs. (Cf. Kim v. Orellana (1983) 145 Cal.App.3d 1024 [the only remedy for malpractice by defendant’s counsel in a civil case is a separate malpractice action, not reversal of the underlying judgment].) The situation here is similar to that in which a lawyer assists in negotiations and drafts a contract on behalf of two parties with adverse interests. If one of the parties later claims he or she was improperly advised by the lawyer, can the contract be rescinded or is the complaining party limited to a malpractice action against the lawyer? This was the issue facing the court in Croce v. Kurnit (S.D.N.Y. 1982) 565 F.Supp. 884. There, the lawyer-defendant who was a principal to the transaction as well as counsel for other defendants drafted a proposed agreement and explained its terms to the plaintiff but failed to advise her she should consult an independent attorney. The court concluded that rescission of the resulting agreement was inappropriate unless the breach of fiduciary duty was “so fundamental as to defeat the intent or purpose of the contract.” (Id. at p. 894.) Finding no such fundamental breach, it held that the plaintiff was limited to seeking damages from the lawyer-defendant for breach of his fiduciary duty. (Accord Federal Deposit Ins. Corp. v. Kuang Hsung Chuang (S.D.N.Y. 1988) 690 F.Supp. 192, 196-197.)
Defendant’s notion, however, finds some support in old cases.
In Hammett v. McIntyre (1952) 114 Cal.App.2d 148, the court reversed a judgment after entertaining a defendant’s argument that she had been denied a fair trial because of conflicted counsel. There, the plaintiff sued the defendant and her father-in-law for injuries suffered in an automobile accident in which defendant had been driving her father-in-law’s car. The defendant was insured under her own policy for $10,000 and under the father-in-law’s policy for $20,000, provided she drove the car with her father-in-law’s permission. The father-in-law’s insurance company hired a joint counsel. The plaintiff claimed that the defendant was driving the car with permission; the father-in-law denied the claim. On advice of counsel, the defendant waived a jury, stipulated that the accident was caused by her negligence, and admitted on cross-examination by counsel that she had no contact with her father-in-law and that her consent to drive the car had come from her husband. The defendant’s husband, who admittedly had permission to use the car, was not called to testify whether that permission was without restriction and whether he had permitted his wife to use the vehicle. The trial court found against permissive use. It rendered a judgment in favor of the father-in-law and against the defendant. In reversing, the court held that “there is an absence of that element of fairness which is essential to due process.” (Id. at p. 157.)
In Moxley v. Robertson (1959) 169 Cal.App.2d 72, the court acknowledged Hammett, entertained the argument, but reached the opposite conclusion. There, two coplaintiffs were represented by a single attorney. On appeal from an adverse judgment awarding damages to the defendant, one of the plaintiffs contended that a conflict of interest prevented the attorney from adequately representing him and thus deprived him of a fair trial. The court examined the facts and found no conflict. Although implicitly acknowledging that some conflicts of interest might be so fundamental as to taint the entire judgment, the court held that complaints about the character of a lawyer’s advice did not meet that standard. “Appellant’s argument in the final analysis is that he was ill advised and that he would have been wise to have refused to join his coplaintiff in the action. The character and quality of the advice he received is not an issue before this court.” (Id. at p. 75.)
We disagree with Hammett and Moxley to the extent that they suggest there is a constitutionally grounded due process right to conflict free counsel in civil proceedings.
As Moxley points out, the claim that one’s attorney was conflicted is, in the final analysis, a claim of deficient performance or malpractice. “In a criminal prosecution the defendant has the right to competent representation at trial based on the constitutional right to the assistance of counsel for his defense [citations]. [Citation.] There is no equivalent constitutional right in a civil proceeding. There, the due process clause [citations] guarantees the right of a party to appear by counsel retained at his own expense. [Citations.] . . . Due process does not include the further requirement that competent representation be furnished by counsel in a civil action. The only conduct proscribed by the due process clause of the United States Constitution is conduct that may be fairly attributed to the state; the same is true with respect to the corresponding procedural due process provision of the California Constitution.” (Kim v. Orellana, supra, 145 Cal.App.3d at p. 1027.)
Here, any conflict on the part of defendant’s counsel cannot be attributed to the state.
Defendant also cites Tsakos Shipping & Trading, S.A. v. Juniper Garden Town Homes, Ltd. (1993) 12 Cal.App.4th 74, to support the proposition that an attorney conflict results in a fundamentally unfair proceeding and justifies reversal of a judgment. But that case is inapposite. In Tsakos, a limited partnership informally dissolved; thereafter, the former managing general partner borrowed money and signed a loan guaranty in the partnership name; he failed to repay the money; the creditor sued the general partner and partnership in New York; the general partner hired an attorney to represent him and the partnership; the attorney failed to assert defenses that would have benefited the partnership but not the general partner (the general partner acted without authority to bind the partnership in taking out the loan; the partnership had previously been dissolved by operation of law). The evidence further indicated that the general partner had not informed the other partners of the pendency of the action and that the decision to hire a single attorney to jointly represent both him and the partnership was his alone. The creditor recovered a judgment against the general partner and partnership. It then entered a sister state judgment in California. The partnership then filed a motion to set aside the sister state judgment on the ground, among others, that the New York judgment had been obtained on the basis of extrinsic fraud in that the attorney had a conflict of interest. The trial court denied the motion. On appeal, the court reversed. It concluded that “Dual representation under such circumstances resulted in the denial of a fair trial.” (Id. at p. 96.) But it noted that its conclusion rested upon the concepts of extrinsic fraud and third-party culpability, neither of which is present in the case before us: “Vacating a judgment for extrinsic fraud or mistake is an equitable remedy. If [the creditor] had been an innocent third party misled to its detriment by [the general partner’s] actions and the dual representation of [the general partner] and [the partnership] at trial, [the partnership] would be the appropriate party to bear the burden of failing to take effective steps earlier to wind up partnership affairs and terminate the partnership. Vacation of judgment is appropriate in this case, however because [the creditor] is not an innocent third party. As discussed above, [the partnership] had a meritorious defense against being held liable under the guaranty agreement. An examination of the partnership agreement would have revealed both that the partnership had dissolved upon the expiration of its term and that the partnership was not in the business of guaranteeing personal loans. [The creditor] in fact obtained a windfall from the dual representation, in that it obtained a joint and several judgment against [the partnership] as well as [the general partner].” (Id. at p. 97.)
Moreover, defendant’s point is patently without merit.
Attorneys are required to avoid the representation of conflicting interests. (See, e.g., Flatt v. Superior Court (1994) 9 Cal.4th 275, 282 (Flatt).) An attorney “ ‘represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose.’ ” (Id. at p. 282, fn. 2; see generally McMunigal, Rethinking Attorney Conflict of Interest Doctrine (1992) 5 Geo. J. Legal Ethics 823, 843-846 [surveying attempts to define “conflict of interest”].)
For purposes of attorney disqualification, it is important to distinguish between actual and potential conflicts of interest. An actual conflict of interest exists when current circumstances impair “the attorney’s ability to fulfill his or her professional obligations to each client” in the joint representation. (Vapnek et al., Cal. Practice Guide: Professional Responsibility (The Rutter Group 2007) ¶ 4:72, p. 4-24.5.) A potential conflict arises when it is reasonably foreseeable that an actual conflict may later occur. (Id. at ¶ 4:64, p. 4-24.2.) According to one commentator: “Joint representation invariably involves potential conflicts.” (Ibid., italics added; see also, id. at ¶ 4:27, p. 4-11.) Another authority qualifies that pronouncement somewhat, opining: “The representation of more than one client in a common engagement frequently raises a potential conflict.” (Cal. Compendium on Professional Responsibility, Vol. 3, State Bar Formal Opn. No. 471, p. 187, italics added; cf., In re Katrina W. (1994) 31 Cal.App.4th 441, 449 [no potential conflict of interest between jointly represented minors].)
Only an actual conflict between clients warrants automatic disqualification of their joint counsel. Potential adversity is not a sufficient predicate for applying the per se disqualification rule. (See, e.g., Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 302 [no disqualification “when only a hypothetical conflict exists”]; Federal Home Loan Mortgage Corp. v. La Conchita Ranch Co. (1998) 68 Cal.App.4th 856, 862 [mandatory disqualification is not justified by “some hypothetical possibility” of adversity between mortgagee and mortgagors]; Klemm v. Superior Court (1977) 75 Cal.App.3d 893, 899-901 [no disqualification required where conflict between ex-spouses was “merely potential”]; Spindle v. Chubb/Pacific Indemnity Group (1979) 89 Cal.App.3d 706, 713 [distinguishing “divergence in interest” from actual conflict of interest]; cf., In re Candida S. (1992) 7 Cal.App.4th 1240, 1252 [in dependency proceeding, appointment of separate counsel for each child was required only in cases of actual conflict].)
To the extent that jointly represented clients share common goals in their simultaneous representation, their interests are not actually (currently) in conflict. Put another way, there is no adversity where two parties have “sought to accomplish a common end result and engaged the services of a single attorney to implement their joint plan.” (Moxley v. Robertson, supra, 169 Cal.App.2d 72, 75 [attorney’s representation of both seller and buyer of equipment was proper, where they had common purpose of wresting possession of equipment from defendant]; accord, Buehler v. Sbardellati (1995) 34 Cal.App.4th 1527, 1540 [“an attorney’s representation of partners pursuing a common end result does not constitute a conflict of interest”]; Klemm v. Superior Court, supra, 75 Cal.App.3d at p. 899 [attorney properly represented both divorcing spouses, where the couple shared a common interest in opposing the county’s efforts to impose child support obligation on the husband].)
Here, as defendant explicitly concedes by arguing that the dual representation in this case posed a potential conflict of interest, there is nothing in the record that depicts defendant’s counsel taking a position contrary to his interests. Counsel’s defense of defendant and MOOB was consistent throughout the trial. He argued for a common purpose that defendant committed no tort. There was no issue of finger pointing or comparative fault between defendant and MOOB. The issue between them was whether MOOB was vicariously liable for defendant’s acts, an issue that potentially exonerates MOOB independently but not at the expense of defendant. Even so, counsel did not argue that any liability of defendant did not extend to MOOB. The trial court drew its conclusion from the evidence and a partial concession from plaintiffs. In short, defendant’s position and MOOB’s position were not at odds. Separate trial counsel would not have changed any of the evidence or arguments.
Plaintiffs conceded that most of defendant’s acts occurred under Rosenthal. They unsuccessfully argued that MOOB ratified defendant’s acts.
DISPOSITION
The judgment is affirmed.
WE CONCUR: Rushing, P.J., Elia, J.